SF 41

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/14/2024 09:25am

A bill for an act
relating to energy; providing for a revenue-neutral assessment on environmental
emissions; providing for refundable FICA and property tax credits; providing for
credits against income taxes to be paid as dividends; authorizing loans for energy
efficiency and renewable energy projects; providing rulemaking authority; requiring
reports; appropriating money; amending Minnesota Statutes 2022, sections
273.1392; 273.1393; 275.065, subdivision 3; 276.04, subdivision 2; proposing
coding for new law in Minnesota Statutes, chapters 273; 290; proposing coding
for new law as Minnesota Statutes, chapter 216I.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin CITATION.
new text end

new text begin This act may be cited as the "Carbon Assessment and Dividend Act" or "CADA."
new text end

Sec. 2.

new text begin [216I.01] DEFINITIONS.
new text end

new text begin Subdivision 1. new text end

new text begin Scope. new text end

new text begin The definitions in this section apply to this chapter.
new text end

new text begin Subd. 2. new text end

new text begin Coal. new text end

new text begin "Coal" means bituminous coal, subbituminous coal, lignite, and coke.
new text end

new text begin Subd. 3. new text end

new text begin Commissioner. new text end

new text begin "Commissioner" means the commissioner of revenue.
new text end

new text begin Subd. 4. new text end

new text begin Importer. new text end

new text begin "Importer" means the entity that receives assessed fuels liable for
assessment under this chapter.
new text end

new text begin Subd. 5. new text end

new text begin Liquid fuels. new text end

new text begin "Liquid fuels" means gasoline, liquefied petroleum gas, aviation
gasoline, fuel oil and kerosene, diesel fuel, methanol from nonplant sources, biofuel, and
kerosene.
new text end

new text begin Subd. 6. new text end

new text begin Natural gas. new text end

new text begin "Natural gas" means a naturally occurring mixture of hydrocarbons
and nonhydrocarbon gases found in porous geologic formations beneath the earth's surface,
the principal constituent of which is methane.
new text end

new text begin Subd. 7. new text end

new text begin Primary carbon-based fuels. new text end

new text begin "Primary carbon-based fuels" means coal, mixed
municipal solid waste and refuse-derived fuel, natural gas, and liquid fuels.
new text end

new text begin Subd. 8. new text end

new text begin Program year. new text end

new text begin "Program year" means January 1 through December 31.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
assessments beginning on January 1, 2024, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.
new text end

Sec. 3.

new text begin [216I.02] ENVIRONMENTAL EMISSIONS ASSESSMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Assessed fuels. new text end

new text begin (a) The use of primary carbon-based fuels and the use
of fuels to generate electricity to provide for in-state energy consumption are subject to an
environmental emissions assessment under this section.
new text end

new text begin (b) Use of the following are not subject to the assessment under this chapter: ethanol;
biofuel; methanol from plant materials, wood, wood wastes, agricultural crops, crop residues,
sludge, solvents, waste oil, hazardous waste, or medical waste; and hydro-electricity.
new text end

new text begin (c) The assessment does not apply to the use of liquid fuel as a lubricant or physical
component of a manufactured product.
new text end

new text begin Subd. 2. new text end

new text begin Amount of assessment. new text end

new text begin (a) The environmental emissions assessment applies
based on the amount of carbon dioxide emitted from the burning of fuel. The amount of
carbon dioxide emitted must be calculated by determining the estimated amount of carbon
dioxide emitted from the burning of fuel according to fuel type or subtype as provided in
subdivision 3.
new text end

new text begin (b) The assessment in the first program year, beginning January 1, 2024, is $50 per ton
of carbon dioxide emitted from the burning of each assessed fuel. The assessment increases
each succeeding program year by $5 per ton of carbon dioxide emitted, until the assessment
equals a maximum amount of $200 per ton of carbon emitted.
new text end

new text begin Subd. 3. new text end

new text begin Calculation of assessment; special rules. new text end

new text begin (a) In consultation with the
commissioner of the Pollution Control Agency, the commissioner must:
new text end

new text begin (1) estimate the average amount of carbon dioxide emitted by burning a unit of each
assessed fuel;
new text end

new text begin (2) multiply the amount in clause (1) by the number of units of the assessed fuel at the
point of assessment to determine the number of tons of carbon dioxide that would be emitted
by the burning of those units; and
new text end

new text begin (3) multiply the result of clause (2) by the applicable rate per ton of carbon dioxide
emitted specified under subdivision 2.
new text end

new text begin (b) For electricity generated in another state and imported under contract by a utility for
consumption in Minnesota, the commissioner must estimate the amount of carbon dioxide
emitted in paragraph (a), clause (1), based on the proportions of the mix of assessed fuels
used to generate the electricity purchased under the contract.
new text end

new text begin (c) For electricity generated in another state and purchased by a utility in the wholesale
electricity markets operated by the Midcontinent Independent System Operator for
consumption in Minnesota, the commissioner must estimate the amount in paragraph (a),
clause (1), based on the average proportion of the mix of assessed fuels used to generate
electricity by all generators who are members of the Midcontinent Independent System
Operator.
new text end

new text begin (d) For a blend of assessed and nonassessed fuels produced or blended in another state
for use in this state, the commissioner must calculate the assessment based on the volume
of the assessed fuel in the blended fuel.
new text end

