Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6329

STATE OF MINNESOTA

 

Journal of the House

 

NINETY-SECOND SESSION - 2021

 

_____________________

 

FORTY-FIFTH DAY

 

Saint Paul, Minnesota, Thursday, April 22, 2021

 

 

      The House of Representatives convened at 11:30 a.m. and was called to order by Dan Wolgamott, Speaker pro tempore.

 

      Prayer was offered by the Reverend Rick King, Falcon Heights Church, Falcon Heights, Minnesota.

 

      The members of the House gave the pledge of allegiance to the flag of the United States of America.

 

      The roll was called and the following members were present:

 


Acomb

Agbaje

Akland

Albright

Anderson

Backer

Bahner

Bahr

Baker

Becker-Finn

Bennett

Berg

Bernardy

Bierman

Bliss

Boe

Boldon

Burkel

Carlson

Christensen

Daniels

Daudt

Davids

Davnie

Demuth

Dettmer

Drazkowski

Ecklund

Edelson

Elkins

Erickson

Feist

Fischer

Franke

Franson

Frazier

Frederick

Freiberg

Garofalo

Gomez

Green

Greenman

Grossell

Gruenhagen

Haley

Hamilton

Hansen, R.

Hanson, J.

Hassan

Hausman

Heinrich

Heintzeman

Her

Hertaus

Hollins

Hornstein

Howard

Huot

Igo

Johnson

Jordan

Jurgens

Keeler

Kiel

Klevorn

Koegel

Kotyza-Witthuhn

Koznick

Kresha

Lee

Liebling

Lillie

Lippert

Lislegard

Long

Lucero

Lueck

Mariani

Marquart

Masin

McDonald

Mekeland

Miller

Moller

Moran

Morrison

Mortensen

Mueller

Munson

Murphy

Nash

Nelson, M.

Nelson, N.

Neu Brindley

Noor

Novotny

O'Driscoll

Olson, B.

Olson, L.

O'Neill

Pelowski

Petersburg

Pfarr

Pierson

Pinto

Poston

Pryor

Quam

Raleigh

Rasmusson

Reyer

Richardson

Robbins

Sandell

Sandstede

Schomacker

Schultz

Scott

Stephenson

Sundin

Swedzinski

Theis

Torkelson

Urdahl

Vang

Wazlawik

West

Winkler

Wolgamott

Xiong, J.

Xiong, T.

Youakim

Spk. Hortman


 

      A quorum was present.

 

      Thompson was excused until 3:05 p.m.

 

      The Chief Clerk proceeded to read the Journal of the preceding day.  There being no objection, further reading of the Journal was dispensed with and the Journal was approved as corrected by the Chief Clerk.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6330

REPORTS OF CHIEF CLERK

 

      S. F. No. 193 and H. F. No. 269, which had been referred to the Chief Clerk for comparison, were examined and found to be not identical.

 

      Morrison moved that S. F. No. 193 be substituted for H. F. No. 269 and that the House File be indefinitely postponed.  The motion prevailed.

 

 

      S. F. No. 443 and H. F. No. 331, which had been referred to the Chief Clerk for comparison, were examined and found to be identical.

 

      Edelson moved that S. F. No. 443 be substituted for H. F. No. 331 and that the House File be indefinitely postponed.  The motion prevailed.

 

 

      S. F. No. 1807 and H. F. No. 2245, which had been referred to the Chief Clerk for comparison, were examined and found to be identical.

 

      Hollins moved that S. F. No. 1807 be substituted for H. F. No. 2245 and that the House File be indefinitely postponed.  The motion prevailed.

 

 

SECOND READING OF SENATE BILLS

 

 

      S. F. Nos. 193, 443 and 1807 were read for the second time.

 

 

INTRODUCTION AND FIRST READING OF HOUSE BILLS

 

 

      The following House File was introduced:

 

 

Franson introduced:

 

H. F. No. 2563, A bill for an act relating to liquor; authorizing an on-sale license in Alexandria.

 

The bill was read for the first time and referred to the Committee on Commerce Finance and Policy.

 

 

MESSAGES FROM THE SENATE

 

 

      The following messages were received from the Senate:

 

 

Madam Speaker:

 

I hereby announce that the Senate accedes to the request of the House for the appointment of a Conference Committee on the amendments adopted by the Senate to the following House File: 


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6331

H. F. No. 1077, A bill for an act relating to housing; establishing a budget for the Minnesota Housing Finance Agency; adopting housing finance agency policy provisions; expanding eligibility requirements for certain affordable housing, workforce housing, and disaster recovery programs; increasing the agency debt limit; increasing the individual and family household income limits under the community land trusts program; expanding requirements and uses and loan amount under the rehabilitation loan program; expanding allowable uses of housing infrastructure bonds; refunding certain deposits to bond issuers; creating the lead safe homes grant program; creating the Naturally Occurring Affordable Housing grant program; establishing a task force on shelter resident rights and shelter provider practices; expanding rental lease covenants and remedies available to tenants; expanding accommodation requirements for service and support animals; expanding procedural and reporting requirements for evictions; limiting public access to pending eviction actions; expanding eligibility for certain expungements of eviction case files; permitting manufactured homes affixed to certain property to be deemed an improvement to real property; providing residents an opportunity to purchase manufactured home parks; making technical and conforming changes; appropriating money; amending Minnesota Statutes 2020, sections 12A.09, subdivision 3; 256C.02; 273.11, subdivision 12; 273.125, subdivision 8; 363A.09, subdivision 5; 462A.05, subdivisions 14, 14a, by adding a subdivision; 462A.07, subdivision 2; 462A.204, subdivision 3; 462A.22, subdivision 1; 462A.30, subdivision 9; 462A.37, subdivisions 1, 2; 462A.38, subdivision 1; 462A.39, subdivisions 2, 5; 474A.21; 484.014, subdivisions 2, 3; 504B.001, subdivision 4; 504B.135; 504B.161, subdivision 1; 504B.211, subdivisions 2, 6; 504B.241, subdivision 4; 504B.245; 504B.321; 504B.331; 504B.335; 504B.345, subdivision 1, by adding a subdivision; 504B.361, subdivision 1; 504B.371, subdivisions 4, 5, 7; 504B.375, subdivision 1; 504B.381, subdivisions 1, 5, by adding a subdivision; proposing coding for new law in Minnesota Statutes, chapters 168A; 327C; 462A; 504B; repealing Minnesota Statutes 2020, sections 168A.141; 327C.096; 504B.341.

 

The Senate has appointed as such committee:

 

Senators Draheim, Duckworth, Dahms, Pratt and Dziedzic.

 

Said House File is herewith returned to the House.

 

Cal R. Ludeman, Secretary of the Senate

 

 

Madam Speaker:

 

I hereby announce the Senate refuses to concur in the House amendments to the following Senate File: 

 

S. F. No. 972, A bill for an act relating to commerce and energy; appropriating money for the Department of Commerce; modifying the evaluation process for mandated health benefit proposals; requiring the commissioner of commerce to apply for continuation of the state innovation waiver; establishing a revolving loan fund for energy conservation improvements in state buildings; establishing the Minnesota efficient technology accelerator; authorizing a power purchase agreement for certain electric cogeneration activities; encouraging natural gas utilities to develop innovative resources; establishing a program to provide financial incentives for the production of wood pellets; extending provision to assess for certain regulatory duties; abolishing prohibition on issuing certificate of need for new nuclear power plant; establishing a program to promote the use of solar energy on school buildings; establishing a process to compensate businesses for loss of business opportunity resulting from sale and closure of a biomass energy plant; authorizing a local exchange carrier to elect competitive market regulation under certain conditions; appropriating money; requiring reports; amending Minnesota Statutes 2020, sections 16B.86; 16B.87; 62J.03, subdivision 4; 62J.26, subdivisions 1, 2, 3, 4, 5; 116C.779, subdivision 1; 116C.7792; 216B.1691, subdivision 2f; 216B.241, by adding a subdivision; 216B.2422, by adding a subdivision; 216B.2424, by adding subdivisions; 216B.243, subdivision 3b; 216B.62, subdivision 3b; 237.025, subdivisions 6, 9; Laws 2017, chapter 13, article 1, section 15, as amended; proposing coding for new law in Minnesota Statutes, chapters 216B; 216C; repealing Minnesota Statutes 2020, sections 115C.13; 216C.417; Laws 2005, chapter 97, article 10, section 3, as amended.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6332

The Senate respectfully requests that a Conference Committee be appointed thereon.  The Senate has appointed as such committee:

 

Senators Dahms, Senjem, Utke, Mathews and Frentz.

 

Said Senate File is herewith transmitted to the House with the request that the House appoint a like committee.

 

Cal R. Ludeman, Secretary of the Senate

 

 

      Winkler moved that the House accede to the request of the Senate and that the Speaker appoint a Conference Committee of 5 members of the House to meet with a like committee appointed by the Senate on the disagreeing votes of the two houses on S. F. No. 972.  The motion prevailed.

 

 

Madam Speaker:

 

      I hereby announce the passage by the Senate of the following Senate File, herewith transmitted:

 

      S. F. No. 151.

 

Cal R. Ludeman, Secretary of the Senate

 

 

FIRST READING OF SENATE BILLS

 

 

S. F. No. 151, A bill for an act relating to the State Lottery; providing for second chance drawings; classifying certain lottery prize winner data; amending Minnesota Statutes 2020, sections 349A.01, by adding a subdivision; 349A.08, subdivision 9.

 

The bill was read for the first time. 

 

Kotyza-Witthuhn moved that S. F. No. 151 and H. F. No. 832, now on the General Register, be referred to the Chief Clerk for comparison.  The motion prevailed.

 

 

REPORT FROM THE COMMITTEE ON RULES

AND LEGISLATIVE ADMINISTRATION

 

      Winkler from the Committee on Rules and Legislative Administration, pursuant to rules 1.21 and 3.33, designated the following bill to be placed on the Calendar for the Day for Monday, April 26, 2021 and established a prefiling requirement for amendments offered to the following bill:

 

      H. F. No. 2128.

 

 

MOTIONS AND RESOLUTIONS

 

 

TAKEN FROM TABLE

 

      Winkler moved that S. F. No. 958 be taken from the table.  The motion prevailed.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6333

           S. F. No. 958 was reported to the House.

 

 

      Sundin moved to amend S. F. No. 958, the third engrossment, as follows:

 

      Delete everything after the enacting clause and insert the following language of H. F. No. 1524, the second engrossment:

 

\

"ARTICLE 1

AGRICULTURE APPROPRIATIONS

 

Section 1.  AGRICULTURE APPROPRIATIONS. 

 

The sums shown in the columns marked "Appropriations" are appropriated to agencies for the purposes specified in this article.  The appropriations are from the general fund, or another named fund, and are available for the fiscal years indicated for each purpose.  The figures "2022" and "2023" used in this article mean that the appropriations listed under them are available for the fiscal year ending June 30, 2022, or June 30, 2023, respectively.  "The first year" is fiscal year 2022.  "The second year" is fiscal year 2023.  "The biennium" is fiscal years 2022 and 2023.

 

 

 

 

APPROPRIATIONS

 

 

 

Available for the Year

 

 

 

Ending June 30

 

 

 

2022

2023

 

Sec. 2.  DEPARTMENT OF AGRICULTURE

 

 

 

 

 

Subdivision 1.  Total Appropriation

 

$56,977,000

 

$56,610,000

 

Appropriations by Fund

 

 

2022

 

2023

General

56,578,000

56,211,000

Remediation

399,000

399,000

 

The amounts that may be spent for each purpose are specified in the following subdivisions.

 

Subd. 2.  Protection Services

 

 

 

 

 

Appropriations by Fund

 

 

2022

 

2023

General

15,750,000

15,476,000

Remediation

399,000

399,000

 

(a) $399,000 the first year and $399,000 the second year are from the remediation fund for administrative funding for the voluntary cleanup program.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6334

(b) $175,000 the first year and $175,000 the second year are for compensation for destroyed or crippled livestock under Minnesota Statutes, section 3.737.  The first year appropriation may be spent to compensate for livestock that were destroyed or crippled during fiscal year 2021.  If the amount in the first year is insufficient, the amount in the second year is available in the first year.  The commissioner may use up to $5,000 each year to reimburse expenses incurred by university extension educators to provide fair market values of destroyed or crippled livestock.  If the commissioner receives federal dollars to pay claims for destroyed or crippled livestock, an equivalent amount of this appropriation may be used to reimburse nonlethal prevention methods performed by federal wildlife services staff.

 

(c) $155,000 the first year and $155,000 the second year are for compensation for crop damage under Minnesota Statutes, section 3.7371.  If the amount in the first year is insufficient, the amount in the second year is available in the first year.  The commissioner may use up to $10,000 of the appropriation each year to reimburse expenses incurred by the commissioner or the commissioner's approved agent to investigate and resolve claims as well as for costs associated with training for approved agents.  The commissioner may use up to $20,000 of the appropriation each year to make grants to producers for measures to protect stored crops from elk damage.

 

If the commissioner determines that claims made under Minnesota Statutes, section 3.737 or 3.7371, are unusually high, amounts appropriated for either program may be transferred to the appropriation for the other program.

 

(d) $225,000 the first year and $225,000 the second year are for additional funding for the noxious weed and invasive plant program.

 

(e) $50,000 the first year is for additional funding for the industrial hemp program for IT development.  This is a onetime appropriation and is available until June 30, 2023.

 

(f) $110,000 the first year and $110,000 the second year are for additional funding for meat and poultry inspection services.

 

(g) $66,000 the first year and $66,000 the second year are for additional funding to replace capital equipment in the Department of Agriculture's analytical laboratory.

 

(h) $500,000 the first year is to establish a climate smart farm endorsement for the Minnesota Agricultural Water Quality Certification Program that incentivizes and quantifies climate‑supportive farming practices.  This is a onetime appropriation and is available until June 30, 2026.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6335

(i) $274,000 the first year and $550,000 the second year are to maintain the current level of service delivery.

 

Subd. 3.  Agricultural Marketing and Development

 

4,510,000

 

4,415,000

 

(a) $186,000 the first year and $186,000 the second year are for transfer to the Minnesota grown account and may be used as grants for Minnesota grown promotion under Minnesota Statutes, section 17.102.  Grants may be made for one year.  Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract on or before June 30, 2023, for Minnesota grown grants in this paragraph are available until June 30, 2025.

 

(b) $100,000 the first year is to expand international marketing opportunities for farmers and value-added processors, including in‑market representation in Taiwan.  This is a onetime appropriation and is available until June 30, 2023.

 

(c) $634,000 the first year and $634,000 the second year are for continuation of the dairy development and profitability enhancement programs including dairy profitability teams and dairy business planning grants.  The dairy profitability enhancement teams shall provide one-on-one assistance to all sizes of dairy farms to enhance the financial success and long-term sustainability of dairy farms in the state.  The teams may consist of farm business management instructors, dairy extension specialists, and other dairy industry partners to deliver the informational and technical assistance.  Activities of the dairy teams must be spread throughout the dairy producing regions of the state.  The commissioner must make grants to regional or statewide organizations qualified to manage the various components of the teams.  Each regional or statewide organization must designate a coordinator responsible for overseeing the program and making required reports to the commissioner.  Dairy development and profitability enhancement teams are encouraged to engage in activities including but not limited to comprehensive financial analysis, risk management education, enhanced milk marketing tools and technologies, and production systems including rotational grazing and other sustainable agriculture methods.  The regional and statewide organizations that deliver the dairy development and profitability enhancement program must submit periodic reports to the commissioner on the aggregate changes in producer financial stability, productivity, product quality, animal health, environmental protection, and other performance measures attributable to the program in a format that maintains the confidentiality of business information related to any single dairy producer.

 

The commissioner may award dairy planning grants of up to $5,000 per producer to develop comprehensive business plans.  Grants must not be used for capital improvements.


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The commissioner may allocate the available sums among permissible activities, including efforts to improve the quality of milk produced in the state, in the proportions that the commissioner deems most beneficial to Minnesota's dairy farmers.  The commissioner must submit a detailed accomplishment report and a work plan detailing future plans for, and anticipated accomplishments from, expenditures under this program to the chairs and ranking minority members of the legislative committees and divisions with jurisdiction over agriculture policy and finance on or before the start of each fiscal year.  If significant changes are made to the plans in the course of the year, the commissioner must notify the chairs and ranking minority members.

 

(d) $50,000 the first year and $50,000 the second year are for additional funding for mental health outreach and support to farmers and others in the agricultural community, including a 24‑hour hotline, stigma reduction, and educational offerings.  These are onetime appropriations.

 

(e) $100,000 the first year and $50,000 the second year are for a pilot project creating farmland access teams to provide technical assistance to potential beginning farmers.  The farmland access teams must assist existing farmers and beginning farmers on transitioning farm ownership and operation.  Teams may include but are not limited to providing mediation assistance, designing contracts, financial planning, tax preparation, estate planning, and housing assistance.  Of this amount, up to $50,000 the first year may be used to upgrade the Minnesota FarmLink web application that connects farmers looking for land with farmers looking to transition their land.  These are onetime appropriations.

 

(f) $10,000 the first year and $10,000 the second year are for transfer to the emerging farmer account under Minnesota Statutes, section 17.055, subdivision 1a.

 

(g) $150,000 the first year and $150,000 the second year are to establish an emerging farmer office and hire a full-time emerging farmer outreach coordinator.  The emerging farmer outreach coordinator must engage and support emerging farmers regarding resources and opportunities available throughout the Department of Agriculture and the state.  For purposes of this paragraph, "emerging farmer" has the meaning provided in Minnesota Statutes, section 17.055, subdivision 1.  Of the amount appropriated each year, $25,000 is for translation services.

 

(h) $100,000 the first year and $100,000 the second year are for the farm safety grant and outreach programs under Minnesota Statutes, section 17.1195.  These are onetime appropriations.

 

(i) $54,000 the first year and $109,000 the second year are to maintain the current level of service delivery.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6337

(j) The commissioner may use funds appropriated in this subdivision for annual cost-share payments to resident farmers or entities that sell, process, or package agricultural products in this state for the costs of organic certification.  The commissioner may allocate these funds for assistance to persons transitioning from conventional to organic agriculture.

 

Subd. 4.  Agriculture, Bioenergy, and Bioproduct Advancement

 

26,904,000

 

 

26,917,000

 

(a) $9,300,000 the first year and $9,300,000 the second year are for transfer to the agriculture research, education, extension, and technology transfer account under Minnesota Statutes, section 41A.14, subdivision 3.  Of these amounts:  at least $600,000 the first year and $600,000 the second year are for the Minnesota Agricultural Experiment Station's agriculture rapid response under Minnesota Statutes, section 41A.14, subdivision 1, clause (2); $2,000,000 the first year and $2,000,000 the second year are for grants to the Minnesota Agriculture Education Leadership Council to enhance agricultural education with priority given to Farm Business Management challenge grants; $350,000 the first year and $350,000 the second year are for potato breeding; and $450,000 the first year and $450,000 the second year are for the cultivated wild rice breeding project at the North Central Research and Outreach Center to include a tenure track/research associate plant breeder.  The commissioner shall transfer the remaining funds in this appropriation each year to the Board of Regents of the University of Minnesota for purposes of Minnesota Statutes, section 41A.14.  Of the amount transferred to the Board of Regents, up to $1,000,000 each year is for research on avian influenza, salmonella, and other turkey-related diseases.

 

To the extent practicable, money expended under Minnesota Statutes, section 41A.14, subdivision 1, clauses (1) and (2), must supplement and not supplant existing sources and levels of funding.  The commissioner may use up to one percent of this appropriation for costs incurred to administer the program.

 

(b) $15,589,000 the first year and $15,588,000 the second year are for the agricultural growth, research, and innovation program in Minnesota Statutes, section 41A.12.  Except as provided below, the commissioner may allocate the appropriation each year among the following areas:  facilitating the start-up, modernization, improvement, or expansion of livestock operations including beginning and transitioning livestock operations with preference given to robotic dairy-milking equipment; providing funding not to exceed $800,000 each year to develop and enhance farm-to-school markets for Minnesota farmers by providing more fruits, vegetables, meat, grain, and dairy for Minnesota children in school and child care settings including, at the commissioner's discretion, reimbursing schools for purchases from local farmers; assisting


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6338

value-added agricultural businesses to begin or expand, to access new markets, or to diversify, including aquaponics systems; providing funding not to exceed $600,000 each year for urban youth agricultural education or urban agriculture community development; providing funding not to exceed $600,000 each year for the good food access program under Minnesota Statutes, section 17.1017; facilitating the start-up, modernization, or expansion of other beginning and transitioning farms including by providing loans under Minnesota Statutes, section 41B.056; sustainable agriculture on-farm research and demonstration; development or expansion of food hubs and other alternative community-based food distribution systems; enhancing renewable energy infrastructure and use; crop research; Farm Business Management tuition assistance; and good agricultural practices and good handling practices certification assistance.  The commissioner may use up to 6.5 percent of this appropriation for costs incurred to administer the program.

 

Of the amount appropriated for the agricultural growth, research, and innovation program in Minnesota Statutes, section 41A.12:

 

(1) $1,000,000 the first year and $1,000,000 the second year are for distribution in equal amounts to each of the state's county fairs to preserve and promote Minnesota agriculture;

 

(2) $4,000,000 the first year and $4,000,000 the second year are for incentive payments under Minnesota Statutes, sections 41A.16, 41A.17, and 41A.18.  Notwithstanding Minnesota Statutes, section 16A.28, the first year appropriation is available until June 30, 2023, and the second year appropriation is available until June 30, 2024.  If this appropriation exceeds the total amount for which all producers are eligible in a fiscal year, the balance of the appropriation is available for the agricultural growth, research, and innovation program.  The base amount for the allocation under this clause is $4,000,000 in fiscal year 2024 and later; and

 

(3) up to $1,000,000 the first year is for grants to facilitate the start-up, modernization, or expansion of meat, poultry, egg, and milk processing facilities.

 

Notwithstanding Minnesota Statutes, section 16A.28, any unencumbered balance does not cancel at the end of the first year and is available for the second year, and appropriations encumbered under contract on or before June 30, 2023, for agricultural growth, research, and innovation grants are available until June 30, 2026.

 

The base amount for the agricultural growth, research, and innovation program is $15,584,000 in fiscal year 2024 and $15,584,000 in fiscal year 2025, and includes funding for incentive payments under Minnesota Statutes, sections 41A.16, 41A.17, and 41A.18.


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(c) $2,000,000 the first year and $2,000,000 the second year are for a biofuels infrastructure financial assistance program.  Notwithstanding Minnesota Statutes, section 16A.28, the appropriations encumbered under contract for grants on or before June 30, 2023, are available until June 30, 2027.  Of this amount, $100,000 each year is for the administration of the biofuels infrastructure financial assistance program.

 

(d) $15,000 the first year and $29,000 the second year are to maintain the current level of service delivery.

 

(e) No later than February 1, 2023, the commissioner must report equity data and outcomes for the agriculture research, education, extension, and technology transfer program and the agricultural growth, research, and innovation program to the legislative committees with jurisdiction over agriculture finance.

 

Subd. 5.  Administration and Financial Assistance

 

9,414,000

 

9,403,000

 

(a) $474,000 the first year and $474,000 the second year are for payments to county and district agricultural societies and associations under Minnesota Statutes, section 38.02, subdivision 1.  Aid payments to county and district agricultural societies and associations shall be disbursed no later than July 15 of each year.  These payments are the amount of aid from the state for an annual fair held in the previous calendar year.

 

(b) $287,000 the first year and $287,000 the second year are for farm advocate services.

 

(c) $238,000 the first year and $238,000 the second year are for transfer to the Board of Trustees of the Minnesota State Colleges and Universities for statewide mental health counseling support to farm families and business operators through the Minnesota State Agricultural Centers of Excellence.  South Central College and Central Lakes College shall serve as the fiscal agents.

 

(d) $1,650,000 the first year and $1,650,000 the second year are for grants to Second Harvest Heartland on behalf of Minnesota's six Feeding America food banks for the following:

 

(1) to purchase milk for distribution to Minnesota's food shelves and other charitable organizations that are eligible to receive food from the food banks.  Milk purchased under the grants must be acquired from Minnesota milk processors and based on low-cost bids.  The milk must be allocated to each Feeding America food bank serving Minnesota according to the formula used in the distribution of United States Department of Agriculture commodities under The Emergency Food Assistance Program.  Second Harvest Heartland may enter into contracts or agreements with food banks for shared funding or reimbursement of the direct purchase of milk.  Each food bank that receives funding under this clause may use up to two percent for administrative expenses;


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(2) to compensate agricultural producers and processors for costs incurred to harvest and package for transfer surplus fruits, vegetables, and other agricultural commodities that would otherwise go unharvested, be discarded, or sold in a secondary market.  Surplus commodities must be distributed statewide to food shelves and other charitable organizations that are eligible to receive food from the food banks.  Surplus food acquired under this clause must be from Minnesota producers and processors.  Second Harvest Heartland may use up to 15 percent of each grant awarded under this clause for administrative and transportation expenses; and

 

(3) to purchase and distribute protein products, including but not limited to pork, poultry, beef, dry legumes, cheese, and eggs to Minnesota's food shelves and other charitable organizations that are eligible to receive food from the food banks.  Second Harvest Heartland may use up to two percent of each grant awarded under this clause for administrative expenses.  Protein products purchased under the grants must be acquired from Minnesota processors and producers.

 

Of the amount appropriated under this paragraph, at least $600,000 each year must be allocated under clause (1).  Notwithstanding Minnesota Statutes, section 16A.28, any unencumbered balance the first year does not cancel and is available in the second year.  Second Harvest Heartland must submit quarterly reports to the commissioner and the chairs and ranking minority members of the legislative committees with jurisdiction over agriculture finance in the form prescribed by the commissioner.  The reports must include but are not limited to information on the expenditure of funds, the amount of milk or other commodities purchased, and the organizations to which this food was distributed.

 

(e) $250,000 the first year and $250,000 the second year are for grants to the Minnesota Agricultural Education and Leadership Council for programs of the council under Minnesota Statutes, chapter 41D.

 

(f) The commissioner shall continue to increase connections with ethnic minority and immigrant farmers to farming opportunities and farming programs throughout the state.

 

(g) $1,000,000 the first year and $1,000,000 the second year are for transfer to the agricultural and environmental revolving loan account established under Minnesota Statutes, section 17.117, subdivision 5a, for low-interest loans under Minnesota Statutes, section 17.117.  These are onetime transfers.

 

(h) $150,000 the first year and $150,000 the second year are for grants to the Center for Rural Policy and Development.  These are onetime appropriations.


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(i) $47,000 the first year and $47,000 the second year are for grants to the Northern Crops Institute that may be used to purchase equipment.  These are onetime appropriations.

 

(j) $75,000 the first year and $75,000 the second year are for grants to the Minnesota Turf Seed Council for basic and applied research on:  (1) the improved production of forage and turf seed related to new and improved varieties; and (2) native plants, including plant breeding, nutrient management, pest management, disease management, yield, and viability.  The Minnesota Turf Seed Council may subcontract with a qualified third party for some or all of the basic or applied research.  Any unencumbered balance does not cancel at the end of the first year and is available for the second year.  These are onetime appropriations.

 

(k) $1,000 the first year and $1,000 the second year are for grants to the Minnesota State Poultry Association.  These are onetime appropriations.

 

(l) $17,000 the first year and $17,000 the second year are for grants to the Minnesota State Horticultural Society.  These are onetime appropriations.

 

(m) $18,000 the first year and $18,000 the second year are for grants to the Minnesota Livestock Breeders Association.  These are onetime appropriations.

 

(n) $325,000 the first year and $325,000 the second year are for transfer to the Minnesota Humanities Center for the healthy eating, here at home program under Minnesota Statutes, section 138.912.  Participating nonprofit organizations may receive up to three percent of the amount transferred each year for program administration costs.

 

(o) $75,000 the first year is for a grant to Greater Mankato Growth, Inc., for assistance to agriculture-related businesses to promote jobs, innovation, and synergy development.  This is a onetime appropriation.

 

(p) $25,000 the first year and $25,000 the second year are for grants to the Southern Minnesota Initiative Foundation to promote local foods through an annual event that raises public awareness of local foods and connects local food producers and processors with potential buyers.

 

(q) $222,000 the first year and $286,000 the second year are to maintain the current level of service delivery.

 

Sec. 3.  BOARD OF ANIMAL HEALTH

 

$5,980,000

 

$6,081,000

 

(a) $200,000 the first year and $200,000 the second year are for agricultural emergency preparedness and response.


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(b) $103,000 the first year and $204,000 the second year are to maintain the current level of service delivery.

 

Sec. 4.  AGRICULTURAL UTILIZATION RESEARCH INSTITUTE

 

$4,043,000

 

 

$4,043,000

 

$150,000 the first year and $150,000 the second year are for a meat scientist.

