1.1 A bill for an act
1.2 relating to taxation; modifying provisions governing individual income and
1.3 corporate franchise taxes, property taxes, certain state aid programs, and provisions
1.4 related to public finance; modifying property tax classifications, exemptions, and
1.5 refunds; modifying aid reporting requirements; providing certain aid penalty relief;
1.6 appropriating money; amending Minnesota Statutes 2024, sections 3.8855,
1.7 subdivisions 2, 3, 8; 10A.02, subdivision 11b; 10A.322, subdivision 4; 270C.445,
1.8 subdivision 3; 272.01, subdivision 2; 272.02, subdivision 19, by adding
1.9 subdivisions; 273.124, subdivisions 8, 14; 273.13, subdivision 22; 273.38; 273.41;
1.10 290.0132, by adding subdivisions; 290.06, subdivision 23; 290.0693, subdivision
1.11 1; 290.0695, subdivisions 1, 3; 290.091, subdivision 2; 290A.03, subdivision 3;
1.12 446A.086, subdivision 1; 469.104; 474A.091, subdivisions 2, 2a; Laws 2023,
1.13 chapter 64, article 4, section 27, by adding a subdivision; repealing Minnesota
1.14 Statutes 2024, sections 13.4967, subdivision 2a; 290.0679.
1.15BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.16 ARTICLE 1
1.17 INCOME AND CORPORATE FRANCHISE TAXES
1.18 Section 1. Minnesota Statutes 2024, section 3.8855, subdivision 2, is amended to read:
1.19 Subd. 2.Definitions.For the purposes of this section,:
1.20 (1) "commissioner" means the commissioner of revenue; and
1.21 (2) "significant tax expenditure," "tax," and "tax expenditure" have the meanings given
1.22in section 270C.11, subdivision 6.
1.23 EFFECTIVE DATE.This section is effective the day following final enactment.
1.24 Sec. 2. Minnesota Statutes 2024, section 3.8855, subdivision 3, is amended to read:
1.25 Subd. 3.Membership.(a) The commission consists of:
1Article 1 Sec. 2.
S0132-1 1st EngrossmentSF132 REVISOR MS
SENATE
STATE OF MINNESOTA
S.F. No. 132NINETY-FOURTH SESSION
(SENATE AUTHORS: PUTNAM, Rest, Dibble, Miller and Weber)
OFFICIAL STATUSD-PGDATE
Introduction and first reading8001/16/2025
Referred to Taxes
Author added Miller14401/21/2025
Author added Weber16601/23/2025
Comm report: To pass as amended03/17/2025
Second reading 2.1 (1) two senators appointed by the senate majority leader;
2.2 (2) two senators appointed by the senate minority leader;
2.3 (3) two representatives appointed by the speaker of the house;
2.4 (4) two representatives appointed by the minority leader of the house of representatives;
2.5and
2.6 (5) the commissioner of revenue or the commissioner's designee.
2.7 (b) Each appointing authority must make appointments by January 31 of the regular
2.8legislative session in the odd-numbered year.
2.9 (c) If the chair of the house or senate committee with primary jurisdiction over taxes is
2.10not an appointed member, the chair is an ex officio, nonvoting member of the commission.
2.11 (d) The commissioner may designate another individual to represent the commissioner
2.12or the commissioner's designee at any meeting of the commission.
2.13 EFFECTIVE DATE.This section is effective the day following final enactment.
2.14 Sec. 3. Minnesota Statutes 2024, section 3.8855, subdivision 8, is amended to read:
2.15 Subd. 8.Terms; vacancies; meetings.(a) Members of the commission serve a term
2.16beginning upon appointment and ending at the beginning of the regular legislative session
2.17in the next odd-numbered year. The appropriate appointing authority must fill a vacancy
2.18for a seat of a current legislator for the remainder of the unexpired term. Members may be
2.19removed or replaced at the pleasure of the appointing authority.
2.20 (b) If a commission member ceases to be a member of the legislative body from which
2.21the member was appointed, the member vacates membership on the commission.
2.22 (c) The commissioner of revenue must convene the first meeting of each year required
2.23under subdivision 4, paragraph (c).
2.24 EFFECTIVE DATE.This section is effective the day following final enactment.
2.25 Sec. 4. Minnesota Statutes 2024, section 10A.02, subdivision 11b, is amended to read:
2.26 Subd. 11b.Data privacy related to electronic reporting system.(a) The board may
2.27develop and maintain systems to enable treasurers to enter and store electronic records
2.28online for the purpose of complying with this chapter. Data entered into such systems by
2.29treasurers or their authorized agents is not government data under chapter 13 and may not
2.30be accessed or used by the board for any purpose without the treasurer's written consent.
2Article 1 Sec. 4.
S0132-1 1st EngrossmentSF132 REVISOR MS 3.1Data from such systems that has been submitted to the board as a filed report is government
3.2data under chapter 13.
3.3 (b) For purposes of administering the refund under section 290.06, subdivision 23, the
3.4board may access or use the following data entered and stored in an electronic reporting
3.5system and share the data with the commissioner of revenue: (1) the amount of the
3.6contribution; (2) the name and address of the contributor; (3) any unique identifier for the
3.7contribution; (4) the name and campaign identification number of the party or candidate
3.8that received the contribution; and (5) the date on which the contribution was received. Data
3.9accessed, used, or maintained by the board under this paragraph are classified as nonpublic
3.10data, as defined in section 13.02, subdivision 9, and private data on individuals, as defined
3.11in section 13.02, subdivision 12.
3.12 EFFECTIVE DATE.This section is effective January 1, 2027.
3.13 Sec. 5. Minnesota Statutes 2024, section 10A.322, subdivision 4, is amended to read:
3.14 Subd. 4.Refund receipt forms receipts; penalty.(a) The board must make available
3.15to a political party on request and to any candidate for whom an agreement under this section
3.16is effective, a supply of official refund receipt forms receipts in an electronic format that
3.17state in boldface type that:
3.18 (1) a contributor who is given a receipt form is eligible to claim a refund as provided in
3.19section 290.06, subdivision 23; and
3.20 (2) if the contribution is to a candidate, that the candidate has signed an agreement to
3.21limit campaign expenditures as provided in this section.
3.22 The forms must provide duplicate copies of the receipt to be attached to the contributor's
3.23claim. An official refund receipt must only be issued for a contribution of $10 or more.
3.24Each receipt must be in an electronic format and include a unique receipt validation number
3.25that allows the commissioner of revenue to verify the information on the receipt with the
3.26Campaign Finance Board. A political party or candidate may provide a printed copy of the
3.27electronic receipt to the contributor.
3.28 (b) Once each business day, the board must provide the commissioner of revenue a
3.29receipt validation report. For each contribution reported to the board since the previous
3.30report, the report must include:
3.31 (1) the date and amount of the contribution;
3.32 (2) the name and address of the contributor;
3Article 1 Sec. 5.
S0132-1 1st EngrossmentSF132 REVISOR MS 4.1 (3) the name and campaign identification number of the party or candidate that received
4.2the contribution; and
4.3 (4) the receipt validation number assigned to the contribution.
4.4 (b) (c) The willful issuance of an official refund receipt form or a facsimile of one to
4.5any of the candidate's contributors by a candidate or treasurer of a candidate who did not
4.6sign an agreement under this section is subject to a civil penalty of up to $3,000 imposed
4.7by the board.
4.8 (c) (d) The willful issuance of an official refund receipt form or a facsimile to an
4.9individual not eligible to claim a refund under section 290.06, subdivision 23, is subject to
4.10a civil penalty of up to $3,000 imposed by the board.
4.11 (d) (e) A violation of paragraph (b) (c) or (c) (d) is a misdemeanor.
4.12 (f) A receipt validation report and a receipt validation number prepared pursuant to this
4.13section are classified as nonpublic data, as defined in section 13.02, subdivision 9, and
4.14private data on individuals, as defined in section 13.02, subdivision 12.
4.15 EFFECTIVE DATE.This section is effective for contributions made after December
4.1631, 2026.
