1.1 	A bill for an act
1.2 	relating to taxation; modifying individual income and corporate franchise taxes, 
1.3 	sales and use taxes, property taxes, local government aids, and other miscellaneous 
1.4 	taxes and tax provisions; modifying income tax additions, subtractions, and credits; 
1.5 	modifying taxes on capital gains; proposing a child tax credit; proposing an advance 
1.6 	payment and one-time refundable tax credit; modifying cannabis-related sales and 
1.7 	use tax provisions; proposing sales tax exemptions for certain entities; modifying 
1.8 	eligibility for certain property tax programs; modifying the formula and adding 
1.9 	definitions for the calculation of local government aids; proposing new forms of 
1.10 	local government aids; appropriating money;amending Minnesota Statutes 2022, 
1.11 	sections 116J.8737, subdivisions 5, 12; 270C.52, subdivision 2; 273.124, 
1.12 	subdivisions 6, 13, 13a, 13c, 13d, 14; 273.1245, subdivision 1; 273.1315, 
1.13 	subdivision 2; 273.1387, subdivision 2; 289A.08, subdivisions 7, as amended, 7a, 
1.14 	as amended; 290.0131, by adding a subdivision; 290.0132, subdivision 26; 290.06, 
1.15 	subdivision 2c, as amended; 290.067; 290.0671, subdivision 1; 290.0674, 
1.16 	subdivisions 2, 2a, by adding a subdivision; 290.0677, subdivision 1; 290.0681, 
1.17 	subdivisions 3, 10; 290.091, subdivision 2, as amended; 290B.03, subdivision 1; 
1.18 	290B.04, subdivisions 3, 4; 290B.05, subdivision 1; 297A.61, by adding 
1.19 	subdivisions; 297A.67, subdivisions 2, 7; 297A.70, subdivisions 2, 4, 18; 297A.71, 
1.20 	by adding a subdivision; 297A.75, subdivisions 1, 2, 3; 477A.011, subdivision 34, 
1.21 	by adding subdivisions; 477A.0124, subdivision 2; 477A.013, subdivisions 8, 9; 
1.22 	477A.03, subdivisions 2a, 2b; Laws 2006, chapter 259, article 11, section 3, as 
1.23 	amended; Laws 2023, chapter 1, section 15; proposing coding for new law in 
1.24 	Minnesota Statutes, chapters 290; 477A; repealing Minnesota Statutes 2022, 
1.25 	sections 290.0132, subdivision 33; 477A.011, subdivisions 30a, 38, 42, 45; 
1.26 	477A.013, subdivision 13.
1.27 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.28 	ARTICLE 1
1.29 	INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