new text begin Subd. 4. new text end

new text begin Assessment procedure. new text end

new text begin (a) For an assessed fuel produced in another state and
used in this state, the assessment under this section applies to the first receipt of the assessed
fuel in this state. The importer in this state who first receives the assessed fuel is liable for
the assessment. An importer who receives an assessed fuel has the burden of proving to the
satisfaction of the commissioner that the assessed fuel was not received for use in Minnesota.
new text end

new text begin (b) For an assessed fuel produced in this state, the assessment under this section applies
at the point of production. The producer who produces the assessed fuel is liable for the
assessment.
new text end

new text begin (c) An assessment under this section is prohibited if and to the extent that the assessment
is duplicative of a charge made by federal law or regulation or a multistate agreement to
which Minnesota is a signatory.
new text end

new text begin (d) If an assessed fuel is produced in or transported to Minnesota from another state that
assesses the fuel based on the amount of carbon dioxide emitted when the fuel is used, a
credit against the assessment authorized under this section is allowed in the amount of the
assessment paid to the state where the fuel is produced.
new text end

new text begin (e) The commissioner must not assess a unit of fuel more than once under this section.
new text end

new text begin Subd. 5. new text end

new text begin Data provision. new text end

new text begin Upon request of the commissioner, a person must provide to
the commissioner information the commissioner determines is necessary to accurately make
the assessment required under this section.
new text end

new text begin Subd. 6. new text end

new text begin Technical assistance. new text end

new text begin Upon request of the commissioners of revenue and the
Pollution Control Agency, an agency as defined in section 14.02 must provide technical
assistance to the commissioners to facilitate the administration of this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
assessments beginning on January 1, 2024, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.
new text end

Sec. 4.

new text begin [216I.03] ACCOUNT ESTABLISHED; EXPENDITURES.
new text end

new text begin Subdivision 1. new text end

new text begin Account established. new text end

new text begin (a) A carbon assessment dividend account is
established as a separate account in the special revenue fund in the state treasury. The
account must be administered by the commissioner as provided under this chapter and
sections 273.1388, 290.0693, and 290.98.
new text end

new text begin (b) The commissioner must deposit all assessments collected under section 216I.02 into
the account established under this subdivision.
new text end

new text begin Subd. 2. new text end

new text begin Allowable expenditures. new text end

new text begin Amounts in the carbon assessment dividend account
are appropriated as provided in:
new text end

new text begin (1) section 216I.04 to pay refunds;
new text end

new text begin (2) section 216I.07 to make loans to businesses for energy efficiency or renewable energy
projects;
new text end

new text begin (3) section 273.1388 to pay for the cover and tillage credit;
new text end

new text begin (4) section 290.0693 to pay dividends; and
new text end

new text begin (5) section 290.98 to pay rebates.
new text end

new text begin Subd. 3. new text end

new text begin Allocation of assessment revenues. new text end

new text begin (a) Revenue from the carbon assessment
dividend account must be used as provided by this section. By August 1 of each year, the
commissioner of the Pollution Control Agency shall estimate:
new text end

new text begin (1) the amount of revenues to be collected in the next calendar year from the assessment,
less:
new text end

new text begin (i) in fiscal year 2025 only, $50,000,000 to be appropriated to the commissioner of
commerce for deposit in the revolving loan account established under section 216I.07, to
make loans to businesses for energy efficiency or renewable energy projects; and
new text end

new text begin (ii) the refund under section 216I.04; and
new text end

new text begin (2) the respective proportions of the assessments that are attributable to energy usage
by individuals and households and by business firms.
new text end

new text begin (b) Amounts in the account, less the appropriation and refund amounts determined under
paragraph (a), must be divided in proportion to the shares determined under paragraph (a),
clause (2), and appropriated as follows:
new text end

new text begin (1) of the amount attributable to energy usage by individuals and households, ... percent
must be used to pay a dividend as provided by section 290.0693, and ... percent must be
used to pay for the property tax credit under section 273.1388; and
new text end

new text begin (2) the amount attributable to energy usage by business firms must be used for a
refundable payroll tax rebate as provided in section 290.98.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
assessments beginning on January 1, 2024, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.
new text end

Sec. 5.

new text begin [216I.04] REFUNDS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Assessment adjustment factor" means the percentage of the annual average increase
in the retail cost of each energy source that is due to the assessment on an assessed fuel used
to produce that energy source as determined by the commissioner of commerce.
new text end

new text begin (c) "Energy project" means:
new text end

new text begin (1) an energy conservation improvement, as defined in section 216B.241, subdivision
1;
new text end

new text begin (2) the installation of a renewable energy system on or adjacent to a place of business;
or
new text end

new text begin (3) a combination of clauses (1) and (2).
new text end

new text begin (d) "Energy source" means any source of energy that is produced using an assessed fuel.
new text end

new text begin (e) "Qualifying sales" means a person's total annual sales wherever made in connection
with the person's employment or business conducted in this state, as determined under
section 290.191.
new text end

new text begin (f) "Renewable energy" has the meaning given in section 216C.435, subdivision 9.
new text end

new text begin (g) "Total energy costs for each energy source" means the total annual cost to a business
firm to purchase an energy source that is used in a trade or business, excluding any energy
source that is sold.
new text end