4.17 Sec. 6. Minnesota Statutes 2024, section 270C.445, subdivision 3, is amended to read:
4.18 Subd. 3.Standards of conduct.No tax preparer shall:
4.19 (1) without good cause fail to promptly, diligently, and without unreasonable delay
4.20complete a client's return;
4.21 (2) obtain the signature of a client to a return or authorizing document that contains
4.22blank spaces to be filled in after it has been signed;
4.23 (3) fail to sign a client's return when compensation for services rendered has been made;
4.24 (4) fail to provide on a client's return the preparer tax identification number when required
4.25under section 6109(a)(4) of the Internal Revenue Code or section 289A.60, subdivision 28;
4.26 (5) fail or refuse to give a client a copy of any document requiring the client's signature
4.27within a reasonable time after the client signs the document;
4.28 (6) fail to retain for at least four years a copy of a client's returns;
4.29 (7) fail to maintain a confidential relationship with clients or former clients;
4Article 1 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 5.1 (8) fail to take commercially reasonable measures to safeguard a client's nonpublic
5.2personal information;
5.3 (9) make, authorize, publish, disseminate, circulate, or cause to make, either directly or
5.4indirectly, any false, deceptive, or misleading statement or representation relating to or in
5.5connection with the offering or provision of tax preparation services;
5.6 (10) require a client to enter into a loan arrangement in order to complete a client's return;
5.7 (11) claim credits or deductions on a client's return for which the tax preparer knows or
5.8reasonably should know the client does not qualify;
5.9 (12) report a household income on a client's claim filed under chapter 290A that the tax
5.10preparer knows or reasonably should know is not accurate;
5.11 (13) engage in any conduct that is subject to a penalty under section 289A.60, subdivision
5.1213, 20, 20a, 26, or 28;
5.13 (14) whether or not acting as a taxpayer representative, fail to conform to the standards
5.14of conduct required by Minnesota Rules, part 8052.0300, subpart 4;
5.15 (15) whether or not acting as a taxpayer representative, engage in any conduct that is
5.16incompetent conduct under Minnesota Rules, part 8052.0300, subpart 5;
5.17 (16) whether or not acting as a taxpayer representative, engage in any conduct that is
5.18disreputable conduct under Minnesota Rules, part 8052.0300, subpart 6;
5.19 (17) charge, offer to accept, or accept a fee based upon a percentage of an anticipated
5.20refund for tax preparation services;
5.21 (18) under any circumstances, withhold or fail to return to a client a document provided
5.22by the client for use in preparing the client's return;
5.23 (19) take control or ownership of a client's refund by any means, including:
5.24 (i) directly or indirectly endorsing or otherwise negotiating a check or other refund
5.25instrument, including an electronic version of a check;
5.26 (ii) directing an electronic or direct deposit of the refund into an account unless the
5.27client's name is on the account; and
5.28 (iii) establishing or using an account in the preparer's name to receive a client's refund
5.29through a direct deposit or any other instrument unless the client's name is also on the
5.30account, except that a taxpayer may assign the portion of a refund representing the Minnesota
5Article 1 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 6.1education credit available under section 290.0674 to a bank account without the client's
6.2name, as provided under section 290.0679;
6.3 (20) fail to act in the best interests of the client;
6.4 (21) fail to safeguard and account for any money handled for the client;
6.5 (22) fail to disclose all material facts of which the preparer has knowledge which might
6.6reasonably affect the client's rights and interests;
6.7 (23) violate any provision of section 332.37;
6.8 (24) include any of the following in any document provided or signed in connection
6.9with the provision of tax preparation services:
6.10 (i) a hold harmless clause;
6.11 (ii) a confession of judgment or a power of attorney to confess judgment against the
6.12client or appear as the client in any judicial proceeding;
6.13 (iii) a waiver of the right to a jury trial, if applicable, in any action brought by or against
6.14a debtor;
6.15 (iv) an assignment of or an order for payment of wages or other compensation for
6.16services;
6.17 (v) a provision in which the client agrees not to assert any claim or defense otherwise
6.18available;
6.19 (vi) a waiver of any provision of this section or a release of any obligation required to
6.20be performed on the part of the tax preparer; or
6.21 (vii) a waiver of the right to injunctive, declaratory, or other equitable relief or relief on
6.22a class basis; or
6.23 (25) if making, providing, or facilitating a refund anticipation loan, fail to provide all
6.24disclosures required by the federal Truth in Lending Act, United States Code, title 15, in a
6.25form that may be retained by the client.
6.26 EFFECTIVE DATE.This section is effective for taxable years beginning after December
6.2731, 2025.
6Article 1 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 7.1 Sec. 7. Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision
7.2to read:
7.3 Subd. 36.Discharges of indebtedness; coerced debt.The amount of discharge of
7.4indebtedness awarded to a claimant under section 332.74, subdivision 3, is a subtraction.
7.5 EFFECTIVE DATE.This section is effective for taxable years beginning after December
7.631, 2024.
7.7 Sec. 8. Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision
7.8to read:
7.9 Subd. 37.Foreign service pension; retirement pay.(a) Compensation received from
7.10a pension or other retirement pay from the federal government for service in the foreign
7.11service and established under United States Code, title 22, sections 4041 to 4069 and 4071,
7.12is a subtraction.
7.13 (b) The subtraction equals the product of:
7.14 (1) the amount of compensation received under paragraph (a); and
7.15 (2) the number of years of foreign service divided by the total number of years of civil
7.16service for which the taxpayer receives pension income.
7.17 (c) Any amount used to claim the subtraction in this subdivision must not be used to
7.18claim the subtraction in subdivision 34.
7.19 EFFECTIVE DATE.This section is effective for taxable years beginning after December
7.2031, 2024.
7.21 Sec. 9. Minnesota Statutes 2024, section 290.06, subdivision 23, is amended to read:
7.22 Subd. 23.Refund of contributions to political parties and candidates.(a) A taxpayer
7.23may claim a refund equal to the amount of the taxpayer's contributions made in the calendar
7.24year to candidates and to a political party. The maximum total refund per calendar year for
7.25an individual must not exceed $75 and for a married couple, filing jointly, must not exceed
7.26$150. The commissioner must not issue a refund, whether in one payment or in aggregate,
7.27to a taxpayer that exceeds the maximum refund amounts specified in this subdivision. A
7.28refund of a contribution is allowed only if the taxpayer files:
7.29 (1) a form required by the commissioner and attaches to the form a copy of an official
7.30refund receipt form issued by the candidate or party and signed by the candidate, the treasurer
7.31of the candidate's principal campaign committee, or the chair or treasurer of the party unit,
7Article 1 Sec. 9.
S0132-1 1st EngrossmentSF132 REVISOR MS 8.1after the contribution was received. The receipt forms must be numbered, and the data on
8.2the receipt that are not public must be made available to the campaign finance and public
8.3disclosure board upon its request.; or
8.4 (2) a claim using the electronic filing system authorized in paragraph (i).
8.5The form or claim must include one or more unique receipt validation numbers from receipts
8.6issued pursuant to section 10A.322, subdivision 4.
8.7 (b) A claim must be filed with the commissioner no sooner than January 1 of the calendar
8.8year in which the contribution was made and no later than April 15 of the calendar year
8.9following the calendar year in which the contribution was made. A taxpayer may file only
8.10one claim per calendar year. A claim must be for a minimum of $10. Amounts paid by the
8.11commissioner after June 15 of the calendar year following the calendar year in which the
8.12contribution was made must include interest at the rate specified in section 270C.405.
8.13 (b) (c) No refund is allowed under this subdivision for a contribution to a candidate
8.14unless the candidate:
8.15 (1) has signed an agreement to limit campaign expenditures as provided in section
8.1610A.322;
8.17 (2) is seeking an office for which voluntary spending limits are specified in section
8.1810A.25; and
8.19 (3) has designated a principal campaign committee.
8.20 This subdivision does not limit the campaign expenditures of a candidate who does not
8.21sign an agreement but accepts a contribution for which the contributor improperly claims
8.22a refund.
8.23 (c) (d) For purposes of this subdivision, "political party" means a major political party
8.24as defined in section 200.02, subdivision 7, or a minor political party qualifying for inclusion
8.25on the income tax or property tax refund form under section 10A.31, subdivision 3a.
8.26 A "major party" or "minor party" includes the aggregate of that party's organization
8.27within each house of the legislature, the state party organization, and the party organization
8.28within congressional districts, counties, legislative districts, municipalities, and precincts.
8.29 "Candidate" means a candidate as defined in section 10A.01, subdivision 10, except a
8.30candidate for judicial office.
8.31 "Contribution" means a gift of money.
8Article 1 Sec. 9.
S0132-1 1st EngrossmentSF132 REVISOR MS 9.1 (d) (e) The commissioner shall make copies of the form available to the public and
9.2candidates upon request.
9.3 (e) (f) The following data collected or maintained by the commissioner under this
9.4subdivision are private: the identities of individuals claiming a refund, the identities of
9.5candidates to whom those individuals have made contributions, and the amount of each
9.6contribution.
9.7 (f) (g) The commissioner shall report to the campaign finance and public disclosure
9.8board by each August 1 a summary showing the total number and aggregate amount of
9.9political contribution refunds made on behalf of each candidate and each political party.
9.10These data are public.
9.11 (g) (h) The amount necessary to pay claims for the refund provided in this section is
9.12appropriated from the general fund to the commissioner of revenue.
9.13 (h) For a taxpayer who files a claim for refund via the Internet or other electronic means,
9.14the commissioner may accept the number on the official receipt as documentation that a
9.15contribution was made rather than the actual receipt as required by paragraph (a).
9.16 (i) The commissioner must establish an electronic filing system by which refunds are
9.17claimed.
9.18 EFFECTIVE DATE.This section is effective for contributions made after December
9.1931, 2026.
9.20 Sec. 10. Minnesota Statutes 2024, section 290.0693, subdivision 1, is amended to read:
9.21 Subdivision 1.Definitions.(a) For the purposes of this section, the following terms have
9.22the meanings given.
9.23 (b) "Combined exemption amount" means the sum of:
9.24 (1) for the taxpayer's first dependent, the exemption amount multiplied by 1.4;
9.25 (2) for the taxpayer's second dependent, the exemption amount multiplied by 1.3;
9.26 (3) for the taxpayer's third dependent, the exemption amount multiplied by 1.2;
9.27 (4) for the taxpayer's fourth dependent, the exemption amount multiplied by 1.1;
9.28 (5) for the taxpayer's fifth dependent, the exemption amount; and
9.29 (6) if the taxpayer or taxpayer's spouse had a disability or attained the age of 65 on or
9.30before the close of the taxable year, the exemption amount.
9Article 1 Sec. 10.
S0132-1 1st EngrossmentSF132 REVISOR MS 10.1 (b) (c) "Dependent" means any individual who is considered a dependent under sections
10.2151 and 152 of the Internal Revenue Code.
10.3 (c) (d) "Disability" has the meaning given in section 290A.03, subdivision 10.
10.4 (d) (e) "Exemption amount" means the exemption amount under section 290.0121,
10.5subdivision 1, paragraph (b).
10.6 (e) (f) "Gross rent" means rent paid for the right of occupancy, at arm's length, of a
10.7homestead, exclusive of charges for any medical services furnished by the landlord as a
10.8part of the rental agreement, whether expressly set out in the rental agreement or not. The
10.9gross rent of a resident of a nursing home or intermediate care facility is $600 per month.
10.10The gross rent of a resident of an adult foster care home is $930 per month. The commissioner
10.11shall annually adjust the amounts in this paragraph as provided in section 270C.22. The
10.12statutory year is 2023. If the landlord and tenant have not dealt with each other at arm's
10.13length and the commissioner determines that the gross rent charged was excessive, the
10.14commissioner may adjust the gross rent to a reasonable amount for purposes of this section.
10.15 (f) (g) "Homestead" has the meaning given in section 290A.03, subdivision 6.