1.30 	Section 1. Minnesota Statutes 2022, section 116J.8737, subdivision 5, is amended to read:
1.31 		Subd. 5.Credit allowed. (a) A qualified investor or qualified fund is eligible for a credit 
1.32 	equal to 25 percent of the qualified investment in a qualified small business. Investments 
2.1 	made by a pass-through entity qualify for a credit only if the entity is a qualified fund. The 
2.2 	commissioner must not allocate to qualified investors or qualified funds more than the dollar 
2.3 	amount in credits allowed for the taxable years listed in paragraph (i). For each taxable year, 
2.4 	50 percent must be allocated to credits for qualified investments in qualified greater 
2.5 	Minnesota businesses and minority-owned, women-owned, or veteran-owned qualified 
2.6 	small businesses in Minnesota. Any portion of a taxable year's credits that is reserved for 
2.7 	qualified investments in greater Minnesota businesses and minority-owned, women-owned, 
2.8 	or veteran-owned qualified small businesses in Minnesota that is not allocated by September 
2.9 	30 of the taxable year is available for allocation to other credit applications beginning on 
2.10 	October 1. Any portion of a taxable year's credits that is not allocated by the commissioner 
2.11 	does not cancel and may be carried forward to subsequent taxable years until all credits 
2.12 	have been allocated.
2.13 	(b) The commissioner may not allocate more than a total maximum amount in credits 
2.14 	for a taxable year to a qualified investor for the investor's cumulative qualified investments 
2.15 	as an individual qualified investor and as an investor in a qualified fund; for married couples 
2.16 	filing joint returns the maximum is $250,000, and for all other filers the maximum is 
2.17 	$125,000. The commissioner may not allocate more than a total of $1,000,000 in credits 
2.18 	over all taxable years for qualified investments in any one qualified small business.
2.19 	(c) The commissioner may not allocate a credit to a qualified investor either as an 
2.20 	individual qualified investor or as an investor in a qualified fund if, at the time the investment 
2.21 	is proposed:
2.22 	(1) the investor is an officer or principal of the qualified small business; or
2.23 	(2) the investor, either individually or in combination with one or more members of the 
2.24 	investor's family, owns, controls, or holds the power to vote 20 percent or more of the 
2.25 	outstanding securities of the qualified small business.
2.26 	A member of the family of an individual disqualified by this paragraph is not eligible for a 
2.27 	credit under this section. For a married couple filing a joint return, the limitations in this 
2.28 	paragraph apply collectively to the investor and spouse. For purposes of determining the 
2.29 	ownership interest of an investor under this paragraph, the rules under section 267(c) and 
2.30 	267(e) of the Internal Revenue Code apply.
2.31 	(d) Applications for tax credits must be made available on the department's website by 
2.32 	November 1 of the preceding year.
2.33 	(e) Qualified investors and qualified funds must apply to the commissioner for tax credits. 
2.34 	Tax credits must be allocated to qualified investors or qualified funds in the order that the 
3.1 	tax credit request applications are filed with the department. The commissioner must approve 
3.2 	or reject tax credit request applications within 15 days of receiving the application. The 
3.3 	investment specified in the application must be made within 60 days of the allocation of 
3.4 	the credits. If the investment is not made within 60 days, the credit allocation is canceled 