new text begin Subd. 2. new text end

new text begin Determination of aggregate increased energy cost. new text end

new text begin (a) For purposes of
calculating the refund in subdivision 3, the commissioner of commerce must determine a
business firm's aggregate increased energy cost under this subdivision. The aggregate
increased energy cost equals the sum of the total increased energy costs for each energy
source as determined in paragraph (b).
new text end

new text begin (b) The total increased energy costs for each energy source are calculated by multiplying:
new text end

new text begin (1) the total energy costs for each energy source; by
new text end

new text begin (2) the assessment adjustment factor of each energy source.
new text end

new text begin Subd. 3. new text end

new text begin High impact refund. new text end

new text begin (a) A business firm who is not a utility, importer, or
producer of assessed fuels is allowed a refund equal to the product of:
new text end

new text begin (1) the amount of the business firm's aggregate increased energy cost minus three percent
of the taxpayer's qualifying sales; and
new text end

new text begin (2) 75 percent.
new text end

new text begin (b) The amount of a refund paid to an importer or producer under paragraph (a) for a
taxable year must not exceed the annual cost to the importer or producer of implementing
the required energy project in subdivision 4.
new text end

new text begin Subd. 4. new text end

new text begin Energy project. new text end

new text begin (a) A person is allowed a refund under this section only if the
person implements an energy project that has been approved by the commissioner of
commerce. An applicant for a refund must submit a proposed energy project to the
commissioner of commerce that contains the following information:
new text end

new text begin (1) a description of the energy project, including existing equipment, operating
characteristics, energy sources, and other elements that the energy project is designed to
modify or replace;
new text end

new text begin (2) a budget for the energy project;
new text end

new text begin (3) annual and cumulative energy and monetary savings projected to result from
implementation of the energy project and calculations demonstrating that the energy project
will have a payback period of less than ten years;
new text end

new text begin (4) the current level of carbon dioxide emissions at the facility where the energy project
is to be implemented and the estimated amount of carbon dioxide emissions after the project
is implemented; and
new text end

new text begin (5) information demonstrating the ability of the person to repay any loan received under
section 216I.07 to finance or partially finance the energy project.
new text end

new text begin (b) The commissioner of commerce may not approve an energy project that does not
reduce the amount of carbon dioxide emissions from the facility implementing the energy
project by less than ... percent from the current amount of emissions.
new text end

new text begin (c) An applicant for a refund must provide evidence to the commissioner of commerce
demonstrating that the energy project has been implemented. If a determination is made
that the person qualifies for a refund under this section, the commissioner of commerce
shall notify the person and the commissioner in writing within 15 days of the determination.
new text end

new text begin (d) A person may apply for and receive a refund annually under this section for five
years following the first issuance of the notice under paragraph (c).
new text end

new text begin Subd. 5. new text end

new text begin Liquid fuel used as lubricant or physical component. new text end

new text begin A person who uses
liquid fuel that is exempt from the assessment under section 216I.02, subdivision 1, paragraph
(c), may apply for a refund of any assessment paid on the fuel.
new text end

new text begin Subd. 6. new text end

new text begin Application. new text end

new text begin A person may apply for a refund under this section. The
commissioner of commerce must prescribe the form of the application. An application for
refund must be filed at the same time as the return under section 216I.05. Claims for a refund
are subject to section 289A.40.
new text end

new text begin Subd. 7. new text end

new text begin Appropriation. new text end

new text begin An amount as determined under section 216I.03, subdivision
3, is appropriated to the commissioner of commerce from the carbon assessment and dividend
account to pay refunds under this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
assessments beginning on January 1, 2024, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.
new text end

Sec. 6.

new text begin [216I.05] ADMINISTRATION AND ENFORCEMENT.
new text end

new text begin Subdivision 1. new text end

new text begin Annual returns. new text end

new text begin A person required to pay the assessment under section
216I.02 must file a return relating to the assessment due for the preceding calendar year
with the commissioner by April 15 each year on a form prescribed by the commissioner.
Payment of the assessment to the extent not paid in full under subdivision 2 must be submitted
with the return.
new text end

new text begin Subd. 2. new text end

new text begin Declaration of estimated assessment. new text end

new text begin A person required to pay the assessment
under section 216I.02 must make a declaration of the amount of estimated assessment due
for the calendar year if the person reasonably expects the amount of estimated assessment
to be in excess of $1,000. The amount of estimated assessment with respect to which a
declaration is required must be paid in four equal installments on or before the 15th day of
March, June, September, and December. An amendment of a declaration may be filed
between installment dates but only one amendment may be filed in each interval. If an
amendment of a declaration is filed, the amount of each remaining installment must be
determined in a manner established by rule. The commissioner may grant a reasonable
extension of time of up to six months for filing a declaration.
new text end

new text begin Subd. 3. new text end

new text begin Failure to pay estimated assessment. new text end

new text begin Section 289A.25, subdivision 3, applies
to failure of a person to pay an estimated assessment due under this chapter.
new text end

new text begin Subd. 4. new text end

new text begin Refunds. new text end

new text begin Section 289A.50 applies to the refunds claimed and made under this
chapter. Refunds of overpayments of an estimated assessment must be made as provided
in section 289A.56, subdivision 2.
new text end