 

Sec. 5.  CANCELLATIONS.

 

(a) $916,553 of the fiscal year 2021 general fund appropriation for protection services under Laws 2019, First Special Session chapter 1, article 1, section 2, subdivision 2, is canceled.

 

(b) $136,000 of the fiscal year 2021 general fund appropriation for agricultural marketing and development under Laws 2019, First Special Session chapter 1, article 1, section 2, subdivision 3, is canceled.

 

(c) $120,000 of the fiscal year 2021 general fund appropriation for agriculture, bioenergy, and bioproduct advancement under Laws 2019, First Special Session chapter 1, article 1, section 2, subdivision 4, is canceled.

 

(d) $157,500 of the fiscal year 2021 general fund appropriation for administration and financial assistance under Laws 2019, First Special Session chapter 1, article 1, section 2, subdivision 5, is canceled.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 6.  FEDERAL FUNDS REPLACEMENT; APPROPRIATION.

 

Notwithstanding any law to the contrary, the commissioner of management and budget must determine whether the expenditures authorized under this act are eligible uses of federal funding received under the Coronavirus State Fiscal Recovery Fund or any other federal funds received by the state under the American Rescue Plan Act, Public Law 117-2.  If the commissioner of management and budget determines an expenditure is eligible for funding under Public Law 117-2, the amount of the eligible expenditure is appropriated from the account or fund where those amounts have been deposited and the corresponding general fund amounts appropriated under this act are canceled to the general fund.  No later than February 1, 2022, the commissioner of agriculture, in consultation with the commissioner of management and budget, must report all appropriations, cancellations, and expenditures under this section to the legislative committees with jurisdiction over agriculture finance.

 

ARTICLE 2

AGRICULTURE STATUTORY CHANGES

 

Section 1.  Minnesota Statutes 2020, section 15.057, is amended to read:

 

15.057 PUBLICITY REPRESENTATIVES.

 

No state department, bureau, or division, whether the same operates on funds appropriated or receipts or fees of any nature whatsoever, except the Department of Transportation, the Department of Employment and Economic Development, the Department of Agriculture, the Game and Fish Division, State Agricultural Society, and Explore Minnesota Tourism shall use any of such funds for the payment of the salary or expenses of a publicity representative.  The head of any such department, bureau, or division shall be personally liable for funds used contrary to this provision.  This section shall not be construed, however, as preventing any such department, bureau, or division from sending out any bulletins or other publicity required by any state law or necessary for the satisfactory conduct of the business for which such department, bureau, or division was created.


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Sec. 2.  Minnesota Statutes 2020, section 17.055, subdivision 1, is amended to read:

 

Subdivision 1.  Emerging farmer working group.  (a) To advise the commissioner and legislature regarding the development and implementation of programs and initiatives that support emerging farmers in this state, the commissioner must periodically convene a working group consisting, to the extent possible, of persons who are, and organizations that represent, farmers or aspiring farmers who are women, veterans, persons with disabilities, American Indian or Alaskan Natives, members of a community of color, young, and urban, and any other emerging farmers as determined by the commissioner.  No later than January 15 each year, the commissioner must update the chairs and ranking minority members of the legislative committees and divisions with jurisdiction over agriculture regarding the working group's activities and recommendations.

 

(b) The commissioner may accept on behalf of the state donations of money, services, or other assistance or gifts from public or private sources to further the objectives of the emerging farmer working group.

 

Sec. 3.  Minnesota Statutes 2020, section 17.055, is amended by adding a subdivision to read:

 

Subd. 1a.  Emerging farmer account.  An emerging farmer account is established in the agricultural fund.  The account consists of money appropriated by law and any other money donated, allotted, transferred, or otherwise provided to the account.  Money in the account, including interest, is appropriated to the commissioner for the purposes of this section and must be used to further the objectives of the emerging farmer working group.

 

Sec. 4.  [17.1016] COOPERATIVE GRANTS.

 

Subdivision 1.  Definitions.  For purposes of this section:

 

(1) "agricultural commodity" and "agricultural product processing facility" have the meanings given in section 17.101, subdivision 5; and

 

(2) "agricultural service" means an action made under the direction of a farmer that provides value to another entity.  Agricultural service includes grazing to manage vegetation.

 

Subd. 2.  Grant program.  (a) The commissioner must establish and implement a grant program to help farmers finance new cooperatives that organize for purposes of operating an agricultural product processing facility or marketing an agricultural product or agricultural service.

 

(b) To be eligible for this program, a grantee must:

 

(1) be a cooperative organized under chapter 308A;

 

(2) certify that all control and equity in the cooperative is from farmers, family farm partnerships, family farm limited liability companies, or family farm corporations as defined in section 500.24, subdivision 2, who are actively engaged in agricultural commodity production;

 

(3) be operated primarily to process agricultural commodities or market agricultural products or services produced in Minnesota; and

 

(4) receive agricultural commodities produced primarily by shareholders or members of the cooperative.

 

(c) The commissioner may receive applications and make grants up to $50,000 to eligible grantees for feasibility, marketing analysis, assistance with organizational development, financing and managing new cooperatives, product development, development of business and marketing plans, and predesign of facilities including site analysis, development of bid specifications, preliminary blueprints and schematics, and completion of purchase agreements and other necessary legal documents.


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Sec. 5.  Minnesota Statutes 2020, section 17.1017, subdivision 5, is amended to read:

 

Subd. 5.  Eligible projects.  (a) The commissioner, in cooperation with the program partners and advisers, shall establish project eligibility guidelines and application processes to be used to review and select project applicants for financing or other financial or technical assistance.  All projects must be located in an underserved community or must serve primarily underserved communities in low-income and moderate-income areas.

 

(b) Projects eligible for financing include, but are not limited to, new construction, renovations, expansions of operations, and infrastructure upgrades of grocery stores and small food retailers to improve the availability of and access to affordable, nutritious food, including fresh fruits and vegetables, and build capacity in areas of greatest need.

 

(c) Projects eligible for other types of financial assistance such as grants or technical assistance are primarily projects throughout the state, including, but not limited to, feasibility studies, new construction, renovations, expansion of operations, and infrastructure upgrades of small food retailers.

 

Sec. 6.  Minnesota Statutes 2020, section 17.1017, subdivision 6, is amended to read:

 

Subd. 6.  Qualifications for receipt of financing and other financial or technical assistance.  (a) An applicant for receipt of financing through an economic or community development financial institution, or an applicant for a grant or other financial or technical assistance, may be a for-profit or not-for-profit entity, including, but not limited to, a sole proprietorship, limited liability company, corporation, cooperative, nonprofit organization, or nonprofit community development organization.  Each applicant must:

 

(1) demonstrate community engagement in and support for the project;

 

(2) demonstrate the capacity to successfully implement the project;

 

(3) demonstrate a viable plan for long-term sustainability, including the ability to increase the availability of and access to affordable, nutritious, and culturally appropriate food, including fresh fruits and vegetables, for underserved communities in low-income and moderate-income areas; and

 

(4) demonstrate the ability to repay the debt, to the extent that the financing requires repayment.

 

(b) Each applicant must also agree to comply with the following conditions for a period of at least five years, except as otherwise specified in this section:

 

(1) accept Supplemental Nutrition Assistance Program (SNAP) benefits;

 

(2) apply to accept Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) benefits and, if approved, accept WIC benefits;

 

(3) (2) allocate at least 30 percent of retail space for the sale of affordable, nutritious, and culturally appropriate foods, including fruits and vegetables, low-fat and nonfat dairy, fortified dairy substitute beverages such as soy‑based or nut-based dairy substitute beverages, whole grain-rich staple foods, meats, poultry, fish, seafood, and other proteins, consistent with nutrition standards in national guidelines described in the current United States Department of Agriculture Dietary Guidelines for Americans;

 

(4) (3) comply with all data collection and reporting requirements established by the commissioner; and

 

(5) (4) promote the hiring, training, and retention of local or regional residents from low-income and moderate‑income areas that reflect area demographics, including communities of color.


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(c) A selected project that is a small food retailer is not subject to the allocation agreement under paragraph (b), clause (3) (2), and may use financing, grants, or other financial or technical assistance for refrigeration, displays, or onetime capital expenditures for the promotion and sale of perishable foods, including a combination of affordable, nutritious, and culturally appropriate fresh or frozen dairy, dairy substitute products, produce, meats, poultry, and fish, consistent with nutrition standards in national guidelines described in the current United States Department of Agriculture Dietary Guidelines for Americans.

 

Sec. 7.  Minnesota Statutes 2020, section 17.116, subdivision 2, is amended to read:

 

Subd. 2.  Eligibility.  (a) Grants may only be made to farmers, educational institutions, individuals at educational institutions, or nonprofit organizations residing or located in the state for research or demonstrations on farms in the state.

 

(b) Grants may only be made for projects that show:

 

(1) the ability to maximize direct or indirect energy savings or production;

 

(2) a positive effect or reduced adverse effect on the environment; and or

 

(3) increased profitability for the individual farm by reducing costs or improving marketing opportunities.

 

Sec. 8.  Minnesota Statutes 2020, section 18B.26, subdivision 3, is amended to read:

 

Subd. 3.  Registration application and gross sales fee.  (a) For an agricultural pesticide, a registrant shall pay an annual registration application fee for each agricultural pesticide of $350.  The fee is due by December 31 preceding the year for which the application for registration is made.  The fee is nonrefundable.

 

(b) For a nonagricultural pesticide, a registrant shall pay a minimum annual registration application fee for each nonagricultural pesticide of $350.  The fee is due by December 31 preceding the year for which the application for registration is made.  The fee is nonrefundable.  If the registrant's annual gross sales of the nonagricultural pesticide exceeded $70,000 in the previous calendar year, the registrant shall pay, in addition to the $350 minimum fee, a fee equal to 0.5 0.9 percent of that portion of the annual gross sales over $70,000.  For purposes of this subdivision, gross sales includes both nonagricultural pesticide sold in the state and nonagricultural pesticide sold into the state for use in this state.  No additional fee is required if the fee due amount based on percent of annual gross sales of a nonagricultural pesticide is less than $10.  The registrant shall secure sufficient sales information of nonagricultural pesticides distributed into this state from distributors and dealers, regardless of distributor location, to make a determination.  Sales of nonagricultural pesticides in this state and sales of nonagricultural pesticides for use in this state by out-of-state distributors are not exempt and must be included in the registrant's annual report, as required under paragraph (g), and fees shall be paid by the registrant based upon those reported sales.  Sales of nonagricultural pesticides in the state for use outside of the state are exempt from the gross sales fee in this paragraph if the registrant properly documents the sale location and distributors.  A registrant paying more than the minimum fee shall pay the balance due by March 1 based on the gross sales of the nonagricultural pesticide by the registrant for the preceding calendar year.  A pesticide determined by the commissioner to be a sanitizer or disinfectant is exempt from the gross sales fee.

 

(c) For agricultural pesticides, a licensed agricultural pesticide dealer or licensed pesticide dealer shall pay a gross sales fee of 0.55 0.9 percent of annual gross sales of the agricultural pesticide in the state and the annual gross sales of the agricultural pesticide sold into the state for use in this state.

 

(d) In those cases where a registrant first sells an agricultural pesticide in or into the state to a pesticide end user, the registrant must first obtain an agricultural pesticide dealer license and is responsible for payment of the annual gross sales fee under paragraph (c), record keeping under paragraph (i), and all other requirements of section 18B.316.


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(e) If the total annual revenue from fees collected in fiscal year 2011, 2012, or 2013, by the commissioner on the registration and sale of pesticides is less than $6,600,000, the commissioner, after a public hearing, may increase proportionally the pesticide sales and product registration fees under this chapter by the amount necessary to ensure this level of revenue is achieved.  The authority under this section expires on June 30, 2014.  The commissioner shall report any fee increases under this paragraph 60 days before the fee change is effective to the senate and house of representatives agriculture budget divisions.

 

(f) (e) An additional fee of 50 percent of the registration application fee must be paid by the applicant for each pesticide to be registered if the application is a renewal application that is submitted after December 31.

 

(g) (f) A registrant must annually report to the commissioner the amount, type and annual gross sales of each registered nonagricultural pesticide sold, offered for sale, or otherwise distributed in the state.  The report shall be filed by March 1 for the previous year's registration.  The commissioner shall specify the form of the report or approve the method for submittal of the report and may require additional information deemed necessary to determine the amount and type of nonagricultural pesticide annually distributed in the state.  The information required shall include the brand name, United States Environmental Protection Agency registration number, and amount of each nonagricultural pesticide sold, offered for sale, or otherwise distributed in the state, but the information collected, if made public, shall be reported in a manner which does not identify a specific brand name in the report.

 

(h) (g) A licensed agricultural pesticide dealer or licensed pesticide dealer must annually report to the commissioner the amount, type, and annual gross sales of each registered agricultural pesticide sold, offered for sale, or otherwise distributed in the state or into the state for use in the state.  The report must be filed by January 31 for the previous year's sales.  The commissioner shall specify the form, contents, and approved electronic method for submittal of the report and may require additional information deemed necessary to determine the amount and type of agricultural pesticide annually distributed within the state or into the state.  The information required must include the brand name, United States Environmental Protection Agency registration number, and amount of each agricultural pesticide sold, offered for sale, or otherwise distributed in the state or into the state.

 

(i) (h) A person who registers a pesticide with the commissioner under paragraph (b), or a registrant under paragraph (d), shall keep accurate records for five years detailing all distribution or sales transactions into the state or in the state and subject to a fee and surcharge under this section.

 

(j) (i) The records are subject to inspection, copying, and audit by the commissioner and must clearly demonstrate proof of payment of all applicable fees and surcharges for each registered pesticide product sold for use in this state.  A person who is located outside of this state must maintain and make available records required by this subdivision in this state or pay all costs incurred by the commissioner in the inspecting, copying, or auditing of the records.

 

(k) (j) The commissioner may adopt by rule regulations that require persons subject to audit under this section to provide information determined by the commissioner to be necessary to enable the commissioner to perform the audit.

 

(l) (k) A registrant who is required to pay more than the minimum fee for any pesticide under paragraph (b) must pay a late fee penalty of $100 for each pesticide application fee paid after March 1 in the year for which the license is to be issued.

 

Sec. 9.  Minnesota Statutes 2020, section 21.82, subdivision 3, is amended to read:

 

Subd. 3.  Treated seed.  For all named agricultural, vegetable, flower, or wildflower seeds which are treated, for which a separate label may be used, the label must contain:

 

(1) a word or statement to indicate that the seed has been treated;


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(2) the commonly accepted, coined, chemical, or abbreviated generic chemical name of the applied substance;

 

(3) the caution statement "Do not use for food, feed, or oil purposes" if the substance in the amount present with the seed is harmful to human or other vertebrate animals;

 

(4) in the case of mercurials or similarly toxic substances, a poison statement and symbol;

 

(5) a word or statement describing the process used when the treatment is not of pesticide origin; and

 

(6) the date beyond which the inoculant is considered ineffective if the seed is treated with an inoculant.  It must be listed on the label as "inoculant:  expires (month and year)" or wording that conveys the same meaning.; and

 

(7) for corn or soybean seed treated with neonicotinoid pesticide, the following caution statement framed in a box and including a bee icon approved by the commissioner:  "Planting seed treated with a neonicotinoid pesticide may negatively impact pollinator health.  Please use care when handling and planting this seed.  Do not use for food, feed, or oil purposes, or ethanol production."

 

Sec. 10.  Minnesota Statutes 2020, section 21.86, subdivision 2, is amended to read:

 

Subd. 2.  Miscellaneous violations.  No person may:

 

(a) detach, alter, deface, or destroy any label required in sections 21.82 and 21.83, alter or substitute seed in a manner that may defeat the purposes of sections 21.82 and 21.83, or alter or falsify any seed tests, laboratory reports, records, or other documents to create a misleading impression as to kind, variety, history, quality, or origin of the seed;

 

(b) hinder or obstruct in any way any authorized person in the performance of duties under sections 21.80 to 21.92;

 

(c) fail to comply with a "stop sale" order or to move or otherwise handle or dispose of any lot of seed held under a stop sale order or attached tags, except with express permission of the enforcing officer for the purpose specified;

 

(d) use the word "type" in any labeling in connection with the name of any agricultural seed variety;

 

(e) use the word "trace" as a substitute for any statement which is required;

 

(f) plant any agricultural seed which the person knows contains weed seeds or noxious weed seeds in excess of the limits for that seed; or

 

(g) advertise or sell seed containing patented, protected, or proprietary varieties used without permission of the patent or certificate holder of the intellectual property associated with the variety of seed.; or

 

(h) use or sell as food, feed, oil, or ethanol feedstock any seed treated or coated with neonicotinoid pesticide.

 

Sec. 11.  [21.915] PROHIBITED DISPOSAL METHODS.

 

A person must not dispose of seed treated or coated with neonicotinoid pesticide in a manner inconsistent with the product label, where applicable, or by:

 

(1) burial near a drinking water source or any creek, stream, river, lake, or other surface water;


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(2) composting; or

 

(3) incinerating within a home or other dwelling.

 

Sec. 12.  Minnesota Statutes 2020, section 28A.08, is amended by adding a subdivision to read:

 

Subd. 4.  Food handler license account; appropriation.  A food handler license account is established in the agricultural fund.  Fees paid under subdivision 3 must be deposited in the account.  Money in the account, including interest, is appropriated to the commissioner for expenses relating to licensing and inspecting food handlers under chapters 28 to 34A or rules adopted under one of those chapters.

 

Sec. 13.  Minnesota Statutes 2020, section 28A.09, is amended by adding a subdivision to read:

 

Subd. 3.  Vending machine inspection account; appropriation.  A vending machine inspection account is established in the agricultural fund.  Fees paid under subdivision 1 must be deposited in the account.  Money in the account, including interest, is appropriated to the commissioner for expenses relating to identifying and inspecting food vending machines under chapters 28 to 34A or rules adopted under one of those chapters.

 

Sec. 14.  Minnesota Statutes 2020, section 28A.152, subdivision 1, is amended to read:

 

Subdivision 1.  Licensing provisions applicability.  (a) The licensing provisions of sections 28A.01 to 28A.16 do not apply to the following:

 

(1) an individual who prepares and sells food that is not potentially hazardous food, as defined in Minnesota Rules, part 4626.0020, subpart 62, if the following requirements are met:

 

(i) the prepared food offered for sale under this clause is labeled to accurately reflect the name and the registration number or address of the individual preparing and selling the food, the date on which the food was prepared, and the ingredients and any possible allergens; and

 

(ii) the individual displays at the point of sale a clearly legible sign or placard stating:  "These products are homemade and not subject to state inspection."; and

 

(2) an individual who prepares and sells home-processed and home-canned food products if the following requirements are met:

 

(i) the products are pickles, vegetables, or fruits having an equilibrium pH value of 4.6 or lower, or a water activity value of .85 or less;

 

(ii) the products are home-processed and home-canned in Minnesota;

 

(iii) the individual displays at the point of sale a clearly legible sign or placard stating:  "These canned goods are homemade and not subject to state inspection."; and

 

(iv) each container of the product sold or offered for sale under this clause is accurately labeled to provide the name and the registration number or address of the individual who processed and canned the goods, the date on which the goods were processed and canned, and ingredients and any possible allergens.

 

(b) An individual who qualifies for an exemption under paragraph (a), clause (2), is also exempt from the provisions of sections 31.31 and 31.392.

 

(c) An individual who qualifies for an exemption under paragraph (a) may organize the individual's cottage food business as a business entity recognized by state law.


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Sec. 15.  Minnesota Statutes 2020, section 28A.152, subdivision 3, is amended to read:

 

Subd. 3.  Limitation on sales.  An individual selling exempt foods under this section is limited to total sales with gross receipts of $18,000 $78,000 or less in a calendar year.

 

Sec. 16.  Minnesota Statutes 2020, section 28A.152, subdivision 4, is amended to read:

 

Subd. 4.  Registration.  An individual who prepares and sells exempt food under subdivision 1 must register annually with the commissioner.  The commissioner shall register an individual within 30 days of submitting a complete registration to the commissioner.  A registration shall be deemed accepted after 30 days following an individual's complete registration to the commissioner.  The annual registration fee is $50 $25.  An individual with $5,000 or less in annual gross receipts from the sale of exempt food under this section is not required to pay the registration fee.  Beginning January 1, 2022, and every five years thereafter, the commissioner shall adjust the gross receipts amount of this fee exemption based on the consumer price index using 2015 as the index year for the $5,000 gross receipts exemption.

 

Sec. 17.  Minnesota Statutes 2020, section 28A.152, subdivision 5, is amended to read:

 

Subd. 5.  Training.  (a) An individual with gross receipts between $5,000 and $18,000 in a calendar year from the sale of exempt food under this section must complete a safe food handling training course that is approved by the commissioner before registering under subdivision 4.  The training shall not exceed eight hours and must be completed every three years while the individual is registered under subdivision 4.

 

(b) An individual with gross receipts of less than $5,000 in a calendar year from the sale of exempt food under this section must satisfactorily complete an online course and exam as approved by the commissioner before registering under subdivision 4.  The commissioner shall offer the online course and exam under this paragraph at no cost to the individual.

 

Sec. 18.  [28A.153] WILD GAME PROCESSOR EXEMPTION.

 

Subdivision 1.  Licensing provisions applicability.  The licensing provisions of sections 28A.01 to 28A.16 do not apply to an individual who processes wild game or fowl as described in section 31A.15, subdivision 1, clause (2), if the following requirements are met:

 

(1) the individual does not conduct another operation subject to the licensing provisions of sections 28A.01 to 28A.16;

 

(2) the individual's operation is limited to the handling of raw products, to include cutting, grinding, and packaging, and without further preparation of the wild game or fowl products;

 

(3) the individual does not add any additional ingredients to the wild game or fowl products;

 

(4) the wild game or fowl products are not donated; and

 

(5) all wild game or fowl products are packaged and labeled as "Not for Sale."

 

Subd. 2.  Sales limitation.  An individual processing wild game or fowl under this section is limited to total services with gross receipts of $20,000 or less in a calendar year.

 

Subd. 3.  Registration.  An individual processing wild game under this section must register annually with the commissioner.  The commissioner must not assess a registration fee.


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Subd. 4.  Permit exemption.  An individual processing wild game under this section is not required to obtain a custom processing permit under section 28A.04, subdivision 2.

 

Subd. 5.  Local ordinances.  This section does not preempt the application of any business licensing requirement or sanitation, public health, or zoning ordinance of a political subdivision.

 

Subd. 6.  Chronic wasting disease.  An individual processing wild game under this section must:

 

(1) ensure that each white-tailed deer processed by the individual and harvested from a chronic wasting disease management zone established by the commissioner of natural resources is tested for chronic wasting disease; and

 

(2) dispose of the carcass of each white-tailed deer under clause (1) through a chronic wasting disease adopt‑a‑dumpster program administered by the commissioner of natural resources.

 

Sec. 19.  Minnesota Statutes 2020, section 35.02, subdivision 1, is amended to read:

 

Subdivision 1.  Members; officers.  The board has five seven members appointed by the governor with the advice and consent of the senate, three of whom are producers of livestock in the state, and two three of whom are practicing veterinarians licensed in Minnesota at least one of whom is a small-animal veterinarian, and one of whom is a member of a federally recognized Tribe located in Minnesota with knowledge of animal health.  The commissioners of agriculture, natural resources, and health, the dean of the College of Veterinary Medicine, and the director of the Veterinary Diagnostic Laboratory of the University of Minnesota may shall serve as consultants to the board without vote.  Appointments to fill unexpired terms must be made from the classes to which the retiring members belong.  The board shall elect a president and a vice-president from among its members and.  The governor shall appoint a veterinarian licensed in Minnesota who is not a member to be its executive director for a term of one year and until a successor qualifies.  The board shall set the duties of the director.

 

EFFECTIVE DATE.  This section is effective July 1, 2021, and the governor's duty to appoint the executive director of the Board of Animal Health begins with the appointment for state fiscal year 2023.

 

Sec. 20.  Minnesota Statutes 2020, section 41A.16, subdivision 2, is amended to read:

 

Subd. 2.  Payment amounts; limits.  (a) The commissioner shall make payments to eligible producers of advanced biofuel.  The amount of the payment for each eligible producer's annual production is $2.1053 per MMbtu for advanced biofuel production from cellulosic biomass, and $1.053 per MMbtu for advanced biofuel production from sugar, starch, oil, or animal fat at a specific location for ten years after the start of production.

 

(b) Total payments under this section to an eligible biofuel producer in a fiscal year may not exceed the amount necessary for 2,850,000 MMbtu of biofuel production.  Total payments under this section to all eligible biofuel producers in a fiscal year may not exceed the amount necessary for 17,100,000 MMbtu of biofuel production.  If the total amount for which all producers are eligible in a quarter exceeds the amount available for payments, the commissioner shall make the payments on a pro rata basis.  An eligible producer may reapply for payment of the amount of the difference between the claim for payment filed under subdivision 6 and the pro rata amount received until the full amount of the original claim is paid.

 

(c) For purposes of this section, an entity that holds a controlling interest in more than one advanced biofuel facility is considered a single eligible producer.

 

EFFECTIVE DATE.  This section is effective retroactively from January 1, 2020, and applies to claims filed after January 1, 2020.


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Sec. 21.  Minnesota Statutes 2020, section 41A.16, subdivision 5, is amended to read:

 

Subd. 5.  Agricultural cellulosic biomass sourcing plan.  (a) An eligible producer who utilizes agricultural cellulosic biomass other than corn kernel fiber or biogas must submit a responsible biomass sourcing plan for approval by the commissioner prior to applying for payments under this section.  The commissioner shall make the plan publicly available.  The plan must:

 

(1) provide a detailed explanation of how agricultural cellulosic biomass will be produced and managed in a way that preserves soil quality, does not increase soil and nutrient runoff, avoids introduction of harmful invasive species, limits negative impacts on wildlife habitat, and reduces greenhouse gas emissions;

 

(2) include the producer's approach to verifying that biomass suppliers are following the plan;

 

(3) discuss how new technologies and practices that are not yet commercially viable may be encouraged and adopted during the life of the facility, and how the producer will encourage continuous improvement during the life of the project;

 

(4) include specific numeric goals and timelines for making progress;

 

(5) require agronomic practices that result in a positive Natural Resources Conservation Service Soil Conditioning Index score for acres from which biomass from corn stover will be harvested; and

 

(6) include biennial soil sampling to verify maintained or increased levels of soil organic matter.

 

(b) An eligible producer who utilizes agricultural cellulosic biomass and receives payments under this section shall submit an annual report on the producer's responsible biomass sourcing plan to the commissioner by January 15 each year.  The report must include data on progress made by the producer in meeting specific goals laid out in the plan.  The commissioner shall make the report publicly available.  The commissioner shall perform an annual review of submitted reports and may make a determination that the producer is not following the plan based on the reports submitted.  The commissioner may take appropriate steps, including reducing or ceasing payments, until the producer is in compliance with the plan.

 

Sec. 22.  Minnesota Statutes 2020, section 41A.16, subdivision 6, is amended to read:

 

Subd. 6.  Claims.  (a) By the last day of October, January, April, and July, each eligible biofuel producer shall file a claim for payment for advanced biofuel production during the preceding three calendar months.  An eligible biofuel producer that files a claim under this subdivision shall include a statement of the eligible biofuel producer's total advanced biofuel production in Minnesota during the quarter covered by the claim and certify that the eligible producer will not use payments received under this section to compensate a lobbyist who is required to register with the Campaign Finance and Public Disclosure Board under section 10A.03.  For each claim and statement of total advanced biofuel production filed under this subdivision, the volume of advanced biofuel production must be examined by a CPA firm with a valid permit to practice under chapter 326A, in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants.

 

(b) The commissioner must issue payments by November 15, February 15, May 15, and August 15.  A separate payment must be made for each claim filed.

 

Sec. 23.  Minnesota Statutes 2020, section 41A.17, subdivision 2, is amended to read:

 

Subd. 2.  Payment amounts; bonus; limits.  (a) The commissioner shall make payments to eligible producers of renewable chemicals located in the state.  The amount of the payment for each producer's annual production is $0.03 per pound of sugar-derived renewable chemical, $0.03 per pound of cellulosic sugar, starch, oil, or animal fat, and $0.06 per pound of cellulosic-derived renewable chemical produced at a specific location for ten years after the start of production.


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(b) An eligible facility producing renewable chemicals using agricultural cellulosic biomass is eligible for a 20 percent bonus payment for each pound produced from agricultural biomass that is derived from perennial crop or cover crop biomass.