3.5 	and available for reallocation. A qualified investor or qualified fund that fails to invest as 
3.6 	specified in the application, within 60 days of allocation of the credits, must notify the 
3.7 	commissioner of the failure to invest within five business days of the expiration of the 
3.8 	60-day investment period.
3.9 	(f) All tax credit request applications filed with the department on the same day must 
3.10 	be treated as having been filed contemporaneously. If two or more qualified investors or 
3.11 	qualified funds file tax credit request applications on the same day, and the aggregate amount 
3.12 	of credit allocation claims exceeds the aggregate limit of credits under this section or the 
3.13 	lesser amount of credits that remain unallocated on that day, then the credits must be allocated 
3.14 	among the qualified investors or qualified funds who filed on that day on a pro rata basis 
3.15 	with respect to the amounts claimed. The pro rata allocation for any one qualified investor 
3.16 	or qualified fund is the product obtained by multiplying a fraction, the numerator of which 
3.17 	is the amount of the credit allocation claim filed on behalf of a qualified investor and the 
3.18 	denominator of which is the total of all credit allocation claims filed on behalf of all 
3.19 	applicants on that day, by the amount of credits that remain unallocated on that day for the 
3.20 	taxable year.
3.21 	(g) A qualified investor or qualified fund, or a qualified small business acting on their 
3.22 	behalf, must notify the commissioner when an investment for which credits were allocated 
3.23 	has been made, and the taxable year in which the investment was made. A qualified fund 
3.24 	must also provide the commissioner with a statement indicating the amount invested by 
3.25 	each investor in the qualified fund based on each investor's share of the assets of the qualified 
3.26 	fund at the time of the qualified investment. After receiving notification that the investment 
3.27 	was made, the commissioner must issue credit certificates for the taxable year in which the 
3.28 	investment was made to the qualified investor or, for an investment made by a qualified 
3.29 	fund, to each qualified investor who is an investor in the fund. The certificate must state 
3.30 	that the credit is subject to revocation if the qualified investor or qualified fund does not 
3.31 	hold the investment in the qualified small business for at least three years, consisting of the 
3.32 	calendar year in which the investment was made and the two following years. The three-year 
3.33 	holding period does not apply if:
3.34 	(1) the investment by the qualified investor or qualified fund becomes worthless before 
3.35 	the end of the three-year period;
4.1 	(2) 80 percent or more of the assets of the qualified small business is sold before the end 
4.2 	of the three-year period;
4.3 	(3) the qualified small business is sold before the end of the three-year period;
4.4 	(4) the qualified small business's common stock begins trading on a public exchange 
4.5 	before the end of the three-year period; or
4.6 	(5) the qualified investor dies before the end of the three-year period.
4.7 	(h) The commissioner must notify the commissioner of revenue of credit certificates 
4.8 	issued under this section.
4.9 	(i) The credit allowed under this subdivision is effective as follows:
4.10 	(1) $10,000,000 for taxable years beginning after December 31, 2020, and before January 
4.11 	1, 2022; and
4.12 	(2) $5,000,000 for taxable years beginning after December 31, 2021, and before January 
4.13 	1, 2023.; and
4.14 	(3) $10,000,000 for taxable years beginning after December 31, 2022, and before January 
4.15 	1, 2031.