new text begin Subd. 5. new text end

new text begin Exchange of information. new text end

new text begin Notwithstanding sections 13.68 and 116.075, the
commissioner of the Pollution Control Agency may provide the commissioner with
information necessary for the enforcement of this chapter. Section 13.03, subdivision 4,
paragraph (c), applies to data shared under this subdivision. Information obtained in the
course of an audit of an importer, producer, or recipient of a dividend or rebate by the
commissioner is nonpublic data or private data on individuals to the extent it is not directly
divulged in a return.
new text end

new text begin Subd. 6. new text end

new text begin Duties of the commissioner. new text end

new text begin The commissioner of the Pollution Control Agency
shall provide to the commissioner the names and addresses of all persons subject to
assessments under this chapter, together with any information concerning the amount to be
assessed. Upon request by the commissioner, the commissioner of the Pollution Control
Agency shall examine returns and reports filed with the commissioner and notify the
commissioner of any suspected inaccurate or fraudulent declaration or return. The
commissioner of the Pollution Control Agency may assist in auditing a person subject to
the assessment under this chapter when requested by the commissioner.
new text end

new text begin Subd. 7. new text end

new text begin Rules. new text end

new text begin In consultation with the commissioners of commerce and the Pollution
Control Agency, the commissioner may adopt rules under chapter 14 necessary to administer
this chapter.
new text end

new text begin Subd. 8. new text end

new text begin Enforcement. new text end

new text begin The following audit, penalty, and enforcement provisions apply
to assessments under this chapter: sections 270B.18, subdivision 4; 270C.35; 289A.35;
289A.37; 289A.38, subdivisions 1, 2, 5, and 6; 289A.40, subdivision 1; 289A.41; 289A.42,
subdivision 1; 289A.55; 289A.60, subdivisions 1 to 10, 13, 18, and 19; and 289A.63,
subdivisions 1, 2, and 8 to 10.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
assessments beginning on January 1, 2024, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.
new text end

Sec. 7.

new text begin [216I.06] ADMINISTRATION OF DIVIDEND AND REBATE.
new text end

new text begin The commissioner may provide for any requirement necessary to administer this chapter,
including the time and manner for filing returns. All provisions not inconsistent with this
chapter relating to collection, audit, assessment, refunds, penalty, interest, enforcement,
collection remedies, appeal, and administration under chapters 270C and 289A apply to
this chapter.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment for
assessments beginning on January 1, 2024, and applies to coal and natural gas first received,
mixed municipal solid waste and refuse-derived fuel first burned, and liquid fuels first
withdrawn or distributed in this state on and after that date and to electricity sold after that
date.
new text end

Sec. 8.

new text begin [216I.07] ENERGY REVOLVING LOAN FUND.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment of program. new text end

new text begin The commissioner of commerce shall
establish an energy revolving loan program to make low-interest loans to businesses that
implement energy efficiency or renewable energy projects.
new text end

new text begin Subd. 2. new text end

new text begin Account established; appropriation. new text end

new text begin An energy revolving loan account is
established as a separate account in the special revenue fund. This account is a revolving
fund for the loan program under this section. All repayment of loans, loan fees, investment
earnings, and other income of the program are credited to the account. Upon termination
of the program under this section, any money in the loan account cancels to the energy and
conservation account established in section 216B.241, subdivision 2a. Amounts in the energy
revolving loan account are appropriated to the commissioner of commerce to carry out this
section, including reimbursement of administrative costs.
new text end

new text begin Subd. 3. new text end

new text begin Use of loan proceeds. new text end

new text begin The commissioner of commerce may provide loans to
borrowers from amounts in the energy revolving loan fund. Borrowers must use loans to
pay for the purchase and installation of capital improvements to improve energy efficiency
or to access renewable energy sources in order to qualify for a refund under section 216I.04.
new text end

new text begin Subd. 4. new text end

new text begin Underwriting standards. new text end

new text begin The commissioner of commerce may establish
application forms, application procedures, underwriting standards, and other rules for
processing and originating loans under this program.
new text end

new text begin Subd. 5. new text end

new text begin Loan terms. new text end

new text begin (a) The commissioner of commerce shall specify the provisions
governing the loans, including whether they are secured or unsecured, the terms, principal
repayment schedules, and any other provisions the commissioner of commerce deems
appropriate.
new text end

new text begin (b) The commissioner of commerce may set and require that an application fee be paid
by applicants for loans under the program.
new text end

new text begin (c) The loans must bear interest at no less than the interest rate on the most recent sale
of Minnesota general obligation tax exempt state various purpose bonds at the time the loan
is made. Higher interest rates may be charged, based on the security of the loans.
new text end

new text begin Subd. 6. new text end

new text begin Rulemaking. new text end

new text begin The commissioner of commerce may adopt administrative rules
under chapter 14 necessary to implement the provisions of this section.
new text end

new text begin Subd. 7. new text end

new text begin Expiration. new text end

new text begin The authority to make loans under this section expires December
31, 2032.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end

Sec. 9.

