ARTICLE 1

INCOME TAX

Sections 1 to 5 make changes to the angel investment program.

Section 1.  Definitions.  Defines "qualified greater Minnesota business" as a qualified small business certified by the Department of Employment and Economic Development (DEED) under the criteria in section 2.

Section 2.  Certification of Qualified Small Businesses.  Authorizes businesses to apply to DEED for certification as a qualified greater Minnesota business.  Defines “greater Minnesota” as the area of the state outside the seven-county metro area, but including the cities of Hanover, New Prague, Northfield, and Rockford, which are partly in the seven-county metro area and partly in other counties.  To qualify as a greater Minnesota business, a business must have its headquarters and at least 51 percent of its employees and payroll in greater Minnesota.

Section 3.  Credit Allowed.   Increases the rate of credit investments in qualified greater Minnesota businesses from 25 percent to 40 percent.

Section 4.  Revocation of Credits.  Provides language to add qualified greater Minnesota businesses to the provision in current law requiring businesses to repay an amount of credits awarded if a business fails to meet the employment and payroll requirements in the five years following the year in which an investment was made.

Section 5.  Data Privacy.  Provides that the mailing address, phone number, contact person, and type of industry of a qualified small business are public data for purposes of applications for certification of a qualified small business, certification of qualified investors, and certification of qualified funds.  Currently, only the name of the qualified small business may be disclosed. 

Section 6.  Report to Legislature.  Adds language to require DEED to include information on the number of minority or women-owned qualified small businesses in its annual report to the legislature on the angel investment program.

Section 7.  Internal Revenue Code.  Updates the reference in Minnesota Statutes to the most recent version of the Internal Revenue Code for purposes of conforming to federal law enacted in February 2012, which allowed eligible employees and their surviving spouses to transfer up to 90 percent of airline bankruptcy-related payments to a traditional IRA and claim a refund of the federal taxes they paid on such funds.  Those employees who exercised the Roth IRA rollover opportunity prior to the 2012 Act are also eligible to transfer up to 90 percent of those Roth IRA funds to a traditional IRA and claim a refund of the federal taxes they paid on such transferred funds.

Section 8.  Withholding Tax.  Strikes language referencing the contractor withholding requirement.

Section 9.  Net Income.  Updates the reference in Minnesota Statutes to the most recent version of the Internal Revenue Code and strikes obsolete language for purposes of defining Minnesota Net Income for the federal conformity adopted in section 7.

Section 10.  Additions to Federal Taxable Income.  Adds language to conform Minnesota tax law to the federal law pertaining to the increased standard deduction for married filers, effective for tax year 2012 only.

Section 11.  Subtractions to Federal Taxable Income.   Allows an income tax subtraction of 55 percent of military retirement pay beginning in tax year 2013.

Section 12.  Internal Revenue Code.   Updates the reference in Minnesota Statutes to the most recent version of the Internal Revenue Code.

Section 13.   Definitions.  Strikes the definition of “qualified individual” for purposes of the military retirement pay credit repealed in section 22.    

Section 14.  Definitions.   References the definitions of “placed in service” and “qualified rehabilitation expenditures” to their meaning given in section 47 of the Internal Revenue Code.  For purposes of the Minnesota credit in this bill, “Federal credit” is defined as 20 percent of the qualified rehabilitation expenditures with respect to any certified historic structure for a taxable year.

Section 15.  Applications; Allocations.  Replaces “expenses” with “expenditures” for purposes of the historic structure credit and provides for a decision of the State Historic Preservation Office of the Minnesota Historical Society regarding the transfer of a credit or grant to be challenged as a contested case under the state administrative procedure statutes.  Also updates the references to the commissioner of revenue in the statute for consistency with references in other sections.

Section 16.  Partnerships; Multiple Owners.  Adds language to allow credits granted to corporate entities to be passed through to partners, members, shareholders, or owners of a corporate entity according to any executed agreement between relevant parties. 

Section 17.  Sunset.   Extends the sunset date of the state historic structure rehabilitation credit from fiscal year 2015 to fiscal year 2022.  The State Historic Preservation Office is authorized through 2024 to issue credit certificates based on allocation certificates issued before fiscal year 2022.  The requirement to report the economic impact of the historic structure rehabilitation credit or grant to the chairs and ranking minority members of the Senate and House tax committees is extended through 2025, or the year after the year all allocation certificates have been cancelled or resulted in credit certificates, whichever is earlier.

Section 18.  Definitions.   Provides a subtraction from alternative minimum taxable income for amounts deducted for military retirement pay.