 

(c) Total payments under this section to an eligible renewable chemical producer in a fiscal year may not exceed the amount necessary for 99,999,999 pounds of renewable chemical production.  Total payments under this section to all eligible renewable chemical producers in a fiscal year may not exceed the amount necessary for 599,999,999 pounds of renewable chemical production.  If the total amount for which all producers are eligible in a quarter exceeds the amount available for payments, the commissioner shall make the payments on a pro rata basis.  An eligible producer may reapply for payment of the amount of the difference between the claim for payment filed under subdivision 5 and the pro rata amount received until the full amount of the original claim is paid.

 

(d) An eligible facility may blend renewable chemicals with other chemicals that are not renewable chemicals, but only the percentage attributable to renewable chemicals in the blended product is eligible to receive payment.

 

(e) For purposes of this section, an entity that holds a controlling interest in more than one renewable chemical production facility is considered a single eligible producer.

 

EFFECTIVE DATE.  This section is effective retroactively from January 1, 2020, and applies to claims filed after January 1, 2020.

 

Sec. 24.  Minnesota Statutes 2020, section 41A.17, subdivision 4, is amended to read:

 

Subd. 4.  Agricultural cellulosic biomass sourcing plan.  (a) An eligible producer who utilizes agricultural cellulosic biomass other than corn kernel fiber or biogas must submit a responsible biomass sourcing plan to the commissioner prior to applying for payments under this section.  The plan must:

 

(1) provide a detailed explanation of how agricultural cellulosic biomass will be produced and managed in a way that preserves soil quality, does not increase soil and nutrient runoff, avoids introduction of harmful invasive species, limits negative impacts on wildlife habitat, and reduces greenhouse gas emissions;

 

(2) include the producer's approach to verifying that biomass suppliers are following the plan;

 

(3) discuss how new technologies and practices that are not yet commercially viable may be encouraged and adopted during the life of the facility, and how the producer will encourage continuous improvement during the life of the project; and

 

(4) include specific numeric goals and timelines for making progress.

 

(b) An eligible producer who utilizes agricultural cellulosic biomass and receives payments under this section shall submit an annual report on the producer's responsible biomass sourcing plan to the commissioner by January 15 each year.  The report must include data on progress made by the producer in meeting specific goals laid out in the plan.  The commissioner shall make the report publicly available.  The commissioner shall perform an annual review of submitted reports and may make a determination that the producer is not following the plan based on the reports submitted.  The commissioner may take appropriate steps, including reducing or ceasing payments, until the producer is in compliance with the plan.

 

Sec. 25.  Minnesota Statutes 2020, section 41A.17, subdivision 5, is amended to read:

 

Subd. 5.  Claims.  (a) By the last day of October, January, April, and July, each eligible renewable chemical producer shall file a claim for payment for renewable chemical production during the preceding three calendar months.  An eligible renewable chemical producer that files a claim under this subdivision shall include a statement


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of the eligible producer's total renewable chemical production in Minnesota during the quarter covered by the claim and certify that the eligible producer will not use payments received under this section to compensate a lobbyist who is required to register with the Campaign Finance and Public Disclosure Board under section 10A.03.  For each claim and statement of total renewable chemical production filed under this paragraph, the volume of renewable chemical production must be examined by a CPA firm with a valid permit to practice under chapter 326A, in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants.

 

(b) The commissioner must issue payments by November 15, February 15, May 15, and August 15.  A separate payment must be made for each claim filed.

 

Sec. 26.  Minnesota Statutes 2020, section 41A.18, subdivision 2, is amended to read:

 

Subd. 2.  Payment amounts; bonus; limits; blending.  (a) The commissioner shall make payments to eligible producers of biomass thermal located in the state.  The amount of the payment for each producer's annual production is $5.00 per MMbtu of biomass thermal production produced at a specific location for ten years after the start of production.

 

(b) An eligible facility producing biomass thermal using agricultural cellulosic biomass is eligible for a 20 percent bonus payment for each MMbtu produced from agricultural biomass that is derived from perennial crop or cover crop biomass.

 

(c) Total payments under this section to an eligible thermal producer in a fiscal year may not exceed the amount necessary for 30,000 MMbtu of thermal production.  Total payments under this section to all eligible thermal producers in a fiscal year may not exceed the amount necessary for 150,000 MMbtu of total thermal production.  If the total amount for which all producers are eligible in a quarter exceeds the amount available for payments, the commissioner shall make the payments on a pro rata basis.  An eligible producer may reapply for payment of the amount of the difference between the claim for payment filed under subdivision 5 and the pro rata amount received until the full amount of the original claim is paid.

 

(d) An eligible facility may blend a cellulosic feedstock with other fuels in the biomass thermal production facility, but only the percentage attributable to biomass meeting the cellulosic forestry biomass requirements or agricultural cellulosic biomass sourcing plan is eligible to receive payment.

 

(e) When a facility is eligible due to adding production capacity or retrofitting existing capacity, the entire amount of biomass meeting the cellulosic forestry biomass requirements or agricultural cellulosic biomass sourcing plan is assumed to have been used for the biomass thermal production from the added or retrofitted production capacity.

 

(f) For purposes of this section, an entity that holds a controlling interest in more than one biomass thermal production facility is considered a single eligible producer.

 

EFFECTIVE DATE.  This section is effective retroactively from January 1, 2020, and applies to claims filed after January 1, 2020.

 

Sec. 27.  Minnesota Statutes 2020, section 41A.18, subdivision 5, is amended to read:

 

Subd. 5.  Claims.  (a) By the last day of October, January, April, and July, each producer shall file a claim for payment for biomass thermal production during the preceding three calendar months.  A producer that files a claim under this subdivision shall include a statement of the producer's total biomass thermal production in Minnesota during the quarter covered by the claim and certify that the eligible producer will not use payments received under


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this section to compensate a lobbyist who is required to register with the Campaign Finance and Public Disclosure Board under section 10A.03.  For each claim and statement of total biomass thermal production filed under this paragraph, the volume of biomass thermal production must be examined by a CPA firm with a valid permit to practice under chapter 326A, in accordance with Statements on Standards for Attestation Engagements established by the American Institute of Certified Public Accountants.

 

(b) The commissioner must issue payments by November 15, February 15, May 15, and August 15.  A separate payment shall be made for each claim filed.

 

Sec. 28.  Minnesota Statutes 2020, section 41A.19, is amended to read:

 

41A.19 REPORT; INCENTIVE PROGRAMS.

 

By January 15 each year, the commissioner shall report on the incentive programs under sections 41A.16, 41A.17, and 41A.18 to the legislative committees with jurisdiction over environment policy and finance and agriculture policy and finance.  The report shall include information on production and incentive expenditures under the programs., as well as the following information that the commissioner must require of each producer who receives a payment during the reporting period:

 

(1) business structure of the producer;

 

(2) the name and address of the parent company of the producer, if any;

 

(3) a cumulative list of all financial assistance received from all grantors for the project;

 

(4) goals for the number of jobs created and progress in achieving these goals, which may include separate goals for the number of part-time or full-time jobs, or, in cases where job loss is specific and demonstrable, goals for the number of jobs retained;

 

(5) equity hiring goals and progress in achieving these goals;

 

(6) wage goals and progress in achieving these goals for all jobs created or maintained by the producer;

 

(7) board member and executive compensation;

 

(8) evidence of compliance with environmental permits;

 

(9) the producer's intended and actual use of payments received from the commissioner; and

 

(10) if applicable, the latest financial audit opinion statement produced by a certified public accountant in accordance with standards established by the American Institute of Certified Public Accountants.

 

Sec. 29.  [41A.25] BIOFUELS INFRASTRUCTURE FINANCIAL ASSISTANCE PROGRAM.

 

Subdivision 1.  Definitions.  (a) For purposes of this section, the following terms have the meanings given.

 

(b) "Account" means the biofuels infrastructure financial assistance account established in subdivision 3.

 

(c) "Biofuel" has the meaning given in section 239.051.

 

(d) "Biodiesel blend" has the meaning given in section 239.77.


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(e) "Biodiesel fuel" has the meaning given in section 239.77.

 

(f) "Biofuels Infrastructure Financial Assistance Program Advisory Committee" or "advisory committee" means the Biofuels Infrastructure Financial Assistance Program Advisory Committee under section 41A.26.

 

(g) "Commissioner" means the commissioner of agriculture.

 

(h) "Financing" means loans, including low-interest loans, zero-interest loans, forgivable loans, and other types of financial assistance other than grants.

 

(i) "Program" means the biofuels infrastructure financial assistance program established in this section.

 

(j) "Technical assistance" means individualized guidance, presentations, workshops, trainings, printed materials, or other guidance and resources on relevant topics.

 

(k) "Transportation fuel storage and dispensing infrastructure" means an underground storage tank or above‑ground storage tank, as those terms are defined in section 116.46 and any rules adopted under that section.  Transportation fuel storage and dispensing infrastructure includes any structures or appurtenances to an underground storage tank or above-ground storage tank.

 

Subd. 2.  Program established.  (a) A biofuels infrastructure financial assistance program is established within the Department of Agriculture to provide financing and financial assistance to owners of transportation fuel storage and dispensing infrastructure for the purpose of upgrading infrastructure to become compatible with blends of gasoline containing greater than ten percent biofuel by volume or biodiesel blends containing greater than 20 percent of biodiesel fuel by volume.  The commissioner, in cooperation with public and private partners, must establish and implement the program as provided in this section.

 

(b) The biofuels infrastructure financial assistance program must be comprised of state or private grants, loans, or other types of financial and technical assistance for the purpose as provided in this subdivision.

 

(c) The commissioner's actions under this subdivision are not subject to chapter 14.

 

Subd. 3.  Biofuels infrastructure financial assistance account.  A biofuels infrastructure financial assistance account is established in the agricultural fund.  The account consists of money appropriated to the commissioner and any other money donated, allotted, transferred, or otherwise provided to the account.  Money in the account, including interest, is appropriated to the commissioner for the purposes of this section, and must be used, to the extent practicable, to leverage other forms of public and private financing or financial assistance for the projects.

 

Subd. 4.  Program administration.  (a) The commissioner is the administrator of the account for auditing purposes and must establish program requirements and a competitive process for projects applying for financial and technical assistance.

 

(b) The commissioner may receive money or other assets from any source, including but not limited to philanthropic foundations and financial investors, for deposit into the account.

 

(c) Through issuance of requests for proposals, the commissioner may contract with one or more qualified economic or community development financial institutions to manage the financing component of the program and with one or more qualified organizations or public agencies with financial or other program-related expertise to manage the provision of technical assistance to project grantees.


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(d) Money in the account at the close of each fiscal year does not cancel.  In each biennium, the commissioner must determine the appropriate proportion of money to be allocated to loans, grants, technical assistance, and any other types of financial assistance.

 

(e) To encourage public-private, cross-sector collaboration and investment in the account and program and to ensure that the program intent is maintained throughout implementation, the commissioner must convene and maintain the Biofuels Infrastructure Financial Assistance Program Advisory Committee.

 

(f) The commissioner, in cooperation with the Biofuels Infrastructure Financial Assistance Program Advisory Committee, must manage the program, establish program criteria, facilitate leveraging of additional public and private investment, and promote the program statewide.

 

(g) The commissioner, in cooperation with the Biofuels Infrastructure Financial Assistance Program Advisory Committee must establish annual monitoring and accountability mechanisms for all projects receiving financing or other financial or technical assistance through this program.

 

Subd. 5.  Eligible projects.  (a) The commissioner, in cooperation with the Biofuels Infrastructure Financial Assistance Program Advisory Committee, must establish project eligibility guidelines and application processes to be used to review and select project applicants for financing or other financial or technical assistance.

 

(b) Projects eligible for financing, financial assistance such as grants, or technical assistance, must fulfill the purpose as provided in subdivision 2.

 

Subd. 6.  Legislative report.  The commissioner, in cooperation with any economic or community development financial institution and any other entity with which it contracts, must submit a report on the biofuels infrastructure financial assistance program by January 15 of each year to the chairs and ranking minority members of the legislative committees and divisions with jurisdiction over agriculture policy and finance.  The annual report must include but not be limited to a summary of the following metrics:

 

(1) the number and types of projects financed;

 

(2) the amount of dollars leveraged or matched per project;

 

(3) the geographic distribution of financed projects;

 

(4) the number and types of technical assistance recipients;

 

(5) any market expansion associated with upgraded infrastructure;

 

(6) the demographics of the areas served;

 

(7) the costs of the program; and

 

(8) the number of loans or grants to minority-owned or female-owned businesses.

 

Sec. 30.  [41A.26] BIOFUELS INFRASTRUCTURE FINANCIAL ASSISTANCE PROGRAM ADVISORY COMMITTEE.

 

Subdivision 1.  Definitions.  As used in this section, the following terms have the meanings given:

 

(1) "commissioner" means the commissioner of agriculture; and


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(2) "program" means the biofuels infrastructure financial assistance program under section 41A.25.

 

Subd. 2.  Creation.  The Biofuels Infrastructure Financial Assistance Program Advisory Committee consists of no more than 15 members appointed by the commissioner of agriculture, including but not limited to representatives of agriculture, the biofuels industry, and motor fuel retailers.

 

Subd. 3.  Duties.  The advisory committee must advise the commissioner of agriculture on managing the program, establishing program criteria, establishing project eligibility guidelines, establishing application processes and additional selection criteria, establishing annual monitoring and accountability mechanisms, facilitating leveraging of additional public and private investments, and promoting the program statewide.

 

Subd. 4.  Meetings.  The commissioner must convene the advisory committee at least two times per year to achieve the committee's duties.

 

Subd. 5.  Administrative support.  The commissioner of agriculture must provide staffing, meeting space, and administrative services for the advisory committee.

 

Subd. 6.  Chair.  The commissioner of agriculture or the commissioner's designee must serve as chair of the committee.

 

Subd. 7.  Compensation.  The public members of the advisory committee serve without compensation or payment of expenses.

 

Sec. 31.  Minnesota Statutes 2020, section 41B.048, subdivision 2, is amended to read:

 

Subd. 2.  Establishment.  The authority shall establish and implement an agroforestry loan program to help finance the production of short rotation woody crops.  The authority may contract with a fiscal agent to provide an efficient delivery system for this program.

 

Sec. 32.  Minnesota Statutes 2020, section 41B.048, subdivision 4, is amended to read:

 

Subd. 4.  Definitions.  (a) The definitions in this subdivision apply to this section.

 

(b) "Fiscal agent" means any lending institution or other organization of a for-profit or nonprofit nature that is in good standing with the state of Minnesota that has the appropriate business structure and trained personnel suitable to providing efficient disbursement of loan funds and the servicing and collection of loans over an extended period of time.

 

(c) (b) "Growing cycle" means the number of years from planting to harvest.

 

(d) (c) "Harvest" means the day that the crop arrives at the scale of the buyer of the crop.

 

(e) (d) "Short rotation woody crops" or "crop" means hybrid poplar and other woody plants that are harvested for their fiber within 15 years of planting.

 

Sec. 33.  Minnesota Statutes 2020, section 41B.048, subdivision 6, is amended to read:

 

Subd. 6.  Loans.  (a) The authority may disburse loans through a fiscal agent participate with eligible lenders in agroforestry loans to farmers and agricultural landowners who are eligible under subdivision 5.  The total accumulative loan principal must not exceed The authority's participation is limited to 45 percent or $75,000 of total accumulative principal per loan.


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(b) The fiscal agent may impose a loan origination fee in the amount of one percent of the total approved loan.  This fee is to be paid by the borrower to the fiscal agent at the time of loan closing The interest rates and repayment terms of the authority's participation interest may differ from those of the lender's retained portion of the loan.

 

(c) The loan may be disbursed over a period not to exceed 12 years.

 

(d) A borrower may receive loans, depending on the availability of funds, for planted areas up to 160 acres for up to:

 

(1) the total amount necessary for establishment of the crop;

 

(2) the total amount of maintenance costs, including weed control, during the first three years; and

 

(3) 70 percent of the estimated value of one year's growth of the crop for years four through 12.

 

(e) Security for the loan must be the crop, a personal note executed by the borrower, an interest in the land upon which the crop is growing, and whatever other security is required by the fiscal agent eligible lender or the authority.  All recording fees must be paid by the borrower.

 

(f) The authority may prescribe forms and establish an application process for applicants to apply for a loan.

 

(g) The authority may impose a reasonable, nonrefundable application fee for each application for a loan under this program.  The application fee is initially $50.  Application fees received by the authority must be deposited in the Rural Finance Authority administrative account established in section 41B.03.

 

(h) Loans under the program must be made using money in the revolving loan account established under section 41B.06.

 

(i) All repayments of financial assistance granted under this section, including principal and interest, must be deposited into the revolving loan account established under section 41B.06.

 

(j) The interest payable on loans made by the authority for the agroforestry loan program must, if funded by revenue bond proceeds, be at a rate not less than the rate on the revenue bonds, and may be established at a higher rate necessary to pay costs associated with the issuance of the revenue bonds and a proportionate share of the cost of administering the program.  The interest payable on loans for the agroforestry loan program funded from sources other than revenue bond proceeds must be at a rate determined by the authority.

 

(k) Loan principal balance outstanding plus all assessed interest must be repaid within 120 days of harvest, but no later than 15 years from planting.

 

Sec. 34.  Minnesota Statutes 2020, section 583.215, is amended to read:

 

583.215 EXPIRATION.

 

Sections 336.9-601, subsections (h) and (i); 550.365; 559.209; 582.039; and 583.20 to 583.32, expire June 30, 2022 2027.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 35.  Minnesota Statutes 2020, section 583.26, subdivision 4, is amended to read:

 

Subd. 4.  Mediation proceeding notice.  (a) By ten days after receiving a mediation request, the director shall send:  (1) a mediation proceeding notice to the debtor; (2) a mediation proceeding notice to all creditors listed by the debtor in the mediation request and any additional secured creditors identified by the director from the credit report obtained with the debtor's permission under subdivision 2; and (3) a claim form to all secured creditors stated by the debtor or identified by the director.

 

(b) The mediation proceeding notice must state:

 

(1) the name and address of the debtor;

 

(2) that the debtor has requested mediation under the Farmer-Lender Mediation Act;

 

(3) the time and place for the orientation session;

 

(4) the time and place for the initial mediation meeting;

 

(5) a list of the names of three mediators that may be assigned to the proceeding, along with background information on those mediators including biographical information, a summary of previous mediation experience, and the number of agreements signed by parties to previous mediation;

 

(6) that the debtor and the initiating creditor may each request the director to exclude one mediator by notifying the director within three days after receiving the notice;

 

(7) that in lieu of having a mediator assigned by the director, the debtor and any one or more of the creditors may agree to select and pay for a professional mediator that is approved by the director;

 

(8) that the Farmer-Lender Mediation Act prohibits the creditor from beginning or continuing a proceeding to enforce the debt against agricultural property for 90 120 days after the debtor files a mediation request with the director unless otherwise allowed; and

 

(9) that the creditor must provide the debtor by the initial mediation meeting with copies of notes and contracts for debts subject to the Farmer-Lender Mediation Act and provide a statement of interest rates on the debts, delinquent payments, unpaid principal and interest balances, the creditor's value of the collateral, and debt restructuring programs available by the creditor.

 

(c) An initial mediation meeting must be held within 20 days of the notice.

 

(d) The initiating creditor and the debtor may each request the director to exclude one mediator from the list by sending the director a notice to exclude the mediator within three days after receiving the mediation proceeding notice.

 

(e) In lieu of the director assigning a mediator, the debtor and any one or more of the creditors may agree to select and pay for a professional mediator for the mediation proceeding.  The director must approve the professional mediator before the professional mediator may be assigned to the mediation proceeding.  The professional mediator may not be approved unless the professional mediator prepares and signs an affidavit:

 

(1) disclosing any biases, relationships, or previous associations with the debtor or creditors subject to the mediation proceedings;

 

(2) stating certifications, training, or qualifications as a professional mediator;


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(3) disclosing fees to be charged or a rate schedule of fees for the mediation proceeding; and

 

(4) affirming to uphold the Farmer-Lender Mediation Act and faithfully discharge the duties of a mediator.

 

(f) After receiving a mediation proceeding notice, a secured creditor must return a claim form if the debt is not subject to the Farmer-Lender Mediation Act and specify why the debt is not subject to sections 583.20 to 583.32.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to mediation proceedings in progress on that date and mediation proceedings beginning after that date.

 

Sec. 36.  Minnesota Statutes 2020, section 583.26, subdivision 5, is amended to read:

 

Subd. 5.  Effect of mediation proceeding notice.  (a) Except as provided in paragraphs (b), (c), and (d), if a creditor receives a mediation proceeding notice under subdivision 4 the creditor and the creditor's successors in interest may not begin or continue proceedings to enforce a debt subject to the Farmer-Lender Mediation Act against agricultural property of the debtor under chapter 580 or 581 or sections 336.9-501 to 336.9-508, to terminate a contract for deed to purchase agricultural property under section 559.21, or to garnish, levy on, execute on, seize, or attach agricultural property until 90 120 days after the date the debtor files a mediation request with the director.

 

(b) Except as provided in paragraph (c), if a creditor is an agency of the United States and receives a mediation proceeding notice under subdivision 4, the creditor and the creditor's successors in interest may not begin or continue proceedings to enforce a debt against agricultural property of the debtor under chapter 580 or 581 or sections 336.9-501 to 336.9-508, to terminate a contract for deed to purchase agricultural property under section 559.21, or to garnish, levy on, execute on, seize, or attach agricultural property until 90 120 days after the date the debtor files a mediation request with the director.

 

(c) Notwithstanding paragraphs (a) and (b) or subdivision 1, a creditor receiving a mediation proceeding notice may begin proceedings to enforce a debt against agricultural property of the debtor:

 

(1) at the time the creditor receives a mediator's affidavit of the debtor's lack of good faith under section 583.27; or

 

(2) five days after the date the debtor and creditor sign an agreement allowing the creditor to proceed to enforce the debt against agricultural property if the debtor has not rescinded the agreement within the five days.

 

(d) A creditor receiving a mediation proceeding notice must provide the debtor by the initial mediation meeting with copies of notes and contracts for debts subject to the Farmer-Lender Mediation Act and provide a statement of interest rates on the debts, delinquent payments, unpaid principal balance, a list of all collateral securing debts, a creditor's estimate of the value of the collateral, and debt restructuring programs available by the creditor.

 

(e) The provisions of this subdivision are subject to section 583.27, relating to extension or reduction in the period before a creditor may begin to enforce a debt and court-supervised mediation.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to mediation proceedings in progress on that date and mediation proceedings beginning after that date.

 

Sec. 37.  Minnesota Statutes 2020, section 583.26, subdivision 8, is amended to read:

 

Subd. 8.  Mediation period.  The mediator may call mediation meetings during the mediation period, which is up to 60 90 days after the initial mediation meeting.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to mediation proceedings in progress on that date and mediation proceedings beginning after that date.


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Sec. 38.  Minnesota Statutes 2020, section 583.27, subdivision 3, is amended to read:

 

Subd. 3.  Creditor's bad faith; court supervision.  If the mediator finds the creditor has not participated in mediation in good faith, the debtor may require court supervised mandatory mediation by filing the affidavit with the district court of the county of the debtor's residence with a request for court supervision of mediation and serving a copy of the request on the creditor.  Upon request the court shall require both parties to mediate under the supervision of the court in good faith for a period of not more than 60 90 days.  All creditor remedies must be suspended during this period.  The court may issue orders necessary to effect good faith mediation.  Following the mediation period, if the court finds the creditor has not participated in mediation in good faith, the court shall by order suspend the creditor's remedies for an additional period of 180 days.  A creditor found by the mediator not to have participated in good faith shall pay attorneys' fees and costs of the debtor requesting court-supervision of mediation or additional suspension of creditor's remedies.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies to mediation proceedings in progress on that date and mediation proceedings beginning after that date.

 

Sec. 39.  Laws 2020, chapter 71, article 2, section 19, is amended to read:

 

Sec. 19.  USES OF GENERAL-USE SANITIZERS AND DISINFECTANTS FOR TREATMENT OF COVID-19.

 

(a) A person who uses a general-use sanitizer or disinfectant for hire in response to COVID-19 is exempt from the commercial applicator license requirements under Minnesota Statutes, section 18B.33.

 

(b) This section expires April 1, 2021 2022, or 60 days after the peacetime emergency declared in response to the infectious disease known as COVID-19 expires or is terminated by the proper authority, whichever is later.

 

EFFECTIVE DATE.  This section is effective retroactively from March 31, 2021.

 

Sec. 40.  REPEALER.

 

Minnesota Statutes 2020, section 41B.048, subdivision 8, is repealed.

 

ARTICLE 3

BROADBAND

 

Section 1.  BROADBAND DEVELOPMENT APPROPRIATIONS.

 

The sums shown in the columns marked "Appropriations" are appropriated to the agency and for the purposes specified in this article.  The appropriations are from the general fund, or another named fund, and are available for the fiscal years indicated for each purpose.  The figures "2022" and "2023" used in this article mean that the appropriations listed under them are available for the fiscal year ending June 30, 2022, or June 30, 2023, respectively.  "The first year" is fiscal year 2022.  "The second year" is fiscal year 2023.  "The biennium" is fiscal years 2022 and 2023.

 

 

 

 

APPROPRIATIONS

 

 

 

Available for the Year

 

 

 

Ending June 30

 

 

 

2022

2023

 

Sec. 2.  DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT

 

$30,350,000

 

 

$350,000

 

(a) $350,000 each year is for the Office of Broadband Development.


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(b) $30,000,000 the first year is for transfer to the border-to-border broadband fund account under Minnesota Statutes, section 116J.396.  This transfer is onetime."

 

      Delete the title and insert:

 

"A bill for an act relating to agriculture; establishing a budget for the Department of Agriculture, the Board of Animal Health, the Agricultural Utilization Research Institute, and broadband development; making policy and technical changes to various agriculture provisions; modifying fees; creating accounts; creating a biofuels program and advisory committee; extending and modifying the Farmer-Lender Mediation Act; transferring money for deposit in the broadband grant program; appropriating money; amending Minnesota Statutes 2020, sections 15.057; 17.055, subdivision 1, by adding a subdivision; 17.1017, subdivisions 5, 6; 17.116, subdivision 2; 18B.26, subdivision 3; 21.82, subdivision 3; 21.86, subdivision 2; 28A.08, by adding a subdivision; 28A.09, by adding a subdivision; 28A.152, subdivisions 1, 3, 4, 5; 35.02, subdivision 1; 41A.16, subdivisions 2, 5, 6; 41A.17, subdivisions 2, 4, 5; 41A.18, subdivisions 2, 5; 41A.19; 41B.048, subdivisions 2, 4, 6; 583.215; 583.26, subdivisions 4, 5, 8; 583.27, subdivision 3; Laws 2020, chapter 71, article 2, section 19; proposing coding for new law in Minnesota Statutes, chapters 17; 21; 28A; 41A; repealing Minnesota Statutes 2020, section 41B.048, subdivision 8."

 

 

      The motion prevailed and the amendment was adopted.

 

 

Sundin moved to amend S. F. No. 958, the third engrossment, as amended, as follows:

 

Page 18, line 10, delete "act" and insert "article"

 

Page 18, line 16, delete "act" and insert "article"

 

 

      The motion prevailed and the amendment was adopted.

 

 

Lueck moved to amend S. F. No. 958, the third engrossment, as amended, as follows:

 

Page 29, delete section 19

 

Renumber the sections in sequence and correct the internal references

 

Amend the title accordingly

 

 

      The motion did not prevail and the amendment was not adopted.

 

 

Green moved to amend S. F. No. 958, the third engrossment, as amended, as follows:

 

Page 2, line 17, delete "15,750,000" and insert "15,811,000" and delete "15,476,000" and insert "15,502,000"

 

Page 4, after line 19, insert:


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6363

"(j) $61,000 the first year and $26,000 the second year are to monitor groundwater and surface water on outdoor recreation system lands under article 2, section 34.  Of the amount appropriated each year, $17,000 the first year and $15,000 the second year are for transfer to the commissioner of natural resources."

 

Page 12, line 26, delete "9,414,000" and insert "9,353,000" and delete "9,403,000" and insert "9,377,000"

 

Page 17, line 13, delete "$222,000" and insert "$161,000" and delete "$286,000" and insert "$260,000"

 

Page 41, after line 25, insert:

 

"Sec. 34.  Minnesota Statutes 2020, section 103H.175, is amended by adding a subdivision to read:

 

Subd. 4.  Nitrogen monitoring on state lands required.  (a) On outdoor recreation system lands owned by the state, the commissioner of agriculture must monitor groundwater and surface water for nitrogen and report the results as required under this section.

 

(b) At a minimum, the commissioner must test groundwater for nitrates in the following locations:

 

(1) Lost 40 Scientific and Natural Area;

 

(2) Blue Mounds State Park; and

 

(3) Sakatah Lake State Park.