new text begin [216I.08] REPORTS.
new text end

new text begin By September 1 each year, beginning in 2026, the commissioner must, in consultation
with the commissioners of commerce and the Pollution Control Agency, submit a written
report to the chairs and ranking minority members of the legislative committees with primary
jurisdiction over environment policy and finance and energy policy and finance. The report
must contain the following information:
new text end

new text begin (1) the total amount of assessments collected annually under section 216I.02;
new text end

new text begin (2) the total number of refunds awarded annually under section 216I.04;
new text end

new text begin (3) the total number of carbon assessment dividends paid annually under section 290.0693
and the average amount of an individual dividend;
new text end

new text begin (4) the total number of payroll tax rebates paid annually under section 290.98 and the
average amount of a rebate;
new text end

new text begin (5) the total number of property tax credits awarded annually under section 273.1388;
new text end

new text begin (6) the annual total amount of carbon dioxide emissions;
new text end

new text begin (7) an analysis regarding (i) the success of efforts to identify and provide rebates and
dividends to nonfilers under chapter 290, including recommendations regarding how
additional nonfilers may be identified, and (ii) the feasibility and efficacy of providing
rebate and dividend application forms that eligible individuals can file with the Department
of Revenue;
new text end

new text begin (8) recommendations regarding the exemption of specific economic sectors that suffer
significant negative impacts as a result of the assessments imposed under section 216I.02;
new text end

new text begin (9) recommendations regarding the need to adjust the assessment level in order to meet
state or federal greenhouse gas emissions reduction goals;
new text end

new text begin (10) recommendations regarding additional fuels or gaseous emissions not subject to
assessments under section 216I.02 that may be candidates for future assessment; and
new text end

new text begin (11) any additional information the commissioners deem relevant.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end

Sec. 10.

new text begin [273.1388] COVER AND TILLAGE AGRICULTURAL CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Eligibility. new text end

new text begin A qualifying property is eligible to receive a credit under this
section. A qualifying property must be certified by the local soil and water conservation
district. The certification is effective until the local soil and water conservation district
notifies the county assessor that the property no longer qualifies.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For the purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Qualifying acre" means an acre of land on qualifying property on which the practice
of no-till tillage, strip-till tillage, reduced tillage, or the planting of cover crop is used.
new text end

new text begin (c) "Qualifying property" means class 2a and 2b property under section 273.13,
subdivision 23, other than property consisting of the house, garage, and immediately
surrounding one acre of land of an agricultural homestead, and on which the practice of
no-till tillage, strip-till tillage, reduced tillage, or the planting of cover crop is used.
new text end

new text begin Subd. 3. new text end

new text begin Credit amount. new text end

new text begin For each qualifying property, the credit is equal to the amount
available for this credit under section 216I.03, subdivision 3, paragraph (b), clause (1),
multiplied by the ratio of (1) the number of qualifying acres on the property to (2) the total
number of acres that qualify for the credit statewide.
new text end

new text begin Subd. 4. new text end

new text begin Credit reimbursement. new text end

new text begin The county auditor shall determine the credit allowed
under this section within the county for each taxes payable year and shall certify that amount
to the commissioner of revenue as part of the data required under section 270C.85,
subdivision 2. Any prior-year adjustments must be certified as part of the data required
under section 270C.85, subdivision 2. The commissioner shall review the certifications for
accuracy and may make such changes as are deemed necessary or return the certification
to the county auditor for correction. The credit under this section must be used to reduce
the net tax capacity-based property tax payable to each local taxing jurisdiction as provided
in section 273.1393.
new text end

new text begin Subd. 5. new text end

new text begin Payment. new text end

new text begin (a) The commissioner of revenue shall reimburse each local taxing
jurisdiction, other than school districts, for the tax reductions granted under this section in
two equal installments on October 31 and December 26 of the taxes payable year for which
the reductions are granted, including in each payment the prior year adjustments certified
under section 270C.85, subdivision 2, for that taxes payable year.
new text end

new text begin (b) The commissioner of revenue shall certify the total of the tax reductions granted
under this section for each taxes payable year within each school district to the commissioner
of education and the commissioner of education must pay the reimbursement amounts to
each school district as provided in section 273.1392.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin An amount as determined under section 216I.04, subdivision
3, to make the payments required by this section to taxing jurisdictions other than school
districts is annually appropriated from the carbon assessment and dividend account to the
commissioner of revenue. An amount as determined under section 216I.04, subdivision 3,
to make the payments required by this section to school districts is annually appropriated
from the carbon assessment and dividend account to the commissioner of education.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2025.
new text end

Sec. 11.

Minnesota Statutes 2022, section 273.1392, is amended to read:

273.1392 PAYMENT; SCHOOL DISTRICTS.

The amounts of bovine tuberculosis credit reimbursements under section 273.113;
conservation tax credits under section 273.119; disaster or emergency reimbursement under
sections 273.1231 to 273.1235; agricultural credits under sections 273.1384 deleted text begin and deleted text end new text begin , new text end 273.1387 new text begin ,
and 273.1388 new text end ; aids and credits under section 273.1398; enterprise zone property credit
payments under section 469.171; and metropolitan agricultural preserve reduction under
section 473H.10 for school districts, shall be certified to the Department of Education by
the Department of Revenue. The amounts so certified shall be paid according to section
127A.45, subdivisions 9, 10, and 13.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with fiscal year 2025.
new text end

Sec. 12.