Section 19.  Internal Revenue Code;  Section 20.  Scope.   Update the reference in Minnesota Statutes to the most recent version of the Internal Revenue Code.

Section 21.  Tax Credit.  Modifies the definition of “qualified brewer” by increasing, from 100,000 to 250,000, the minimum the number of barrels of fermented malt beverages a brewer may produce to be eligible for the small brewer tax credit.   

Section 22. Repealer.  Repeals the military retirement pay credit, effective tax year 2013, and repeals the contractor withholding requirement.

 ARTICLE 2

SALES TAX

 Section 1.  Sales and Use Tax.  Strikes language requiring accelerated remittance for vendors with annual sales tax collections of at least $120,000 for all payments except the June payment.   

Section 2.  Exemptions.  Adds language to exclude, from gross revenues subject to hospital, surgical, or health care provider taxes used to pay for the MinnesotaCare program, payments by an entity for laboratory services to examine and report results for specimen collected outside the state.  Requires the entity claiming the exemption to keep adequate records demonstrating that the specimen was collected outside the state, so that the commissioner can ensure that the correct amount of tax is paid.

Section 3.  Retail Sale.  Adds payments for rent-to-own or lease-to-own used vehicles that may be returned at any time without penalty to the definition of a “retail sale,” so that sales tax is levied on each payment and is due at the time of each periodic payment on the full value of the lease, instead of at the time of initial lease. 

Section 4.  Drugs; Medical Devices.   Adds a sales tax exemption for medical devices purchased in transactions covered under Medicare and Medicaid.  Clarifies that single patient use items are included in the definition of “durable medical equipment” and that “repair and replacement parts” include single patient use items.  Adds clarifying language to determine when a transaction is considered covered by Medicare or Medicaid. 

Section 5.  Accessories and Supplies.  Adds a sales tax exemption for accessories and supplies required for effective use of durable medical equipment for home use only or when purchased in a transaction covered by Medicare or Medicaid, that are not already exempt under current law.

Section 6.  Capital Equipment.   Adds a phased-in upfront exemption for capital equipment purchases.  For calendar year 2013 and 2014, the upfront exemption applies to purchasers employing 20 or fewer employees during calendar year 2010.  For calendar year 2015, the upfront exemption applies to purchasers employing 50 or fewer employees during calendar year 2010.  Beginning in calendar year 2016, the exemption is available upfront to all purchasers. 

Section 7.  Qualified Data Centers.  Changes the requirements for purchases by a “qualified data center” to be eligible for a sales tax exemption by reducing the requisite cost of construction and investment in technology equipment and software from $50 million within a two-year period to $30 million in a three-year period. 

Section 8.  Tax Collected; Section 9. Refund; Eligible persons; Section 10.  Application.  Remove references to the refund process for capital equipment purchases, effective when the capital equipment exemption becomes upfront for all purchasers in 2016.  

Section 11.  Motor Vehicle Lease Sales Tax Revenue.  Includes sales tax revenue on rent-to-own and lease-to-own used vehicles in the definition of net revenue for purposes of allocation of those proceeds to the transportation funds.

Section 12.  Exemptions.  Exempts purchases of vehicles used exclusively as mobile medical units for federally qualified health centers from sales tax, retroactive to 2011.  

Section 13.  Repealer.  Repeals language relating to the “safe harbor” and penalty provisions that apply to the early vendor remittance requirements.

 ARTICLE 3

PROPERTY TAX

Section 1.  Benefits of Participation; Expenditure Type Reporting.  Modifies the requirements for the monetary benefit found in performance standard measures program by requiring that in 2012 only, a county or city with a population over 2,500 must also participate in the expenditure type reporting under 471.74 in order to be eligible.

Section 2.  Career and Technical Levy.  Eliminates the levy cap on the career and technical levy and eliminates the proration language allowing the levy to rise to the statutory formula level.

Section 3.  Building Lease Levy.  Extends by ten years the authority for school districts that are members of the “Technology and Information Education Systems” joint board to levy under the building lease levy for improvements to its buildings and land.  This section also authorizes school districts that are members of the St. Croix River Education District to enter into a lease purchase agreement for a building and land and use the building lease levy to pay costs of the agreement.

Section 4.  State General Tax.  Removes the inflation index and sets the state general levy base amount for commercial-industrial property at $742,000.000 and at $41,200,000 for seasonal recreational property for taxes payable in 2013 through 2016.  Beginning with taxes payable in 2017, both levies are reduced until the tax is eliminated in taxes payable 2026.