10.16 (g) (h) "Household" has the meaning given in section 290A.03, subdivision 4.
10.17 (h) (i) "Household income" means all income received by all persons of a household in
10.18a taxable year while members of the household, other than income of a dependent.
10.19 (i) (j) "Income" means adjusted gross income, minus:
10.20 (1) for the taxpayer's first dependent, the exemption amount multiplied by 1.4 the
10.21taxpayer's combined exemption amount; and
10.22 (2) for the taxpayer's second dependent, the exemption amount multiplied by 1.3; the
10.23amount of discharge of indebtedness subtracted under section 290.0132, subdivision 36.
10.24 (3) for the taxpayer's third dependent, the exemption amount multiplied by 1.2;
10.25 (4) for the taxpayer's fourth dependent, the exemption amount multiplied by 1.1;
10.26 (5) for the taxpayer's fifth dependent, the exemption amount; and
10.27 (6) if the taxpayer or taxpayer's spouse had a disability or attained the age of 65 on or
10.28before the close of the taxable year, the exemption amount.
10.29 (j) (k) "Rent constituting property taxes" means 17 percent of the gross rent actually
10.30paid in cash, or its equivalent, or the portion of rent paid in lieu of property taxes, in any
10.31taxable year by a claimant for the right of occupancy of the claimant's Minnesota homestead
10Article 1 Sec. 10.
S0132-1 1st EngrossmentSF132 REVISOR MS 11.1in the taxable year, and which rent constitutes the basis, in the succeeding taxable year of
11.2a claim for a credit under this section by the claimant. If an individual occupies a homestead
11.3with another person or persons not related to the individual as the individual's spouse or as
11.4dependents, and the other person or persons are residing at the homestead under a rental or
11.5lease agreement with the individual, the amount of rent constituting property tax for the
11.6individual equals that portion not covered by the rental agreement.
11.7 EFFECTIVE DATE.This section is effective for taxable years beginning after December
11.831, 2024.
11.9 Sec. 11. Minnesota Statutes 2024, section 290.0695, subdivision 1, is amended to read:
11.10 Subdivision 1.Definitions.(a) For purpose purposes of this section, the following terms
11.11have the meanings given them.
11.12 (b) "Credit certificate" means the certificate issued by the commissioner of transportation
11.13under subdivision 3, paragraph (a).
11.14 (b) (c) "Eligible taxpayer" means any railroad that is classified by the United States
11.15Surface Transportation Board as a Class II or Class III railroad.
11.16 (c) (d) "Eligible transferee" means any taxpayer subject to tax under this chapter or
11.17chapter 297I.
11.18 (e) "Eligible transferor" means an eligible taxpayer or a taxpayer to which the credit
11.19may be passed through under subdivision 4.
11.20 (d) (f) "Qualified railroad reconstruction or replacement expenditures" means gross
11.21expenditures in the taxable year for maintenance, reconstruction, or replacement of railroad
11.22infrastructure, including track, roadbed, bridges, industrial leads and sidings, and track-related
11.23structures owned or leased by a Class II or Class III railroad in Minnesota as of January 1,
11.242021. Qualified railroad reconstruction or replacement expenditures also includes new
11.25construction of industrial leads, switches, spurs and sidings and extensions of existing sidings
11.26in Minnesota by a Class II or Class III railroad.
11.27 (g) "Transfer credit certificate" means the certificate issued to a transferee by the
11.28commissioner under subdivision 3, paragraph (d).
11.29 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
11.30after December 31, 2023.
11Article 1 Sec. 11.
S0132-1 1st EngrossmentSF132 REVISOR MS 12.1 Sec. 12. Minnesota Statutes 2024, section 290.0695, subdivision 3, is amended to read:
12.2 Subd. 3.Transferability Credit certificates; written agreement required; credit
12.3certificate transferability.(a) To qualify for a credit under this section, an eligible taxpayer
12.4must apply to the commissioner of transportation for a credit certificate. The application
12.5for the credit certificate must be in the form and manner prescribed by the commissioner
12.6of transportation, in consultation with the commissioner. If the application is approved, the
12.7commissioner of transportation must issue the credit certificate to the eligible transferor
12.8designated in the application within 30 days of receipt of the application. The credit certificate
12.9must state, at a minimum, the number of miles of qualified railroad reconstruction or
12.10replacement expenditures in the taxable year and the total amount of credit calculated under
12.11the provisions of subdivision 2, paragraph (a). The commissioner of transportation must
12.12provide a copy of the credit certificate to the commissioner of revenue. The commissioner
12.13of transportation must not issue more than one credit certificate to an eligible transferor in
12.14a taxable year.
12.15 (b) By written agreement, an eligible taxpayer transferor may transfer the credit allowed
12.16under this section by written agreement to an eligible transferee. The amount of the
12.17transferred credit is limited to the unused, remaining portion of the credit as follows:
12.18 (1) any amount of the credit allowed that is stated in the credit certificate before any of
12.19the credit is claimed; or
12.20 (2) the entire amount of the credit carryover in each of the five succeeding taxable years.
12.21 (b) (c) The eligible taxpayer transferor and the eligible transferee must jointly file a copy
12.22of the written transfer agreement with the commissioner within 30 days of the transfer. The
12.23written agreement must contain the name, address, and taxpayer identification number of
12.24the parties to the transfer; the taxable year the eligible taxpayer incurred the qualified
12.25expenditures; the amount of credit being transferred; and the taxable year or years for which
12.26the transferred credit may be claimed.
12.27 (c) (d) The commissioner must issue a transfer credit certificate to the transferee within
12.2830 days of the joint filing of a copy of the written transfer agreement with the commissioner.
12.29 (d) In the case of an audit or assessment, the transferee is liable for repayment of credits
12.30claimed in excess of the allowed amount.
12.31 (e) An eligible transferor must not transfer a credit to an eligible transferee more than
12.32once in a taxable year.
12Article 1 Sec. 12.
S0132-1 1st EngrossmentSF132 REVISOR MS 13.1 EFFECTIVE DATE.This section is effective retroactively for taxable years beginning
13.2after December 31, 2023.
13.3 Sec. 13. Minnesota Statutes 2024, section 290.091, subdivision 2, is amended to read:
13.4 Subd. 2.Definitions.For purposes of the tax imposed by this section, the following
13.5terms have the meanings given.
13.6 (a) "Alternative minimum taxable income" means the sum of the following for the taxable
13.7year:
13.8 (1) the taxpayer's federal alternative minimum taxable income as defined in section
13.955(b)(1)(D) of the Internal Revenue Code;
13.10 (2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
13.11taxable income, but excluding:
13.12 (i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
13.13 (ii) the medical expense deduction;
13.14 (iii) the casualty, theft, and disaster loss deduction; and
13.15 (iv) the impairment-related work expenses of a person with a disability;
13.16 (3) for depletion allowances computed under section 613A(c) of the Internal Revenue
13.17Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
13.18to the extent not included in federal alternative minimum taxable income, the excess of the
13.19deduction for depletion allowable under section 611 of the Internal Revenue Code for the
13.20taxable year over the adjusted basis of the property at the end of the taxable year (determined
13.21without regard to the depletion deduction for the taxable year);
13.22 (4) to the extent not included in federal alternative minimum taxable income, the amount
13.23of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
13.24Code determined without regard to subparagraph (E);
13.25 (5) to the extent not included in federal alternative minimum taxable income, the amount
13.26of interest income as provided by section 290.0131, subdivision 2;
13.27 (6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;
13.28 (7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
13.29not included in the addition required under clause (6); and
13Article 1 Sec. 13.
S0132-1 1st EngrossmentSF132 REVISOR MS 14.1 (8) to the extent not included in federal alternative minimum taxable income, the amount
14.2of foreign-derived intangible income deducted under section 250 of the Internal Revenue
14.3Code;
14.4 less the sum of the amounts determined under the following:
14.5 (i) interest income as defined in section 290.0132, subdivision 2;
14.6 (ii) an overpayment of state income tax as provided by section 290.0132, subdivision
14.73, to the extent included in federal alternative minimum taxable income;
14.8 (iii) the amount of investment interest paid or accrued within the taxable year on
14.9indebtedness to the extent that the amount does not exceed net investment income, as defined
14.10in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
14.11in computing federal adjusted gross income;
14.12 (iv) amounts subtracted from federal taxable or adjusted gross income as provided by
14.1314.14section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, 26 to 29, 31, 34, and to 35 and 37;
14.15 (v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
14.16paragraph (c); and
14.17 (vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
14.18subdivision 7.
14.19 In the case of an estate or trust, alternative minimum taxable income must be computed
14.20as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
14.21taxable income must be increased by the addition in section 290.0131, subdivision 16.
14.22 (b) "Investment interest" means investment interest as defined in section 163(d)(3) of
14.23the Internal Revenue Code.
14.24 (c) "Net minimum tax" means the minimum tax imposed by this section.
14.25 (d) "Regular tax" means the tax that would be imposed under this chapter (without regard
14.26to this section, section 290.033, and section 290.032), reduced by the sum of the
14.27nonrefundable credits allowed under this chapter.
14.28 (e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
14.29after subtracting the exemption amount determined under subdivision 3.
14.30 EFFECTIVE DATE.This section is effective for taxable years beginning after December
14.3131, 2024.
14Article 1 Sec. 13.
S0132-1 1st EngrossmentSF132 REVISOR MS 15.1 Sec. 14. REPEALER.
15.2 Minnesota Statutes 2024, sections 13.4967, subdivision 2a; and 290.0679, are repealed.
15.3 EFFECTIVE DATE.This section is effective for taxable years beginning after December
15.431, 2025.
15.5 ARTICLE 2
15.6 PROPERTY TAXES
15.7 Section 1. Minnesota Statutes 2024, section 272.01, subdivision 2, is amended to read:
15.8 Subd. 2.Exempt property used by private entity for profit.(a) When any real or
15.9personal property which is exempt from ad valorem taxes, and taxes in lieu thereof, is leased,
15.10loaned, or otherwise made available and used by a private individual, association, or
15.11corporation in connection with a business conducted for profit, there shall be imposed a
15.12tax, for the privilege of so using or possessing such real or personal property, in the same
15.13amount and to the same extent as though the lessee or user was the owner of such property.