Minnesota Statutes 2022, section 273.1393, is amended to read:

273.1393 COMPUTATION OF NET PROPERTY TAXES.

Notwithstanding any other provisions to the contrary, "net" property taxes are determined
by subtracting the credits in the order listed from the gross tax:

(1) disaster credit as provided in sections 273.1231 to 273.1235;

(2) powerline credit as provided in section 273.42;

(3) agricultural preserves credit as provided in section 473H.10;

(4) enterprise zone credit as provided in section 469.171;

(5) disparity reduction credit;

(6) conservation tax credit as provided in section 273.119;

(7) the school bond credit as provided in section 273.1387;

(8) agricultural credit as provided in section 273.1384;

(9) new text begin the cover and tillage agricultural credit as provided in section 273.1388;
new text end

new text begin (10) new text end taconite homestead credit as provided in section 273.135;

deleted text begin (10) deleted text end new text begin (11) new text end supplemental homestead credit as provided in section 273.1391; and

deleted text begin (11) deleted text end new text begin (12) new text end the bovine tuberculosis zone credit, as provided in section 273.113.

The combination of all property tax credits must not exceed the gross tax amount.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2025.
new text end

Sec. 13.

Minnesota Statutes 2022, section 275.065, subdivision 3, is amended to read:

Subd. 3.

Notice of proposed property taxes.

(a) The county auditor shall prepare and
the county treasurer shall deliver after November 10 and on or before November 24 each
year, by first class mail to each taxpayer at the address listed on the county's current year's
assessment roll, a notice of proposed property taxes. Upon written request by the taxpayer,
the treasurer may send the notice in electronic form or by electronic mail instead of on paper
or by ordinary mail.

(b) The commissioner of revenue shall prescribe the form of the notice.

(c) The notice must inform taxpayers that it contains the amount of property taxes each
taxing authority proposes to collect for taxes payable the following year. In the case of a
town, or in the case of the state general tax, the final tax amount will be its proposed tax.
The notice must clearly state for each city that has a population over 500, county, school
district, regional library authority established under section 134.201, metropolitan taxing
districts as defined in paragraph (i), and fire protection and emergency medical services
special taxing districts established under section 144F.01, the time and place of a meeting
for each taxing authority in which the budget and levy will be discussed and public input
allowed, prior to the final budget and levy determination. The taxing authorities must provide
the county auditor with the information to be included in the notice on or before the time it
certifies its proposed levy under subdivision 1. The public must be allowed to speak at that
meeting, which must occur after November 24 and must not be held before 6:00 p.m. It
must provide a telephone number for the taxing authority that taxpayers may call if they
have questions related to the notice and an address where comments will be received by
mail, except that no notice required under this section shall be interpreted as requiring the
printing of a personal telephone number or address as the contact information for a taxing
authority. If a taxing authority does not maintain public offices where telephone calls can
be received by the authority, the authority may inform the county of the lack of a public
telephone number and the county shall not list a telephone number for that taxing authority.

(d) The notice must state for each parcel:

(1) the market value of the property as determined under section 273.11, and used for
computing property taxes payable in the following year and for taxes payable in the current
year as each appears in the records of the county assessor on November 1 of the current
year; and, in the case of residential property, whether the property is classified as homestead
or nonhomestead. The notice must clearly inform taxpayers of the years to which the market
values apply and that the values are final values;

(2) the items listed below, shown separately by county, city or town, and state general
tax, agricultural homestead credit under section 273.1384, school building bond agricultural
credit under section 273.1387, new text begin cover and tillage agricultural credit under section 273.1388,
new text end voter approved school levy, other local school levy, and the sum of the special taxing
districts, and as a total of all taxing authorities:

(i) the actual tax for taxes payable in the current year; and

(ii) the proposed tax amount.

If the county levy under clause (2) includes an amount for a lake improvement district
as defined under sections 103B.501 to 103B.581, the amount attributable for that purpose
must be separately stated from the remaining county levy amount.

In the case of a town or the state general tax, the final tax shall also be its proposed tax
unless the town changes its levy at a special town meeting under section 365.52. If a school
district has certified under section 126C.17, subdivision 9, that a referendum will be held
in the school district at the November general election, the county auditor must note next
to the school district's proposed amount that a referendum is pending and that, if approved
by the voters, the tax amount may be higher than shown on the notice. In the case of the
city of Minneapolis, the levy for Minneapolis Park and Recreation shall be listed separately
from the remaining amount of the city's levy. In the case of the city of St. Paul, the levy for
the St. Paul Library Agency must be listed separately from the remaining amount of the
city's levy. In the case of Ramsey County, any amount levied under section 134.07 may be
listed separately from the remaining amount of the county's levy. In the case of a parcel
where tax increment or the fiscal disparities areawide tax under chapter 276A or 473F
applies, the proposed tax levy on the captured value or the proposed tax levy on the tax
capacity subject to the areawide tax must each be stated separately and not included in the
sum of the special taxing districts; and

(3) the increase or decrease between the total taxes payable in the current year and the
total proposed taxes, expressed as a percentage.

For purposes of this section, the amount of the tax on homesteads qualifying under the
senior citizens' property tax deferral program under chapter 290B is the total amount of
property tax before subtraction of the deferred property tax amount.

(e) The notice must clearly state that the proposed or final taxes do not include the
following:

(1) special assessments;

(2) levies approved by the voters after the date the proposed taxes are certified, including
bond referenda and school district levy referenda;

(3) a levy limit increase approved by the voters by the first Tuesday after the first Monday
in November of the levy year as provided under section 275.73;

(4) amounts necessary to pay cleanup or other costs due to a natural disaster occurring
after the date the proposed taxes are certified;

(5) amounts necessary to pay tort judgments against the taxing authority that become
final after the date the proposed taxes are certified; and

(6) the contamination tax imposed on properties which received market value reductions
for contamination.