Section 5.  Apportionment of State General Tax.  Eliminates the percentage apportionment of the state general levy between commercial-industrial and seasonal-recreational properties.

Section 6.  Notice of Levy Budget Hearing; Expenditure Type Reporting.  Requires all counties and cities with a population of more than 2,500 to provide to the county auditor the municipal Web site where the public is able to access budget information and requires that the published notice for the budget hearing include a statement that budget information is on the municipal website.

Section 7.  Truth in Taxation Notice; Expenditure Type Reporting.  Requires that the notice clearly state for each county and each city with a population of more than 2,500, budgetary information is available on the municipal website.

Section 8.  Targeting Property Tax Refund.  Modifies the formula for the targeting property tax refund.  Currently, the refund formula is 60 percent of the increase over the greater of (1) 12 percent of the previous year’s tax or (2) $100.  This section increases the factor from 60 percent to 75 percent. 

Section 9.  Expenditure Type Reporting.

          Subdivision 1 provides a purpose statement.

          Subdivision 2 defines a "municipality" and "population."

          Subdivision 3 requires that a municipality publish on its Web site three years of previous and one year of current budgetary information on both revenues and expenditures.  The information must be organized by function and by expenditure type and must be published on the Web site within 14 days after its final adoption.

          Subdivision 4 provides alternative publication provisions for municipalities without a Web site.

          Subdivision 5 provides an incentive for participation in 2012; a city or county that complies with this section and the reporting required under the standard measures program will be entitled to the monetary benefit / incentive of .14 per capita not to exceed $25,000.

          Subdivision 6 clarifies that failing to comply with this section in 2013 and thereafter will result in withholding of state-aid road funding, local police and firefighters relief association amortization state aid, local government aid, and county program aid.

Section 10.  Local Government Aid.  Freezes a city’s 2013 local government aid distribution at amount equal to their 2012 distribution.

Section 11.  Local Government Aid; Appropriation.  Updates the appropriation of local government aid to reflect the 2013 freeze.

Section 12. Career and Technical Levy Limitation.  Maintains the levy cap for taxes payable in 2012 only, so that certified levies do not need to be recalculated.

Section 13.  Lease Levy; Administrative Space.

          Subdivision 1 permits Independent School District No. 656, Faribault, to use their lease levy authority to pay for the lease of administrative space rather than instructional space provided that the lease of administrative space is less expensive than leasing instructional space.

          Subdivision 2 permits Independent School District No. 284, Wayzata, to use their lease levy authority to pay for the lease of administrative space rather than instructional space provided that the lease of administrative space is less expensive than leasing instructional space.

Section 14.  Administration of Targeting Property Refund.  Directs the Commissioner of Revenue to recalculate the targeting property tax refund using 75 percent of the property tax increase exceeding 12 percent of income instead of 60 percent.

Section 15.  Repealer.  Repeals the state general levy for taxes payable in 2026 and thereafter.

ARTICLE 4

LOCAL DEVELOPMENT

Section 1.  Authority; Tax Increment Financing.  Modifies the definition of "authority" by adding a municipality that undertakes a project pursuant to the newly created mining reclamation project area.

Section 2.  Project; Tax Increment Financing.  Modifies the definition of "project" under the tax increment financing statute by adding the newly created mining reclamation project area.

Section 3.  TIF; Redevelopment District.  Modifies the definition of a redevelopment district by requiring that 50 percent or more of the buildings be structurally substandard.  This is a change from current law which requires that “more than 50 percent” be structurally substandard.

Section 4.  Soil Deficiency District.  Defines a soil condition district as a district consisting of a project or portions of a project within which the authority finds by resolution that the following exist:

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

Section 5.  Mining Reclamation Project Area.  Creates a mining reclamation project area.

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

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

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

       Paragraph (c) authorizes special rules that apply to a redevelopment district, renewal and renovation district, soil conditions district or soil deficiency district established in a mining reclamation project area

       Paragraph (d) extends the five-year rule to ten years for districts created within the mining reclamation project area.

       Paragraph (e) requires that not more than 80 percent of the increment may be expended on activities outside the district, but within the project area. 

       Paragraph (f) allows increment from a soil deficiency district to be used only to acquire parcels, pay for costs of correcting the unusual terrain or soil deficiencies and the additional cost of installing public improvements, pay for administrative expenses and up to 25 percent may be used to pay for costs as provided under redevelopment statute.

       Paragraph (g) clarifies that increment spent for any infrastructure costs are deemed to satisfy the requirements concerning expenditures for soil condition and redevelopment districts.