15.14 (b) The tax imposed by this subdivision shall not apply to:
15.15 (1) property leased or used as a concession in or relative to the use in whole or part of
15.16a public park, market, fairgrounds, port authority, economic development authority
15.17established under chapter 469, municipal auditorium, municipal parking facility, municipal
15.18museum, or municipal stadium;
15.19 (2) property of an airport owned by a city, town, county, or group thereof which is:
15.20 (i) leased to or used by any person or entity including a fixed base operator; and
15.21 (ii) used as a hangar for the storage or repair of aircraft or to provide aviation goods,
15.22services, or facilities to the airport or general public;
15.23the exception from taxation provided in this clause does not apply to:
15.24 (i) property located at an airport owned or operated by the Metropolitan Airports
15.25Commission or by a city of over 50,000 population according to the most recent federal
15.26census or such a city's airport authority; or
15.27 (ii) hangars leased by a private individual, association, or corporation in connection with
15.28a business conducted for profit other than an aviation-related business;
15.29 (3) property constituting or used as a public pedestrian ramp or concourse in connection
15.30with a public airport;
15Article 2 Section 1.
S0132-1 1st EngrossmentSF132 REVISOR MS 16.1 (4) property constituting or used as a passenger check-in area or ticket sale counter,
16.2boarding area, or luggage claim area in connection with a public airport but not the airports
16.3owned or operated by the Metropolitan Airports Commission or cities of over 50,000
16.4population or an airport authority therein. Real estate owned by a municipality in connection
16.5with the operation of a public airport and leased or used for agricultural purposes is not
16.6exempt;
16.7 (5) property leased, loaned, or otherwise made available to a private individual,
16.8corporation, or association under a cooperative farming agreement made pursuant to section
16.997A.135; or
16.10 (6) property leased, loaned, or otherwise made available to a private individual,
16.11corporation, or association under section 272.68, subdivision 4.; or
16.12 (7) property owned by a nonprofit conservation organization that is leased, loaned, or
16.13otherwise made available to a private individual, corporation, or association for grazing
16.14activities that further the nonprofit conservation organization's conservation objectives for
16.15the property.
16.16 (c) Taxes imposed by this subdivision are payable as in the case of personal property
16.17taxes and shall be assessed to the lessees or users of real or personal property in the same
16.18manner as taxes assessed to owners of real or personal property, except that such taxes shall
16.19not become a lien against the property. When due, the taxes shall constitute a debt due from
16.20the lessee or user to the state, township, city, county, and school district for which the taxes
16.21were assessed and shall be collected in the same manner as personal property taxes. If
16.22property subject to the tax imposed by this subdivision is leased or used jointly by two or
16.23more persons, each lessee or user shall be jointly and severally liable for payment of the
16.24tax.
16.25 (d) The tax on real property of the federal government, the state or any of its political
16.26subdivisions that is leased, loaned, or otherwise made available to a private individual,
16.27association, or corporation and becomes taxable under this subdivision or other provision
16.28of law must be assessed and collected as a personal property assessment. The taxes do not
16.29become a lien against the real property.
16.30 EFFECTIVE DATE.This section is effective beginning with property taxes payable
16.31in 2026.
16Article 2 Section 1.
S0132-1 1st EngrossmentSF132 REVISOR MS 17.1 Sec. 2. Minnesota Statutes 2024, section 272.02, subdivision 19, is amended to read:
17.2 Subd. 19.Property used to distribute electricity to farmers.Electric power distribution
17.3lines and their attachments and appurtenances systems, not including substations, or
17.4transmission or generation equipment, that are used primarily for supplying electricity to
17.5farmers at retail, are exempt.
17.6 EFFECTIVE DATE.This section is effective beginning with assessment year 2025
17.7and thereafter.
17.8 Sec. 3. Minnesota Statutes 2024, section 272.02, is amended by adding a subdivision to
17.9read:
17.10 Subd. 106.Certain property owned by an Indian Tribe.(a) Property is exempt that:
17.11 (1) was classified as class 3a under section 273.13, subdivision 24, for taxes payable in
17.122025;
17.13 (2) is located in a city of the first class with a population greater than 400,000 as of the
17.142020 federal census;
17.15 (3) was on January 1, 2024, and is for the current assessment, owned by a federally
17.16recognized Indian Tribe, or its instrumentality, that is located within the state of Minnesota;
17.17and
17.18 (4) is used exclusively for Tribal purposes or institutions of purely public charity as
17.19defined in subdivision 7.
17.20 (b) Property that qualifies for the exemption under this subdivision is limited to one
17.21parcel that does not exceed 40,000 square feet. Property used for single-family housing,
17.22market-rate apartments, agriculture, or forestry does not qualify for this exemption.
17.23 EFFECTIVE DATE.This section is effective beginning with assessment year 2026.
17.24Sec. 4. Minnesota Statutes 2024, section 272.02, is amended by adding a subdivision to
17.25read:
17.26 Subd. 107.Certain property owned by an Indian Tribe.Property is exempt that:
17.27 (1) was classified as class 2b under section 273.13, subdivision 23, for taxes payable in
17.282025;
17.29 (2) is located within a county with a population greater than 5,580 but less than 5,620
17.30according to the 2020 federal census;
17Article 2 Sec. 4.
S0132-1 1st EngrossmentSF132 REVISOR MS 18.1 (3) is located in an unorganized territory with a population less than 800 according to
18.2the 2020 federal census; and
18.3 (4) was on January 2, 2023, and is for the current assessment, owned by a federally
18.4recognized Indian Tribe, or its instrumentality, that is located within the state of Minnesota.
18.5 EFFECTIVE DATE.This section is effective beginning with assessment year 2026.
18.6 Sec. 5. Minnesota Statutes 2024, section 273.124, subdivision 8, is amended to read:
18.7 Subd. 8.Homestead owned by or leased to family farm corporation, joint farm
18.8venture, limited liability company, or partnership.(a) Each family farm corporation;
18.9each joint family farm venture; and each limited liability company or partnership which
18.10operates a family farm; is entitled to class 1b under section 273.13, subdivision 22, paragraph
18.11(b), or class 2a assessment for one homestead occupied by a shareholder, member, or partner
18.12thereof who is residing on the land, and actively engaged in farming of the land owned by
18.13the family farm corporation, joint family farm venture, limited liability company, or
18.14partnership. Homestead treatment applies even if:
18.15 (1) legal title to the property is in the name of the family farm corporation, joint family
18.16farm venture, limited liability company, or partnership, and not in the name of the person
18.17residing on it; or
18.18 (2) the family farm is operated by a family farm corporation, joint family farm venture,
18.19partnership, or limited liability company other than the family farm corporation, joint family
18.20farm venture, partnership, or limited liability company that owns the land, provided that:
18.21 (i) the shareholder, member, or partner residing on and actively engaged in farming the
18.22land is a shareholder, member, or partner of the family farm corporation, joint family farm
18.23venture, partnership, or limited liability company that is operating the farm; and
18.24 (ii) more than half of the shareholders, members, or partners of each family farm
18.25corporation, joint family farm venture, partnership, or limited liability company are persons
18.26or spouses of persons who are a qualifying relative under section 273.124, subdivision 1,
18.27paragraphs (c) and (d).
18.28 "Family farm corporation," "family farm," and "partnership operating a family farm"
18.29have the meanings given in section 500.24, except that the number of allowable shareholders,
18.30members, or partners under this subdivision shall not exceed 12 18. "Limited liability
18.31company" has the meaning contained in sections 322C.0102, subdivision 12, and 500.24,
18.32subdivision 2, paragraphs (l) and (m). "Joint family farm venture" means a cooperative
18Article 2 Sec. 5.
S0132-1 1st EngrossmentSF132 REVISOR MS 19.1agreement among two or more farm enterprises authorized to operate a family farm under
19.2section 500.24.
19.3 (b) In addition to property specified in paragraph (a), any other residences owned by
19.4family farm corporations, joint family farm ventures, limited liability companies, or
19.5partnerships described in paragraph (a) which are located on agricultural land and occupied
19.6as homesteads by its shareholders, members, or partners who are actively engaged in farming
19.7on behalf of that corporation, joint farm venture, limited liability company, or partnership
19.8must also be assessed as class 2a property or as class 1b property under section 273.13.
19.9 (c) Agricultural property that is owned by a member, partner, or shareholder of a family
19.10farm corporation or joint family farm venture, limited liability company operating a family
19.11farm, or by a partnership operating a family farm and leased to the family farm corporation,
19.12limited liability company, partnership, or joint farm venture, as defined in paragraph (a), is
19.13eligible for classification as class 1b or class 2a under section 273.13, if the owner is actually
19.14residing on the property, and is actually engaged in farming the land on behalf of that
19.15corporation, joint farm venture, limited liability company, or partnership. This paragraph
19.16applies without regard to any legal possession rights of the family farm corporation, joint
19.17family farm venture, limited liability company, or partnership under the lease.
19.18 (d) Nonhomestead agricultural property that is owned by a family farm corporation,
19.19joint farm venture, limited liability company, or partnership; and located not farther than
19.20four townships or cities, or combination thereof, from agricultural land that is owned, and
19.21used for the purposes of a homestead by an individual who is a shareholder, member, or
19.22partner of the corporation, venture, company, or partnership; is entitled to receive the first
19.23tier homestead classification rate on any remaining market value in the first homestead class
19.24tier that is in excess of the market value of the shareholder's, member's, or partner's class 2
19.25agricultural homestead property, if the owner, or someone acting on the owner's behalf
19.26notifies the county assessor by July 1 that the property may be eligible under this paragraph
19.27for the current assessment year, for taxes payable in the following year. As used in this
19.28paragraph, "agricultural property" means property classified as 2a under section 273.13,
19.29along with any contiguous property classified as 2b under section 273.13, if the contiguous
19.302a and 2b properties are under the same ownership.