(f) Except as provided in subdivision 7, failure of the county auditor to prepare or the
county treasurer to deliver the notice as required in this section does not invalidate the
proposed or final tax levy or the taxes payable pursuant to the tax levy.

(g) If the notice the taxpayer receives under this section lists the property as
nonhomestead, and satisfactory documentation is provided to the county assessor by the
applicable deadline, and the property qualifies for the homestead classification in that
assessment year, the assessor shall reclassify the property to homestead for taxes payable
in the following year.

(h) In the case of class 4 residential property used as a residence for lease or rental
periods of 30 days or more, the taxpayer must either:

(1) mail or deliver a copy of the notice of proposed property taxes to each tenant, renter,
or lessee; or

(2) post a copy of the notice in a conspicuous place on the premises of the property.

The notice must be mailed or posted by the taxpayer by November 27 or within three
days of receipt of the notice, whichever is later. A taxpayer may notify the county treasurer
of the address of the taxpayer, agent, caretaker, or manager of the premises to which the
notice must be mailed in order to fulfill the requirements of this paragraph.

(i) For purposes of this subdivision and subdivision 6, "metropolitan special taxing
districts" means the following taxing districts in the seven-county metropolitan area that
levy a property tax for any of the specified purposes listed below:

(1) Metropolitan Council under section 473.132, 473.167, 473.249, 473.325, 473.446,
473.521, 473.547, or 473.834;

(2) Metropolitan Airports Commission under section 473.667, 473.671, or 473.672; and

(3) Metropolitan Mosquito Control Commission under section 473.711.

For purposes of this section, any levies made by the regional rail authorities in the county
of Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington under chapter 398A
shall be included with the appropriate county's levy.

(j) The governing body of a county, city, or school district may, with the consent of the
county board, include supplemental information with the statement of proposed property
taxes about the impact of state aid increases or decreases on property tax increases or
decreases and on the level of services provided in the affected jurisdiction. This supplemental
information may include information for the following year, the current year, and for as
many consecutive preceding years as deemed appropriate by the governing body of the
county, city, or school district. It may include only information regarding:

(1) the impact of inflation as measured by the implicit price deflator for state and local
government purchases;

(2) population growth and decline;

(3) state or federal government action; and

(4) other financial factors that affect the level of property taxation and local services
that the governing body of the county, city, or school district may deem appropriate to
include.

The information may be presented using tables, written narrative, and graphic
representations and may contain instruction toward further sources of information or
opportunity for comment.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2025.
new text end

Sec. 14.

Minnesota Statutes 2022, section 276.04, subdivision 2, is amended to read:

Subd. 2.

Contents of tax statements.

(a) The treasurer shall provide for the printing of
the tax statements. The commissioner of revenue shall prescribe the form of the property
tax statement and its contents. The tax statement must not state or imply that property tax
credits are paid by the state of Minnesota. The statement must contain a tabulated statement
of the dollar amount due to each taxing authority and the amount of the state tax from the
parcel of real property for which a particular tax statement is prepared. The dollar amounts
attributable to the county, the state tax, the voter approved school tax, the other local school
tax, the township or municipality, and the total of the metropolitan special taxing districts
as defined in section 275.065, subdivision 3, paragraph (i), must be separately stated. The
amounts due all other special taxing districts, if any, may be aggregated except that any
levies made by the regional rail authorities in the county of Anoka, Carver, Dakota, Hennepin,
Ramsey, Scott, or Washington under chapter 398A shall be listed on a separate line directly
under the appropriate county's levy. If the county levy under this paragraph includes an
amount for a lake improvement district as defined under sections 103B.501 to 103B.581,
the amount attributable for that purpose must be separately stated from the remaining county
levy amount. In the case of Ramsey County, if the county levy under this paragraph includes
an amount for public library service under section 134.07, the amount attributable for that
purpose may be separated from the remaining county levy amount. The amount of the tax
on homesteads qualifying under the senior citizens' property tax deferral program under
chapter 290B is the total amount of property tax before subtraction of the deferred property
tax amount. The amount of the tax on contamination value imposed under sections 270.91
to 270.98, if any, must also be separately stated. The dollar amounts, including the dollar
amount of any special assessments, may be rounded to the nearest even whole dollar. For
purposes of this section whole odd-numbered dollars may be adjusted to the next higher
even-numbered dollar. The amount of market value excluded under section 273.11,
subdivision 16, if any, must also be listed on the tax statement.

(b) The property tax statements for manufactured homes and sectional structures taxed
as personal property shall contain the same information that is required on the tax statements
for real property.

(c) Real and personal property tax statements must contain the following information
in the order given in this paragraph. The information must contain the current year tax
information in the right column with the corresponding information for the previous year
in a column on the left:

(1) the property's estimated market value under section 273.11, subdivision 1;

(2) the property's homestead market value exclusion under section 273.13, subdivision
35;

(3) the property's taxable market value under section 272.03, subdivision 15;

(4) the property's gross tax, before credits;

(5) for agricultural properties, the credits under sections 273.1384 deleted text begin and deleted text end new text begin , new text end 273.1387 new text begin , and
273.1388 new text end ;

(6) any credits received under sections 273.119; 273.1234 or 273.1235; 273.135;
273.1391; 273.1398, subdivision 4; 469.171; and 473H.10, except that the amount of credit
received under section 273.135 must be separately stated and identified as "taconite tax
relief"; and

(7) the net tax payable in the manner required in paragraph (a).