4.16 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
4.17 	31, 2022.

4.18 	Sec. 2. Minnesota Statutes 2022, section 116J.8737, subdivision 12, is amended to read:
4.19 		Subd. 12.Sunset. This section expires for taxable years beginning after December 31, 
4.20 	2022 2030, except that reporting requirements under subdivision 6 and revocation of credits 
4.21 	under subdivision 7 remain in effect through 2024 2032 for qualified investors and qualified 
4.22 	funds, and through 2026 2034 for qualified small businesses, reporting requirements under 
4.23 	subdivision 9 remain in effect through 2022 2030, and the appropriation in subdivision 11 
4.24 	remains in effect through 2026 2034.

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

4.26 	Sec. 3. Minnesota Statutes 2022, section 289A.08, subdivision 7, as amended by Laws 
4.27 	2023, chapter 1, section 2, is amended to read:
4.28 		Subd. 7.Composite income tax returns for nonresident partners, shareholders, and 
4.29 	beneficiaries. (a) The commissioner may allow a partnership with nonresident partners to 
4.30 	file a composite return and to pay the tax on behalf of nonresident partners who have no 
5.1 	other Minnesota source income. This composite return must include the names, addresses, 
5.2 	Social Security numbers, income allocation, and tax liability for the nonresident partners 
5.3 	electing to be covered by the composite return.
5.4 	(b) The computation of a partner's tax liability must be determined by multiplying the 
5.5 	income allocated to that partner by the highest rate used to determine the tax liability for 
5.6 	individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard 
5.7 	deductions, or personal exemptions are not allowed. The computation of a partner's 
5.8 	preferential rate income tax liability must be computed under section 290.055.
5.9 	(c) The partnership must submit a request to use this composite return filing method for 
5.10 	nonresident partners. The requesting partnership must file a composite return in the form 
5.11 	prescribed by the commissioner of revenue. The filing of a composite return is considered 
5.12 	a request to use the composite return filing method.
5.13 	(d) The electing partner must not have any Minnesota source income other than the 
5.14 	income from the partnership, other electing partnerships, and other qualifying entities 
5.15 	electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined 
5.16 	that the electing partner has other Minnesota source income, the inclusion of the income 
5.17 	and tax liability for that partner under this provision will not constitute a return to satisfy 
5.18 	the requirements of subdivision 1. The tax paid for the individual as part of the composite 
5.19 	return is allowed as a payment of the tax by the individual on the date on which the composite 
5.20 	return payment was made. If the electing nonresident partner has no other Minnesota source 
5.21 	income, filing of the composite return is a return for purposes of subdivision 1.
5.22 	(e) This subdivision does not negate the requirement that an individual pay estimated 
5.23 	tax if the individual's liability would exceed the requirements set forth in section 289A.25. 
5.24 	The individual's liability to pay estimated tax is, however, satisfied when the partnership 
5.25 	pays composite estimated tax in the manner prescribed in section 289A.25.
5.26 	(f) If an electing partner's share of the partnership's gross income from Minnesota sources 
5.27 	is less than the filing requirements for a nonresident under this subdivision, the tax liability 
5.28 	is zero. However, a statement showing the partner's share of gross income must be included 
5.29 	as part of the composite return.
5.30 	(g) The election provided in this subdivision is only available to a partner who has no 
5.31 	other Minnesota source income and who is either (1) a full-year nonresident individual or 
5.32 	(2) a trust or estate that does not claim a deduction under either section 651 or 661 of the 
5.33 	Internal Revenue Code.
6.1 	(h) A corporation defined in section 290.9725 and its nonresident shareholders may 
6.2 	make an election under this paragraph. The provisions covering the partnership apply to 
6.3 	the corporation and the provisions applying to the partner apply to the shareholder.
6.4 	(i) Estates and trusts distributing current income only and the nonresident individual 
6.5 	beneficiaries of the estates or trusts may make an election under this paragraph. The 
6.6 	provisions covering the partnership apply to the estate or trust. The provisions applying to 
6.7 	the partner apply to the beneficiary.
6.8 	(j) For the purposes of this subdivision, "income" means the partner's share of federal 
6.9 	adjusted gross income from the partnership modified by the additions provided in section 
6.10 	290.0131, subdivisions 8 to 10, 16, and 17, and the subtractions provided in: (1) section 
6.11 	290.0132, subdivisions 9, 27, 28, and 31, to the extent the amount is assignable or allocable 
6.12 	to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction 
6.13 	allowed under section 290.0132, subdivision 9, is only allowed on the composite tax 
6.14 	computation to the extent the electing partner would have been allowed the subtraction.