Section 6.  Duration Limits.  Sets that the duration limit for a soil deficiency district at 20 years.

Section 7.  Pooling; Expenditures Outside District.  Modifies law that allows districts to increase by up to ten percent their expenditures outside the district to develop housing.  This section makes the following changes:

1. adds rehabilitation to the list of authorized use of expenditures;
2. requires that the parcel be occupied by one to four family dwelling units with respect to which a mortgage was foreclosed;
3. requires that any applicable redemption has expired without redemption;
4. requires that the authority or developer enters into a purchase agreement to acquire the parcel no earlier than 30 days after the expiration of the redemption period; and
5. removes the requirement that the parcel be vacant for six or more months.

Section 8.  Oakdale, TIF.

          Subdivision 1 extends the deadline for the city of Oakdale to establish a tax increment financing district by six years.

          Subdivision 2 exempts the district from the "blight test" rules which requires that 70 percent of the parcels in an area be occupied by buildings and that more than 50 percent of the buildings be substandard.  Special rules are provided for qualification of parcels as being occupied by substandard buildings by exempting the following:

       1.  the three-year limit between demolition of the building and certification of the district;

       2.  the requirement that private demolition be done under a development agreement; and

       3.  the adjustment to original net tax capacity.

Section 9.  Apple Valley, TIF.

          Subdivision 1 authorizes the city of Apple Valley to use tax increment financing from economic development districts to provide improvements, loans, interest rate subsidies, or assistance if the following conditions are met:

       1.  the project will create or retain jobs, including construction jobs in Minnesota;

       2.  construction of the project will not start before July 1, 2012, without the use of increment;

       3.  certification request is made no later than June 30, 2013;

       4.  constriction begins no later than July 1, 2013; and

       5.  construction begins no later than July 1, 2013, or December 31, 2012, for a housing project. 

          Subdivision 2 extends by 18 months the city’s authority to spend tax increment under the temporary construction authority.

Section 10.  Bloomington TIF.  Authorizes the City of Bloomington and the Bloomington Port Authority to extend the duration of TIF District 1-G (containing the former Met Center property) and a portion of 1-C, through December 31, 2038. Absent an extension, the district must decertify in 2018.

Section 11.  Bloomington TIF.  Authorizes the City of Bloomington and the Bloomington Port Authority to extend the duration of TIF District No. 1-I (containing the Bloomington Central Station property) through December 31, 2038.  Absent an extension, the district must decertify in 2031.

Section 12. Brooklyn Park; TIF.

           Subdivision 1 extends, by one year, the authority of the Brooklyn Park Economic Authority to spend increment from existing TIF districts to assist in the development of a hotel and an aquatic and performance wellness center.

           Subdivision 2 extends the five-year rule through July 1, 2014.

Section 13. Dakota County, Redevelopment TIF.

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

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

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

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

Section 14.  St. Cloud TIF; Expenditure of Fund Balance.  Authorizes the St. Cloud Economic Development Authority to spend the balance of the increments from TIF District No. 2 within the Central Area Urban Renewal Project area of St. Cloud.  Eligible expenditures include public infrastructure improvements.  Any increment remaining must be spent by December 31, 2015, or distributed as excess increment.

 ARTICLE 5

HOMESTEAD MARKET VALUE CLEANUP

Section 1.  County Fairgrounds; Improvement Aided.  Converts the criteria that allows a city, town or school district to spend up to a certain amount per year on county fairground improvements from taxable to estimated market value.

Section 2.  Agricultural Land Preservation and Conservation Assistance Program.  Converts minimum levy required for a county to participate in program from 0.01209 percent of taxable market value to estimated market value.

Section 3.  Fire and Police Department Aid.  Modifies definition of  "market value" by changing it to "estimated market value."

Section 4.  Fire and Police Department Aid; Apportionment of Fire State Aid.  Modifies apportionment of state fire aid based on estimated market value rather than market value.  

Section 5.  Fire and Police Department Aid; Fire State Aid.  Changes reference from market value to estimated market value.

Section 6.  Auxiliary Forest.  Clarifies that the market value of land in an auxiliary forest for all other purposes other than taxation be based on estimated market value.

Section 7.  Watershed Management Tax District.  Converts the levy limits on watershed management tax district levies in rural towns 0.02418 percent of taxable market value to estimated market value.

Section 8.  Watershed Management Organizations.  Converts the reference of levy limits on bond levies in rural towns 0.02418 percent of taxable market value to estimated market value.