 

The commissioner must conduct the testing required by this paragraph at least three times per year for five years, beginning in calendar year 2021.  The commissioner must report its findings to the legislative committees with jurisdiction over agriculture, environment, and natural resources by February 15 each year following the year in which the testing is required."

 

Renumber the sections in sequence and correct the internal references

 

Amend the title accordingly

 

 

      The motion did not prevail and the amendment was not adopted.

 

 

Anderson moved to amend S. F. No. 958, the third engrossment, as amended, as follows:

 

Page 2, line 17, delete "15,750,000" and insert "15,770,000" and delete "15,476,000" and insert "15,496,000"

 

Page 4, after line 19, insert:

 

"(j) $20,000 the first year and $20,000 the second year are to compensate farmers for crop damage caused by deer and Canadian geese."


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6364

Page 12, line 26, delete "9,414,000" and insert "9,394,000" and delete "9,403,000" and insert "9,383,000"

 

Page 17, line 13, delete "$222,000" and insert "$202,000" and delete "$286,000" and insert "$266,000"

 

 

      The motion did not prevail and the amendment was not adopted.

 

 

Anderson moved to amend S. F. No. 958, the third engrossment, as amended, as follows:

 

Page 22, delete section 8

 

Renumber the sections in sequence and correct the internal references

 

Amend the title accordingly

 

 

      A roll call was requested and properly seconded.

 

 

      The question was taken on the Anderson amendment and the roll was called.  There were 64 yeas and 69 nays as follows:

 

      Those who voted in the affirmative were:

 


Akland

Albright

Anderson

Backer

Bahr

Baker

Bennett

Bliss

Boe

Burkel

Daniels

Daudt

Davids

Demuth

Dettmer

Drazkowski

Erickson

Franke

Franson

Garofalo

Green

Grossell

Gruenhagen

Haley

Hamilton

Heinrich

Heintzeman

Hertaus

Igo

Johnson

Jurgens

Kiel

Koznick

Kresha

Lucero

Lueck

McDonald

Mekeland

Miller

Mortensen

Mueller

Munson

Nash

Nelson, N.

Neu Brindley

Novotny

O'Driscoll

Olson, B.

O'Neill

Petersburg

Pfarr

Pierson

Poston

Quam

Raleigh

Rasmusson

Robbins

Schomacker

Scott

Swedzinski

Theis

Torkelson

Urdahl

West


 

      Those who voted in the negative were:

 


Acomb

Agbaje

Bahner

Becker-Finn

Berg

Bernardy

Bierman

Boldon

Carlson

Christensen

Davnie

Ecklund

Edelson

Elkins

Feist

Fischer

Frazier

Frederick

Freiberg

Gomez

Greenman

Hansen, R.

Hanson, J.

Hassan

Hausman

Her

Hollins

Hornstein

Howard

Huot

Jordan

Keeler

Klevorn

Koegel

Kotyza-Witthuhn

Lee

Liebling

Lillie

Lippert

Lislegard

Long

Mariani

Marquart

Masin

Moller

Moran

Morrison

Murphy

Nelson, M.

Noor

Olson, L.

Pelowski

Pinto

Pryor

Reyer

Richardson

Sandell

Sandstede

Schultz

Stephenson

Sundin

Vang

Wazlawik

Winkler

Wolgamott

Xiong, J.

Xiong, T.

Youakim

Spk. Hortman


 

 

      The motion did not prevail and the amendment was not adopted.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6365

S. F. No. 958, A bill for an act relating to state government; establishing a budget for the Department of Agriculture, the Board of Animal Health, the Agricultural Utilization Research Institute, and broadband development; making policy and technical changes to various provisions related to agriculture, food, rural development, and broadband development, including provisions related to grants, loans, pesticides, feedlots, bioincentive programs, Cervidae, veterinary services, reports, and mapping; requiring reports; appropriating money; amending Minnesota Statutes 2020, sections 3.737, by adding a subdivision; 17.1017, subdivision 6; 18B.33, subdivision 1; 18E.04, subdivision 4; 28A.15, by adding a subdivision; 28A.152, subdivisions 1, 3, 4, 5; 31A.15, subdivision 1; 35.155, subdivisions 5, 11; 41A.16, subdivision 5; 41A.17, subdivision 4; 116.07, subdivision 7; 116J.394; 116J.397; 156.12, subdivision 2; Laws 2020, chapter 101, section 5, subdivisions 2, 7; proposing coding for new law in Minnesota Statutes, chapter 25.

 

 

      The bill was read for the third time, as amended, and placed upon its final passage.

 

      The question was taken on the passage of the bill and the roll was called.  There were 69 yeas and 63 nays as follows:

 

      Those who voted in the affirmative were:

 


Acomb

Agbaje

Bahner

Becker-Finn

Berg

Bernardy

Bierman

Boldon

Carlson

Christensen

Davnie

Ecklund

Edelson

Elkins

Feist

Fischer

Frazier

Frederick

Freiberg

Gomez

Greenman

Hansen, R.

Hanson, J.

Hassan

Hausman

Her

Hollins

Hornstein

Howard

Huot

Jordan

Keeler

Klevorn

Koegel

Kotyza-Witthuhn

Lee

Liebling

Lillie

Lippert

Lislegard

Long

Mariani

Marquart

Masin

Moller

Moran

Morrison

Murphy

Nelson, M.

Noor

Olson, L.

Pelowski

Pinto

Pryor

Reyer

Richardson

Sandell

Sandstede

Schultz

Stephenson

Sundin

Vang

Wazlawik

Winkler

Wolgamott

Xiong, J.

Xiong, T.

Youakim

Spk. Hortman


 

      Those who voted in the negative were:

 


Akland

Albright

Anderson

Backer

Bahr

Baker

Bennett

Bliss

Boe

Burkel

Daniels

Daudt

Davids

Demuth

Dettmer

Drazkowski

Erickson

Franke

Franson

Garofalo

Green

Grossell

Gruenhagen

Haley

Hamilton

Heinrich

Heintzeman

Hertaus

Igo

Johnson

Jurgens

Kiel

Kresha

Lucero

Lueck

McDonald

Mekeland

Miller

Mortensen

Mueller

Munson

Nash

Nelson, N.

Neu Brindley

Novotny

O'Driscoll

Olson, B.

O'Neill

Petersburg

Pfarr

Pierson

Poston

Quam

Raleigh

Rasmusson

Robbins

Schomacker

Scott

Swedzinski

Theis

Torkelson

Urdahl

West


 

 

      The bill was passed, as amended, and its title agreed to.

 

 

      There being no objection, the order of business reverted to Calendar for the Day.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6366

CALENDAR FOR THE DAY

 

 

      H. F. No. 991 was reported to the House.

 

 

Davids moved to amend H. F. No. 991, the second engrossment, as follows:

 

Delete everything after the enacting clause and insert:

 

"ARTICLE 1

FEDERAL CONFORMITY

 

Section 1.  Minnesota Statutes 2020, section 289A.02, subdivision 7, is amended to read:

 

Subd. 7.  Internal Revenue Code.  Unless specifically defined otherwise, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through December 31, 2018 2020.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time as the changes were effective for federal purposes.

 

Sec. 2.  Minnesota Statutes 2020, section 290.01, subdivision 19, is amended to read:

 

Subd. 19.  Net income.  (a) For a trust or estate taxable under section 290.03, and a corporation taxable under section 290.02, the term "net income" means the federal taxable income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through the date named in this subdivision, incorporating the federal effective dates of changes to the Internal Revenue Code and any elections made by the taxpayer in accordance with the Internal Revenue Code in determining federal taxable income for federal income tax purposes, and with the modifications provided in sections 290.0131 to 290.0136.

 

(b) For an individual, the term "net income" means federal adjusted gross income with the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

 

(c) In the case of a regulated investment company or a fund thereof, as defined in section 851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, except that:

 

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal Revenue Code does not apply;

 

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue Code must be applied by allowing a deduction for capital gain dividends and exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; and

 

(3) the deduction for dividends paid must also be applied in the amount of any undistributed capital gains which the regulated investment company elects to have treated as provided in section 852(b)(3)(D) of the Internal Revenue Code.

 

(d) The net income of a real estate investment trust as defined and limited by section 856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust taxable income as defined in section 857(b)(2) of the Internal Revenue Code.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6367

(e) The net income of a designated settlement fund as defined in section 468B(d) of the Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal Revenue Code.

 

(f) The Internal Revenue Code of 1986, as amended through December 31, 2018 2020, shall be in effect for taxable years beginning after December 31, 1996.

 

(g) Except as otherwise provided, references to the Internal Revenue Code in this subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of determining net income for the applicable year.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time as the changes were effective for federal purposes.

 

Sec. 3.  Minnesota Statutes 2020, section 290.01, subdivision 31, is amended to read:

 

Subd. 31.  Internal Revenue Code.  Unless specifically defined otherwise, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through December 31, 2018 2020.  Internal Revenue Code also includes any uncodified provision in federal law that relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time as the changes were effective for federal purposes.

 

Sec. 4.  Minnesota Statutes 2020, section 290.0122, subdivision 4, is amended to read:

 

Subd. 4.  Charitable contributions.  (a) A taxpayer is allowed a deduction for charitable contributions.  The deduction equals the amount of the charitable contribution deduction allowable to the taxpayer under section 170 of the Internal Revenue Code, including the denial of the deduction under section 408(d)(8), except that the provisions of section 170(b)(1)(G) apply regardless of the taxable year deduction under this subdivision is limited to 60 percent of the taxpayer's contribution base as defined in section 170(b)(1)(H) of the Internal Revenue Code.

 

(b) For taxable years beginning after December 31, 2017, the determination of carryover amounts must be made by applying the rules under section 170 of the Internal Revenue Code based on the charitable contribution deductions claimed and allowable under this section.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2019.

 

Sec. 5.  Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision to read:

 

Subd. 19.  Business interest.  The amount of business interest deducted under section 163(j) of the Internal Revenue Code of 1986, as amended through December 31, 2020, that exceeds the amount of business interest allowed to be deducted under section 163(j) of the Internal Revenue Code of 1986, as amended through December 31, 2018, is an addition.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, and before January 1, 2021.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6368

Sec. 6.  Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision to read:

 

Subd. 20.  Excess business losses.  The amount by which an excess business loss under section 461(l)(3) of the Internal Revenue Code of 1986, as amended through December 31, 2018, exceeds the amount of a disallowed loss carryover under section 461(l)(3) of the Internal Revenue Code of 1986, as amended through December 31, 2020, is an addition.

 

EFFECTIVE DATE.  This section is effective retroactively at the same time and for the same taxable years as the temporary changes in section 2304 of Public Law 116-136 were effective for federal purposes.

 

Sec. 7.  Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision to read:

 

Subd. 21.  Net operating loss.  The amount by which a net operating loss deducted under section 172 of the Internal Revenue Code of 1986, as amended through December 31, 2020, exceeds the amount of a net operating loss allowed to be deducted under the Internal Revenue Code of 1986, as amended through December 31, 2018, including the amount of the addition required under subdivision 20 to the extent the amount is not included under section 172 of the Internal Revenue Code of 1986, as amended through December 31, 2018, is an addition.

 

EFFECTIVE DATE.  This section is effective retroactively at the same time and for the same taxable years as the temporary changes in section 2303 of Public Law 116-136 were effective for federal purposes.

 

Sec. 8.  Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision to read:

 

Subd. 30.  Delayed business interest.  (a) The amount of delayed business interest is a subtraction.

 

(b) For purposes of this subdivision, the following terms have the meanings given:

 

(1) "delayed business interest" means the lesser of:

 

(i) the base amount; or

 

(ii) the amount of business interest deductible under section 163(j) of the Internal Revenue Code, excluding the special rule under section 163(j)(10) of the Internal Revenue Code, less the amount of business interest deducted under section 163(j) of the Internal Revenue Code for the taxable year; and

 

(2) "base amount" means the sum of each addition required under section 290.0131, subdivision 19, for all prior taxable years, less the sum of all subtractions claimed under this subdivision for all prior taxable years.

 

EFFECTIVE DATE.  This section is effective retroactively at the same time and for the same taxable years as the temporary changes in section 2306 of Public Law 116-136 were effective for federal purposes and thereafter.

 

Sec. 9.  Minnesota Statutes 2020, section 290.0132, is amended by adding a subdivision to read:

 

Subd. 31.  Delayed net operating loss.  (a) The amount of a delayed net operating loss is a subtraction.

 

(b) For purposes of this subdivision, the following terms have the meanings given:

 

(1) "delayed net operating loss" means the lesser of:

 

(i) the base amount; or


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6369

(ii) the net operating loss deduction limit under section 172(a) of the Internal Revenue Code of 1986, as amended through December 31, 2018, including the amount of the addition required under section 290.0131, subdivision 20, to the extent the amount is not included under section 172 of the Internal Revenue Code, less the amount of any net operating loss deducted under section 172 of the Internal Revenue Code for the taxable year; and

 

(2) "base amount" means the sum of each addition required under section 290.0131, subdivision 21, for all prior taxable years, less the sum of all subtractions claimed under this subdivision for all prior taxable years.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2018.

 

Sec. 10.  Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision to read:

 

Subd. 15.  Business interest.  The amount of business interest deducted under section 163(j) of the Internal Revenue Code of 1986, as amended through December 31, 2020, or section 290.34, that exceeds the amount of business interest allowed to be deducted under section 163(j) of the Internal Revenue Code of 1986, as amended through December 31, 2018, or section 290.34, is an addition.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time as the changes were effective for federal purposes.

 

Sec. 11.  Minnesota Statutes 2020, section 290.0134, is amended by adding a subdivision to read:

 

Subd. 20.  Delayed business interest.  (a) The amount of delayed business interest is a subtraction.

 

(b) For purposes of this subdivision, the following terms have the meanings given:

 

(1) "delayed business interest" means the portion of the base amount equal to the difference, if any, between:

 

(i) the amount of business interest deductible under section 290.34 or section 163(j) of the Internal Revenue Code, excluding the special rule under section 163(j)(10) of the Internal Revenue Code; and

 

(ii) the amount of business interest deducted under section 163(j) of the Internal Revenue Code for the taxable year; and

 

(2) "base amount" means the sum of each addition required under section 290.0131, subdivision 16, for all prior taxable years, less the sum of all subtractions claimed under this subdivision for all prior taxable years.

 

EFFECTIVE DATE.  This section is effective retroactively at the same time and for the same taxable years as the temporary changes in section 2306 of Public Law 116-136 were effective for federal purposes and thereafter.

 

Sec. 12.  Minnesota Statutes 2020, section 290.993, is amended to read:

 

290.993 SPECIAL LIMITED ADJUSTMENT.

 

(a) For an individual income taxpayer subject to tax under section 290.06, subdivision 2c, or a partnership that elects to file a composite return under section 289A.08, subdivision 7, for taxable years beginning after December 31, 2017, and before January 1, 2019, the following special rules apply:

 

(1) an individual income taxpayer may:  (i) take the standard deduction; or (ii) make an election under section 63(e) of the Internal Revenue Code to itemize, for Minnesota individual income tax purposes, regardless of the choice made on their federal return; and


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6370

(2) there is an adjustment to tax equal to the difference between the tax calculated under this chapter using the Internal Revenue Code as amended through December 16, 2016, and the tax calculated under this chapter using the Internal Revenue Code amended through December 31, 2018, before the application of credits.  The end result must be zero additional tax due or refund.

 

(b) The adjustment in paragraph (a), clause (2), does not apply to any changes due to sections 11012, 13101, 13201, 13202, 13203, 13204, 13205, 13207, 13301, 13302, 13303, 13313, 13502, 13503, 13801, 14101, 14102, 14211 through 14215, and 14501 of Public Law 115-97; and section 40411 of Public Law 115-123.

 

(c) For an individual, estate, trust, or partnership subject to an adjustment under this section, any change in tax as a result of this act, including amendments to the Internal Revenue Code that are incorporated in this act, must be calculated after the adjustment.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time as the changes were effective for federal purposes.

 

Sec. 13.  Minnesota Statutes 2020, section 290A.03, subdivision 15, is amended to read:

 

Subd. 15.  Internal Revenue Code. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through December 31, 2018 2020.

 

EFFECTIVE DATE.  This section is effective for property tax refunds based on property taxes payable after December 31, 2021, and rent paid after December 31, 2020.

 

Sec. 14.  Minnesota Statutes 2020, section 291.005, subdivision 1, is amended to read:

 

Subdivision 1.  Scope.  Unless the context otherwise clearly requires, the following terms used in this chapter shall have the following meanings:

 

(1) "Commissioner" means the commissioner of revenue or any person to whom the commissioner has delegated functions under this chapter.

 

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued and otherwise determined for federal estate tax purposes under the Internal Revenue Code, increased by the value of any property in which the decedent had a qualifying income interest for life and for which an election was made under section 291.03, subdivision 1d, for Minnesota estate tax purposes, but was not made for federal estate tax purposes.

 

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended through December 31, 2018 2020.

 

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a) excluding therefrom any property included in the estate which has its situs outside Minnesota, and (b) including any property omitted from the federal gross estate which is includable in the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

 

(5) "Nonresident decedent" means an individual whose domicile at the time of death was not in Minnesota.

 

(6) "Personal representative" means the executor, administrator or other person appointed by the court to administer and dispose of the property of the decedent.  If there is no executor, administrator or other person appointed, qualified, and acting within this state, then any person in actual or constructive possession of any


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6371

property having a situs in this state which is included in the federal gross estate of the decedent shall be deemed to be a personal representative to the extent of the property and the Minnesota estate tax due with respect to the property.

 

(7) "Resident decedent" means an individual whose domicile at the time of death was in Minnesota.  The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply to determinations of domicile under this chapter.

 

(8) "Situs of property" means, with respect to:

 

(i) real property, the state or country in which it is located;

 

(ii) tangible personal property, the state or country in which it was normally kept or located at the time of the decedent's death or for a gift of tangible personal property within three years of death, the state or country in which it was normally kept or located when the gift was executed;

 

(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue Code, owned by a nonresident decedent and that is normally kept or located in this state because it is on loan to an organization, qualifying as exempt from taxation under section 501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

 

(iv) intangible personal property, the state or country in which the decedent was domiciled at death or for a gift of intangible personal property within three years of death, the state or country in which the decedent was domiciled when the gift was executed.

 

For a nonresident decedent with an ownership interest in a pass-through entity with assets that include real or tangible personal property, situs of the real or tangible personal property, including qualified works of art, is determined as if the pass-through entity does not exist and the real or tangible personal property is personally owned by the decedent.  If the pass-through entity is owned by a person or persons in addition to the decedent, ownership of the property is attributed to the decedent in proportion to the decedent's capital ownership share of the pass-through entity.

 

(9) "Pass-through entity" includes the following:

 

(i) an entity electing S corporation status under section 1362 of the Internal Revenue Code;

 

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

 

(iii) a single-member limited liability company or similar entity, regardless of whether it is taxed as an association or is disregarded for federal income tax purposes under Code of Federal Regulations, title 26, section 301.7701-3; or

 

(iv) a trust to the extent the property is includable in the decedent's federal gross estate; but excludes

 

(v) an entity whose ownership interest securities are traded on an exchange regulated by the Securities and Exchange Commission as a national securities exchange under section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time as the changes were effective for federal purposes.


Journal of the House - 45th Day - Thursday, April 22, 2021 - Top of Page 6372

Sec. 15.  TEMPORARY NONCONFORMITY ADDITIONS AND SUBTRACTIONS.

 

Subdivision 1.  Definitions.  (a) For the purposes of this section, the terms in this section have the meanings given.

 

(b) For an individual, estate, or trust:

 

(1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132, subdivision 1, and the rules in that subdivision apply for this section; and

 

(2) "addition" has the meaning given in Minnesota Statutes, section 290.0131, subdivision 1, and the rules in that subdivision apply for this section.

 

(c) For a corporation other than an S corporation:

 

(1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0134, subdivision 1, and the rules in that subdivision apply for this section; and

 

(2) "addition" has the meaning given in Minnesota Statutes, section 290.0133, subdivision 1, and the rules in that subdivision apply for this section.

 

(d) The definitions in Minnesota Statutes, section 290.01, apply for this section.

 

Subd. 2.  Temporary subtraction; federal credits for sick and family leave; individuals, estates, and trusts.  (a) For an individual, estate, or trust, the amount by which gross income is increased under the following credits is a subtraction:

 

(1) the payroll credit for required paid sick leave under section 7001 of Public Law 116-127; and

 

(2) the payroll credit for required paid family leave under section 7003 of Public Law 116-127.

 

(b) This subdivision is effective retroactively for taxable years in which a taxpayer claimed the credits described in paragraph (a).

 

Subd. 3.  Temporary subtraction; federal credits for sick and family leave; corporations.  (a) For a corporation other than an S corporation, the amount by which gross income is increased under the following credits is a subtraction:

 

(1) the payroll credit for required paid sick leave under section 7001 of Public Law 116-127; and

 

(2) the payroll credit for required paid family leave under section 7003 of Public Law 116-127.

 

(b) This subdivision is effective retroactively for taxable years in which a taxpayer claimed the credits described in paragraph (a).

 

Subd. 4.  Temporary subtraction; wages used to claim employee retention credit; individuals, estates, and trusts.  (a) For an individual, estate, or trust, the amount disallowed under section 2301(e) of Public Law 116-136 is a subtraction.

 

(b) This subdivision is effective retroactively for taxable years in which a taxpayer had a deduction disallowed under section 2301(e) of Public Law 116-136.


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Subd. 5.  Temporary subtraction; wages used to claim employee retention credit; corporations.  (a) For a corporation other than an S corporation, the amount disallowed under section 2301(e) of Public Law 116-136 is a subtraction.

 

(b) This subdivision is effective retroactively for taxable years in which a taxpayer had a deduction disallowed under section 2301(e) of Public Law 116-136.

 

Subd. 6.  Temporary addition; business meals; individuals, estates, and trusts.  (a) For an individual, estate, or trust, the amount deducted for food or beverages under section 274(n)(2) of the Internal Revenue Code that exceeds the 50 percent limit in section 274(n)(1) of the Internal Revenue Code is an addition.

 

(b) This subdivision is effective retroactively for expenses paid or incurred after December 31, 2020, and before January 1, 2023.

 

Subd. 7.  Temporary addition; business meals; C corporations.  (a) For a corporation other than an S corporation, the amount deducted for food or beverages under section 274(n)(2) of the Internal Revenue Code that exceeds the 50 percent limit in section 274(n)(1) of the Internal Revenue Code is an addition.

 

(b) This subdivision is effective retroactively for expenses paid or incurred after December 31, 2020, and before January 1, 2023.

 

Subd. 8.  Temporary addition; PPP expenses for individuals, estates, and trusts.  (a) For the purposes of this subdivision:

 

(1) "qualifying business" means a business with paycheck protection program expenses in the taxable year that is a partnership, limited liability company, S corporation, or sole proprietorship;

 

(2) "paycheck protection program expenses" means amounts allowed as a deduction under section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260; and

 

(3) "paycheck protection program loan" means a discharged loan that is excluded from gross income under section 1106(i) of Public Law 116-136.

 

(b) For a qualifying business, for each paycheck protection program loan, the amount of paycheck protection program expenses in excess of $350,000 is an addition.

 

(c) This section is effective retroactively at the same time and for the same taxable years as the changes in section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260.

 

Subd. 9.  Temporary addition; PPP expenses for C corporations.  (a) For the purposes of this subdivision:

 

(1) "qualifying business" means a business with paycheck protection program expenses that is a corporation other than an S corporation;

 

(2) "paycheck protection program expenses" means amounts allowed as a deduction under section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260; and

 

(3) "paycheck protection program loan" means a discharged loan that is excluded from gross income under section 1106(i) of Public Law 116-136.

 

(b) For a qualifying business, for each paycheck protection program loan, the amount of paycheck protection program expenses in excess of $350,000 is an addition.


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(c) This section is effective retroactively at the same time and for the same taxable years as the changes in section 276 of the COVID-related Tax Relief Act of 2020 in Public Law 116-260.

 

Subd. 10.  Nonresident apportionment; alternative minimum tax.  (a) For the purpose of calculating the percentage under Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e), the commissioner of revenue must increase:

 

(1) the numerator in Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e), clause (1), by the subtractions in subdivisions 2 and 4; and

 

(2) the denominator in Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e), clause (2), by the additions in subdivisions 6 and 8.

 

(b) For the purpose of determining "income" under Minnesota Statutes, section 289A.08, the commissioner of revenue must consider the additions under subdivisions 6 and 8 and the subtractions under subdivisions 2 and 4.

 

(c) A taxpayer's alternative minimum taxable income under Minnesota Statutes, section 290.091, is increased by the amount of the taxpayer's additions under subdivisions 6 and 8, and reduced by the amount of the taxpayer's subtractions under subdivisions 2 and 4.

 

(d) This section is effective for taxable years in which a taxpayer had an addition or subtraction under this section.

 

EFFECTIVE DATE.  This section is effective for the taxable years specified in each subdivision.

 

Sec. 16.  WORKING FAMILY CREDIT; SPECIAL EARNED INCOME RULES FOR TAX YEAR 2020.

 

For the purposes of calculating the credit under Minnesota Statutes, section 290.067, the commissioner of revenue must allow a taxpayer to elect to determine earned income using the rules in section 211 of the Taxpayer Certainty and Disaster Tax Relief Act of 2020 in Public Law 116-260.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2019, and before January 1, 2021.

 

Sec. 17.  TEMPORARY INDIVIDUAL INCOME TAX SUBTRACTION; UNEMPLOYMENT INSURANCE BENEFITS.

 

(a) For the purposes of this section:

 

(1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132; and

 

(2) "unemployment compensation" has the meaning given in section 85(b) of the Internal Revenue Code.

 

(b) For taxable years beginning after December 31, 2019, and before January 1, 2021, an individual taxpayer with adjusted gross income that is less than $150,000 is allowed a subtraction equal to the amount of unemployment compensation received in the taxable year.  The subtraction is limited to $10,200, except for a joint return the subtraction is limited to $10,200 in unemployment compensation received by each spouse.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2019, and before January 1, 2021.


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Sec. 18.  MMB REQUIRED TO SEEK TREASURY GUIDANCE.

 

No later than June 15, 2021, the commissioner of management and budget must request guidance from the Department of Treasury about whether the revenue reductions in this article are an eligible use of funds received under section 9901 of Public Law 117-2.

 

ARTICLE 2

INDIVIDUAL INCOME AND CORPORATE

FRANCHISE TAXES

 

Section 1.  Minnesota Statutes 2020, section 41B.0391, subdivision 2, is amended to read:

 

Subd. 2.  Tax credit for owners of agricultural assets.  (a) An owner of agricultural assets may take a credit against the tax due under chapter 290 for the sale or rental of agricultural assets to a beginning farmer in the amount allocated by the authority under subdivision 4.  An owner of agricultural assets is eligible for allocation of a credit equal to:

 

(1) five percent of the lesser of the sale price or the fair market value of the agricultural asset, up to a maximum of $32,000;

 

(2) ten percent of the gross rental income in each of the first, second, and third years of a rental agreement, up to a maximum of $7,000 per year; or

 

(3) 15 percent of the cash equivalent of the gross rental income in each of the first, second, and third years of a share rent agreement, up to a maximum of $10,000 per year.

 

(b) A qualifying rental agreement includes cash rent of agricultural assets or a share rent agreement.  The agricultural asset must be rented at prevailing community rates as determined by the authority.

 

(c) The credit may be claimed only after approval and certification by the authority, and is limited to the amount stated on the certificate issued under subdivision 4.  An owner of agricultural assets must apply to the authority for certification and allocation of a credit, in a form and manner prescribed by the authority.

 

(d) An owner of agricultural assets or beginning farmer may terminate a rental agreement, including a share rent agreement, for reasonable cause upon approval of the authority.  If a rental agreement is terminated without the fault of the owner of agricultural assets, the tax credits shall not be retroactively disallowed.  In determining reasonable cause, the authority must look at which party was at fault in the termination of the agreement.  If the authority determines the owner of agricultural assets did not have reasonable cause, the owner of agricultural assets must repay all credits received as a result of the rental agreement to the commissioner of revenue.  The repayment is additional income tax for the taxable year in which the authority makes its decision or when a final adjudication under subdivision 5, paragraph (a), is made, whichever is later.

 

(e) The credit is limited to the liability for tax as computed under chapter 290 for the taxable year.  If the amount of the credit determined under this section for any taxable year exceeds this limitation, the excess is a beginning farmer incentive credit carryover according to section 290.06, subdivision 37.

 

(f) Notwithstanding subdivision 1, paragraph (c), for purposes of the credit for the sale of an agricultural asset under paragraph (a), clause (1), the family member definitional exclusions in subdivision 1, paragraph (c), clauses (4) and (5), do not apply.