6.15 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
6.16 	31, 2022.

6.17 	Sec. 4. Minnesota Statutes 2022, section 289A.08, subdivision 7a, as amended by Laws 
6.18 	2023, chapter 1, section 3, is amended to read:
6.19 		Subd. 7a.Pass-through entity tax. (a) For the purposes of this subdivision, the following 
6.20 	terms have the meanings given:
6.21 	(1) "income" has the meaning given in subdivision 7, paragraph (j), modified by the 
6.22 	addition provided in section 290.0131, subdivision 5, and the subtraction provided in section 
6.23 	290.0132, subdivision 3, except that the provisions that apply to a partnership apply to a 
6.24 	qualifying entity and the provisions that apply to a partner apply to a qualifying owner. The 
6.25 	income of both a resident and nonresident qualifying owner is allocated and assigned to 
6.26 	this state as provided for nonresident partners and shareholders under sections 290.17, 
6.27 	290.191, and 290.20;
6.28 	(2) "qualifying entity" means a partnership, limited liability company, or S corporation 
6.29 	including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the 
6.30 	Internal Revenue Code. Qualifying entity does not include a partnership, limited liability 
6.31 	company, or corporation that has a partnership, limited liability company other than a 
6.32 	disregarded entity, or corporation as a partner, member, or shareholder; and
6.33 	(3) "qualifying owner" means:
7.1 	(i) a resident or nonresident individual or estate that is a partner, member, or shareholder 
7.2 	of a qualifying entity; or
7.3 	(ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an 
7.4 	S corporation.
7.5 	(b) For taxable years beginning after December 31, 2020, in which the taxes of a 
7.6 	qualifying owner are limited under section 164(b)(6)(B) of the Internal Revenue Code, a 
7.7 	qualifying entity may elect to file a return and pay the pass-through entity tax imposed under 
7.8 	paragraph (c). The election:
7.9 	(1) must be made on or before the due date or extended due date of the qualifying entity's 
7.10 	pass-through entity tax return;
7.11 	(2) may only be made by qualifying owners who collectively hold more than a 50 percent 
7.12 	ownership interest in the qualifying entity;
7.13 	(3) is binding on all qualifying owners who have an ownership interest in the qualifying 
7.14 	entity; and
7.15 	(4) once made is irrevocable for the taxable year.
7.16 	(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a 
7.17 	qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.
7.18 	(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount 
7.19 	of the qualifying owner's income multiplied by the highest tax rate for individuals under 
7.20 	section 290.06, subdivision 2c. When making this determination:
7.21 	(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed; 
7.22 	and
7.23 	(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.
7.24 	(e) The amount of each credit and deduction used to determine a qualifying owner's tax 
7.25 	liability under paragraph (d) must also be used to determine that qualifying owner's income 
7.26 	tax liability under chapter 290.
7.27 	(f) This subdivision does not negate the requirement that a qualifying owner pay estimated 
7.28 	tax if the qualifying owner's tax liability would exceed the requirements set forth in section 
7.29 	289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's 
7.30 	tax liability as determined under paragraph (d) is, however, satisfied when the qualifying 
7.31 	entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated 
7.32 	tax.
8.1 	(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the 
8.2 	treatment of distributions, is determined as if the election to pay the pass-through entity tax 
8.3 	under paragraph (b) is not made.
8.4 	(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a 
8.5 	pass-through entity tax return must be treated as a composite return and a qualifying entity 
8.6 	filing a pass-through entity tax return must be treated as a partnership filing a composite 
8.7 	return.
8.8 	(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity 
8.9 	tax under this subdivision.
8.10 	(j) If a nonresident qualifying owner of a qualifying entity making the election to file 
8.11 	and pay the tax under this subdivision has no other Minnesota source income, filing of the 
8.12 	pass-through entity tax return is a return for purposes of subdivision 1, provided that the 
8.13 	nonresident qualifying owner must not have any Minnesota source income other than the 
8.14 	income from the qualifying entity, other electing qualifying entities, and other partnerships 
8.15 	electing to file a composite return under subdivision 7. If it is determined that the nonresident 
8.16 	qualifying owner has other Minnesota source income, the inclusion of the income and tax 
8.17 	liability for that owner under this provision will not constitute a return to satisfy the 
8.18 	requirements of subdivision 1. The tax paid for the qualifying owner as part of the 
8.19 	pass-through entity tax return is allowed as a payment of the tax by the qualifying owner 
8.20 	on the date on which the pass-through entity tax return payment was made.
8.21 	(k) Once a credit is claimed by a qualifying owner under section 290.06, subdivision 
8.22 	40, a qualifying entity cannot receive a refund for tax paid under this subdivision for any 
8.23 	amounts claimed under that section by the qualifying owners. Once a credit is claimed under 
8.24 	section 290.06, subdivision 40, any refund must be claimed in conjunction with a return 
8.25 	filed by the qualifying owner.
8.26 	(l) The computation of a partner's preferential rate income tax liability must be computed 
8.27 	under section 290.055.

8.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
8.29 	31, 2022.

8.30 	Sec. 5. Minnesota Statutes 2022, section 290.0131, is amended by adding a subdivision 
8.31 	to read:
8.32 		Subd. 21.Dependent flexible spending accounts. For a taxpayer who claims the credit 
8.33 	under section 290.067 or for a married taxpayer filing a separate return whose spouse claims 
9.1 	the credit under section 290.067, the amount of dependent care assistance that is excluded 
9.2 	from gross income under section 129 of the Internal Revenue Code is an addition.

9.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
9.4 	31, 2022.