Section 9.  Lake Minnetonka Conservation District.  Converts the total funding limit from .00242 percent of taxable market value to estimated market value.

Section 10.  White Bear Lake Conservation District.  Changes the levy limit for municipalities within the district from 0.02418 percent of taxable market value to estimated market value on taxable property within the district

Section 11. Watershed Districts, Organizational Fund.  Changes the cap on a district’s organizational expense fund from 0.01596 percent of taxable market value to estimated market value.

Section 12.  Watershed District, General Fund.  Modifies the limit on a district’s general levy from 0.048 percent of taxable market value to estimated market value.  This section also modifies the levy for basic water management features from taxable market value to estimated market value.

Section 13.  Watershed District, Survey and Data Acquisition Fund.  Converts the levy limit from .02418 percent of taxable market value to one based on estimated market value.

Section 14.  Eminent Domain, Blight Test.  Modifies the definition of "structurally substandard" in eminent domain law to refer to estimated market value.

Section 15.  State Aid Payment and Adjustment.  Requires Department of Revenue to compute adjusted net tax capacity values for cities and counties and clarifies that the computations use values that reflect fiscal disparities, tax increment financing, and power line credit.

Section 16.  County Historical Society.  Converts city and town levy limits from .02418 percent of taxable market value to estimated market value.

Section 17.  Emergency Medical Service Districts.  Converts district levy limit from 0.048 percent of taxable market value to estimated market value.

Section 18.  County State Aid Highway, Rural Counties.  Converts levy calculation in CSAH formula for rural counties from 0.01596 percent of taxable market value to estimated market value.

Section 19.  County State Aid Highway, Urban Counties.  Converts levy calculation in CSAH formula for urban counties from 0.00967 percent of taxable market value to estimated market value.

Section 20.  County Highways; Bridges Within Certain Cities.  Modifies exemption from requirement that counties spend CSAH money on bridge and dam improvements in cities of the third and fourth class.  Under current law, this requirement does not apply to cities with taxable market value of more than $2,100 per capita and this change converts the amount based on estimated market value.

Section 21.  Taxation in Unorganized Townships.  Modifies qualifying rules related to expenditure of the county road and bridge levy in unorganized towns from valuation based on taxable market value to estimated market value.

Section 22.  County Road and Bridge Bonds.  Converts the limit on county road and bridge bonds from 0.12089 percent of market value to estimated market value.

Section 23.  Definition of Estimated Market Value.  Defines "estimated market value" for property tax statutes as the assessor’s determination of market value.

Section 24.  Definition of Taxable Market Value.  Defines "taxable market value" for property tax statutes as the estimated market value for the parcel as reduced by market value exclusions, deferments of value, or other adjustments.

Section 25.  Definition of Market Value.  Converts taxable market value to estimated market value in statute used in computing tax levy limits, debt limits, and statute aid computations and specifically references statutory exclusions and provides that estimated market value is the value prior to these adjustments.  This section also reverses current law which requires that tax-exempt wind energy property be added to taxable market value.  Also, limits under special law and city charters that are based on market value are changed to estimated market value.  The measure of estimated market value for tax limits is the amount for the previous assessment year while it’s the most recently available amount for debt limits.

Section 26.  Valuation of Property.  Corrects a cross-reference to statute related to value of platted land.

Section 27.  Classification of Property; Tax Capacity.  Eliminates an obsolete definition of "gross tax capacity."

Section 28.  Disparity Reduction Aid.  Requires that taxable market value be used in computing disparity reduction aid.

Section 29.  Disparity Reduction Credit.  Requires that taxable market value be used in computing disparity reduction credit.

Section 30.  Taxes; Determination of Levy Limit.  Provides that the law converting old special law and city charter provisions containing levy or mill rate limits provide increases based on growth in estimated market value rather than taxable market value.

Section 31.  Correction of Levy Amount, Towns.  Modifies threshold used to determine which year levy for a correction of mistakes in town levies will be added to from a percentage or taxable market value to estimated market value.

Section 32. Levy Limits, Adjusted Levy Limit Base.  Changes reference from taxable market value to estimated market value under levy limit.  This law is now obsolete.

Section 33.  Contents of Tax Statement.  Eliminates obsolete reference to limited market value and updates a cross- reference to new definition of "taxable market value."

Section 34.  Iron Range Fiscal Disparities Program, Adjusted Market Value.  Defines "adjusted market value" under the Iron Range Fiscal Disparities Program statute.

Section 35.  Iron Range Fiscal Disparities Program, Fiscal Capacity.  Modifies definition of "fiscal capacity" for municipalities.