(d) If the county uses envelopes for mailing property tax statements and if the county
agrees, a taxing district may include a notice with the property tax statement notifying
taxpayers when the taxing district will begin its budget deliberations for the current year,
and encouraging taxpayers to attend the hearings. If the county allows notices to be included
in the envelope containing the property tax statement, and if more than one taxing district
relative to a given property decides to include a notice with the tax statement, the county
treasurer or auditor must coordinate the process and may combine the information on a
single announcement.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with taxes payable in 2025.
new text end

Sec. 15.

new text begin [290.0693] CARBON ASSESSMENT DIVIDEND.
new text end

new text begin Subdivision 1. new text end

new text begin Dividend allowed. new text end

new text begin A dividend is allowed to an individual as determined
under this section. The dividend shall be paid as a credit against the tax imposed by this
chapter equal to the allowable dollar amount, determined under subdivision 3, for each of
the following individuals:
new text end

new text begin (1) the taxpayer;
new text end

new text begin (2) the taxpayer's spouse for a dividend claimed on a joint return; and
new text end

new text begin (3) each qualified dependent of the taxpayer.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "Dependent" means a dependent as defined in section 152 of the Internal Revenue
Code.
new text end

new text begin (c) "Qualified dependent" means a dependent who has attained the age of 16 by the close
of the taxable year.
new text end

new text begin Subd. 3. new text end

new text begin Determination of allowable amount. new text end

new text begin (a) By August 31 of each year, the
commissioner shall estimate the total number of filers, spouses, and qualified dependents
in the next taxable year.
new text end

new text begin (b) The allowable amount of the dividend for taxable years beginning in the next calendar
year equals the amount of revenues estimated by the commissioner of the Pollution Control
Agency under section 216I.03, subdivision 3, divided by the number estimated under
paragraph (a).
new text end

new text begin Subd. 4. new text end

new text begin Dividend refundable. new text end

new text begin If the claimant is eligible to receive a dividend that
exceeds the claimant's tax liability under this chapter, the commissioner shall refund the
excess to the claimant.
new text end

new text begin Subd. 5. new text end

new text begin Dependent barred from claiming own dividend. new text end

new text begin No dividend may be paid
to an individual claimed as a dependent on the federal tax return of another individual.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin An amount as determined under section 216I.03, subdivision
3, to pay the dividend required by this section is appropriated to the commissioner from the
carbon assessment dividend account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end

Sec. 16.

new text begin [290.98] REBATE OF PAYROLL TAXES.
new text end

new text begin Subdivision 1. new text end

new text begin Rebate to employers. new text end

new text begin (a) The amount determined under section 216I.03,
subdivision 3, must be used to provide a rebate to employers who make payments of Federal
Insurance Contributions Act taxes under section 3111 of the Internal Revenue Code.
new text end

new text begin (b) The amount of the rebate is determined for each employer by:
new text end

new text begin (1) multiplying the amount of the tax paid by an employer under section 3111 of the
Internal Revenue Code by a percentage equal to the percentage of the employer's total
payroll that is determined to be Minnesota payroll for purposes of section 290.191; and
new text end

new text begin (2) multiplying the amount determined under clause (1) by a percentage determined by
dividing the amount specified in paragraph (a) for all employers by the sum of the amounts
determined under clause (1) for all employers who apply for the rebate for the taxable year
and one-half of the self-employment tax paid by Minnesota residents who apply for a rebate
under subdivision 2 for the taxable year.
new text end

new text begin Subd. 2. new text end

new text begin Rebate to individuals paying self-employment taxes. new text end

new text begin The rebate for a
Minnesota resident who pays self-employment tax under section 1401 of the Internal Revenue
Code is determined by multiplying one-half of tax paid during the calendar year by a
percentage determined under subdivision 1, paragraph (b), clause (2).
new text end

new text begin Subd. 3. new text end

new text begin Payment of rebates. new text end

new text begin An applicant may claim the rebate under this section in
the form provided by the commissioner on the applicant's income tax return.
new text end

new text begin Subd. 4. new text end

new text begin Appropriation. new text end

new text begin The amount as determined under section 216I.03, subdivision
3, to pay the rebates provided in this section is appropriated from the carbon assessment
dividend account to the commissioner.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2024.
new text end

Sec. 17. new text begin REPORT ON CARBON ASSESSMENT AND DIVIDEND ACT.
new text end

new text begin By January 1, 2027, the commissioner of revenue must, in consultation with the
commissioners of commerce and the Pollution Control Agency, submit a written report to
the chairs and ranking minority members of the legislative committees with primary
jurisdiction over environment policy and finance and energy policy and finance. The report
must:
new text end

new text begin (1) describe administrative procedures that could be implemented to enable payment of
the dividends and rebates required under Minnesota Statutes, sections 290.0693 and 290.98,
on a quarterly or monthly basis;
new text end

new text begin (2) estimate the administrative costs of a monthly payment system; and
new text end

new text begin (3) analyze the impact on carbon-based fuel consumption resulting from monthly
payments.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end