9.5 	Sec. 6. Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:
9.6 		Subd. 26.Social Security benefits. (a) A portion of taxable Social Security benefits is 
9.7 	allowed as a subtraction. The subtraction equals the lesser of taxable Social Security benefits 
9.8 	or a maximum subtraction subject to the limits under in paragraphs (b), (c), and to (d).
9.9 	(b) For married taxpayers filing a joint return and surviving spouses, the maximum 
9.10 	subtraction equals $5,150 $10,000. The maximum subtraction is reduced by 20 percent of 
9.11 	provisional income over $78,180 $120,000. In no case is the subtraction less than zero.
9.12 	(c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020
9.13 	$7,800. The maximum subtraction is reduced by 20 percent of provisional income over 
9.14 	$61,080 $93,600. In no case is the subtraction less than zero.
9.15 	(d) For married taxpayers filing separate returns, the maximum subtraction equals 
9.16 	one-half the maximum subtraction for joint returns under paragraph (b). The maximum 
9.17 	subtraction is reduced by 20 percent of provisional income over one-half the threshold 
9.18 	amount specified in paragraph (b). In no case is the subtraction less than zero.
9.19 	(e) For purposes of this subdivision, "provisional income" means modified adjusted 
9.20 	gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of 
9.21 	the taxable Social Security benefits received during the taxable year, and "Social Security 
9.22 	benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.
9.23 	(f) The commissioner shall adjust the maximum subtraction and threshold amounts in 
9.24 	paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year 2019
9.25 	2023. The maximum subtraction and threshold amounts as adjusted must be rounded to the 
9.26 	nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10 
9.27 	amount.

9.28 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
9.29 	31, 2022.

10.1 	Sec. 7. [290.055] CAPITAL GAINS TAX.
10.2 	(a) For purposes of this subdivision, "preferential rate income" means the sum of net 
10.3 	long-term capital gain income as defined in section 1222 of the Internal Revenue Code, and 
10.4 	qualified dividend income as defined in section 1(h)(11)(B) of the Internal Revenue Code.
10.5 	(b) In addition to the tax computed under section 290.06, subdivision 2c, an additional 
10.6 	amount of tax is imposed on the preferential rate income of individuals, estates, and trusts 
10.7 	applying the following schedule of rates:
10.8 	(1) On all preferential rate income over $500,000, but not over $1,000,000, 1.5 percent;
10.9 	(2) On all preferential rate income over $1,000,000, four percent;
10.10 	(3) For an individual that is not a Minnesota resident for the entire taxable year, the tax 
10.11 	under this subdivision must be calculated as if the individual is a Minnesota resident for the 
10.12 	entire year, and that amount must be multiplied by a fraction in which:
10.13 	(i) the numerator is preferential rate income allocable under section 290.17 to Minnesota; 
10.14 	and
10.15 	(ii) the denominator is the total amount of preferential rate income for the taxable year;
10.16 	(4) For an estate or trust, the tax on preferential rate income must be computed by 
10.17 	multiplying the preferential rate income tax liability by a fraction, the numerator of which 
10.18 	is the amount of the estate or trust's preferential rate income allocated to the state pursuant 
10.19 	to the provisions of sections 290.17, 290.191, and 290.20, and the denominator of which is 
10.20 	the taxpayer's total preferential rate income.

10.21 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
10.22 	31, 2022.