19.31 EFFECTIVE DATE.This section is effective for homestead applications in 2025 and
19.32thereafter.
19Article 2 Sec. 5.
S0132-1 1st EngrossmentSF132 REVISOR MS 20.1 Sec. 6. Minnesota Statutes 2024, section 273.124, subdivision 14, is amended to read:
20.2 Subd. 14.Agricultural homesteads; special provisions.(a) Real estate of less than ten
20.3acres that is the homestead of its owner must be classified as class 2a under section 273.13,
20.4subdivision 23, paragraph (a), if:
20.5 (1) the parcel on which the house is located is contiguous on at least two sides to (i)
20.6agricultural land, (ii) land owned or administered by the United States Fish and Wildlife
20.7Service, or (iii) land administered by the Department of Natural Resources on which in lieu
20.8taxes are paid under sections 477A.11 to 477A.14 or section 477A.17;
20.9 (2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20
20.10acres;
20.11 (3) the noncontiguous land is located not farther than four townships or cities, or a
20.12combination of townships or cities from the homestead; and
20.13 (4) the agricultural use value of the noncontiguous land and farm buildings is equal to
20.14at least 50 percent of the market value of the house, garage, and one acre of land.
20.15 Homesteads initially classified as class 2a under the provisions of this paragraph shall
20.16remain classified as class 2a, irrespective of subsequent changes in the use of adjoining
20.17properties, as long as the homestead remains under the same ownership, the owner owns a
20.18noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use
20.19value qualifies under clause (4). Homestead classification under this paragraph is limited
20.20to property that qualified under this paragraph for the 1998 assessment.
20.21 (b)(i) Agricultural property shall be classified as the owner's homestead, to the same
20.22extent as other agricultural homestead property, if all of the following criteria are met:
20.23 (1) the agricultural property consists of at least 40 acres including undivided government
20.24lots and correctional 40's;
20.25 (2) the owner, the owner's spouse, or a grandparent, grandchild, child, stepchild, sibling,
20.26or uncle, aunt, nephew, niece, parent, or stepparent of the owner or of the owner's spouse,
20.27is actively farming the agricultural property, either on the person's own behalf as an individual
20.28or on behalf of a partnership operating a family farm, family farm corporation, joint family
20.29farm venture, or limited liability company of which the person is a partner, shareholder, or
20.30member;
20.31 (3) both the owner of the agricultural property and the person who is actively farming
20.32the agricultural property under clause (2), are Minnesota residents;
20Article 2 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 21.1 (4) neither the owner nor the spouse of the owner claims another agricultural homestead
21.2in Minnesota; and
21.3 (5) neither the owner nor the person actively farming the agricultural property lives
21.4farther than four townships or cities, or a combination of four townships or cities, from the
21.5agricultural property, except that if the owner or the owner's spouse is required to live in
21.6employer-provided housing, the owner or owner's spouse, whichever is actively farming
21.7the agricultural property, may live more than four townships or cities, or combination of
21.8four townships or cities from the agricultural property.
21.9 The relationship under this paragraph may be either by blood or marriage.
21.10 (ii) Property containing the residence of an owner who owns qualified property under
21.11clause (i) shall be classified as part of the owner's agricultural homestead, if that property
21.12is also used for noncommercial storage or drying of agricultural crops.
21.13 (iii) As used in this paragraph, "agricultural property" means class 2a property and any
21.14class 2b property that is contiguous to and under the same ownership as the class 2a property.
21.15 (c) Noncontiguous land shall be included as part of a homestead under section 273.13,
21.16subdivision 23, paragraph (a), only if the homestead is classified as class 2a and the detached
21.17land is located in the same township or city, or not farther than four townships or cities or
21.18combination thereof from the homestead. Any taxpayer of these noncontiguous lands must
21.19notify the county assessor that the noncontiguous land is part of the taxpayer's homestead,
21.20and, if the homestead is located in another county, the taxpayer must also notify the assessor
21.21of the other county.
21.22 (d) Agricultural land used for purposes of a homestead and actively farmed by a person
21.23holding a vested remainder interest in it must be classified as a homestead under section
21.24273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, any other
21.25dwellings on the land used for purposes of a homestead by persons holding vested remainder
21.26interests who are actively engaged in farming the property, and up to one acre of the land
21.27surrounding each homestead and reasonably necessary for the use of the dwelling as a home,
21.28must also be assessed class 2a.
21.29 (e) Agricultural land and buildings that were class 2a homestead property under section
21.30273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain classified as
21.31agricultural homesteads for subsequent assessments if:
21.32 (1) the property owner abandoned the homestead dwelling located on the agricultural
21.33homestead as a result of the April 1997 floods;
21Article 2 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 22.1 (2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or
22.2Wilkin;
22.3 (3) the agricultural land and buildings remain under the same ownership for the current
22.4assessment year as existed for the 1997 assessment year and continue to be used for
22.5agricultural purposes;
22.6 (4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles
22.7of one of the parcels of agricultural land that is owned by the taxpayer; and
22.8 (5) the owner notifies the county assessor that the relocation was due to the 1997 floods,
22.9and the owner furnishes the assessor any information deemed necessary by the assessor in
22.10verifying the change in dwelling. Further notifications to the assessor are not required if the
22.11property continues to meet all the requirements in this paragraph and any dwellings on the
22.12agricultural land remain uninhabited.
22.13 (f) Agricultural land and buildings that were class 2a homestead property under section
22.14273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain classified
22.15agricultural homesteads for subsequent assessments if:
22.16 (1) the property owner abandoned the homestead dwelling located on the agricultural
22.17homestead as a result of damage caused by a March 29, 1998, tornado;
22.18 (2) the property is located in the county of Blue Earth, Brown, Cottonwood, Le Sueur,
22.19Nicollet, Nobles, or Rice;
22.20 (3) the agricultural land and buildings remain under the same ownership for the current
22.21assessment year as existed for the 1998 assessment year;
22.22 (4) the dwelling occupied by the owner is located in this state and is within 50 miles of
22.23one of the parcels of agricultural land that is owned by the taxpayer; and
22.24 (5) the owner notifies the county assessor that the relocation was due to a March 29,
22.251998, tornado, and the owner furnishes the assessor any information deemed necessary by
22.26the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the
22.27owner must notify the assessor by December 1, 1998. Further notifications to the assessor
22.28are not required if the property continues to meet all the requirements in this paragraph and
22.29any dwellings on the agricultural land remain uninhabited.
22.30 (g) Agricultural property of a family farm corporation, joint family farm venture, family
22.31farm limited liability company, or partnership operating a family farm as described under
22.32subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead
22.33property, if all of the following criteria are met:
22Article 2 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 23.1 (1) the property consists of at least 40 acres including undivided government lots and
23.2correctional 40's;
23.3 (2) a shareholder, member, or partner of that entity is actively farming the agricultural
23.4property;
23.5 (3) that shareholder, member, or partner who is actively farming the agricultural property
23.6is a Minnesota resident;
23.7 (4) neither that shareholder, member, or partner, nor the spouse of that shareholder,
23.8member, or partner claims another agricultural homestead in Minnesota; and
23.9 (5) that shareholder, member, or partner does not live farther than four townships or
23.10cities, or a combination of four townships or cities, from the agricultural property.
23.11 Homestead treatment applies under this paragraph even if:
23.12 (i) the shareholder, member, or partner of that entity is actively farming the agricultural
23.13property on the shareholder's, member's, or partner's own behalf; or
23.14 (ii) the family farm is operated by a family farm corporation, joint family farm venture,
23.15partnership, or limited liability company other than the family farm corporation, joint family
23.16farm venture, partnership, or limited liability company that owns the land, provided that:
23.17 (A) the shareholder, member, or partner of the family farm corporation, joint family
23.18farm venture, partnership, or limited liability company that owns the land who is actively
23.19farming the land is a shareholder, member, or partner of the family farm corporation, joint
23.20family farm venture, partnership, or limited liability company that is operating the farm;
23.21and
23.22 (B) more than half of the shareholders, members, or partners of each family farm
23.23corporation, joint family farm venture, partnership, or limited liability company are persons
23.24or spouses of persons who are a qualifying relative under section 273.124, subdivision 1,
23.25paragraphs (c) and (d).
23.26 Homestead treatment applies under this paragraph for property leased to a family farm
23.27corporation, joint farm venture, limited liability company, or partnership operating a family
23.28farm if legal title to the property is in the name of an individual who is a member, shareholder,
23.29or partner in the entity.
23.30 (h) To be eligible for the special agricultural homestead under this subdivision, an initial
23.31full application must be submitted to the county assessor where the property is located.
23.32Owners and the persons who are actively farming the property shall be required to complete
23Article 2 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 24.1only a one-page abbreviated version of the application in each subsequent year provided
24.2that none of the following items have changed since the initial application:
24.3 (1) the day-to-day operation, administration, and financial risks remain the same;
24.4 (2) the owners and the persons actively farming the property continue to live within the
24.5four townships or city criteria and are Minnesota residents;
24.6 (3) the same operator of the agricultural property is listed with the Farm Service Agency;
24.7 (4) a Schedule F or equivalent income tax form was filed for the most recent year;
24.8 (5) the property's acreage is unchanged; and
24.9 (6) none of the property's acres have been enrolled in a federal or state farm program
24.10since the initial application.
24.11 The owners and any persons who are actively farming the property must include the
24.12appropriate Social Security numbers or individual taxpayer identification numbers, and sign
24.13and date the application. If any of the specified information has changed since the full
24.14application was filed, the owner must notify the assessor, and must complete a new
24.15application to determine if the property continues to qualify for the special agricultural
24.16homestead. The commissioner of revenue shall prepare a standard reapplication form for
24.17use by the assessors.