Section 36.  Iron Range Fiscal Disparities Program, Average Fiscal Capacity.  Modifies definition of  "average fiscal capacity" for municipalities.

Section 37.  Iron Range Fiscal Disparities Program, Net Tax Capacity.  Modifies definition of net tax capacity by changing market value to taxable market value.

Section 38.  Mortgage Registry Tax.  Clarifies that the county portion of collections of mortgage registry tax paid for mortgages on properties in more than one county is allocated to the counties based on estimated market value.

Section 39.  Real Property Outside County, Deed Tax.  Clarifies that the county portion of collections of the deed tax for properties in more than one county is allocated to the counties based on estimated market value.

Section 40.  Volunteer Firefighters Retirement Plan.  Provides that one-half of additional contributions to a volunteer firefighter’s pension fund, required due to insufficient funds, be allocated to employer-municipalities in proportion to their estimated market values.

Section 41.  Town General Law; Major Purchases.  Converts threshold that subjects large contracts for town purchases to reverse referendum authority from 0.24177 of the taxable market value to estimated market value.

Section 42.  Towns; Authority to Issue Certificates of Indebtedness.  Converts reference from market value to estimated market value under threshold that subjects town’s issuance of certificates of indebtedness  to reverse referendum authority.

Section 43.  Towns; Firefighters’ Relief Tax Levy.  Converts levy limit for firefighter pension benefits from 0.00806 percent of taxable market value to estimated market value.

Section 44.  Metropolitan Area Towns; Certificate of Indebtedness.  Converts reference from market value of the town to estimated market value of the town concerning threshold for certificates of indebtedness.

Section 45.  Towns May Be Dissolved.  Converts criteria for dissolution of town from amount of taxable market value to estimated market value.

Section 46.  Counties; Change of Boundaries.  Changes reference from market value of a county to estimated market value for purposes of the criteria for creating new counties.

Section 47.  Counties; Capital Improvement Bonds.  Removes definition of  "tax capacity."

Section 48.  Counties; Capital Improvement Bond Debt Limit.  Converts limit on capital improvement bonds from .012 percent of taxable market value of property in county to estimated market value.

Section 49.  Counties; Nonprofit Legal Assistance.  Converts limit on county’s appropriation to nonprofit corporation providing legal assistance from 0.00604 percent of taxable market value to estimated market value.

Section 50.  Counties; Courthouse.  Converts debt limit from 0.04030 percent of taxable market value to estimated market value.  Any amount in excess requires approval of majority of county voters.

Section 51.  Counties; County Emergency Jobs Program.  Modifies the limit that a county may levy for emergency jobs program from 0.01209 percent of taxable market value to estimated market value.

Section 52.  Hennepin County; Building, and Maintenance Fund.  Converts levy limit from 0.02215 percent of taxable market value to estimated market value.

Section 53.  Hennepin County Library Levy.  Converts levy limit from 0.01612 percent of taxable market value to estimated market value.

Section 54.  Three Rivers Park District Levy.  Converts levy limit from 0.03224 percent of taxable market value to estimated market value.

Section 55.  Anoka County; Library Debt Limit.  Converts debt limit on library bonds from 0.01 percent of taxable market value to estimated market value.

Section 56.  Anoka County; Library Levy Limit.  Converts levy limit from .01 percent of taxable market value of taxable property in the county to estimated market value.

Section 57.  Payment of County Orders or Warrants.  Converts minimum amount required for county to qualify to borrow from another county from $1.033 billion of taxable market value to estimated market value.

Section 58.  Nonconformities; Continuation of Nonconformity.  Changes from market value to estimated market value concerning an exception to continue nonconforming land uses if more than 50 percent of the market value of the building or structure is destroyed by fire or natural disaster. 

Section 59.  Regional Railroad Authority; Levy Limit.  Converts levy limit from 0.04835 percent of taxable market value to estimated market value.

Section 60.  Community Corrections; Leasing.  Converts rent limit from 0.1 percent of taxable market value to estimated market concerning issuance of revenue bonds financing community correction facilities.

Section 61.  Home Rule Charter City; Issuance of Capital Notes.  Converts debt limit on capital notes issued by home rule charter city without election from 0.03 percent of taxable market value to estimated market value.

Section 62.  Statutory Cities; Contracts.  Converts threshold that subjects conditional sale contracts and contracts for deed purchases to reverse referendum authority from 0.24177 percent of market value to estimated market value.