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(g) For a qualifying sale to a family member, to qualify for the credit under paragraph (a), clause (1), the sale price of the agricultural asset must equal or exceed the assessed value of the asset as of the date of the sale.  If there is no assessed value, the sale price must equal or exceed 80 percent of the fair market value of the asset as of the date of the sale.

 

(h) For the purposes of this section, "qualifying sale to a family member" means a sale to a beginning farmer in which the beginning farmer or the beginning farmer's spouse is a family member of:

 

(1) the owner of the agricultural asset; or

 

(2) a partner, member, shareholder, or trustee of the owner of the agricultural asset.

 

(i) For a sale to a socially disadvantaged farmer or rancher, the credit rate under paragraph (a), clause (1), is ten percent rather than five percent.  For the purposes of this section, "socially disadvantaged farmer or rancher" has the meaning given in United States Code, title 7, section 2279(a)(5).

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 2.  Minnesota Statutes 2020, section 41B.0391, subdivision 4, is amended to read:

 

Subd. 4.  Authority duties.  (a) The authority shall:

 

(1) approve and certify or recertify beginning farmers as eligible for the program under this section;

 

(2) approve and certify or recertify owners of agricultural assets as eligible for the tax credit under subdivision 2 subject to the allocation limits in paragraph (c);

 

(3) provide necessary and reasonable assistance and support to beginning farmers for qualification and participation in financial management programs approved by the authority;

 

(4) refer beginning farmers to agencies and organizations that may provide additional pertinent information and assistance; and

 

(5) notwithstanding section 41B.211, the Rural Finance Authority must share information with the commissioner of revenue to the extent necessary to administer provisions under this subdivision and section 290.06, subdivisions 37 and 38.  The Rural Finance Authority must annually notify the commissioner of revenue of approval and certification or recertification of beginning farmers and owners of agricultural assets under this section.  For credits under subdivision 2, the notification must include the amount of credit approved by the authority and stated on the credit certificate.

 

(b) The certification of a beginning farmer or an owner of agricultural assets under this section is valid for the year of the certification and the two following years, after which time the beginning farmer or owner of agricultural assets must apply to the authority for recertification.

 

(c) For credits for owners of agricultural assets allowed under subdivision 2, the authority must not allocate more than $5,000,000 for taxable years beginning after December 31, 2017, and before January 1, 2019, and must not allocate more than $6,000,000 for taxable years beginning after December 31, 2018.  The authority must allocate credits on a first-come, first-served basis beginning on January 1 of each year, except that recertifications for the second and third years of credits under subdivision 2, paragraph (a), clauses (1) and (2), have first priority.  Any amount authorized but not allocated in any taxable year does not cancel and is added to the allocation for the next taxable year.


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(d) For taxable years beginning after December 31, 2020, the amount available to be allocated for the taxable year under paragraph (c) is reduced by five percent.  Beginning in fiscal year 2022, an amount equal to the reduction under this paragraph is annually appropriated from the general fund to the Rural Finance Authority to develop an online application system and administer the credits under this section.  The amount of the appropriation for a fiscal year must be determined based on the reduction for taxable years beginning after December 31 of the previous fiscal year and before January 1 of the fiscal year of the appropriation.  The Rural Finance Authority must disregard amounts carried forward from previous taxable years when calculating the reduction under this paragraph.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 3.  Minnesota Statutes 2020, section 116J.8737, subdivision 5, is amended to read:

 

Subd. 5.  Credit allowed.  (a) A qualified investor or qualified fund is eligible for a credit equal to 25 percent of the qualified investment in a qualified small business.  Investments made by a pass-through entity qualify for a credit only if the entity is a qualified fund.  The commissioner must not allocate more than $10,000,000 in credits to qualified investors or qualified funds for the taxable years listed in paragraph (i).  For each taxable year, 50 percent must be allocated to credits for qualified investments in qualified greater Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified small businesses in Minnesota.  Any portion of a taxable year's credits that is reserved for qualified investments in greater Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified small businesses in Minnesota that is not allocated by September 30 of the taxable year is available for allocation to other credit applications beginning on October 1.  Any portion of a taxable year's credits that is not allocated by the commissioner does not cancel and may be carried forward to subsequent taxable years until all credits have been allocated.

 

(b) The commissioner may not allocate more than a total maximum amount in credits for a taxable year to a qualified investor for the investor's cumulative qualified investments as an individual qualified investor and as an investor in a qualified fund; for married couples filing joint returns the maximum is $250,000, and for all other filers the maximum is $125,000.  The commissioner may not allocate more than a total of $1,000,000 in credits over all taxable years for qualified investments in any one qualified small business.

 

(c) The commissioner may not allocate a credit to a qualified investor either as an individual qualified investor or as an investor in a qualified fund if, at the time the investment is proposed:

 

(1) the investor is an officer or principal of the qualified small business; or

 

(2) the investor, either individually or in combination with one or more members of the investor's family, owns, controls, or holds the power to vote 20 percent or more of the outstanding securities of the qualified small business.

 

A member of the family of an individual disqualified by this paragraph is not eligible for a credit under this section.  For a married couple filing a joint return, the limitations in this paragraph apply collectively to the investor and spouse.  For purposes of determining the ownership interest of an investor under this paragraph, the rules under section 267(c) and 267(e) of the Internal Revenue Code apply.

 

(d) Applications for tax credits for 2010 must be made available on the department's website by September 1, 2010, and the department must begin accepting applications by September 1, 2010.  Applications for subsequent years must be made available by November 1 of the preceding year.

 

(e) Qualified investors and qualified funds must apply to the commissioner for tax credits.  Tax credits must be allocated to qualified investors or qualified funds in the order that the tax credit request applications are filed with the department.  The commissioner must approve or reject tax credit request applications within 15 days of receiving the application.  The investment specified in the application must be made within 60 days of the allocation of the


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credits.  If the investment is not made within 60 days, the credit allocation is canceled and available for reallocation.  A qualified investor or qualified fund that fails to invest as specified in the application, within 60 days of allocation of the credits, must notify the commissioner of the failure to invest within five business days of the expiration of the 60-day investment period.

 

(f) All tax credit request applications filed with the department on the same day must be treated as having been filed contemporaneously.  If two or more qualified investors or qualified funds file tax credit request applications on the same day, and the aggregate amount of credit allocation claims exceeds the aggregate limit of credits under this section or the lesser amount of credits that remain unallocated on that day, then the credits must be allocated among the qualified investors or qualified funds who filed on that day on a pro rata basis with respect to the amounts claimed.  The pro rata allocation for any one qualified investor or qualified fund is the product obtained by multiplying a fraction, the numerator of which is the amount of the credit allocation claim filed on behalf of a qualified investor and the denominator of which is the total of all credit allocation claims filed on behalf of all applicants on that day, by the amount of credits that remain unallocated on that day for the taxable year.

 

(g) A qualified investor or qualified fund, or a qualified small business acting on their behalf, must notify the commissioner when an investment for which credits were allocated has been made, and the taxable year in which the investment was made.  A qualified fund must also provide the commissioner with a statement indicating the amount invested by each investor in the qualified fund based on each investor's share of the assets of the qualified fund at the time of the qualified investment.  After receiving notification that the investment was made, the commissioner must issue credit certificates for the taxable year in which the investment was made to the qualified investor or, for an investment made by a qualified fund, to each qualified investor who is an investor in the fund.  The certificate must state that the credit is subject to revocation if the qualified investor or qualified fund does not hold the investment in the qualified small business for at least three years, consisting of the calendar year in which the investment was made and the two following years.  The three-year holding period does not apply if:

 

(1) the investment by the qualified investor or qualified fund becomes worthless before the end of the three-year period;

 

(2) 80 percent or more of the assets of the qualified small business is sold before the end of the three-year period;

 

(3) the qualified small business is sold before the end of the three-year period;

 

(4) the qualified small business's common stock begins trading on a public exchange before the end of the three‑year period; or

 

(5) the qualified investor dies before the end of the three-year period.

 

(h) The commissioner must notify the commissioner of revenue of credit certificates issued under this section.

 

(i) The credit allowed under this subdivision is effective for each of the following taxable years: taxable years beginning after December 31, 2020, and before January 1, 2023.

 

(1) taxable years beginning after December 31, 2018, and before January 1, 2020; and

 

(2) taxable years beginning after December 31, 2020, and before January 1, 2022.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 4.  Minnesota Statutes 2020, section 116J.8737, subdivision 12, is amended to read:

 

Subd. 12.  Sunset.  This section expires for taxable years beginning after December 31, 2021 2022, except that reporting requirements under subdivision 6 and revocation of credits under subdivision 7 remain in effect through 2023 2024 for qualified investors and qualified funds, and through 2025 2026 for qualified small businesses, reporting requirements under subdivision 9 remain in effect through 2021 2022, and the appropriation in subdivision 11 remains in effect through 2025 2026.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 5.  [116U.27] FILM PRODUCTION CREDIT.

 

Subdivision 1.  Definitions.  (a) For purposes of this section, the following terms have the meanings given.

 

(b) "Allocation certificate" means a certificate issued by the commissioner to a taxpayer upon receipt of an initial application for a credit for a project that has not yet been completed.

 

(c) "Application" means the application for a credit under subdivision 4.

 

(d) "Commissioner" means the commissioner of employment and economic development.

 

(e) "Credit certificate" means a certificate issued by the commissioner upon submission of the cost verification report in subdivision 4, paragraph (e).

 

(f) "Eligible production costs" means eligible production costs as defined in section 116U.26, paragraph (b), clause (1), incurred in Minnesota that are directly attributable to the production of a film project in Minnesota.

 

(g) "Film" has the meaning given in section 116U.26, paragraph (b), clause (2).

 

(h) "Project" means a film:

 

(1) that includes the promotion of Minnesota;

 

(2) for which the taxpayer has expended at least $1,000,000 in the taxable year for eligible production costs; and

 

(3) to the extent practicable, that employs Minnesota residents.

 

(i) "Promotion of Minnesota" or "promotion" means visible display of a static or animated logo, approved by the commissioner and lasting approximately five seconds, that promotes Minnesota within its presentation and all promotional trailers worldwide in the end credits before the below-the-line crew crawl for the life of the project.

 

Subd. 2.  Credit allowed.  A taxpayer is eligible for a credit up to 25 percent of eligible production costs paid in a taxable year.  A taxpayer may only claim a credit if the taxpayer was issued a credit certificate under subdivision 4.

 

Subd. 3.  Credit assignable.  A taxpayer who is eligible for a credit under this subdivision may assign the credit, in whole or in part, to another taxpayer, who is then allowed the credit under section 290.06, subdivision 39, or 297I.20, subdivision 4.  An assignment is not valid unless the assignee notifies the commissioner within 30 days of the date that the assignment is made.  The commissioner shall prescribe the forms necessary for notifying the commissioner of the assignment of a credit certificate and for claiming a credit by assignment.  A credit must be assigned for at least 75 percent of the credit amount subject to assignment.  A credit may be assigned at any time, provided that, for an assignment of a credit carryover under section 290.06, subdivision 39, paragraph (b), only the unused amount of the carryover is assigned.


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Subd. 4.  Applications; allocations.  (a) To qualify for a credit under this section, a taxpayer must submit to the commissioner an initial application for a credit in the form prescribed by the commissioner, in consultation with the commissioner of revenue.

 

(b) Upon approving an application for a credit that meets the requirements of this section, the commissioner shall issue allocation certificates that:

 

(1) verify eligibility for the credit;

 

(2) state the amount of credit anticipated for the eligible project, with the credit amount up to 25 percent of eligible project costs; and

 

(3) state the taxable year in which the credit is allocated.

 

The commissioner must consult with Minnesota Film and Television prior to issuing an allocation certificate.

 

(c) The commissioner must not issue allocation certificates for more than $10,000,000 of credits each year.  If the entire amount is not allocated in that taxable year, any remaining amount is available for allocation for the four following taxable years until the entire allocation has been made.  The commissioner must not award any credits for taxable years beginning after December 31, 2024, and any unallocated amounts cancel on that date.

 

(d) The commissioner must allocate credits on a first-come, first-served basis.

 

(e) Upon completion of a project, the taxpayer shall submit to the commissioner a report prepared by an independent certified public accountant licensed in the state of Minnesota to verify the amount of eligible production costs related to the project.  The report must be prepared in accordance with generally accepted accounting principles.  Upon receipt and review of the cost verification report, the commissioner shall determine the final amount of eligible production costs and issue a credit certificate to the taxpayer.  The credit may not exceed the anticipated credit amount on the allocation certificate.  If the credit is less than the anticipated amount on the allocation credit, the difference is returned to the amount available for allocation under paragraph (c).  To claim the credit under section 290.06, subdivision 39, or 297I.20, subdivision 4, a taxpayer must include a copy of the certificate as part of the taxpayer's return.

 

Subd. 5.  Report required.  By March 15, 2024, the commissioner, in consultation with the commissioner of revenue, must provide a report to the chairs and ranking minority members of the legislative committees with jurisdiction over economic development and taxes.  The report must comply with sections 3.195 and 3.197, and must detail the following:

 

(1) the amount of credits earned in each taxable year;

 

(2) the number of applications received and approved for the credit;

 

(3) the types of projects eligible for the credit;

 

(4) the total economic impact of the credit in Minnesota, including the number of jobs resulting from the credit; and

 

(5) any other information the commissioner, in consultation with the commissioner of revenue, deems necessary for purposes of claiming and administering the credit.

 

Subd. 6.  Expiration.  This section expires January 1, 2025, for taxable years beginning after December 31, 2024.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020, and before January 1, 2025.


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Sec. 6.  Minnesota Statutes 2020, section 289A.08, subdivision 7, is amended to read:

 

Subd. 7.  Composite income tax returns for nonresident partners, shareholders, and beneficiaries.  (a) The commissioner may allow a partnership with nonresident partners to file a composite return and to pay the tax on behalf of nonresident partners who have no other Minnesota source income.  This composite return must include the names, addresses, Social Security numbers, income allocation, and tax liability for the nonresident partners electing to be covered by the composite return.

 

(b) The computation of a partner's tax liability must be determined by multiplying the income allocated to that partner by the highest rate used to determine the tax liability for individuals under section 290.06, subdivision 2c.  Nonbusiness deductions, standard deductions, or personal exemptions are not allowed.

 

(c) The partnership must submit a request to use this composite return filing method for nonresident partners.  The requesting partnership must file a composite return in the form prescribed by the commissioner of revenue.  The filing of a composite return is considered a request to use the composite return filing method.

 

(d) The electing partner must not have any Minnesota source income other than the income from the partnership and other electing partnerships.  If it is determined that the electing partner has other Minnesota source income, the inclusion of the income and tax liability for that partner under this provision will not constitute a return to satisfy the requirements of subdivision 1.  The tax paid for the individual as part of the composite return is allowed as a payment of the tax by the individual on the date on which the composite return payment was made.  If the electing nonresident partner has no other Minnesota source income, filing of the composite return is a return for purposes of subdivision 1.

 

(e) This subdivision does not negate the requirement that an individual pay estimated tax if the individual's liability would exceed the requirements set forth in section 289A.25.  The individual's liability to pay estimated tax is, however, satisfied when the partnership pays composite estimated tax in the manner prescribed in section 289A.25.

 

(f) If an electing partner's share of the partnership's gross income from Minnesota sources is less than the filing requirements for a nonresident under this subdivision, the tax liability is zero.  However, a statement showing the partner's share of gross income must be included as part of the composite return.

 

(g) The election provided in this subdivision is only available to a partner who has no other Minnesota source income and who is either (1) a full-year nonresident individual or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of the Internal Revenue Code.

 

(h) A corporation defined in section 290.9725 and its nonresident shareholders may make an election under this paragraph.  The provisions covering the partnership apply to the corporation and the provisions applying to the partner apply to the shareholder.

 

(i) Estates and trusts distributing current income only and the nonresident individual beneficiaries of the estates or trusts may make an election under this paragraph.  The provisions covering the partnership apply to the estate or trust.  The provisions applying to the partner apply to the beneficiary.

 

(j) For the purposes of this subdivision, "income" means the partner's share of federal adjusted gross income from the partnership modified by the additions provided in section 290.0131, subdivisions 8 to 10 and, 16, and 19 to 23, and the subtractions provided in:  (1) section 290.0132, subdivision 9, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision subdivisions 14, 30, and 31.  The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite tax computation to the extent the electing partner would have been allowed the subtraction.


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EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020, except that the provisions relating to section 290.0131, subdivisions 20 and 21, are effective retroactively for taxable years beginning after December 31, 2017, and the provisions relating to section 290.0131, subdivision 19, and section 290.0132, subdivisions 30 and 31, are effective retroactively for taxable years beginning after December 31, 2018.

 

Sec. 7.  Minnesota Statutes 2020, section 289A.08, is amended by adding a subdivision to read:

 

Subd. 7a.  Pass-through entity tax.  (a) For the purposes of this subdivision, the following terms have the meanings given:

 

(1) "income" has the meaning given in subdivision 7, paragraph (j), except that the provisions that apply to a partnership apply to a qualifying entity and the provisions that apply to a partner apply to a qualifying owner.  The income of both a resident and nonresident qualifying owner is allocated and assigned to this state as provided for nonresident partners and shareholders under section 290.17;

 

(2) "qualifying owner" means a resident or nonresident individual, estate, or trust that is a partner, member, or shareholder of a qualifying entity; and

 

(3) "qualifying entity" means a partnership, limited liability company, or corporation organized under subchapter S of the Internal Revenue Code for federal income tax purposes, including a qualified subsidiary also organized under subchapter S of the Internal Revenue Code.  Qualifying entity does not include a partnership, limited liability company, or corporation that has a partnership, limited liability company, or corporation as a partner, member, or shareholder.

 

(b) A qualifying entity may elect to file a return and pay the pass-through entity tax imposed under paragraph (c).  The election:

 

(1) must be made on or before the due date or extended due date of the qualifying entity's pass-through entity tax return;

 

(2) may only be made by qualifying owners who hold more than a 50 percent ownership interest in a qualifying entity; and

 

(3) is binding on all qualifying owners who have an ownership interest in the qualifying entity.

 

(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.

 

(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount of the qualifying owner's income multiplied by the tax rates and brackets used to determine the tax liability for married individuals filing separate returns, estates, and trusts under section 290.06, subdivision 2c.  When making this determination:

 

(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed; and

 

(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.

 

(e) The amount of each credit and deduction used to determine a qualifying owner's tax liability under paragraph (d) must also be used to determine that qualifying owner's individual income tax liability under chapter 290.

 

(f) This subdivision does not negate the requirement that a qualifying owner pay estimated tax if the qualifying owner's tax liability would exceed the requirements set forth in section 289A.25.  The qualifying owner's liability to pay estimated tax on the qualifying owner's tax liability as determined under paragraph (d) is, however, satisfied when the qualifying entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated tax.


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(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the treatment of distributions, is determined as if the election to pay the pass-through entity tax under paragraph (b) is not made.

 

(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a pass-through entity tax return must be treated as a composite return and a qualifying entity filing a pass-through entity tax return must be treated as a partnership filing a composite return.

 

(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity tax under this subdivision.

 

(j) If a nonresident qualifying owner of a qualifying entity making the election to file and pay the tax under this subdivision has no other Minnesota source income, filing of the pass-through entity tax return is a return for purposes of subdivision 1, provided that the nonresident qualifying owner must not have any Minnesota source income other than the income from the qualifying entity and other electing qualifying entities.  If it is determined that the nonresident qualifying owner has other Minnesota source income, the inclusion of the income and tax liability for that owner under this provision will not constitute a return to satisfy the requirements of subdivision 1.  The tax paid for the individual as part of the pass-through entity tax return is allowed as a payment of the tax by the individual on the date on which the pass-through entity tax return payment was made.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 8.  Minnesota Statutes 2020, section 289A.08, subdivision 11, is amended to read:

 

Subd. 11.  Information included in income tax return.  (a) The return must state:

 

(1) the name of the taxpayer, or taxpayers, if the return is a joint return, and the address of the taxpayer in the same name or names and same address as the taxpayer has used in making the taxpayer's income tax return to the United States;

 

(2) the date or dates of birth of the taxpayer or taxpayers;

 

(3) the following information:

 

(i) the Social Security number of the taxpayer, or taxpayers, if a Social Security number has been issued by the United States with respect to the taxpayers; or

 

(ii) the individual tax identification number of the taxpayer, or taxpayers, if a Social Security number has not been issued by the United States with respect to the taxpayers, as allowed under section 290.0671; and

 

(4) the amount of the taxable income of the taxpayer as it appears on the federal return for the taxable year to which the Minnesota state return applies.

 

(b) The taxpayer must attach to the taxpayer's Minnesota state income tax return a copy of the federal income tax return that the taxpayer has filed or is about to file for the period.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 9.  Minnesota Statutes 2020, section 290.01, is amended by adding a subdivision to read:

 

Subd. 7c.  Resident trust.  (a) "Resident trust" means a trust, except a grantor type trust, which has sufficient relevant connections with Minnesota during the applicable tax year to be permissibly taxed, consistent with due process, as a resident trust.  Relevant connections with Minnesota include but are not limited to the following:


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(1) one or more of the trustees, fiduciaries, nonfiduciary service providers, settlors, grantors, or beneficiaries of the trust are residents or part-year residents of Minnesota;

 

(2) tangible or intangible assets making up any part of the trust are located in Minnesota;

 

(3) any part of the administration of the trust took place in Minnesota;

 

(4) the laws of Minnesota are specifically made applicable to the trust or to the parties to the trust, whether by choice of law or by operation of law;

 

(5) the trust was created by a will of a decedent who at death was domiciled in Minnesota;

 

(6) the trust and the will under which it was created were probated in Minnesota or were otherwise approved or enforced by Minnesota's courts; and

 

(7) Minnesota's courts have a continuing supervisory or other existing relationship with the trust.

 

(b) The term "grantor type trust" means a trust where the income or gains of the trust are taxable to the grantor or others treated as substantial owners under sections 671 to 678 of the Internal Revenue Code.

 

(c) The term "administration of the trust" means the performance of any administrative function for the trust, including but not limited to the following:

 

(1) investing of trust assets;

 

(2) distributing of trust assets;

 

(3) conducting trust business;

 

(4) conducting any litigation or other legal proceedings;

 

(5) conducting administrative services, including but not limited to record keeping and the preparation and filing of tax returns;

 

(6) making fiduciary decisions, including but not limited to decisions regarding any of the administrative functions listed in this paragraph; and

 

(7) official keeping of books and records of the trust, including but not limited to the original minutes of trustee meetings and the original trust instruments, are located in Minnesota.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 10.  Minnesota Statutes 2020, section 290.0122, subdivision 8, is amended to read:

 

Subd. 8.  Losses.  A taxpayer is allowed a deduction for losses.  The deduction equals the amount allowed under sections 165(d) and 165(h) of the Internal Revenue Code, disregarding the limitation on personal casualty losses in paragraph (h)(5). section 165(a) of the Internal Revenue Code, including the limitation provided in section 67(b)(3) of the Internal Revenue Code, for the following:

 

(1) losses described in paragraphs (2) and (3) of section 165(c) of the Internal Revenue Code, including the provisions of section 165(h) of the Internal Revenue Code but disregarding paragraph (h)(5); and


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(2) losses described in section 165(d) of the Internal Revenue Code.

 

EFFECTIVE DATE.  This section is effective the day following final enactment, except that the reference to paragraph (2) of section 165(c) of the Internal Revenue Code is effective retroactively for taxable years beginning after December 31, 2018.

 

Sec. 11.  Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision to read:

 

Subd. 22.  Previously taxed deferred foreign income.  The amount received by a resident or part-year resident that is excluded from federal adjusted gross income or federal taxable income under section 959 of the Internal Revenue Code, because the amount was previously included under sections 951A or 965 of the Internal Revenue Code, is an addition.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 12.  Minnesota Statutes 2020, section 290.0131, is amended by adding a subdivision to read:

 

Subd. 23.  Income attributable to domestic production activities of cooperatives.  The amount of the deduction allowable under section 199A(g) of the Internal Revenue Code is an addition.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 13.  Minnesota Statutes 2020, section 290.0132, subdivision 27, is amended to read:

 

Subd. 27.  Deferred foreign income.  The amount of deferred foreign income recognized because of under section 965 of the Internal Revenue Code is a subtraction.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2015, except the changes incorporated by federal changes are effective retroactively at the same time the changes became effective for federal purposes.

 

Sec. 14.  Minnesota Statutes 2020, section 290.0133, subdivision 6, is amended to read:

 

Subd. 6.  Special deductions.  The amount of any special deductions under sections 241 to 247, and 250, and 965 of the Internal Revenue Code is an addition.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2015, except that the changes incorporated by federal changes are effective retroactively at the same time the changes became effective for federal purposes.

 

Sec. 15.  Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision to read:

 

Subd. 16.  Previously taxed deferred foreign income.  The amount received by a corporation that is excluded from gross income under section 959 of the Internal Revenue Code, because the amount was previously included under sections 951A or 965 of the Internal Revenue Code, is an addition.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 16.  Minnesota Statutes 2020, section 290.0133, is amended by adding a subdivision to read:

 

Subd. 17.  Income attributable to domestic production activities of cooperatives.  The amount of the deduction allowable under section 199A(g) of the Internal Revenue Code is an addition.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.


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Sec. 17.  Minnesota Statutes 2020, section 290.0134, subdivision 18, is amended to read:

 

Subd. 18.  Deferred foreign income.  The amount of deferred foreign income recognized because of under section 965 of the Internal Revenue Code is a subtraction.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 18.  Minnesota Statutes 2020, section 290.06, subdivision 2c, is amended to read:

 

Subd. 2c.  Schedules of rates for individuals, estates, and trusts.  (a) The income taxes imposed by this chapter upon married individuals filing joint returns and surviving spouses as defined in section 2(a) of the Internal Revenue Code must be computed by applying to their taxable net income the following schedule of rates:

 

(1) On the first $38,770 $42,800, 5.35 percent;

 

(2) On all over $38,770 $42,800, but not over $154,020 $154,010, 6.8 percent;

 

(3) On all over $154,020 $154,010, but not over $269,010 $276,200, 7.85 percent;

 

(4) On all over $269,010 $276,200, but not over $1,000,000, 9.85 percent.;

 

(5) On all over $1,000,000, 11.15 percent.

 

Married individuals filing separate returns, estates, and trusts must compute their income tax by applying the above rates to their taxable income, except that the income brackets will be one-half of the above amounts after the adjustment required in subdivision 2d.

 

(b) The income taxes imposed by this chapter upon unmarried individuals must be computed by applying to taxable net income the following schedule of rates:

 

(1) On the first $26,520 $29,270, 5.35 percent;

 

(2) On all over $26,520 $29,270, but not over $87,110 $86,620, 6.8 percent;

 

(3) On all over $87,110 $86,620, but not over $161,720 $166,040, 7.85 percent;

 

(4) On all over $161,720 $166,040, but not over $500,000, 9.85 percent.;

 

(5) On all over $500,000, 11.15 percent.

 

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as a head of household as defined in section 2(b) of the Internal Revenue Code must be computed by applying to taxable net income the following schedule of rates:

 

(1) On the first $32,650 $36,030, 5.35 percent;

 

(2) On all over $32,650 $36,030, but not over $131,190 $131,230, 6.8 percent;

 

(3) On all over $131,190 $131,230, but not over $214,980 $220,730, 7.85 percent;

 

(4) On all over $214,980 $220,730, but not over $750,000, 9.85 percent.;

 

(5) On all over $750,000, 11.15 percent.


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(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax of any individual taxpayer whose taxable net income for the taxable year is less than an amount determined by the commissioner must be computed in accordance with tables prepared and issued by the commissioner of revenue based on income brackets of not more than $100.  The amount of tax for each bracket shall be computed at the rates set forth in this subdivision, provided that the commissioner may disregard a fractional part of a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

 

(e) An individual who is not a Minnesota resident for the entire year must compute the individual's Minnesota income tax as provided in this subdivision.  After the application of the nonrefundable credits provided in this chapter, the tax liability must then be multiplied by a fraction in which:

 

(1) the numerator is the individual's Minnesota source federal adjusted gross income as defined in section 62 of the Internal Revenue Code and increased by:

 

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, and 19 to 23, and 290.0137, paragraph (a); and reduced by

 

(ii) the Minnesota assignable portion of the subtraction for United States government interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132, subdivisions 9, 10, 14, 15, 17, 18, and 27, 30, and 31, and 290.0137, paragraph (c), after applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

 

(2) the denominator is the individual's federal adjusted gross income as defined in section 62 of the Internal Revenue Code, increased by:

 

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and 17, and 19 to 23, and 290.0137, paragraph (a); and reduced by

 

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, and 27, 30, and 31, and 290.0137, paragraph (c).