24.18 (i) Agricultural land and buildings that were class 2a homestead property under section
24.19273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain classified
24.20agricultural homesteads for subsequent assessments if:
24.21 (1) the property owner abandoned the homestead dwelling located on the agricultural
24.22homestead as a result of damage caused by the August 2007 floods;
24.23 (2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele,
24.24Wabasha, or Winona;
24.25 (3) the agricultural land and buildings remain under the same ownership for the current
24.26assessment year as existed for the 2007 assessment year;
24.27 (4) the dwelling occupied by the owner is located in this state and is within 50 miles of
24.28one of the parcels of agricultural land that is owned by the taxpayer; and
24.29 (5) the owner notifies the county assessor that the relocation was due to the August 2007
24.30floods, and the owner furnishes the assessor any information deemed necessary by the
24.31assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the
24.32owner must notify the assessor by December 1, 2008. Further notifications to the assessor
24Article 2 Sec. 6.
S0132-1 1st EngrossmentSF132 REVISOR MS 25.1are not required if the property continues to meet all the requirements in this paragraph and
25.2any dwellings on the agricultural land remain uninhabited.
25.3 (j) Agricultural land and buildings that were class 2a homestead property under section
25.4273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain classified as
25.5agricultural homesteads for subsequent assessments if:
25.6 (1) the property owner abandoned the homestead dwelling located on the agricultural
25.7homestead as a result of the March 2009 floods;
25.8 (2) the property is located in the county of Marshall;
25.9 (3) the agricultural land and buildings remain under the same ownership for the current
25.10assessment year as existed for the 2008 assessment year and continue to be used for
25.11agricultural purposes;
25.12 (4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles
25.13of one of the parcels of agricultural land that is owned by the taxpayer; and
25.14 (5) the owner notifies the county assessor that the relocation was due to the 2009 floods,
25.15and the owner furnishes the assessor any information deemed necessary by the assessor in
25.16verifying the change in dwelling. Further notifications to the assessor are not required if the
25.17property continues to meet all the requirements in this paragraph and any dwellings on the
25.18agricultural land remain uninhabited.
25.19 EFFECTIVE DATE.This section is effective beginning with assessment year 2026.
25.20Sec. 7. Minnesota Statutes 2024, section 273.13, subdivision 22, is amended to read:
25.21 Subd. 22.Class 1.(a) Except as provided in subdivision 23 and in paragraphs (b) and
25.22(c), real estate which is residential and used for homestead purposes is class 1a. In the case
25.23of a duplex or triplex in which one of the units is used for homestead purposes, the entire
25.24property is deemed to be used for homestead purposes. The market value of class 1a property
25.25must be determined based upon the value of the house, garage, and land.
25.26 The first $500,000 of market value of class 1a property has a net classification rate of
25.27one percent of its market value; and the market value of class 1a property that exceeds
25.28$500,000 has a classification rate of 1.25 percent of its market value.
25.29 (b) Class 1b property includes homestead real estate or homestead manufactured homes
25.30used for the purposes of a homestead by:
25.31 (1) any person who is blind as defined in section 256D.35, or the person who is blind
25.32and the spouse of the person who is blind;
25Article 2 Sec. 7.
S0132-1 1st EngrossmentSF132 REVISOR MS 26.1 (2) any person who is permanently and totally disabled or by the person with a disability
26.2and the spouse of the person with a disability; or
26.3 (3) the surviving spouse of a veteran who was permanently and totally disabled
26.4homesteading a property classified under this paragraph for taxes payable in 2008.
26.5 Property is classified and assessed under clause (2) only if the government agency or
26.6income-providing source certifies, upon the request of the homestead occupant, that the
26.7homestead occupant satisfies the disability requirements of this paragraph, and that the
26.8property is not eligible for the valuation exclusion under subdivision 34.
26.9 Property is classified and assessed under paragraph (b) only if the commissioner of
26.10revenue or the county assessor certifies that the homestead occupant satisfies the requirements
26.11of this paragraph.
26.12 Permanently and totally disabled for the purpose of this subdivision means a condition
26.13which is permanent in nature and totally incapacitates the person from working at an
26.14occupation which brings the person an income. The first $50,000 market value of class 1b
26.15property has a net classification rate of .45 percent of its market value. The remaining market
26.16value of class 1b property is classified as class 1a or class 2a property, whichever is
26.17appropriate.
26.18 (c) Class 1c property is commercial use real and personal property that abuts public
26.19water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by
26.20the Department of Natural Resources, and is devoted to temporary and seasonal residential
26.21occupancy for recreational purposes but not devoted to commercial purposes for more than
26.22250 days in the year preceding the year of assessment, and that includes a portion used as
26.23a homestead by the owner, which includes a dwelling occupied as a homestead by a
26.24shareholder of a corporation that owns the resort, a partner in a partnership that owns the
26.25resort, or a member of a limited liability company that owns the resort even if the title to
26.26the homestead is held by the corporation, partnership, or limited liability company. For
26.27purposes of this paragraph, property is devoted to a commercial purpose on a specific day
26.28if any portion of the property, excluding the portion used exclusively as a homestead, is
26.29used for residential occupancy and a fee is charged for residential occupancy. Class 1c
26.30property must contain three or more rental units. A "rental unit" is defined as a cabin,
26.31condominium, townhouse, sleeping room, or individual camping site equipped with water
26.32and electrical hookups for recreational vehicles. Class 1c property must provide recreational
26.33activities such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill
26.34or cross-country ski equipment; provide marina services, launch services, or guide services;
26Article 2 Sec. 7.
S0132-1 1st EngrossmentSF132 REVISOR MS 27.1or sell bait and fishing tackle. Any unit in which the right to use the property is transferred
27.2to an individual or entity by deeded interest, or the sale of shares or stock, no longer qualifies
27.3for class 1c even though it may remain available for rent. A camping pad offered for rent
27.4by a property that otherwise qualifies for class 1c is also class 1c, regardless of the term of
27.5the rental agreement, as long as the use of the camping pad does not exceed 250 days. If
27.6the same owner owns two separate parcels that are located in the same township, and one
27.7of those properties is classified as a class 1c property and the other would be eligible to be
27.8classified as a class 1c property if it was used as the homestead of the owner, both properties
27.9will be assessed as a single class 1c property; for purposes of this sentence, properties are
27.10deemed to be owned by the same owner if each of them is owned by a limited liability
27.11company, and both limited liability companies have the same membership. The portion of
27.12the property used as a homestead is class 1a property under paragraph (a). The remainder
27.13of the property is classified as follows: the first $600,000 $1,500,000 of market value is tier
27.14I, the next $1,700,000 $3,000,000 of market value is tier II, and any remaining market value
27.15is tier III. The classification rates for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent;
27.16and tier III, 1.25 percent. Owners of real and personal property devoted to temporary and
27.17seasonal residential occupancy for recreation purposes in which all or a portion of the
27.18property was devoted to commercial purposes for not more than 250 days in the year
27.19preceding the year of assessment desiring classification as class 1c, must submit a declaration
27.20to the assessor designating the cabins or units occupied for 250 days or less in the year
27.21preceding the year of assessment by January 15 of the assessment year. Those cabins or
27.22units and a proportionate share of the land on which they are located must be designated as
27.23class 1c as otherwise provided. The remainder of the cabins or units and a proportionate
27.24share of the land on which they are located must be designated as class 3a commercial. The
27.25owner of property desiring designation as class 1c property must provide guest registers or
27.26other records demonstrating that the units for which class 1c designation is sought were not
27.27occupied for more than 250 days in the year preceding the assessment if so requested. The
27.28portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center
27.29or meeting room, and (5) other nonresidential facility operated on a commercial basis not
27.30directly related to temporary and seasonal residential occupancy for recreation purposes
27.31does not qualify for class 1c.
27.32 (d) Class 1d property includes structures that meet all of the following criteria:
27.33 (1) the structure is located on property that is classified as agricultural property under
27.34section 273.13, subdivision 23;
27Article 2 Sec. 7.
S0132-1 1st EngrossmentSF132 REVISOR MS 28.1 (2) the structure is occupied exclusively by seasonal farm workers during the time when
28.2they work on that farm, and the occupants are not charged rent for the privilege of occupying
28.3the property, provided that use of the structure for storage of farm equipment and produce
28.4does not disqualify the property from classification under this paragraph;
28.5 (3) the structure meets all applicable health and safety requirements for the appropriate
28.6season; and
28.7 (4) the structure is not salable as residential property because it does not comply with
28.8local ordinances relating to location in relation to streets or roads.
28.9 The market value of class 1d property has the same classification rates as class 1a property
28.10under paragraph (a).
28.11 EFFECTIVE DATE.This section is effective beginning with assessment year 2026.
28.12Sec. 8. Minnesota Statutes 2024, section 273.38, is amended to read:
28.13 273.38 PERCENTAGE OF ASSESSMENTS; EXCEPTIONS.
28.14 The distribution lines and the attachments and appurtenances thereto systems, not
28.15including substations, or transmission or generation equipment, of cooperative associations
28.16organized under the provisions of Laws 1923, chapter 326, and laws amendatory thereof
28.17and supplemental thereto, and engaged in the electrical heat, light and power business, upon
28.18a mutual, nonprofit and cooperative plan, shall be assessed and taxed as provided in sections
28.19273.40 and 273.41.
28.20 EFFECTIVE DATE.This section is effective beginning with assessment year 2025
28.21and thereafter.
28.22Sec. 9. Minnesota Statutes 2024, section 273.41, is amended to read:
28.23 273.41 AMOUNT OF TAX; DISTRIBUTION.
28.24 There is hereby imposed upon each such cooperative association on December 31 of
28.25each year a tax of $10 for each 100 members, or fraction thereof, of such association. The
28.26tax, when paid, shall be in lieu of all personal property taxes, state, county, or local, upon
28.27distribution lines and the attachments and appurtenances thereto of such associations that
28.28part of the association's distribution system, not including substations, or transmission or
28.29generation equipment, located in rural areas. The tax shall be payable on or before March
28.301 of the next succeeding year, to the commissioner of revenue. If the tax, or any portion
28.31thereof, is not paid within the time herein specified for the payment thereof, there shall be
28.32added thereto a specific penalty equal to ten percent of the amount so remaining unpaid.