Section 63.  Statutory Cities; Certificates of Indebtedness.  Converts threshold that subjects issuance of certificates of indebtedness to reverse referendum authority from 0.25 percent of market value to estimated market value.

Section 64.  Special Service Districts.  Modifies test used to determine whether a split use property in a special service district is subject to full or proportionately to the chargers or levies from 50 percent of taxable market value to estimated market value.

Section 65.  Pedestrian Mall; Improvement Assessments.  Converts levy limits for pedestrian mall improvements from 0.12089 percent of market value to estimated market value.

Section 66.  Hospital; City of the First Class.  Converts levy limit for cities of the first class owning hospitals from 0.00806 percent of market value to taxable market value.

Section 67.  Tourist Camping Grounds.  Converts levy for camping ground established by home rule charter or statutory city from 0.00806 percent of taxable market value to estimated market value.

Section 68.  Museum, Gallery, or School of Arts.  Converts levy from 0.00846 percent of taxable market value to estimated market value.

Section 69.  St. Cloud Transit Commission Levy.  Converts levy limit from 0.12089 percent of market value to estimated market value.

Section 70.  Duluth Transit Commission Levy.  Converts levy limit from 0.07253 percent of taxable market value to estimated market value.

Section 71.  Municipalities; Acceptance of Gifts.  Converts qualifying rule for cities of the second, third, and fourth class to accept gifts with conditions from $41 million of taxable market value to estimated market value.

Section 72.  Housing and Redevelopment Authorities Levy Limit.  Converts levy limit for housing and redevelopment authorities from 0.0185 percent of market value to estimated market value.

Section 73.  Housing and Redevelopment Authorities Debt Limit.  Converts debt limit on issuance of general obligation bonds from one-half percent of taxable market value to estimated market value.

Section 74.  Port Authorities; Mandatory City Levy.  Converts levy limit from 0.01813 percent of taxable market value to estimated market value.

Section 75.  Seaway Port Authority Levy.  Converts levy limit from 0.01813 percent of taxable market value to estimated market value.

Section 76.  Port Authorities’ Discretionary City Levy.  Converts levy limit from 0.00282 percent of taxable market value to estimated market value.

Section 77.  Economic Development Authorities; City Tax Levy Limit.  Converts levy limit from 0.01813 percent of taxable market value to estimated market value.

Section 78 . Tax Increment Financing; Original Net Tax Capacity.  Provides for adjustments to the original tax capacity of TIF districts for market value exclusions.

Section 79.  Development Pacts with Entities of Other States.  Converts levy limit from 0.00080 percent of taxable market value to estimated market value.

Section 80.  First Class City; Publicity Levy.  Converts levy limit from 0.00080 percent of taxable market value to estimated market value.

Section 81.  Hazardous Property Penalty.  Converts penalty city may assess on property determined to be hazardous from one percent of taxable market value to estimated market value.

Section 82.  Towns/Cities; Joint Maintenance of Cemetery.  Modifies law allowing contiguous towns and statutory cities to jointly maintain public cemeteries if each have a minimum market value of $2 million.  The minimum market value would be based on estimated market value.

Section 83.  City Improvement Fund.  Modifies minimum requirement of taconite and iron ore values that permits cities to establish a permanent improvement fund based on estimated rather than taxable market value.

Section 84.  City Improvement Fund; Levy Limit.  Converts levy limit from 0.08059 percent of taxable market value to estimated market value.

 Section 85.  Acceptance of Provisions.  Modifies reference in acceptance of 1943 law regulating financial practices which applied to cities with more than 50 percent of their value in unmined iron ore value to refer to estimated market value.

Section 86.  Metropolitan County; Debt Limit.  Converts debt limit from 0.01209 percent of taxable market value to estimated market value.

Section 87.  Value of Property for Bond Issues by School Districts.  Converts statute that adjusts school district debt limit for districts affected by airport detachments from taxable market value to estimated market value.

Section 88.  Metropolitan Airport Commission; General Budget.  Converts commission’s levy limit for operation and maintenance from 0.00806 percent of market value to estimated market value.

Section 89.  Metropolitan Airport Commission; Additional Taxes.  Converts commission’s additional levy limit from 0.00121 percent of market value to estimated market value.

Section 90.  Metropolitan Airport Commission; Levy Limit.  Converts commission’s levy limit from 0.00806 percent of taxable market value to estimated market value.

Section 91.  Metropolitan Mosquito Control Commission; Levy Limit.  Converts rate of growth in commission’s levy from the growth in its taxable market value to estimated market value.