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 19.  Minnesota Statutes 2020, section 290.06, subdivision 2d, is amended to read:

 

Subd. 2d.  Inflation adjustment of brackets.  The commissioner shall annually adjust the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed in subdivision 2c as provided in section 270C.22.  The statutory year is taxable year 2019 2021.  The rate applicable to any rate bracket must not be changed.  The dollar amounts setting forth the tax shall be adjusted to reflect the changes in the rate brackets.  The rate brackets as adjusted must be rounded to the nearest $10 amount.  If the rate bracket ends in $5, it must be rounded up to the nearest $10 amount.  The commissioner shall determine the rate bracket for married filing separate returns after this adjustment is done.  The rate bracket for married filing separate must be one-half of the rate bracket for married filing joint.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2021.

 

Sec. 20.  Minnesota Statutes 2020, section 290.06, subdivision 22, is amended to read:

 

Subd. 22.  Credit for taxes paid to another state.  (a) A taxpayer who is liable for taxes based on net income to another state, as provided in paragraphs (b) through (f), upon income allocated or apportioned to Minnesota, is entitled to a credit for the tax paid to another state if the tax is actually paid in the taxable year or a subsequent


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taxable year.  A taxpayer who is a resident of this state pursuant to section 290.01, subdivision 7, paragraph (b), and who is subject to income tax as a resident in the state of the individual's domicile is not allowed this credit unless the state of domicile does not allow a similar credit.

 

(b) For an individual, estate, or trust, the credit is determined by multiplying the tax payable under this chapter by the ratio derived by dividing the income subject to tax in the other state that is also subject to tax in Minnesota while a resident of Minnesota by the taxpayer's federal adjusted gross income, as defined in section 62 of the Internal Revenue Code, modified by the addition required by section 290.0131, subdivision 2, and the subtraction allowed by section 290.0132, subdivision 2, to the extent the income is allocated or assigned to Minnesota under sections 290.081 and 290.17.

 

(c) If the taxpayer is an athletic team that apportions all of its income under section 290.17, subdivision 5, the credit is determined by multiplying the tax payable under this chapter by the ratio derived from dividing the total net income subject to tax in the other state by the taxpayer's Minnesota taxable income.

 

(d)(1) The credit determined under paragraph (b) or (c) shall not exceed the amount of tax so paid to the other state on the gross income earned within the other state subject to tax under this chapter; and

 

(2) the allowance of the credit does not reduce the taxes paid under this chapter to an amount less than what would be assessed if the gross income earned within the other state were excluded from taxable net income.

 

(e) In the case of the tax assessed on a lump-sum distribution under section 290.032, the credit allowed under paragraph (a) is the tax assessed by the other state on the lump-sum distribution that is also subject to tax under section 290.032, and shall not exceed the tax assessed under section 290.032.  To the extent the total lump-sum distribution defined in section 290.032, subdivision 1, includes lump-sum distributions received in prior years or is all or in part an annuity contract, the reduction to the tax on the lump-sum distribution allowed under section 290.032, subdivision 2, includes tax paid to another state that is properly apportioned to that distribution.

 

(f) If a Minnesota resident reported an item of income to Minnesota and is assessed tax in such other state on that same income after the Minnesota statute of limitations has expired, the taxpayer shall receive a credit for that year under paragraph (a), notwithstanding any statute of limitations to the contrary.  The claim for the credit must be submitted within one year from the date the taxes were paid to the other state.  The taxpayer must submit sufficient proof to show entitlement to a credit.

 

(g) For the purposes of this subdivision, a resident shareholder of a corporation treated as an "S" corporation under section 290.9725, must be considered to have paid a tax imposed on the shareholder in an amount equal to the shareholder's pro rata share of any net income tax paid by the S corporation to another state.  For the purposes of the preceding sentence, the term "net income tax" means any tax imposed on or measured by a corporation's net income.

 

(h) For the purposes of this subdivision, a resident partner of an entity taxed as a partnership under the Internal Revenue Code must be considered to have paid a tax imposed on the partner in an amount equal to the partner's pro rata share of any net income tax paid by the partnership to another state.  For purposes of the preceding sentence, the term "net income" tax means any tax imposed on or measured by a partnership's net income.  For purposes of this paragraph, "partnership" includes a limited liability company and "partner" includes a member of a limited liability company.

 

(i) For the purposes of this subdivision, "another state":

 

(1) includes:

 

(i) the District of Columbia; and


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(ii) a province or territory of Canada; but

 

(2) excludes Puerto Rico and the several territories organized by Congress.

 

(j) The limitations on the credit in paragraphs (b), (c), and (d), are imposed on a state by state basis.

 

(k) For a tax imposed by a province or territory of Canada, the tax for purposes of this subdivision is the excess of the tax over the amount of the foreign tax credit allowed under section 27 of the Internal Revenue Code.  In determining the amount of the foreign tax credit allowed, the net income taxes imposed by Canada on the income are deducted first.  Any remaining amount of the allowable foreign tax credit reduces the provincial or territorial tax that qualifies for the credit under this subdivision.

 

(l)(1) The credit allowed to a qualifying individual under this section for tax paid to a qualifying state equals the credit calculated under paragraphs (b) and (d), plus the amount calculated by multiplying:

 

(i) the difference between the preliminary credit and the credit calculated under paragraphs (b) and (d), by

 

(ii) the ratio derived by dividing the income subject to tax in the qualifying state that consists of compensation for performance of personal or professional services by the total amount of income subject to tax in the qualifying state.

 

(2) If the amount of the credit that a qualifying individual is eligible to receive under clause (1) for tax paid to a qualifying state exceeds the tax due under this chapter before the application of the credit calculated under clause (1), the commissioner shall refund the excess to the qualifying individual.  An amount sufficient to pay the refunds required by this subdivision is appropriated to the commissioner from the general fund.

 

(3) For purposes of this paragraph, "preliminary credit" means the credit that a qualifying individual is eligible to receive under paragraphs (b) and (d) for tax paid to a qualifying state without regard to the limitation in paragraph (d), clause (2); "qualifying individual" means a Minnesota resident under section 290.01, subdivision 7, paragraph (a), who received compensation during the taxable year for the performance of personal or professional services within a qualifying state; and "qualifying state" means a state with which an agreement under section 290.081 is not in effect for the taxable year but was in effect for a taxable year beginning before January 1, 2010.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 21.  Minnesota Statutes 2020, section 290.06, is amended by adding a subdivision to read:

 

Subd. 39.  Film production credit.  (a) A taxpayer, including a taxpayer to whom a credit has been assigned under section 116U.27, subdivision 3, may claim a credit against the tax imposed by this chapter equal to the amount certified on a credit certificate under section 116U.27, subject to the limitations in this subdivision.

 

(b) The credit is limited to the liability for tax, as computed under this chapter, for the taxable year.  If the amount of the credit determined under this subdivision for any taxable year exceeds this limitation, the excess is a film production credit carryover to each of the five succeeding taxable years.  The entire amount of the excess unused credit for the taxable year is carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried.  The amount of the unused credit that may be added under this paragraph must not exceed the taxpayer's liability for tax, less any film production credit for the taxable year.

 

(c) Credits allowed to a partnership, a limited liability company taxed as a partnership, or an S corporation are passed through to the partners, members, shareholders, or owners, respectively, pro rata to each based on the partner's, member's, shareholder's, or owner's share of the entity's assets, or as specially allocated in the organizational documents or any other executed agreement, as of the last day of the taxable year.


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(d) Notwithstanding the approval and certification by the commissioner of employment and economic development under section 116U.27, the commissioner may utilize any audit and examination powers under chapter 270C or 289A to the extent necessary to verify that the taxpayer is eligible for the credit and to assess the amount of any improperly claimed credit.  The commissioner may only assess the original recipient of the credit certificate for the amount of improperly claimed credits.  The commissioner may not assess a credit certificate transferee for any amount of improperly claimed credits, and a transferee's claim for credit is not affected by the commissioner's assessment of improperly claimed credits against the transferor.

 

(e) This subdivision expires January 1, 2025, for taxable years beginning after December 31, 2024, except that the expiration of this section does not affect the commissioner of revenue's authority to audit or power of examination and assessment for credits claimed under this subdivision.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020, and before January 1, 2025.

 

Sec. 22.  Minnesota Statutes 2020, section 290.06, is amended by adding a subdivision to read:

 

Subd. 40.  Pass-through entity tax credit.  (a) A qualifying owner of a qualifying entity that elects to pay the pass-through entity tax under section 289A.08, subdivision 7a, may claim a credit against the tax due under this chapter equal to the amount of the owner's tax liability as calculated under section 289A.08, subdivision 7a, paragraph (d).

 

(b) If the amount of the credit the taxpayer may claim under this subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of revenue shall refund the excess to the taxpayer.  The amount necessary to pay the claim for the refund provided in this subdivision is appropriated from the general fund to the commissioner of revenue.

 

(c) For purposes of this subdivision, "qualifying entity," "qualifying owner," and "tax liability" have the meanings given in section 289A.08, subdivision 7a, paragraphs (a) and (d).

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 23.  Minnesota Statutes 2020, section 290.0671, subdivision 1, is amended to read:

 

Subdivision 1.  Credit allowed.  (a) An individual who is a resident of Minnesota is allowed a credit against the tax imposed by this chapter equal to a percentage of earned income.  To receive a credit, a taxpayer must be eligible for a credit under section 32 of the Internal Revenue Code, except that:.

 

(b) A taxpayer who is a resident of Minnesota and is otherwise eligible for the credit under section 32 of the Internal Revenue Code may qualify for the credit under this section under one or more of the following exceptions: 

 

(1) a taxpayer with the taxpayer had no qualifying children who has and attained the age of 21, but not attained the age of 65, before the close of the taxable year and is otherwise eligible for a credit under section 32 of the Internal Revenue Code may also receive a credit; and

 

(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal Revenue Code remains eligible for the credit even if the taxpayer otherwise qualifies for a credit under this section and the taxpayer's earned income or adjusted gross income exceeds the income limitation under section 32 of the Internal Revenue Code.; or

 

(3) the taxpayer does not meet the requirements of section 32(m) of the Internal Revenue Code but provides an individual taxpayer identification number.


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(b) (c) For individuals with no qualifying children, the credit equals 3.9 5 percent of the first $7,150 $8,000 of earned income.  The credit is reduced by 2.0 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(c) (d) For individuals with one qualifying child, the credit equals 9.35 percent of the first $11,950 $12,270 of earned income.  The credit is reduced by 6.0 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(d) (e) For individuals with two qualifying children, the credit equals 11 percent of the first $19,600 $20,120 of earned income.  The credit is reduced by 10.5 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(e) (f) For individuals with three or more qualifying children, the credit equals 12.5 percent of the first $20,000 $20,530 of earned income.  The credit is reduced by 10.5 percent of earned income or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in no case is the credit less than zero.

 

(f) (g) For a part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

 

(g) (h) For a person who was a resident for the entire tax year and has earned income not subject to tax under this chapter, including income excluded under section 290.0132, subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross income reduced by the earned income not subject to tax under this chapter over federal adjusted gross income.  For purposes of this paragraph, the following clauses are not considered "earned income not subject to tax under this chapter":

 

(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;

 

(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and

 

(3) income derived from an Indian reservation by an enrolled member of the reservation while living on the reservation.

 

(h) (i) For the purposes of this section, the phaseout threshold equals:

 

(1) $14,570 $14,960 for married taxpayers filing joint returns with no qualifying children;

 

(2) $8,730 $8,960 for all other taxpayers with no qualifying children;

 

(3) $28,610 $29,380 for married taxpayers filing joint returns with one qualifying child;

 

(4) $22,770 $23,380 for all other taxpayers with one qualifying child;

 

(5) $32,840 $33,720 for married taxpayers filing joint returns with two qualifying children;

 

(6) $27,000 $27,720 for all other taxpayers with two qualifying children;

 

(7) $33,140 $34,030 for married taxpayers filing joint returns with three or more qualifying children; and

 

(8) $27,300 $28,030 for all other taxpayers with three or more qualifying children.


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(i) (j) The commissioner shall construct tables showing the amount of the credit at various income levels and make them available to taxpayers.  The tables shall follow the schedule contained in this subdivision, except that the commissioner may graduate the transition between income brackets.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 24.  Minnesota Statutes 2020, section 290.0671, subdivision 1a, is amended to read:

 

Subd. 1a.  Definitions.  (a) For purposes of this section, the following terms "Qualifying child," and have the meanings given.

 

(b) "Earned income, " have has the meanings meaning given in section 32(c) of the Internal Revenue Code, and the term "adjusted gross income" has the meaning given in section 62 of the Internal Revenue Code.

 

(c) "Earned income of the lesser-earning spouse" has the meaning given in section 290.0675, subdivision 1, paragraph (d).

 

(d) "Qualifying child" has the meaning given in section 32(c) of the Internal Revenue Code, except that the requirements of section 32(m) of the Internal Revenue Code do not apply for the purposes of determining a qualifying child if the taxpayer provides an individual taxpayer identification number.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 25.  Minnesota Statutes 2020, section 290.0671, subdivision 7, is amended to read:

 

Subd. 7.  Inflation adjustment.  The commissioner shall annually adjust the earned income amounts used to calculate the credit and the phase-out thresholds in subdivision 1 as provided in section 270C.22.  The statutory year is taxable year 2019 2021.

 

Sec. 26.  Minnesota Statutes 2020, section 290.0674, subdivision 2a, is amended to read:

 

Subd. 2a.  Income.  (a) For purposes of this section, "income" means the sum of the following:

 

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; and

 

(2) the sum of the following amounts to the extent not included in clause (1):

 

(i) all nontaxable income;

 

(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss carryover allowed under section 469(b) of the Internal Revenue Code;

 

(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a solvent individual excluded from gross income under section 108(g) of the Internal Revenue Code;

 

(iv) cash public assistance and relief;

 

(v) any pension or annuity (including railroad retirement benefits, all payments received under the federal Social Security Act, Supplemental Security Income, and veterans benefits), which was not exclusively funded by the claimant or spouse, or which was funded exclusively by the claimant or spouse and which funding payments were excluded from federal adjusted gross income in the years when the payments were made;


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(vi) interest received from the federal or a state government or any instrumentality or political subdivision thereof;

 

(vii) workers' compensation;

 

(viii) nontaxable strike benefits;

 

(ix) the gross amounts of payments received in the nature of disability income or sick pay as a result of accident, sickness, or other disability, whether funded through insurance or otherwise;

 

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1995;

 

(xi) contributions made by the claimant to an individual retirement account, including a qualified voluntary employee contribution; simplified employee pension plan; self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal Revenue Code;

 

(xii) nontaxable scholarship or fellowship grants;

 

(xiii) the amount of deduction allowed under section 199 199A(g) of the Internal Revenue Code;

 

(xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue Code;

 

(xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue Code; and

 

(xvi) the amount deducted for certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) of the Internal Revenue Code.

 

In the case of an individual who files an income tax return on a fiscal year basis, the term "federal adjusted gross income" means federal adjusted gross income reflected in the fiscal year ending in the next calendar year.  Federal adjusted gross income may not be reduced by the amount of a net operating loss carryback or carryforward or a capital loss carryback or carryforward allowed for the year.

 

(b) "Income" does not include:

 

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;

 

(2) amounts of any pension or annuity that were exclusively funded by the claimant or spouse if the funding payments were not excluded from federal adjusted gross income in the years when the payments were made;

 

(3) surplus food or other relief in kind supplied by a governmental agency;

 

(4) relief granted under chapter 290A;

 

(5) child support payments received under a temporary or final decree of dissolution or legal separation; and

 

(6) restitution payments received by eligible individuals and excludable interest as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.


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Sec. 27.  Minnesota Statutes 2020, section 290.0681, subdivision 10, is amended to read:

 

Subd. 10.  Sunset.  This section expires after fiscal year 2021 2029, except that the office's authority to issue credit certificates under subdivision 4 based on allocation certificates that were issued before fiscal year 2022 2030 remains in effect through 2024 2032, and the reporting requirements in subdivision 9 remain in effect through the year following the year in which all allocation certificates have either been canceled or resulted in issuance of credit certificates, or 2025 2033, whichever is earlier.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 28.  Minnesota Statutes 2020, section 290.0682, is amended to read:

 

290.0682 STUDENT LOAN CREDIT.

 

Subdivision 1.  Definitions.  (a) For purposes of this section, the following terms have the meanings given.

 

(b) "Adjusted gross income" means federal adjusted gross income as defined in section 62 of the Internal Revenue Code.

 

(c) "Earned income" has the meaning given in section 32(c) of the Internal Revenue Code 290.0675, subdivision 1, paragraph (b).

 

(d) "Eligible individual" means a resident individual with one or more qualified education loans related to an undergraduate or graduate degree program at a postsecondary educational institution.

 

(e) "Eligible loan payments" means the amount the eligible individual paid during the taxable year in principal and interest on qualified education loans.

 

(f) "Postsecondary educational institution" means a public or nonprofit postsecondary institution eligible for state student aid under section 136A.103 or, if the institution is not located in this state, a public or nonprofit postsecondary institution participating in the federal Pell Grant program under title IV of the Higher Education Act of 1965, Public Law 89-329, as amended.

 

(g) "Qualified education loan" has the meaning given in section 221 of the Internal Revenue Code, but is limited to indebtedness incurred on behalf of the eligible individual.

 

Subd. 2.  Credit allowed.  (a) An eligible individual is allowed a credit against the tax due under this chapter.

 

(b) The credit for an eligible individual equals the least of:

 

(1) eligible loan payments minus ten percent of an amount equal to adjusted gross income in excess of $10,000, but in no case less than zero;

 

(2) the earned income for the taxable year of the eligible individual, if any;

 

(3) the sum of:

 

(i) the interest portion of eligible loan payments made during the taxable year; and

 

(ii) ten percent of the original loan amount of all qualified education loans of the eligible individual; or

 

(4) $500.


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(c) For a part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

 

(d) In the case of a married couple, each spouse is eligible for the credit in this section.  For the purposes of paragraph (b), for married taxpayers filing joint returns, each spouse's adjusted gross income equals the spouse's percentage share of the couple's earned income, multiplied by the couple's combined adjusted gross income.

 

Subd. 3.  Credit refundable; appropriation.  (a) If the amount of credit which a claimant is eligible to receive under this section exceeds the claimant's tax liability under this chapter, the commissioner shall refund the excess to the claimant.

 

(b) An amount sufficient to pay the refunds required by this section is appropriated to the commissioner from the general fund.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 29.  Minnesota Statutes 2020, section 290.0685, subdivision 1, is amended to read:

 

Subdivision 1.  Credit allowed.  (a) An eligible individual is allowed a credit against the tax imposed by this chapter equal to $2,000 for each birth for which a certificate of birth resulting in stillbirth has been issued under section 144.2151 stillbirth.  The credit under this section is allowed only in the taxable year in which the stillbirth occurred and if the child would have been a dependent of the taxpayer as defined in section 152 of the Internal Revenue Code.

 

(b) For a nonresident or part-year resident, the credit must be allocated based on the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2015.

 

Sec. 30.  Minnesota Statutes 2020, section 290.0685, is amended by adding a subdivision to read:

 

Subd. 1a.  Definitions.  (a) For purposes of this section, the following terms have the meanings given, unless the context clearly indicates otherwise.

 

(b) "Certificate of birth" means the printed certificate of birth resulting in stillbirth issued under section 144.2151 or for a birth occurring in another state or country a similar certificate issued under that state's or country's law.

 

(c) "Eligible individual" means an individual who is:

 

(1)(i) a resident; or

 

(ii) the nonresident spouse of a resident who is a member of armed forces of the United States or the United Nations; and

 

(2)(i) the individual who gave birth resulting in stillbirth and is listed as a parent on the certificate of birth;

 

(ii) if no individual meets the requirements of clause (i) for a stillbirth that occurs in this state, then the first parent listed on the certificate of birth resulting in still birth; or

 

(iii) the individual who gave birth resulting in stillbirth for a birth outside of this state for which no certificate of birth was issued.


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(d) "Stillbirth" means a birth for which a fetal death report would be required under section 144.222, subdivision 1, if the birth occurred in this state.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2015.

 

Sec. 31.  Minnesota Statutes 2020, section 290.091, subdivision 2, is amended to read:

 

Subd. 2.  Definitions.  For purposes of the tax imposed by this section, the following terms have the meanings given.

 

(a) "Alternative minimum taxable income" means the sum of the following for the taxable year:

 

(1) the taxpayer's federal alternative minimum taxable income as defined in section 55(b)(2) of the Internal Revenue Code;

 

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum taxable income, but excluding:

 

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

 

(ii) the medical expense deduction;

 

(iii) the casualty, theft, and disaster loss deduction; and

 

(iv) the impairment-related work expenses of a person with a disability;

 

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), to the extent not included in federal alternative minimum taxable income, the excess of the deduction for depletion allowable under section 611 of the Internal Revenue Code for the taxable year over the adjusted basis of the property at the end of the taxable year (determined without regard to the depletion deduction for the taxable year);

 

(4) to the extent not included in federal alternative minimum taxable income, the amount of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue Code determined without regard to subparagraph (E);

 

(5) to the extent not included in federal alternative minimum taxable income, the amount of interest income as provided by section 290.0131, subdivision 2;

 

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16, and 19 to 23;

 

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent not included in the addition required under clause (6); and

 

(8) to the extent not included in federal alternative minimum taxable income, the amount of foreign-derived intangible income deducted under section 250 of the Internal Revenue Code;

 

less the sum of the amounts determined under the following:

 

(i) interest income as defined in section 290.0132, subdivision 2;

 

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 3, to the extent included in federal alternative minimum taxable income;


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(iii) the amount of investment interest paid or accrued within the taxable year on indebtedness to the extent that the amount does not exceed net investment income, as defined in section 163(d)(4) of the Internal Revenue Code.  Interest does not include amounts deducted in computing federal adjusted gross income;

 

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, and 26 to 29, 30, and 31;

 

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, paragraph (c); and

 

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122, subdivision 7.

 

In the case of an estate or trust, alternative minimum taxable income must be computed as provided in section 59(c) of the Internal Revenue Code, except alternative minimum taxable income must be increased by the addition in section 290.0131, subdivision 16.

 

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of the Internal Revenue Code.

 

(c) "Net minimum tax" means the minimum tax imposed by this section.

 

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed under this chapter.

 

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income after subtracting the exemption amount determined under subdivision 3.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020, except that the provisions relating to section 290.0131, subdivisions 20 and 21, are effective retroactively for taxable years beginning after December 31, 2017, and the provisions relating to section 290.0131, subdivision 19, and section 290.0132, subdivisions 30 and 31, are effective retroactively for taxable years beginning after December 31, 2018.

 

Sec. 32.  Minnesota Statutes 2020, section 290.17, is amended by adding a subdivision to read:

 

Subd. 4a.  Controlled foreign corporations.  (a) For purposes of applying subdivision 4, a controlled foreign corporation as defined in section 957 of the Internal Revenue Code is deemed to be a domestic corporation if:

 

(1) a United States shareholder of a controlled foreign corporation is required for the taxable year to include in gross income the shareholder's global intangible low-taxed income under section 951A of the Internal Revenue Code; and

 

(2) the controlled foreign corporation is a member of a unitary group.

 

(b) In the event the taxpayer fails to designate the controlled foreign corporation as a member of a unitary group and the commissioner subsequently determines that the controlled foreign corporation is a member of a unitary group, the commissioner's determination is prima facie valid.  The taxpayer subject to the determination has the burden of establishing the incorrectness of the determination in any related action or proceeding.

 

(c) For purposes of imposing a tax under this chapter, the federal taxable income of a controlled foreign corporation deemed to be a domestic corporation under this subdivision must be computed as follows:

 

(1) a profit and loss statement must be prepared in the currency in which the books of account of the controlled foreign corporation are regularly maintained;


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(2) except as determined by the commissioner or otherwise allowed under the Internal Revenue Code, adjustments must be made to the profit and loss statement to conform the statement to the accounting principles generally accepted in the United States for the preparation of those statements;

 

(3) adjustments must be made to the profit and loss statement to conform it to the tax accounting standards required by the commissioner;

 

(4) unless otherwise authorized by the commissioner, the apportionment factors and profit and loss statement of each member of the combined group must be converted into the currency in which the parent company maintains its books and records; and

 

(5) the taxpayer's apportionment factors and profit and loss statement must be expressed in United States dollars.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 33.  Minnesota Statutes 2020, section 290.17, is amended by adding a subdivision to read:

 

Subd. 4b.  Worldwide election.  (a) Taxpayer members of a unitary group, of which one or more members are deemed to be domestic corporations under subdivision 4a for the taxable year, may elect to determine each of their apportioned shares of the net business income or loss of the combined group under a worldwide election.  Under the election, taxpayer members must take into account the entire income and apportionment factors of each member of the unitary group, regardless of the place where a member is incorporated or formed.  Corporations or other entities incorporated or formed outside of the United States are subject to the requirements of subdivision 4a, paragraph (c), in reporting their income.

 

(b) A worldwide election is effective only if made on a timely filed, original return for the tax year by each member of the unitary group subject to tax under this chapter.

 

(c) A worldwide election is binding for and applies to the taxable year it is made and for the ten following taxable years.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 34.  Minnesota Statutes 2020, section 290.17, is amended by adding a subdivision to read:

 

Subd. 4c.  Withdrawal; reinstitution.  (a) The election under subdivision 4b, paragraph (a), may be withdrawn:

 

(1) after expiration of the ten-year period in subdivision 4b, paragraph (c), provided that the withdrawal is made in writing within one year after the expiration of the election; or

 

(2) prior to the expiration of the ten-year period, if the taxpayer members:

 

(i) file a written withdrawal request with the commissioner;

 

(ii) demonstrate that they would experience an extraordinary financial hardship due to increased tax arising from unforeseen changes in this state's tax statutes, laws, or policies; and

 

(iii) receive written permission from the commissioner approving the withdrawal, which the commissioner may grant.

 

(b) A withdrawal made under paragraph (a) is binding for ten years.  If no withdrawal is properly made under paragraph (a), clause (1), the worldwide election is binding for an additional ten taxable years.  If the commissioner grants written permission to withdraw under paragraph (a), clause (2), the commissioner must impose any requirement deemed necessary to prevent evasion of tax or to clearly reflect income for the election period before or after withdrawal.


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(c) Notwithstanding the requirement binding withdrawal for ten years under paragraph (b), the election may be reinstituted if the taxpayer members:

 

(1) file a written reinstitution request with the commissioner;

 

(2) demonstrate that they would experience an extraordinary hardship due to unforeseen changes in this state's tax statutes, laws, or policies; and

 

(3) receive written permission from the commissioner approving the reinstitution, which the commissioner may grant.

 

(d) A reinstitution under paragraph (c) is binding for a period of ten years.  The withdrawal provisions of paragraph (a) apply to a reinstitution under paragraph (c), and the provisions of paragraph (c) apply to a reinstitution following a subsequent withdrawal.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 35.  Minnesota Statutes 2020, section 290.21, subdivision 9, is amended to read:

 

Subd. 9.  Controlled foreign corporations.  The net income of a domestic corporation that is included pursuant to section 951 of the Internal Revenue Code is dividend income.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 36.  Minnesota Statutes 2020, section 290.21, is amended by adding a subdivision to read:

 

Subd. 10.  Previously taxed deferred foreign income.  The amount included under section 290.0133, subdivision 16, is dividend income.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 37.  Minnesota Statutes 2020, section 290.92, subdivision 4b, is amended to read:

 

Subd. 4b.  Withholding by partnerships.  (a) A partnership shall deduct and withhold a tax as provided in paragraph (b) for nonresident individual partners based on their distributive shares of partnership income for a taxable year of the partnership.

 

(b) The amount of tax withheld is determined by multiplying the partner's distributive share allocable to Minnesota under section 290.17, paid or credited during the taxable year by the highest rate used to determine the income tax liability for an individual under section 290.06, subdivision 2c, except that the amount of tax withheld may be determined by the commissioner if the partner submits a withholding exemption certificate under subdivision 5.

 

(c) The commissioner may reduce or abate the tax withheld under this subdivision if the partnership had reasonable cause to believe that no tax was due under this section.