28Article 2 Sec. 9.
S0132-1 1st EngrossmentSF132 REVISOR MS 29.1Such penalty shall be collected as part of said tax, and the amount of said tax not timely
29.2paid, together with said penalty, shall bear interest at the rate specified in section 270C.40
29.3from the time such tax should have been paid until paid. The commissioner shall deposit
29.4the amount so received in the general fund of the state treasury.
29.5 EFFECTIVE DATE.This section is effective beginning with assessment year 2025
29.6and thereafter.
29.7 Sec. 10. Minnesota Statutes 2024, section 290A.03, subdivision 3, is amended to read:
29.8 Subd. 3.Income.(a) "Income" means the sum of the following:
29.9 (1) federal adjusted gross income as defined in the Internal Revenue Code; and
29.10 (2) the sum of the following amounts to the extent not included in clause (1):
29.11 (i) all nontaxable income;
29.12 (ii) the amount of a passive activity loss that is not disallowed as a result of section 469,
29.13paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss
29.14carryover allowed under section 469(b) of the Internal Revenue Code;
29.15 (iii) an amount equal to the total of any discharge of qualified farm indebtedness of a
29.16solvent individual excluded from gross income under section 108(g) of the Internal Revenue
29.17Code;
29.18 (iv) cash public assistance and relief;
29.19 (v) any pension or annuity (including railroad retirement benefits, all payments received
29.20under the federal Social Security Act, Supplemental Security Income, and veterans benefits),
29.21which was not exclusively funded by the claimant or spouse, or which was funded exclusively
29.22by the claimant or spouse and which funding payments were excluded from federal adjusted
29.23gross income in the years when the payments were made;
29.24 (vi) interest received from the federal or a state government or any instrumentality or
29.25political subdivision thereof;
29.26 (vii) workers' compensation;
29.27 (viii) nontaxable strike benefits;
29.28 (ix) the gross amounts of payments received in the nature of disability income or sick
29.29pay as a result of accident, sickness, or other disability, whether funded through insurance
29.30or otherwise;
29Article 2 Sec. 10.
S0132-1 1st EngrossmentSF132 REVISOR MS 30.1 (x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of
30.21986, as amended through December 31, 1995;
30.3 (xi) contributions made by the claimant to an individual retirement account, including
30.4a qualified voluntary employee contribution; simplified employee pension plan;
30.5self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of
30.6the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal
30.7Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for
30.8the claimant and spouse;
30.9 (xii) to the extent not included in federal adjusted gross income, distributions received
30.10by the claimant or spouse from a traditional or Roth style retirement account or plan;
30.11 (xiii) nontaxable scholarship or fellowship grants;
30.12 (xiv) alimony received to the extent not included in the recipient's income;
30.13 (xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue
30.14Code;
30.15 (xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue
30.16Code; and
30.17 (xvii) the amount deducted for certain expenses of elementary and secondary school
30.18teachers under section 62(a)(2)(D) of the Internal Revenue Code.
30.19 In the case of an individual who files an income tax return on a fiscal year basis, the
30.20term "federal adjusted gross income" shall mean federal adjusted gross income reflected in
30.21the fiscal year ending in the calendar year. Federal adjusted gross income shall not be reduced
30.22by the amount of a net operating loss carryback or carryforward or a capital loss carryback
30.23or carryforward allowed for the year.
30.24 (b) "Income" does not include:
30.25 (1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
30.26 (2) amounts of any pension or annuity which was exclusively funded by the claimant
30.27or spouse and which funding payments were not excluded from federal adjusted gross
30.28income in the years when the payments were made;
30.29 (3) to the extent included in federal adjusted gross income, amounts contributed by the
30.30claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed
30.31the retirement base amount reduced by the amount of contributions excluded from federal
30.32adjusted gross income, but not less than zero;
30Article 2 Sec. 10.
S0132-1 1st EngrossmentSF132 REVISOR MS 31.1 (4) surplus food or other relief in kind supplied by a governmental agency;
31.2 (5) relief granted under this chapter;
31.3 (6) child support payments received under a temporary or final decree of dissolution or
31.4legal separation;
31.5 (7) restitution payments received by eligible individuals and excludable interest as
31.6defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001,
31.7Public Law 107-16;
31.8 (8) alimony paid; or
31.9 (9) veterans disability compensation paid under title 38 of the United States Code; or
31.10 (10) to the extent included in federal adjusted gross income, the amount of discharge of
31.11indebtedness awarded to the claimant under section 332.74, subdivision 3.
31.12 (c) The sum of the following amounts may be subtracted from income:
31.13 (1) for the claimant's first dependent, the exemption amount multiplied by 1.4;
31.14 (2) for the claimant's second dependent, the exemption amount multiplied by 1.3;
31.15 (3) for the claimant's third dependent, the exemption amount multiplied by 1.2;
31.16 (4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;
31.17 (5) for the claimant's fifth dependent, the exemption amount; and
31.18 (6) if the claimant or claimant's spouse had a disability or attained the age of 65 on or
31.19before December 31 of the year for which the taxes were levied, the exemption amount.
31.20 (d) For purposes of this subdivision, the following terms have the meanings given:
31.21 (1) "exemption amount" means the exemption amount under section 290.0121,
31.22subdivision 1, paragraph (b), for the taxable year for which the income is reported;
31.23 (2) "retirement base amount" means the deductible amount for the taxable year for the
31.24claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for
31.25inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard
31.26to whether the claimant or spouse claimed a deduction; and
31.27 (3) "traditional or Roth style retirement account or plan" means retirement plans under
31.28sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.
31.29 EFFECTIVE DATE.This section is effective beginning with property taxes payable
31.30in 2026.
31Article 2 Sec. 10.
S0132-1 1st EngrossmentSF132 REVISOR MS 32.1 ARTICLE 3
32.2 AIDS AND CREDITS
32.3 Section 1. Laws 2023, chapter 64, article 4, section 27, is amended by adding a subdivision
32.4to read:
32.5 Subd. 9.Report.(a) By January 15, 2026, each: (1) local unit that receives aid in an
32.6amount greater than $10,000; (2) county; and (3) Tribal government must report the following
32.7information to the commissioner of public safety in the form and manner approved by that
32.8commissioner:
32.9 (i) the amount of aid received; and
32.10 (ii) the ways in which the aid was used or is intended to be used.
32.11 (b) By February 15, 2026, the commissioner of public safety must compile the information
32.12received from counties, Tribal governments, or local units pursuant to paragraph (a) and
32.13submit the compiled data in a report to the chairs and ranking minority members of the
32.14legislative committees and divisions with jurisdiction over public safety finance and policy
32.15and taxes and property taxes. The report must comply with the requirements of Minnesota
32.16Statutes, sections 3.195 and 3.197.
32.17 EFFECTIVE DATE.This section is effective the day following final enactment.
32.18Sec. 2. 2023 AID PENALTY FORGIVENESS; CITY OF STEWART.
32.19 Notwithstanding Minnesota Statutes, section 477A.017, subdivision 3, the city of Stewart
32.20must receive its aid payment for calendar year 2023 under Minnesota Statutes, section
32.21477A.013, that was withheld under Minnesota Statutes, section 477A.017, subdivision 3,
32.22provided that the state auditor certifies to the commissioner of revenue that the state auditor
32.23received the annual financial reporting form for 2022 from the city by June 1, 2025. The
32.24commissioner of revenue must make a payment of $87,501.50 to the city of Stewart by June
32.2530, 2025. An amount sufficient to pay aid under this section is appropriated in fiscal year
32.262025 from the general fund to the commissioner of revenue. This is a onetime appropriation.
32.27 EFFECTIVE DATE.This section is effective the day following final enactment.
32Article 3 Sec. 2.
S0132-1 1st EngrossmentSF132 REVISOR MS 33.1 ARTICLE 4
33.2 PUBLIC FINANCE
33.3 Section 1. Minnesota Statutes 2024, section 446A.086, subdivision 1, is amended to read:
33.4 Subdivision 1.Definitions.(a) As used in this section, the following terms have the
33.5meanings given.
33.6 (b) "Authority" means the Minnesota Public Facilities Authority.
33.7 (c) "Commissioner" means the commissioner of management and budget.
33.8 (d) "Debt obligation" means:
33.9 (1) a general obligation bond or note issued by a county, a bond or note to which the
33.10general obligation of a county is pledged under section 469.034, subdivision 2, or a bond
33.11or note payable from a county lease obligation under section 641.24, to provide funds for
33.12the construction of:
33.13 (i) jails;
33.14 (ii) correctional facilities;
33.15 (iii) law enforcement facilities;
33.16 (iv) a court house or justice center, if connected to a jail, correctional facility, or other
33.17law enforcement facility;
33.18 (iv) (v) social services and human services facilities;
33.19 (v) (vi) solid waste facilities; or
33.20 (vi) (vii) qualified housing development projects as defined in section 469.034,
33.21subdivision 2; or
33.22 (2) a general obligation bond or note issued by a governmental unit to provide funds for
33.23the construction, improvement, or rehabilitation of:
33.24 (i) wastewater facilities;
33.25 (ii) drinking water facilities;
33.26 (iii) stormwater facilities; or
33.27 (iv) any publicly owned building or infrastructure improvement that has received partial
33.28funding from grants awarded by the commissioner of employment and economic development
33.29related to redevelopment, contaminated site cleanup, bioscience, small cities development
33Article 4 Section 1.
S0132-1 1st EngrossmentSF132 REVISOR MS 34.1programs, and rural business infrastructure programs, for which bonds are issued by the
34.2authority under section 446A.087.
34.3 (e) "Governmental unit" means a county or a statutory or home rule charter city.
34.4 Sec. 2. Minnesota Statutes 2024, section 469.104, is amended to read:
34.5 469.104 SECTIONS THAT APPLY IF FEDERAL LIMIT APPLIES.