Section 92.  Metropolitan Area Fiscal Disparities Program; Adjusted Market Value.  Defines "adjusted market value" as taxable market value adjusted by the assessment sales ratio.

Section 93.  Metropolitan Area Fiscal Disparities Program; Fiscal Capacity.  Defines "fiscal capacity" as being based on adjusted market value.

Section 94.  Metropolitan Area Fiscal Disparities Program; Average Fiscal Capacity.  Defines "average fiscal capacity" as being based on adjusted market value.

Section 95.  Metropolitan Area Fiscal Disparities Program; Net Tax Capacity.  Defines "net tax capacity" as being based on taxable market value.

Section 96.  Debt of Defines Municipalities; Capitol Improvement Bonds.  Converts limit that applies under city capital improvement bond law from .16 percent of taxable market value to estimated market value.

Section 97.  Debt of Defined Municipalities; General Net Debt Limit.  Converts general net debt limit for municipalities other than school districts and cities of the first class from three percent of market value to estimated market value.

Section 98.  Debt of Defined Municipalities; First Class Cities Net Debt Limit.  Converts net debt limit from two percent of market value to estimated market value.

Section 99.  Debt of Defined Municipalities; School Districts Net Debt Limit.  Converts net debt limit from 15 percent of taxable market value to estimated market value and clarifies that values may be adjusted by assessor’s sales ratio if it results in a higher limit.

Section 100.  Certain Independent School Districts; City of the First Class.  Converts net debt limit for bonds with a maturity of more than two years from 0.7 percent of taxable market value to estimated market value.

Section 101.  Refunding Bonds.  Converts debt threshold that allows a city, county, town, or school to issue refunding bonds without an election from 1.62 percent of taxable market value to estimated market value.

Section 102.  State Board of Investment; Bond Purchase.  Converts maximum limit on Minnesota municipal bond purchases by State Board of Investment from 3.63 percent of taxable market value to estimated market value.

Section 103.  Local Government Aid; City Net Tax Capacity.  Updates reference to city net tax capacity in LGA statute to recodified section.  This section is effective the day following final enactment.

Section 104.  Local Government Aid; County Program Aid.  Updates reference to county net tax capacity in county program aid statute to redodified section.  This section is effective the day following final enactment.

Section 105.  County and Regional Jails; Levy Limit.  Converts levy to pay county jail bonds issued without election from 0.09671 percent of market value to estimated market value.

Section 106.  County and Regional Jails; Leases.  Converts rent limit permitting lease revenue bond financing of county jails from 0.1 percent of taxable market value to estimated market value.

Section 107.  Definition of Estimated Market Value.  Adds definition of  "estimated market value" to general definition section of statutes.  This definition applies for purposes of levy, tax, spending, debt limit and calculation of aid payments.

Section 108.  Revisor’s Instruction.   Directs the Revisor of Statutes to recodify the statute governing calculation of adjusted net tax capacity in property tax statutes (Chapter 273).   This section is effective the day following final enactment.

Section 109.  Repealer.  Repeals the following statutes: 

• M.S. 273.11, subd. 1a – Limited Market Value
• M.S. 276A.01, subd. 11 – Definition of ‘valuation’ under Iron Range Fiscal Disparities Law.
• M.S. 276A.06, subd. 10 – Adjustment of value under Iron Range Fiscal Disparities Law.
• M.S. 473F.02, subd. 13 – Definition of ‘valuation’ under Metropolitan Area Fiscal Disparities Law.
• M.S. 473F.08, subd. 10 – Adjustment of value under Metropolitan Area Fiscal Disparities Law.
• 477A.01, subd 11 – Definition of ‘equalized market value’ in local government aid statute.

Section 110.  Effective Date.  Provides the changes affecting computation of debt limits are effective the day following final enactment while changes affecting levy and tax limitations or aid computations are effective for taxes payable in 2013.

 ARTICLE 6

MISCELLANEOUS

Section 1.  General Fund Savings and Budget Reserve Transfer.  Requires the Commissioner of Management and Budget to reduce general fund appropriations to executive agencies by June 30, 2013, by the amount of savings provided through implementation of the data analytics master contract program.  Requires the Commissioner of Management and Budget to cancel the difference between the savings resulting from state government appropriation reductions and $99,900,000 in the budget reserve account to the general fund on November 15, 2012.  Effective the day following final enactment.

Section 2.  Special Recovery Fund; Cancellation.  Transfers $4,300,000 of the balance in the Revenue Department service and recovery special revenue fund to the general fund in fiscal year 2012.  Effective the day following final enactment.