 

(d) Notwithstanding paragraph (a), a partnership is not required to deduct and withhold tax for a nonresident partner if:

 

(1) the partner elects to have the tax due paid as part of the partnership's composite return under section 289A.08, subdivision 7;

 

(2) the partner has Minnesota assignable federal adjusted gross income from the partnership of less than $1,000; or


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(3) the partnership is liquidated or terminated, the income was generated by a transaction related to the termination or liquidation, and no cash or other property was distributed in the current or prior taxable year;

 

(4) the distributive shares of partnership income are attributable to:

 

(i) income required to be recognized because of discharge of indebtedness;

 

(ii) income recognized because of a sale, exchange, or other disposition of real estate, depreciable property, or property described in section 179 of the Internal Revenue Code; or

 

(iii) income recognized on the sale, exchange, or other disposition of any property that has been the subject of a basis reduction pursuant to section 108, 734, 743, 754, or 1017 of the Internal Revenue Code

 

to the extent that the income does not include cash received or receivable or, if there is cash received or receivable, to the extent that the cash is required to be used to pay indebtedness by the partnership or a secured debt on partnership property; or

 

(5) the partnership is a publicly traded partnership, as defined in section 7704(b) of the Internal Revenue Code.; or

 

(6) the partnership has elected to pay the pass-through entity tax under section 289A.08, subdivision 7a.

 

(e) For purposes of sections 270C.60, 289A.09, subdivision 2, 289A.20, subdivision 2, paragraph (c), 289A.50, 289A.56, 289A.60, and 289A.63, a partnership is considered an employer.

 

(f) To the extent that income is exempt from withholding under paragraph (d), clause (4), the commissioner has a lien in an amount up to the amount that would be required to be withheld with respect to the income of the partner attributable to the partnership interest, but for the application of paragraph (d), clause (4).  The lien arises under section 270C.63 from the date of assessment of the tax against the partner, and attaches to that partner's share of the profits and any other money due or to become due to that partner in respect of the partnership.  Notice of the lien may be sent by mail to the partnership, without the necessity for recording the lien.  The notice has the force and effect of a levy under section 270C.67, and is enforceable against the partnership in the manner provided by that section.  Upon payment in full of the liability subsequent to the notice of lien, the partnership must be notified that the lien has been satisfied.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 38.  Minnesota Statutes 2020, section 290.92, subdivision 4c, is amended to read:

 

Subd. 4c.  Withholding by S corporations.  (a) A corporation having a valid election in effect under section 290.9725 shall deduct and withhold a tax as provided in paragraph (b) for nonresident individual shareholders their share of the corporation's income for the taxable year.

 

(b) The amount of tax withheld is determined by multiplying the amount of income allocable to Minnesota under section 290.17 by the highest rate used to determine the income tax liability of an individual under section 290.06, subdivision 2c, except that the amount of tax withheld may be determined by the commissioner if the shareholder submits a withholding exemption certificate under subdivision 5.

 

(c) Notwithstanding paragraph (a), a corporation is not required to deduct and withhold tax for a nonresident shareholder, if:

 

(1) the shareholder elects to have the tax due paid as part of the corporation's composite return under section 289A.08, subdivision 7;


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(2) the shareholder has Minnesota assignable federal adjusted gross income from the corporation of less than $1,000; or

 

(3) the corporation is liquidated or terminated, the income was generated by a transaction related to the termination or liquidation, and no cash or other property was distributed in the current or prior taxable year.; or

 

(4) the S corporation has elected to pay the pass-through entity tax under section 289A.08, subdivision 7a.

 

(d) For purposes of sections 270C.60, 289A.09, subdivision 2, 289A.20, subdivision 2, paragraph (c), 289A.50, 289A.56, 289A.60, and 289A.63, a corporation is considered an employer.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 39.  Minnesota Statutes 2020, section 290A.03, subdivision 3, is amended to read:

 

Subd. 3.  Income.  (a) "Income" means the sum of the following:

 

(1) federal adjusted gross income as defined in the Internal Revenue Code; and

 

(2) the sum of the following amounts to the extent not included in clause (1):

 

(i) all nontaxable income;

 

(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss carryover allowed under section 469(b) of the Internal Revenue Code;

 

(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a solvent individual excluded from gross income under section 108(g) of the Internal Revenue Code;

 

(iv) cash public assistance and relief;

 

(v) any pension or annuity (including railroad retirement benefits, all payments received under the federal Social Security Act, Supplemental Security Income, and veterans benefits), which was not exclusively funded by the claimant or spouse, or which was funded exclusively by the claimant or spouse and which funding payments were excluded from federal adjusted gross income in the years when the payments were made;

 

(vi) interest received from the federal or a state government or any instrumentality or political subdivision thereof;

 

(vii) workers' compensation;

 

(viii) nontaxable strike benefits;

 

(ix) the gross amounts of payments received in the nature of disability income or sick pay as a result of accident, sickness, or other disability, whether funded through insurance or otherwise;

 

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1995;


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(xi) contributions made by the claimant to an individual retirement account, including a qualified voluntary employee contribution; simplified employee pension plan; self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal Revenue Code, to the extent the sum of amounts exceeds the retirement base amount for the claimant and spouse;

 

(xii) to the extent not included in federal adjusted gross income, distributions received by the claimant or spouse from a traditional or Roth style retirement account or plan;

 

(xiii) nontaxable scholarship or fellowship grants;

 

(xiv) alimony received to the extent not included in the recipient's income;

 

(xv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue Code;

 

(xvi) the amount deducted for tuition expenses under section 222 of the Internal Revenue Code; and

 

(xvii) the amount deducted for certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) of the Internal Revenue Code.; and

 

(xviii) the amount of deduction allowed under section 199A(g) of the Internal Revenue Code.

 

In the case of an individual who files an income tax return on a fiscal year basis, the term "federal adjusted gross income" shall mean federal adjusted gross income reflected in the fiscal year ending in the calendar year.  Federal adjusted gross income shall not be reduced by the amount of a net operating loss carryback or carryforward or a capital loss carryback or carryforward allowed for the year.

 

(b) "Income" does not include:

 

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;

 

(2) amounts of any pension or annuity which was exclusively funded by the claimant or spouse and which funding payments were not excluded from federal adjusted gross income in the years when the payments were made;

 

(3) to the extent included in federal adjusted gross income, amounts contributed by the claimant or spouse to a traditional or Roth style retirement account or plan, but not to exceed the retirement base amount reduced by the amount of contributions excluded from federal adjusted gross income, but not less than zero;

 

(4) surplus food or other relief in kind supplied by a governmental agency;

 

(5) relief granted under this chapter;

 

(6) child support payments received under a temporary or final decree of dissolution or legal separation;

 

(7) restitution payments received by eligible individuals and excludable interest as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16; or

 

(8) alimony paid.

 

(c) The sum of the following amounts may be subtracted from income:


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(1) for the claimant's first dependent, the exemption amount multiplied by 1.4;

 

(2) for the claimant's second dependent, the exemption amount multiplied by 1.3;

 

(3) for the claimant's third dependent, the exemption amount multiplied by 1.2;

 

(4) for the claimant's fourth dependent, the exemption amount multiplied by 1.1;

 

(5) for the claimant's fifth dependent, the exemption amount; and

 

(6) if the claimant or claimant's spouse had a disability or attained the age of 65 on or before December 31 of the year for which the taxes were levied or rent paid, the exemption amount.

 

(d) For purposes of this subdivision, the following terms have the meanings given:

 

(1) "exemption amount" means the exemption amount under section 290.0121, subdivision 1, paragraph (b), for the taxable year for which the income is reported;

 

(2) "retirement base amount" means the deductible amount for the taxable year for the claimant and spouse under section 219(b)(5)(A) of the Internal Revenue Code, adjusted for inflation as provided in section 219(b)(5)(C) of the Internal Revenue Code, without regard to whether the claimant or spouse claimed a deduction; and

 

(3) "traditional or Roth style retirement account or plan" means retirement plans under sections 401, 403, 408, 408A, and 457 of the Internal Revenue Code.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after December 31, 2020.

 

Sec. 40.  Minnesota Statutes 2020, section 297I.20, is amended by adding a subdivision to read:

 

Subd. 4.  Film production credit.  (a) A taxpayer may claim a credit against the premiums tax imposed under this chapter equal to the amount indicated on the credit certificate statement issued to the company under section 116U.27.  If the amount of the credit exceeds the taxpayer's liability for tax under this chapter, the excess is a credit carryover to each of the five succeeding taxable years.  The entire amount of the excess unused credit for the taxable year must be carried first to the earliest of the taxable years to which the credit may be carried and then to each successive year to which the credit may be carried.  This credit does not affect the calculation of fire state aid under section 477B.03 and police state aid under section 477C.03.

 

(b) This subdivision expires January 1, 2025, for taxable years beginning after and premiums received after December 31, 2024.

 

EFFECTIVE DATE.  This section is effective for taxable years beginning after and for premiums received after December 31, 2020, and before January 1, 2025.

 

Sec. 41.  CLARIFICATION OF SECTION 179 EXPENSING CONFORMITY.

 

For taxable years beginning after December 31, 2019, no addition is required under Minnesota Statutes, sections 290.0131, subdivision 10, and 290.0133, subdivision 12, for property placed in service in taxable years beginning before January 1, 2020, including the following: 

 

(1) the addition for carryover amounts pursuant to section 179(b)(3) of the Internal Revenue Code for property placed in service in taxable years beginning before January 1, 2020; and


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(2) the addition for property placed in service in taxable years beginning before January 1, 2020, resulting from being a shareholder or partner in an S-corporation or partnership with a taxable year that began before January 1, 2020.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2019.

 

Sec. 42.  REPEALER.

 

(a) Minnesota Statutes 2020, sections 290.01, subdivision 19i; and 290.0131, subdivision 18, are repealed effective retroactively for taxable years beginning after December 31, 2015.

 

(b) Minnesota Statutes 2020, section 290.01, subdivision 7b, is repealed effective for taxable years beginning after December 31, 2020.

 

ARTICLE 3

PARTNERSHIP AUDITS

 

Section 1.  Minnesota Statutes 2020, section 270C.445, subdivision 6, is amended to read:

 

Subd. 6.  Enforcement; administrative order; penalties; cease and desist.  (a) The commissioner may impose an administrative penalty of not more than $1,000 per violation of subdivision 3 or 5, or section 270C.4451, provided that a penalty may not be imposed for any conduct for which a tax preparer penalty is imposed under section 289A.60, subdivision 13.  The commissioner may terminate a tax preparer's authority to transmit returns electronically to the state, if the commissioner determines the tax preparer engaged in a pattern and practice of violating this section.  Imposition of a penalty under this paragraph is subject to the contested case procedure under chapter 14.  The commissioner shall collect the penalty in the same manner as the income tax.  There is no right to make a claim for refund under section 289A.50 of the penalty imposed under this paragraph.  Penalties imposed under this paragraph are public data.

 

(b) In addition to the penalty under paragraph (a), if the commissioner determines that a tax preparer has violated subdivision 3 or 5, or section 270C.4451, the commissioner may issue an administrative order to the tax preparer requiring the tax preparer to cease and desist from committing the violation.  The administrative order may include an administrative penalty provided in paragraph (a).

 

(c) If the commissioner issues an administrative order under paragraph (b), the commissioner must send the order to the tax preparer addressed to the last known address of the tax preparer.

 

(d) A cease and desist order under paragraph (b) must:

 

(1) describe the act, conduct, or practice committed and include a reference to the law that the act, conduct, or practice violates; and

 

(2) provide notice that the tax preparer may request a hearing as provided in this subdivision.

 

(e) Within 30 days after the commissioner issues an administrative order under paragraph (b), the tax preparer may request a hearing to review the commissioner's action.  The request for hearing must be made in writing and must be served on the commissioner at the address specified in the order.  The hearing request must specifically state the reasons for seeking review of the order.  The date on which a request for hearing is served by mail is the postmark date on the envelope in which the request for hearing is mailed.

 

(f) If a tax preparer does not timely request a hearing regarding an administrative order issued under paragraph (b), the order becomes a final order of the commissioner and is not subject to review by any court or agency.


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(g) If a tax preparer timely requests a hearing regarding an administrative order issued under paragraph (b), the hearing must be commenced within ten days after the commissioner receives the request for a hearing.

 

(h) A hearing timely requested under paragraph (e) is subject to the contested case procedure under chapter 14, as modified by this subdivision.  The administrative law judge must issue a report containing findings of fact, conclusions of law, and a recommended order within ten days after the completion of the hearing, the receipt of late‑filed exhibits, or the submission of written arguments, whichever is later.

 

(i) Within five days of the date of the administrative law judge's report issued under paragraph (h), any party aggrieved by the administrative law judge's report may submit written exceptions and arguments to the commissioner.  Within 15 days after receiving the administrative law judge's report, the commissioner must issue an order vacating, modifying, or making final the administrative order.

 

(j) The commissioner and the tax preparer requesting a hearing may by agreement lengthen any time periods prescribed in paragraphs (g) to (i).

 

(k) An administrative order issued under paragraph (b) is in effect until it is modified or vacated by the commissioner or an appellate court.  The administrative hearing provided by paragraphs (e) to (i) and any appellate judicial review as provided in chapter 14 constitute the exclusive remedy for a tax preparer aggrieved by the order.

 

(l) The commissioner may impose an administrative penalty, in addition to the penalty under paragraph (a), up to $5,000 per violation of a cease and desist order issued under paragraph (b).  Imposition of a penalty under this paragraph is subject to the contested case procedure under chapter 14.  Within 30 days after the commissioner imposes a penalty under this paragraph, the tax preparer assessed the penalty may request a hearing to review the penalty order.  The request for hearing must be made in writing and must be served on the commissioner at the address specified in the order.  The hearing request must specifically state the reasons for seeking review of the order.  The cease and desist order issued under paragraph (b) is not subject to review in a proceeding to challenge the penalty order under this paragraph.  The date on which a request for hearing is served by mail is the postmark date on the envelope in which the request for hearing is mailed.  If the tax preparer does not timely request a hearing, the penalty order becomes a final order of the commissioner and is not subject to review by any court or agency.  A penalty imposed by the commissioner under this paragraph may be collected and enforced by the commissioner as an income tax liability.  There is no right to make a claim for refund under section 289A.50 of the penalty imposed under this paragraph.  A penalty imposed under this paragraph is public data.

 

(m) If a tax preparer violates a cease and desist order issued under paragraph (b), the commissioner may terminate the tax preparer's authority to transmit returns electronically to the state.  Termination under this paragraph is public data.

 

(n) A cease and desist order issued under paragraph (b) is public data when it is a final order.

 

(o) Notwithstanding any other law, the commissioner may impose a penalty or take other action under this subdivision against a tax preparer, with respect to a return, within the period to assess tax on that return as provided by section sections 289A.38 to 289A.382.

 

(p) Notwithstanding any other law, the imposition of a penalty or any other action against a tax preparer under this subdivision, other than with respect to a return, must be taken by the commissioner within five years of the violation of statute.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.


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Sec. 2.  Minnesota Statutes 2020, section 289A.31, subdivision 1, is amended to read:

 

Subdivision 1.  Individual income, fiduciary income, mining company, corporate franchise, and entertainment taxes.  (a) Individual income, fiduciary income, mining company, and corporate franchise taxes, and interest and penalties, must be paid by the taxpayer upon whom the tax is imposed, except in the following cases:

 

(1) the tax due from a decedent for that part of the taxable year in which the decedent died during which the decedent was alive and the taxes, interest, and penalty due for the prior years must be paid by the decedent's personal representative, if any.  If there is no personal representative, the taxes, interest, and penalty must be paid by the transferees, as defined in section 270C.58, subdivision 3, to the extent they receive property from the decedent;

 

(2) the tax due from an infant or other incompetent person must be paid by the person's guardian or other person authorized or permitted by law to act for the person;

 

(3) the tax due from the estate of a decedent must be paid by the estate's personal representative;

 

(4) the tax due from a trust, including those within the definition of a corporation, as defined in section 290.01, subdivision 4, must be paid by a trustee; and

 

(5) the tax due from a taxpayer whose business or property is in charge of a receiver, trustee in bankruptcy, assignee, or other conservator, must be paid by the person in charge of the business or property so far as the tax is due to the income from the business or property.

 

(b) Entertainment taxes are the joint and several liability of the entertainer and the entertainment entity.  The payor is liable to the state for the payment of the tax required to be deducted and withheld under section 290.9201, subdivision 7, and is not liable to the entertainer for the amount of the payment.

 

(c) The taxes imposed under sections 289A.35, paragraph (b), 289A.382, subdivision 3, and 290.0922 on partnerships are the joint and several liability of the partnership and the general partners.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 3.  Minnesota Statutes 2020, section 289A.37, subdivision 2, is amended to read:

 

Subd. 2.  Erroneous refunds.  (a) Except as provided in paragraph (b), an erroneous refund occurs when the commissioner issues a payment to a person that exceeds the amount the person is entitled to receive under law.  An erroneous refund is considered an underpayment of tax on the date issued.

 

(b) To the extent that the amount paid does not exceed the amount claimed by the taxpayer, an erroneous refund does not include the following:

 

(1) any amount of a refund or credit paid pursuant to a claim for refund filed by a taxpayer, including but not limited to refunds of claims made under section 290.06, subdivision 23; 290.067; 290.0671; 290.0672; 290.0674; 290.0675; 290.0677; 290.068; 290.0681; or 290.0692; or chapter 290A; or

 

(2) any amount paid pursuant to a claim for refund of an overpayment of tax filed by a taxpayer.

 

(c) The commissioner may make an assessment to recover an erroneous refund at any time within two years from the issuance of the erroneous refund.  If all or part of the erroneous refund was induced by fraud or misrepresentation of a material fact, the assessment may be made at any time.


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(d) Assessments of amounts that are not erroneous refunds under paragraph (b) must be conducted under section sections 289A.38 to 289A.382.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 4.  Minnesota Statutes 2020, section 289A.38, subdivision 7, is amended to read:

 

Subd. 7.  Federal tax changes.  (a) If the amount of income, items of tax preference, deductions, or credits for any year of a taxpayer, or the wages paid by a taxpayer for any period, as reported to the Internal Revenue Service is changed or corrected by the commissioner of Internal Revenue or other officer of the United States or other competent authority, or where a renegotiation of a contract or subcontract with the United States results in a change in income, items of tax preference, deductions, credits, or withholding tax, or, in the case of estate tax, where there are adjustments to the taxable estate, the taxpayer shall report the change or correction or renegotiation results federal adjustments in writing to the commissioner.  The federal adjustments report must be submitted within 180 days after the final determination date and must be in the form of either an amended Minnesota estate, withholding tax, corporate franchise tax, or income tax return conceding the accuracy of the federal determination adjustment or a letter detailing how the federal determination adjustment is incorrect or does not change the Minnesota tax.  An amended Minnesota income tax return must be accompanied by an amended property tax refund return, if necessary.  A taxpayer filing an amended federal tax return must also file a copy of the amended return with the commissioner of revenue within 180 days after filing the amended return.

 

(b) For the purposes of paragraph (a), a change or correction includes any case where a taxpayer reaches a closing agreement or compromise with the Internal Revenue Service under section 7121 or 7122 of the Internal Revenue Code.  In the case of a final federal adjustment arising from a partnership-level audit or an administrative adjustment request filed by a partnership under section 6227 of the Internal Revenue Code, a taxpayer must report adjustments as provided for under section 289A.382, and not this section.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 5.  Minnesota Statutes 2020, section 289A.38, subdivision 8, is amended to read:

 

Subd. 8.  Failure to report change or correction of federal return.  If a taxpayer fails to make a federal adjustments report as required by subdivision 7 or section 289A.382, the commissioner may recompute the tax, including a refund, based on information available to the commissioner.  The tax may be recomputed within six years after the federal adjustments report should have been filed, notwithstanding any period of limitations to the contrary.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 6.  Minnesota Statutes 2020, section 289A.38, subdivision 9, is amended to read:

 

Subd. 9.  Report made of change or correction of federal return.  If a taxpayer is required to make a federal adjustments report under subdivision 7 or section 289A.382, and does report the change or files a copy of the amended return, the commissioner may recompute and reassess the tax due, including a refund (1) within one year after the federal adjustments report or amended return is filed with the commissioner, notwithstanding any period of


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limitations to the contrary, or (2) within any other applicable period stated in this section, whichever period is longer.  The period provided for the carryback of any amount of loss or credit is also extended as provided in this subdivision, notwithstanding any law to the contrary.  If the commissioner has completed a field audit of the taxpayer, and, but for this subdivision, the commissioner's time period to adjust the tax has expired, the additional tax due or refund is limited to only those changes that are required to be made to the return which relate to the changes made on the federal return.  This subdivision does not apply to sales and use tax.

 

For purposes of this subdivision and section 289A.42, subdivision 2, a "field audit" is the physical presence of examiners in the taxpayer's or taxpayer's representative's office conducting an examination of the taxpayer with the intention of issuing an assessment or notice of change in tax or which results in the issuing of an assessment or notice of change in tax.  The examination may include inspecting a taxpayer's place of business, tangible personal property, equipment, computer systems and facilities, pertinent books, records, papers, vouchers, computer printouts, accounts, and documents.

 

A taxpayer may make estimated payments to the commissioner of the tax expected to result from a pending audit by the Internal Revenue Service.  The taxpayer may make estimated payments prior to the due date of the federal adjustments report without the taxpayer having to file the report with the commissioner.  The commissioner must credit the estimated tax payments against any tax liability of the taxpayer ultimately found to be due to the commissioner.  The estimated payments limit the accrual of further statutory interest on that amount.  If the estimated tax payments exceed the final tax liability plus statutory interest ultimately determined to be due, the taxpayer is entitled to a refund or credit for the excess, provided the taxpayer files a federal adjustments report, or claim for refund or credit of tax, no later than one year following the final determination date.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 7.  Minnesota Statutes 2020, section 289A.38, subdivision 10, is amended to read:

 

Subd. 10.  Incorrect determination of federal adjusted gross income.  Notwithstanding any other provision of this chapter, if a taxpayer whose net income is determined under section 290.01, subdivision 19, omits from income an amount that will under the Internal Revenue Code extend the statute of limitations for the assessment of federal income taxes, or otherwise incorrectly determines the taxpayer's federal adjusted gross income resulting in adjustments by the Internal Revenue Service, then the period of assessment and determination of tax will be that under the Internal Revenue Code.  When a change is made to federal income during the extended time provided under this subdivision, the provisions under subdivisions 7 to 9 and section 289A.382 regarding additional extensions apply.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 8.  [289A.381] DEFINITIONS; PARTNERSHIPS; FEDERAL ADJUSTMENTS.

 

Subdivision 1.  Definitions relating to federal adjustments.  Unless otherwise specified, the definitions in this section apply for the purposes of sections 289A.38, subdivisions 7 to 9, 289A.381, and 289A.382.

 

Subd. 2.  Administrative adjustment request. "Administrative adjustment request" means an administrative adjustment request filed by a partnership under section 6227 of the Internal Revenue Code.

 

Subd. 3.  Audited partnership. "Audited partnership" means a partnership subject to a federal adjustment resulting from a partnership-level audit.


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Subd. 4.  Corporate partner. "Corporate partner" means a partner that is subject to tax under section 290.02.

 

Subd. 5.  Direct partner. "Direct partner" means a partner that holds an immediate legal ownership interest in a partnership or pass-through entity.

 

Subd. 6.  Exempt partner. "Exempt partner" means a partner that is exempt from taxes on its net income under section 290.05, subdivision 1.

 

Subd. 7.  Federal adjustment. "Federal adjustment" means any change in an amount calculated under the Internal Revenue Code, whether to income, gross estate, a credit, an item of preference, or any other item that is used by a taxpayer to compute a tax administered under this chapter for the reviewed year whether that change results from action by the Internal Revenue Service or other competent authority, including a partnership-level audit, or from the filing of an amended federal return, federal refund claim, or an administrative adjustment request by the taxpayer.  A federal adjustment is positive to the extent that it increases taxable income as determined under section 290.01, subdivision 29, and is negative to the extent that it decreases taxable income as determined under section 290.01, subdivision 29.

 

Subd. 8.  Federal adjustments report. "Federal adjustments report" includes a method or form prescribed by the commissioner for use by a taxpayer to report federal adjustments, including an amended Minnesota tax return or a uniform multistate report.

 

Subd. 9.  Federal partnership representative. "Federal partnership representative" means the person the partnership designates for the taxable year as the partnership's representative, or the person the Internal Revenue Service has appointed to act as the partnership representative, pursuant to section 6223(a) of the Internal Revenue Code.

 

Subd. 10.  Final determination date. "Final determination date" means:

 

(1) for a federal adjustment arising from an audit by the Internal Revenue Service or other competent authority, the first day on which no federal adjustment arising from that audit remains to be finally determined, whether by agreement, or, if appealed or contested, by a final decision with respect to which all rights of appeal have been waived or exhausted;

 

(2) for a federal adjustment arising from an audit or other action by the Internal Revenue Service or other competent authority, if the taxpayer filed as a member of a combined report under section 290.17, subdivision 4, the first day on which no related federal adjustments arising from that audit remain to be finally determined as described in clause (1) for the entire combined group;

 

(3) for a federal adjustment arising from the filing of an amended federal return, a federal refund claim, or the filing by a partnership of an administrative adjustment request, the date on which the amended return, refund claim, or administrative adjustment request was filed; or

 

(4) for agreements required to be signed by the Internal Revenue Service and the taxpayer, the date on which the last party signed the agreement.

 

Subd. 11.  Final federal adjustment. "Final federal adjustment" means a federal adjustment after the final determination date for that federal adjustment has passed.

 

Subd. 12.  Indirect partner. "Indirect partner" means either:

 

(1) a partner in a partnership or pass-through entity that itself holds an immediate legal ownership interest in another partnership or pass-through entity; or


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(2) a partner in a partnership or pass-through entity that holds an indirect interest in another partnership or pass‑through entity through another indirect partner.

 

Subd. 13.  Partner. "Partner" means a person that holds an interest directly or indirectly in a partnership or other pass-through entity.

 

Subd. 14.  Partnership. "Partnership" has the meaning provided under section 7701(a)(2) of the Internal Revenue Code.

 

Subd. 15.  Partnership-level audit. "Partnership-level audit" means an examination by the Internal Revenue Service at the partnership level pursuant to subtitle F, chapter 63, subchapter C, of the Internal Revenue Code, which results in federal adjustments and adjustments to partnership-related items.

 

Subd. 16.  Pass-through entity. "Pass-through entity" means an entity, other than a partnership, that is not subject to the tax imposed under section 290.02.  The term pass-through entity includes but is not limited to S corporations, estates, and trusts other than grantor trusts.

 

Subd. 17.  Resident partner. "Resident partner" means an individual, trust, or estate partner who is a resident of Minnesota under section 290.01, subdivision 7, 7a, or 7b, for the relevant tax period.

 

Subd. 18.  Reviewed year. "Reviewed year" means the taxable year of a partnership that is subject to a partnership-level audit from which federal adjustments arise.

 

Subd. 19.  Tiered partner. "Tiered partner" means any partner that is a partnership or pass-through entity.

 

Subd. 20.  Unrelated business taxable income. "Unrelated business taxable income" has the meaning provided under section 512 of the Internal Revenue Code.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 9.  [289A.382] REPORTING AND PAYMENT REQUIREMENTS.

 

Subdivision 1.  State partnership representative.  (a) With respect to an action required or permitted to be taken by a partnership under this section, or in a proceeding under section 270C.35 or 271.06, the state partnership representative for the reviewed year shall have the sole authority to act on behalf of the partnership, and its direct partners and indirect partners shall be bound by those actions.

 

(b) The state partnership representative for the reviewed year is the partnership's federal partnership representative unless the partnership, in a form and manner prescribed by the commissioner, designates another person as its state partnership representative.

 

Subd. 2.  Reporting and payment requirements for partnerships and tiered partners.  (a) Except for when an audited partnership makes the election in subdivision 3, and except for negative federal adjustments required under federal law taken into account by the partnership in the partnership return for the adjustment or other year, all final federal adjustments of an audited partnership must comply with paragraph (b) and each direct partner of the audited partnership, other than a tiered partner, must comply with paragraph (c).

 

(b) No later than 90 days after the final determination date, the audited partnership must:


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(1) file a completed federal adjustments report, including all partner-level information required under section 289A.12, subdivision 3, with the commissioner;

 

(2) notify each of its direct partners of their distributive share of the final federal adjustments;

 

(3) file an amended composite report for all direct partners who were included in a composite return under section 289A.08, subdivision 7, in the reviewed year, and pay the additional amount that would have been due had the federal adjustments been reported properly as required; and

 

(4) file amended withholding reports for all direct partners who were or should have been subject to nonresident withholding under section 290.92, subdivision 4b, in the reviewed year, and pay the additional amount that would have been due had the federal adjustments been reported properly as required.

 

(c) No later than 180 days after the final determination date, each direct partner, other than a tiered partner, that is subject to a tax administered under this chapter, other than the sales tax, must:

 

(1) file a federal adjustments report reporting their distributive share of the adjustments reported to them under paragraph (b), clause (2); and

 

(2) pay any additional amount of tax due as if the final federal adjustment had been properly reported, plus any penalty and interest due under this chapter, and less any credit for related amounts paid or withheld and remitted on behalf of the direct partner under paragraph (b), clauses (3) and (4).