34.6 Sections 474A.01 to 474A.21 apply to obligations issued under sections 469.090 to
34.7469.108 that are limited required by federal tax law as defined in section 474A.02,
34.8subdivision 8 to obtain an allocation of volume cap.
34.9 Sec. 3. Minnesota Statutes 2024, section 474A.091, subdivision 2, is amended to read:
34.10 Subd. 2.Application for residential rental projects.(a) Issuers may apply for an
34.11allocation for residential rental bonds under this section by submitting to the department an
34.12application on forms provided by the department accompanied by:
34.13 (1) a preliminary resolution;
34.14 (2) a statement of bond counsel that the proposed issue of obligations requires an
34.15allocation under this chapter and the Internal Revenue Code;
34.16 (3) an application deposit in the amount of two percent of the requested allocation;
34.17 (4) a sworn statement from the applicant identifying the project as a preservation project,
34.1830 percent AMI residential rental project, 50 percent AMI residential rental project, 100
34.19percent LIHTC project, 20 percent LIHTC project, or any other residential rental project;
34.20and
34.21 (5) a certification from the applicant or its accountant stating that the requested allocation
34.22does not exceed the aggregate bond limitation.
34.23The issuer must pay the application deposit to the Department of Management and Budget.
34.24An entitlement issuer may not apply for an allocation for residential rental project bonds
34.25under this section unless it has either permanently issued bonds equal to the amount of its
34.26entitlement allocation for the current year plus any amount carried forward from previous
34.27years or returned for reallocation all of its unused entitlement allocation. For purposes of
34.28this subdivision, its entitlement allocation includes an amount obtained under section
34.29474A.04, subdivision 6.
34.30 (b) An issuer that receives an allocation under this subdivision must permanently issue
34.31obligations equal to all or a portion of the allocation received on or before the earlier of: (i)
34Article 4 Sec. 3.
S0132-1 1st EngrossmentSF132 REVISOR MS 35.1180 days of the allocation, or (ii) the last business day of December. If an issuer that receives
35.2an allocation under this subdivision does not permanently issue obligations equal to all or
35.3a portion of the allocation received within the time period provided in this paragraph or
35.4returns the allocation to the commissioner, the amount of the allocation is canceled and
35.5returned for reallocation through the unified pool.
35.6 (c) The Minnesota Housing Finance Agency may apply for and receive an allocation
35.7under this section without submitting an application deposit.
35.8 Sec. 4. Minnesota Statutes 2024, section 474A.091, subdivision 2a, is amended to read:
35.9 Subd. 2a.Application for all other types of qualified bonds.(a) Issuers may apply
35.10for an allocation for all types of qualified bonds other than residential rental bonds under
35.11this section by submitting to the department an application on forms provided by the
35.12department accompanied by:
35.13 (1) a preliminary resolution;
35.14 (2) a statement of bond counsel that the proposed issue of obligations requires an
35.15allocation under this chapter and the Internal Revenue Code;
35.16 (3) the type of qualified bonds to be issued;
35.17 (4) an application deposit in the amount of two percent of the requested allocation; and
35.18 (5) a public purpose scoring worksheet for manufacturing and enterprise zone
35.19applications.
35.20The issuer must pay the application deposit to the Department of Management and Budget.
35.21An entitlement issuer may not apply for an allocation for public facility bonds or mortgage
35.22bonds under this section unless it has either permanently issued bonds equal to the amount
35.23of its entitlement allocation for the current year plus any amount carried forward from
35.24previous years or returned for reallocation all of its unused entitlement allocation. For
35.25purposes of this subdivision, an entitlement allocation includes an amount obtained under
35.26section 474A.04, subdivision 6.
35.27 (b) An issuer that receives an allocation under this subdivision must permanently issue
35.28obligations equal to all or a portion of the allocation received on or before the earlier of: (i)
35.29120 days of the allocation, or (ii) the last business day of December. If an issuer that receives
35.30an allocation under this subdivision does not permanently issue obligations equal to all or
35.31a portion of the allocation received within the time period provided in this paragraph or
35Article 4 Sec. 4.
S0132-1 1st EngrossmentSF132 REVISOR MS 36.1returns the allocation to the commissioner, the amount of the allocation is canceled and
36.2returned for reallocation through the unified pool.
36.3 (c) Notwithstanding the restrictions imposed on entitlement issuers under this subdivision,
36.4the Minnesota Housing Finance Agency may not receive an allocation for mortgage bonds
36.5under this section prior to the first Monday in October, but may be awarded allocations for
36.6mortgage bonds from the unified pool on or after the first Monday in October. The Minnesota
36.7Housing Finance Agency, the Minnesota Office of Higher Education, and the Minnesota
36.8Rural Finance Authority may apply for and receive an allocation under this section without
36.9submitting an application deposit.
36Article 4 Sec. 4.
S0132-1 1st EngrossmentSF132 REVISOR MS Page.Ln 1.16INCOME AND CORPORATE FRANCHISE TAXES..........................ARTICLE 1
Page.Ln 15.5PROPERTY TAXES..............................................................................ARTICLE 2
Page.Ln 32.1AIDS AND CREDITS............................................................................ARTICLE 3
Page.Ln 33.1PUBLIC FINANCE................................................................................ARTICLE 4
1
APPENDIX
Article locations for S0132-1 13.4967 OTHER TAX DATA CODED ELSEWHERE.
Subd. 2a.Assignment of refund.Data regarding assignment of individual income tax refunds
is classified by section 290.0679, subdivision 9.
290.0679 ASSIGNMENT OF REFUND.
Subdivision 1.Definitions.(a) "Qualifying taxpayer" means a resident who has a child in
kindergarten through grade 12 in the current tax year and who met the income requirements under
section 290.0674, subdivision 2, for receiving the education credit in the tax year preceding the
assignment of the taxpayer's refund.
(b) "Education credit" means the credit allowed under section 290.0674.
(c) "Refund" means an individual income tax refund.
(d) "Financial institution" means a state or federally chartered bank, savings bank, savings
association, or credit union.
(e) "Qualifying organization" means a tax-exempt organization under section 501(c)(3) of the
Internal Revenue Code.
(f) "Assignee" means a financial institution or qualifying organization that is entitled to receive
payment of a refund assigned under this section.
Subd. 2.Conditions for assignment.A qualifying taxpayer may assign all or part of an
anticipated refund for the current and future taxable years to a financial institution or a qualifying
organization. A financial institution or qualifying organization accepting assignment must pay the
amount secured by the assignment to a third-party vendor. The commissioner of education shall,
upon request from a third-party vendor, certify that the vendor's products and services qualify for
the education credit. A denial of a certification may be appealed to the commissioner pursuant to
this subdivision and notwithstanding chapter 14. A financial institution or qualifying organization
that accepts assignments under this section must verify as part of the assignment documentation
that the product or service to be provided by the third-party vendor has been certified by the
commissioner of education as qualifying for the education credit. The amount assigned for the
current and future taxable years may not exceed the maximum allowable education credit for the
current taxable year. Both the taxpayer and spouse must consent to the assignment of a refund from
a joint return.
Subd. 3.Consent for disclosure.When the taxpayer applies to the financial institution or the
qualifying organization for a loan to be secured by the assignment under subdivision 2, the taxpayer
must sign a written consent on a form prescribed by the commissioner. The consent must authorize
the commissioner to disclose to the financial institution or qualifying organization the total amount
of state taxes owed or revenue recapture claims filed under chapter 270A against the taxpayer, and
the total amount of outstanding assignments made by the taxpayer under this section. For a refund
from a joint return, the consent must also authorize the disclosure of taxes, revenue recapture claims,
and assignments relating to the taxpayer's spouse, and must be signed by the spouse. The financial
institution or qualifying organization may request that the taxpayer provide a copy of the taxpayer's
previous year's income tax return, if any, and may assist the taxpayer in requesting a copy of the
previous year's return from the commissioner.
Subd. 4.Consumer disclosure.(a) A third-party vendor that receives payment of the amount
secured by an assignment must comply with the requirements of this subdivision.
(b) The third-party vendor must disclose to the taxpayer, in plain language:
(1) the cost of each product or service for which the third-party vendor separately charges the
taxpayer;
(2) any fees charged to the taxpayer for tax preparation services; and
(3) for qualifying low-income taxpayers, information on the availability of free tax preparation
services.
(c) The third-party vendor must provide to the taxpayer executed copies of any documents
signed by the taxpayer.
Subd. 5.Filing of assignment.The commissioner shall prescribe the form of and manner for
filing an assignment of a refund under this section.
1R
APPENDIX
Repealed Minnesota Statutes: S0132-1 Subd. 6.Effect of assignment.The taxpayer may not revoke an assignment after it has been
filed. The assignee must notify the commissioner if the loan secured by the assignment has been
paid in full, in which case the assignment is canceled. An assignment is in effect until the amount
assigned is refunded in full to the assignee, or until the assignee cancels the assignment.
Subd. 7.Payment of refund.When a refund assigned under this section is issued by the
commissioner, the proceeds of the refund, as defined in subdivision 1, paragraph (c), must be
distributed in the following order:
(1) to satisfy any delinquent tax obligations of the taxpayer which are owed to the commissioner;
(2) to claimant agencies to satisfy any revenue recapture claims filed against the taxpayer, in
the order of priority of the claims set forth in section 270A.10;
(3) to assignees to satisfy assignments under this section, based on the order in time in which
the commissioner received the assignments; and
(4) to the taxpayer.
Subd. 8.Legal action.If there is a dispute between the taxpayer and the assignee after the
commissioner has remitted the taxpayer's refund to the assignee, the taxpayer's only remedy is to
bring an action against the assignee in court to recover the refund. The action must be brought
within two years after the commissioner remits the refund to the assignee. The commissioner may
not be a party to the proceeding.
Subd. 9.Assignments private data.Information regarding assignments under this section is
classified as private data on individuals.
2R
APPENDIX
Repealed Minnesota Statutes: S0132-1