 

Subd. 3.  Election; partnership or tiered partners pay.  (a) An audited partnership may make an election under this subdivision to pay its assessment at the entity level.  If an audited partnership makes an election to pay its assessment at the entity level it must:

 

(1) no later than 90 days after the final determination date:

 

(i) file a completed federal adjustments report, which includes the residency information for all individual, trust, and estate direct partners and information pertaining to all other direct partners as prescribed by the commissioner; and

 

(ii) notify the commissioner that it is making the election under this subdivision; and

 

(2) no later than 180 days after the final determination date, pay an amount, determined as follows, in lieu of taxes on partners:

 

(i) exclude from final federal adjustments the distributive share of these adjustments made to a direct exempt partner that is not unrelated business taxable income;

 

(ii) exclude from final federal adjustments the distributive share of these adjustments made to a direct partner that has filed a federal adjustments report and paid the applicable tax, as required under subdivision 2, for the distributive share of adjustments reported on a federal return under section 6225(c) of the Internal Revenue Code;

 

(iii) assign and apportion at the partnership level using sections 290.17 to 290.20 the total distributive share of the remaining final federal adjustments for the reviewed year attributed to direct corporate partners and direct exempt partners; multiply the total by the highest tax rate in section 290.06, subdivision 1, for the reviewed year; and calculate interest and penalties as applicable under this chapter;

 

(iv) allocate at the partnership level using section 290.17, subdivision 1, the total distributive share of all final federal adjustments attributable to individual resident direct partners for the reviewed year; multiply the total by the highest tax rate in section 290.06, subdivision 2c, for the reviewed year; and calculate interest and penalties as applicable under this chapter;


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(v) assign and apportion at the partnership level using sections 290.17 to 290.20 the total distributive share of the remaining final federal adjustments attributable to nonresident individual direct partners and direct partners who are an estate or a trust for the reviewed year; multiply the total by the highest tax rate in section 290.06, subdivision 2c, for the reviewed year; and calculate interest and penalties as applicable under this chapter;

 

(vi) for the total distributive share of the remaining final federal adjustments reported to tiered partners:

 

(A) determine the amount of the adjustments that would be assigned using section 290.17, subdivision 2, paragraphs (a) to (d), excluding income or gains from intangible personal property not employed in the business of the recipient of the income or gains if the recipient of the income or gains is a resident of this state or is a resident trust or estate under section 290.17, subdivision 2, paragraph (c), or apportioned using sections 290.17, subdivision 3, 290.191, and 290.20; and then determine the portion of the amount that would be allocated to this state;

 

(B) determine the amount of the adjustments that are fully sourced to the taxpayer's state of residency under section 290.17, subdivision 2, paragraph (e), and income or gains from intangible personal property not employed in the business of the recipient of the income or gains if the recipient of the income or gains is a resident of this state or is a resident trust or estate under section 290.17, subdivision 2, paragraph (c);

 

(C) determine the portion of the amount determined in subitem (B) that can be established to be properly allocable to nonresident indirect partners or other partners not subject to tax on the adjustments; and

 

(D) multiply the total of the amounts determined in subitems (A) and (B) reduced by the amount determined in subitem (C) by the highest tax rate in section 290.06, subdivision 2c, for the reviewed year, and calculate interest and penalties as applicable under this chapter; and

 

(vii) add the amounts determined in items (iii) to (vi), and pay all applicable taxes, penalties, and interest to the commissioner.

 

(b) An audited partnership may not make an election under this subdivision to report: 

 

(1) a federal adjustment that results in unitary business income to a corporate partner required to file as a member of a combined report under section 290.17, subdivision 4; or

 

(2) any final federal adjustments resulting from an administrative adjustment request.

 

(c) An audited partnership not otherwise subject to any reporting or payment obligation to this state may not make an election under this subdivision.

 

Subd. 4.  Tiered partners and indirect partners.  The direct and indirect partners of an audited partnership that are tiered partners, and all the partners of the tiered partners, that are subject to tax under chapter 290 are subject to the reporting and payment requirements contained in subdivision 2, and the tiered partners are entitled to make the elections provided in subdivision 3.  The tiered partners or their partners shall make required reports and payments no later than 90 days after the time for filing and furnishing of statements to tiered partners and their partners as established under section 6226 of the Internal Revenue Code.

 

Subd. 5.  Effects of election by partnership or tiered partner and payment of amount due.  (a) Unless the commissioner determines otherwise, an election under subdivision 3 is irrevocable.

 

(b) If an audited partnership or tiered partner properly reports and pays an amount determined in subdivision 3, the amount must be treated as paid in lieu of taxes owed by the partnership's direct partners and indirect partners, to the extent applicable, on the same final federal adjustments.  The direct partners or indirect partners of the partnership who are not resident partners may not take any deduction or credit for this amount or claim a refund of the amount in this state.


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(c) Nothing in this subdivision precludes resident direct partners from claiming a credit against taxes paid under section 290.06 on any amounts paid by the audited partnership or tiered partners on the resident partner's behalf to another state or local tax jurisdiction.

 

Subd. 6.  Failure of partnership or tiered partner to report or pay.  Nothing in this section prevents the commissioner from assessing direct partners or indirect partners for taxes they owe, using the best information available, in the event that, for any reason, a partnership or tiered partner fails to timely make any report or payment required by this section.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 10.  Minnesota Statutes 2020, section 289A.42, is amended to read:

 

289A.42 CONSENT TO EXTEND STATUTE.

 

Subdivision 1.  Extension agreement.  If before the expiration of time prescribed in sections 289A.38 to 289A.382 and 289A.40 for the assessment of tax or the filing of a claim for refund, both the commissioner and the taxpayer have consented in writing to the assessment or filing of a claim for refund after that time, the tax may be assessed or the claim for refund filed at any time before the expiration of the agreed-upon period.  The period may be extended by later agreements in writing before the expiration of the period previously agreed upon.  The taxpayer and the commissioner may also agree to extend the period for collection of the tax.

 

Subd. 2.  Federal extensions.  When a taxpayer consents to an extension of time for the assessment of federal withholding or income taxes, the period in which the commissioner may recompute the tax is also extended, notwithstanding any period of limitations to the contrary, as follows:

 

(1) for the periods provided in section sections 289A.38, subdivisions 8 and 9, and 289A.382, subdivisions 2 and 3;

 

(2) for six months following the expiration of the extended federal period of limitations when no change is made by the federal authority.  If no change is made by the federal authority, and, but for this subdivision, the commissioner's time period to adjust the tax has expired, and if the commissioner has completed a field audit of the taxpayer, no additional changes resulting in additional tax due or a refund may be made.  For purposes of this subdivision, "field audit" has the meaning given it in section 289A.38, subdivision 9.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 11.  Minnesota Statutes 2020, section 289A.60, subdivision 24, is amended to read:

 

Subd. 24.  Penalty for failure to notify of federal change.  If a person fails to report to the commissioner a change or correction of the person's federal return in the manner and time prescribed in section sections 289A.38, subdivision 7, and 289A.382, there must be added to the tax an amount equal to ten percent of the amount of any underpayment of Minnesota tax attributable to the federal change.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.


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Sec. 12.  Minnesota Statutes 2020, section 290.31, subdivision 1, is amended to read:

 

Subdivision 1.  Partners, not partnership, subject to tax.  Except as provided under section sections 289A.35, paragraph (b), and 289A.382, subdivision 3, a partnership as such shall not be subject to the income tax imposed by this chapter, but is subject to the tax imposed under section 290.0922.  Persons carrying on business as partners shall be liable for income tax only in their separate or individual capacities.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 13.  Minnesota Statutes 2020, section 297F.17, subdivision 6, is amended to read:

 

Subd. 6.  Time limit for bad debt refund.  Claims for refund must be filed with the commissioner during the one-year period beginning with the timely filing of the taxpayer's federal income tax return containing the bad debt deduction that is being claimed.  Claimants under this subdivision are subject to the notice requirements of section sections 289A.38, subdivision 7, and 289A.382.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 14.  Minnesota Statutes 2020, section 297G.16, subdivision 7, is amended to read:

 

Subd. 7.  Time limit for a bad debt deduction.  Claims for refund must be filed with the commissioner within one year of the filing of the taxpayer's income tax return containing the bad debt deduction that is being claimed.  Claimants under this subdivision are subject to the notice requirements of section 289A.38, subdivision 7 sections 289A.38 to 289A.382.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

Sec. 15.  Minnesota Statutes 2020, section 469.319, subdivision 4, is amended to read:

 

Subd. 4.  Repayment procedures.  (a) For the repayment of taxes imposed under chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must file an amended return with the commissioner of revenue and pay any taxes required to be repaid within 30 days after becoming subject to repayment under this section.  The amount required to be repaid is determined by calculating the tax for the period or periods for which repayment is required without regard to the exemptions and credits allowed under section 469.315.

 

(b) For the repayment of taxes imposed under chapter 297B, a business must pay any taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner of revenue, within 30 days after becoming subject to repayment under this section.

 

(c) For the repayment of property taxes, the county auditor shall prepare a tax statement for the business, applying the applicable tax extension rates for each payable year and provide a copy to the business and to the taxpayer of record.  The business must pay the taxes to the county treasurer within 30 days after receipt of the tax statement.  The business or the taxpayer of record may appeal the valuation and determination of the property tax to the Tax Court within 30 days after receipt of the tax statement.


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(d) The provisions of chapters 270C and 289A relating to the commissioner's authority to audit, assess, and collect the tax and to hear appeals are applicable to the repayment required under paragraphs (a) and (b).  The commissioner may impose civil penalties as provided in chapter 289A, and the additional tax and penalties are subject to interest at the rate provided in section 270C.40.  The additional tax shall bear interest from 30 days after becoming subject to repayment under this section until the date the tax is paid.  Any penalty imposed pursuant to this section shall bear interest from the date provided in section 270C.40, subdivision 3, to the date of payment of the penalty.

 

(e) If a property tax is not repaid under paragraph (c), the county treasurer shall add the amount required to be repaid to the property taxes assessed against the property for payment in the year following the year in which the auditor provided the statement under paragraph (c).

 

(f) For determining the tax required to be repaid, a reduction of a state or local sales or use tax is deemed to have been received on the date that the good or service was purchased or first put to a taxable use.  In the case of an income tax or franchise tax, including the credit payable under section 469.318, a reduction of tax is deemed to have been received for the two most recent tax years that have ended prior to the date that the business became subject to repayment under this section.  In the case of a property tax, a reduction of tax is deemed to have been received for the taxes payable in the year that the business became subject to repayment under this section and for the taxes payable in the prior year.

 

(g) The commissioner may assess the repayment of taxes under paragraph (d) any time within two years after the business becomes subject to repayment under subdivision 1, or within any period of limitations for the assessment of tax under section sections 289A.38 to 289A.382, whichever period is later.  The county auditor may send the statement under paragraph (c) any time within three years after the business becomes subject to repayment under subdivision 1.

 

(h) A business is not entitled to any income tax or franchise tax benefits, including refundable credits, for any part of the year in which the business becomes subject to repayment under this section nor for any year thereafter.  Property is not exempt from tax under section 272.02, subdivision 64, for any taxes payable in the year following the year in which the property became subject to repayment under this section nor for any year thereafter.  A business is not eligible for any sales tax benefits beginning with goods or services purchased or first put to a taxable use on the day that the business becomes subject to repayment under this section.

 

EFFECTIVE DATE.  This section is effective retroactively for taxable years beginning after December 31, 2017, except that for partnerships that make an election under Code of Federal Regulations, title 26, section 301.9100-22T, this section is effective retroactively and applies to the same tax periods to which the election relates.

 

ARTICLE 4

SALES AND USE TAXES

 

Section 1.  Minnesota Statutes 2020, section 297A.67, is amended by adding a subdivision to read:

 

Subd. 38.  Season ticket purchasing rights to collegiate events.  The sale of a right to purchase the privilege of admission to a college or university athletic event in a preferred viewing location for a season of a particular athletic event is exempt provided that:

 

(1) the consideration paid for the right to purchase is used entirely to support student scholarships, wellness, and academic costs;

 

(2) the consideration paid for the right to purchase is separately stated from the admission price; and


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(3) the admission price is equal to or greater than the highest priced general admission ticket for the closest seat not in the preferred viewing location.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2021.

 

Sec. 2.  Minnesota Statutes 2020, section 297A.70, subdivision 13, is amended to read:

 

Subd. 13.  Fund-raising sales by or for nonprofit groups.  (a) The following sales by the specified organizations for fund-raising purposes are exempt, subject to the limitations listed in paragraph (b):

 

(1) all sales made by a nonprofit organization that exists solely for the purpose of providing educational or social activities for young people primarily age 18 and under;

 

(2) all sales made by an organization that is a senior citizen group or association of groups if (i) in general it limits membership to persons age 55 or older; (ii) it is organized and operated exclusively for pleasure, recreation, and other nonprofit purposes; and (iii) no part of its net earnings inures to the benefit of any private shareholders;

 

(3) the sale or use of tickets or admissions to a golf tournament held in Minnesota if the beneficiary of the tournament's net proceeds qualifies as a tax-exempt organization under section 501(c)(3) of the Internal Revenue Code; and

 

(4) sales of candy sold for fund-raising purposes by a nonprofit organization that provides educational and social activities primarily for young people age 18 and under.

 

(b) The exemptions listed in paragraph (a) are limited in the following manner:

 

(1) the exemption under paragraph (a), clauses (1) and (2), applies only to the first $20,000 of the gross annual receipts of the organization from fund-raising; and

 

(2) the exemption under paragraph (a), clause (1), does not apply if the sales are derived from admission charges or from activities for which the money must be deposited with the school district treasurer under section 123B.49, subdivision 2, or; and

 

(3) the exemption under paragraph (a), clause (1), does not apply if the sales are derived from admission charges or from activities for which the money must be recorded in the same manner as other revenues or expenditures of the school district under section 123B.49, subdivision 4., unless the following conditions are both met:

 

(i) the sales are made for fund-raising purposes of a club, association, or other organization of elementary or secondary school students organized for the purpose of carrying on sports activities, educational activities, or other extracurricular activities; and

 

(ii) the school district reserves revenue raised for extracurricular activities, as provided in section 123B.49, subdivision 4, paragraph (e), and spends the revenue raised by a particular extracurricular activity only for that extracurricular activity.

 

(c) Sales of tangible personal property and services are exempt if the entire proceeds, less the necessary expenses for obtaining the property or services, will be contributed to a registered combined charitable organization described in section 43A.50, to be used exclusively for charitable, religious, or educational purposes, and the registered combined charitable organization has given its written permission for the sale.  Sales that occur over a period of more than 24 days per year are not exempt under this paragraph.


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(d) For purposes of this subdivision, a club, association, or other organization of elementary or secondary school students organized for the purpose of carrying on sports, educational, or other extracurricular activities is a separate organization from the school district or school for purposes of applying the $20,000 limit.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after the date of final enactment.

 

Sec. 3.  Minnesota Statutes 2020, section 297A.70, is amended by adding a subdivision to read:

 

Subd. 22.  Prepared food used by certain nonprofits.  Sales of prepared food to a nonprofit organization that, as part of its charitable mission, is sponsoring and managing the provision of meals and other food through the federal Child and Adult Care Food Program or the federal Summer Food Service Program to unaffiliated centers and sites are exempt from sales tax.  Only prepared food purchased from a caterer or other business under a contract with the nonprofit and used directly in the federal Child and Adult Care Food Program or the federal Summer Food Service Program qualifies for this exemption.  Prepared food purchased by the nonprofit for other purposes remains taxable.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2021.

 

Sec. 4.  Minnesota Statutes 2020, section 297A.71, subdivision 52, is amended to read:

 

Subd. 52.  Construction; certain local government facilities.  (a) Materials and supplies used in and equipment incorporated into the construction, reconstruction, upgrade, expansion, or remodeling of the following local government owned facilities are exempt:

 

(1) a new fire station, which includes firefighting, emergency management, public safety training, and other public safety facilities in the city of Monticello if materials, supplies, and equipment are purchased after January 31, 2019, and before January 1, 2022;

 

(2) a new fire station, which includes firefighting and public safety training facilities and public safety facilities, in the city of Inver Grove Heights if materials, supplies, and equipment are purchased after June 30, 2018, and before January 1, 2021;

 

(3) a fire station and police station, including access roads, lighting, sidewalks, and utility components, on or adjacent to the property on which the fire station or police station are located that are necessary for safe access to and use of those buildings, in the city of Minnetonka if materials, supplies, and equipment are purchased after May 23, 2019, and before January 1, 2021 2022;

 

(4) the school building in Independent School District No. 414, Minneota, if materials, supplies, and equipment are purchased after January 1, 2018, and before January 1, 2021;

 

(5) a fire station in the city of Mendota Heights, if materials, supplies, and equipment are purchased after December 31, 2018, and before January 1, 2021; and

 

(6) a Dakota County law enforcement collaboration center, also known as the Safety and Mental Health Alternative Response Training (SMART) Center, if materials, supplies, and equipment are purchased after June 30, 2019, and before July 1, 2021.

 

(b) The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied and then refunded in the manner provided in section 297A.75.

 

(c) The total refund for the project listed in paragraph (a), clause (3), must not exceed $850,000.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.


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Sec. 5.  Minnesota Statutes 2020, section 297A.71, is amended by adding a subdivision to read:

 

Subd. 53.  Public safety facilities.  (a) Materials and supplies used or consumed in and equipment incorporated into the construction, remodeling, expansion, or improvement of a fire station or police station, including related facilities, owned and operated by a local government, as defined in section 297A.70, subdivision 2, paragraph (d), are exempt.

 

(b) For purposes of this subdivision, "related facilities" includes access roads, lighting, sidewalks, and utility components on or adjacent to the property on which the fire station or police station is located that are necessary for safe access to and use of those buildings.

 

(c) The tax must be imposed and collected as if the rate under section 297A.62, subdivision 1, applied and then refunded in the manner provided in section 297A.75.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2021.

 

Sec. 6.  Minnesota Statutes 2020, section 297A.75, subdivision 1, is amended to read:

 

Subdivision 1.  Tax collected.  The tax on the gross receipts from the sale of the following exempt items must be imposed and collected as if the sale were taxable and the rate under section 297A.62, subdivision 1, applied.  The exempt items include:

 

(1) building materials for an agricultural processing facility exempt under section 297A.71, subdivision 13;

 

(2) building materials for mineral production facilities exempt under section 297A.71, subdivision 14;

 

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

 

(4) building materials used in a residence for veterans with a disability exempt under section 297A.71, subdivision 11;

 

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

 

(6) materials and supplies for qualified low-income housing under section 297A.71, subdivision 23;

 

(7) materials, supplies, and equipment for municipal electric utility facilities under section 297A.71, subdivision 35;

 

(8) equipment and materials used for the generation, transmission, and distribution of electrical energy and an aerial camera package exempt under section 297A.68, subdivision 37;

 

(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph (a), clause (10);

 

(10) materials, supplies, and equipment for construction or improvement of projects and facilities under section 297A.71, subdivision 40;

 

(11) materials, supplies, and equipment for construction, improvement, or expansion of a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 45;

 

(12) enterprise information technology equipment and computer software for use in a qualified data center exempt under section 297A.68, subdivision 42;


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(13) materials, supplies, and equipment for qualifying capital projects under section 297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);

 

(14) items purchased for use in providing critical access dental services exempt under section 297A.70, subdivision 7, paragraph (c);

 

(15) items and services purchased under a business subsidy agreement for use or consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 44;

 

(16) building materials, equipment, and supplies for constructing or replacing real property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51; and

 

(17) building materials, equipment, and supplies for qualifying capital projects under section 297A.71, subdivision 52.; and

 

(18) building materials, equipment, and supplies for constructing, remodeling, expanding, or improving a fire station, police station, or related facilities exempt under section 297A.71, subdivision 53.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2021.

 

Sec. 7.  Minnesota Statutes 2020, section 297A.75, subdivision 2, is amended to read:

 

Subd. 2.  Refund; eligible persons.  Upon application on forms prescribed by the commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must be paid to the applicant.  Only the following persons may apply for the refund:

 

(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;

 

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

 

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits provided in United States Code, title 38, chapter 21;

 

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead property;

 

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;

 

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a joint venture of municipal electric utilities;

 

(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying business;

 

(8) for subdivision 1, clauses (9), (10), (13), and (17), and (18), the applicant must be the governmental entity that owns or contracts for the project or facility; and

 

(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the building or project.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2021.


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Sec. 8.  Minnesota Statutes 2020, section 297A.75, subdivision 3, is amended to read:

 

Subd. 3.  Application.  (a) The application must include sufficient information to permit the commissioner to verify the tax paid.  If the tax was paid by a contractor, subcontractor, or builder, under subdivision 1, clauses (3) to (13) or (15) to (17) (18), the contractor, subcontractor, or builder must furnish to the refund applicant a statement including the cost of the exempt items and the taxes paid on the items unless otherwise specifically provided by this subdivision.  The provisions of sections 289A.40 and 289A.50 apply to refunds under this section.

 

(b) An applicant may not file more than two applications per calendar year for refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

 

EFFECTIVE DATE.  This section is effective for sales and purchases made after June 30, 2021.

 

Sec. 9.  Laws 2017, First Special Session chapter 1, article 3, section 32, the effective date, as amended by Laws 2019, First Special Session chapter 6, article 3, section 18, is amended to read:

 

EFFECTIVE DATE.  Paragraph (a) is effective retroactively for sales and purchases made after September 30, 2016, and before January July 1, 2023.  Paragraph (b) is effective for sales and purchases made (1) after September 30, 2016, and before July 1, 2017; and (2) after December 31, 2018, and before July 1, 2019.

 

EFFECTIVE DATE.  This section is effective the day following final enactment.

 

Sec. 10.  PROPERTIES DESTROYED OR DAMAGED BY FIRE; CITY OF ALEXANDRIA.

 

(a) The sale and purchase of the following items are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if the items are used to repair, replace, clean, or otherwise remediate damage to real and personal property damaged or destroyed in the February 25, 2020, fire in the city of Alexandria, if sales and purchases are made after February 24, 2020, and before February 28, 2023:

 

(1) building materials and supplies used or consumed in, and equipment incorporated into the construction, replacement, or repair of real property; and

 

(2) durable equipment used in a restaurant for food storage, preparation, and serving.

 

(b) Building cleaning and disinfecting services related to mitigating smoke damage to real property are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if sales and purchases are made after February 24, 2020, and before January 1, 2021.

 

(c) For sales and purchases made after February 24, 2020, and before July 1, 2021, the tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the manner provided in Minnesota Statutes, section 297A.75.  The amount required to pay the refunds under this section is appropriated from the general fund to the commissioner of revenue.  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

EFFECTIVE DATE.  This section is effective the day following final enactment and applies retroactively to sales and purchases made after February 24, 2020.

 

Sec. 11.  CITY OF BUFFALO; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of a new fire station, which includes firefighting, emergency management, public safety training, and other public safety facilities in the city of Buffalo, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after March 31, 2020, and before July 1, 2021.


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(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from April 1, 2020, and applies to sales and purchases made after March 31, 2020, and before July 1, 2021.

 

Sec. 12.  CITY OF HIBBING; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the following projects in the city of Hibbing are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after May 1, 2019, and before January 1, 2025:

 

(1) the addition of an Early Childhood Family Education Center to an existing elementary school; and

 

(2) improvements to an existing athletic facility in Independent School District No. 701.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from May 2, 2019, and applies to sales and purchases made after May 1, 2019, and before January 1, 2025.

 

Sec. 13.  CITY OF MAPLEWOOD; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of a new fire station and emergency management operations center, including on-site infrastructure improvements of parking lot, road access, lighting, sidewalks, and utility components in the city of Maplewood are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after September 30, 2020, and before July 1, 2021.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from August 1, 2020, and applies to sales and purchases made after September 30, 2020, and before July 1, 2021.


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Sec. 14.  CITY OF MARSHALL; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the following projects in the city of Marshall in Independent School District No. 413 are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after May 1, 2019, and before January 1, 2022:

 

(1) the construction of a new elementary school; and

 

(2) the remodeling of existing school buildings.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively to May 2, 2019, and applies to materials, supplies, and equipment purchased after May 1, 2019, and before January 1, 2022.

 

Sec. 15.  CITY OF PLYMOUTH; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the following projects in the city of Plymouth are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after January 1, 2021, and before July 1, 2021:

 

(1) demolition and replacement of the existing Fire Station No. 2 on its existing site; and

 

(2) renovation and expansion of Fire Station No. 3.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from January 2, 2021, and applies to sales and purchases made after January 1, 2021, and before July 1, 2021.

 

Sec. 16.  CITY OF PROCTOR; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of a sand and salt storage facility in the city of Proctor are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after March 31, 2021, and before January 1, 2023.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.


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Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from April 1, 2021, and applies to sales and purchases made after March 31, 2021, and before January 1, 2023.

 

Sec. 17.  CITY OF VIRGINIA; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of a regional public safety center and training facility for fire and police departments, emergency medical services, regional emergency services training, and other regional community needs are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after May 1, 2021, and before July 1, 2021.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from May 2, 2021, and applies to sales and purchases made after May 1, 2021, and before July 1, 2021.

 

Sec. 18.  ROCK RIDGE PUBLIC SCHOOLS; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the construction of two new elementary school buildings and a new high school building in Independent School District No. 2909, Rock Ridge Public Schools, are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after May 1, 2019, and before January 1, 2024.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).  Refunds for eligible purchases must not be issued until after June 30, 2021.

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective retroactively from May 2, 2019, and applies to sales and purchases made after May 1, 2019, and before January 1, 2024.

 

Sec. 19.  MSP AIRPORT; SALES TAX EXEMPTION FOR CONSTRUCTION MATERIALS.

 

Subdivision 1.  Exemption; refund.  (a) Materials and supplies used in and equipment incorporated into the following projects at the Minneapolis-St. Paul International Airport are exempt from sales and use tax imposed under Minnesota Statutes, chapter 297A, if materials, supplies, and equipment are purchased after June 30, 2021, and before January 1, 2024:

 

(1) construction of an aircraft rescue and firefighting station and associated facilities;

 

(2) construction of a facility for the storage of trades materials and equipment;


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(3) replacement and rehabilitation of a terminal building roof;

 

(4) replacement, rehabilitation, and improvements of a baggage handling system; and

 

(5) replacement, rehabilitation, and operational improvements of Terminal 1 passenger arrivals and departures area.

 

(b) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the same manner provided for projects under Minnesota Statutes, section 297A.75, subdivision 1, clause (17).

 

Subd. 2.  Appropriation.  The amount required to pay the refunds under subdivision 1 is appropriated from the general fund to the commissioner of revenue.

 

EFFECTIVE DATE.  This section is effective from July 1, 2021, and applies to sales and purchases made after June 30, 2021, and before January 1, 2024.

 

Sec. 20.  PROPERTIES DESTROYED OR DAMAGED DURING PROTESTS AND UNREST IN MAY AND JUNE OF 2020.

 

Subdivision 1.  Exemption.  (a) The sale and purchase of the following items are exempt if the items are used to repair, replace, clean, or otherwise remediate damage to real and personal property damaged or destroyed after May 24, 2020, and before June 16, 2020, resulting from protests and unrest in the cities included in the peacetime emergency declared in the governor's Executive Order No. 20-64:

 

(1) building materials and supplies used or consumed in, and equipment incorporated into, the construction, replacement, or repair of real property;

 

(2) retail fixtures, office equipment, and restaurant equipment, so long as each item has a useful life of more than one year and costs at least $5,000; and

 

(3) building cleaning and disinfecting services related to mitigating smoke damage and graffiti on and in impacted buildings.

 

(b) The exemption in this subdivision only applies to materials, supplies, and services purchased to repair, replace, clean, or otherwise remediate damage to buildings owned by a government entity or by a private owner provided the building housed one or more of the following entities at the time of the damage or destruction:

 

(1) a commercial establishment with an annual gross income of $30,000,000 or less in calendar year 2019;

 

(2) a nonprofit organization; or

 

(3) a low-income housing development that meets the certification requirements under Minnesota Statutes, section 273.128, whether or not the development was occupied at the time of its damage or destruction.

 

(c) The tax must be imposed and collected as if the rate under Minnesota Statutes, section 297A.62, subdivision 1, applied and then refunded in the manner provided in Minnesota Statutes, section 297A.75, except that the applicant must have been an owner or occupant of the real property at the time of its destruction.  The exemption under paragraph (a) applies to sales and purchases made after May 25, 2020, and befo