10.23 	Sec. 8. Minnesota Statutes 2022, section 290.06, subdivision 2c, as amended by Laws 
10.24 	2023, chapter 1, section 15, is amended to read:
10.25 		Subd. 2c.Schedules of rates for individuals, estates, and trusts. (a) The income taxes 
10.26 	imposed by this chapter upon married individuals filing joint returns and surviving spouses 
10.27 	as defined in section 2(a) of the Internal Revenue Code must be computed by applying to 
10.28 	their taxable net income the following schedule of rates:
10.29 	(1) On the first $38,770, 5.35 percent;
10.30 	(2) On all over $38,770, but not over $154,020, 6.8 percent;
10.31 	(3) On all over $154,020, but not over $269,010, 7.85 percent;
11.1 	(4) On all over $269,010, 9.85 percent.
11.2 	Married individuals filing separate returns, estates, and trusts must compute their income 
11.3 	tax by applying the above rates to their taxable income, except that the income brackets 
11.4 	will be one-half of the above amounts after the adjustment required in subdivision 2d.
11.5 	(b) The income taxes imposed by this chapter upon unmarried individuals must be 
11.6 	computed by applying to taxable net income the following schedule of rates:
11.7 	(1) On the first $26,520, 5.35 percent;
11.8 	(2) On all over $26,520, but not over $87,110, 6.8 percent;
11.9 	(3) On all over $87,110, but not over $161,720, 7.85 percent;
11.10 	(4) On all over $161,720, 9.85 percent.
11.11 	(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as 
11.12 	a head of household as defined in section 2(b) of the Internal Revenue Code must be 
11.13 	computed by applying to taxable net income the following schedule of rates:
11.14 	(1) On the first $32,650, 5.35 percent;
11.15 	(2) On all over $32,650, but not over $131,190, 6.8 percent;
11.16 	(3) On all over $131,190, but not over $214,980, 7.85 percent;
11.17 	(4) On all over $214,980, 9.85 percent.
11.18 	(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax 
11.19 	of any individual taxpayer whose taxable net income for the taxable year is less than an 
11.20 	amount determined by the commissioner must be computed in accordance with tables 
11.21 	prepared and issued by the commissioner of revenue based on income brackets of not more 
11.22 	than $100. The amount of tax for each bracket shall be computed at the rates set forth in 
11.23 	this subdivision, provided that the commissioner may disregard a fractional part of a dollar 
11.24 	unless it amounts to 50 cents or more, in which case it may be increased to $1.
11.25 	(e) An individual who is not a Minnesota resident for the entire year must compute the 
11.26 	individual's Minnesota income tax as provided in this subdivision. After the application of 
11.27 	the nonrefundable credits provided in this chapter, the tax liability must then be multiplied 
11.28 	by a fraction in which:
11.29 	(1) the numerator is the individual's Minnesota source federal adjusted gross income as 
11.30 	defined in section 62 of the Internal Revenue Code and increased by:
12.1 	(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
12.2 	17, 19, and 20, and 290.0137, paragraph (a); and reduced by
12.3 	(ii) the Minnesota assignable portion of the subtraction for United States government 
12.4 	interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132, 
12.5 	subdivisions 9, 10, 14, 15, 17, 18, 27, and 31, and 32, and 290.0137, paragraph (c), after 
12.6 	applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17; 
12.7 	and
12.8 	(2) the denominator is the individual's federal adjusted gross income as defined in section 
12.9 	62 of the Internal Revenue Code, increased by:
12.10 	(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
12.11 	17, 19, and 20, and 290.0137, paragraph (a); and reduced by
12.12 	(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27, 
12.13 	and 31, and 32, and 290.0137, paragraph (c).
12.14 	(f) If an individual who is not a Minnesota resident for the entire year is a qualifying 
12.15 	owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision 
12.16 	7a, paragraph (b), the individual must compute the individual's Minnesota income tax as 
12.17 	provided in paragraph (e), and also must include, to the extent attributed to the electing 
12.18 	qualifying entity:
12.19 	(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the 
12.20 	addition under section 290.0131, subdivision 5; and
12.21 	(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the 
12.22 	subtraction under section 290.0132, subdivision 3.

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

12.25 	Sec. 9. Minnesota Statutes 2022, section 290.067, is amended to read:
12.26 	290.067 DEPENDENT GREAT START CHILD CARE AND DEPENDENT CARE 
12.27 	CREDIT.
12.28 		Subdivision 1.Amount of credit. (a) A taxpayer may take as a credit against the tax 
12.29 	due from the taxpayer and a spouse, if any, under this chapter an amount equal to the 
12.30 	dependent care credit for which the taxpayer is eligible pursuant to the provisions of section 
12.31 	21 of the Internal Revenue Code except that in determining whether the child qualified as 
12.32 	a dependent, income received as a Minnesota family investment program grant or allowance 
13.1 	to or on behalf of the child must not be taken into account in determining whether the child 
13.2 	received more than half of the child's support from the taxpayer the taxpayer's eligible 
13.3 	dependent care expenses, as determined under subdivisions 1a and 1b, multiplied by the 
13.4 	taxpayer's credit percentage, as determined under subdivision 1c.
13.5 	(b) If a child who has not attained the age of six years at the close of the taxable year is 
13.6 	cared for at a licensed family day care home operated by the child's parent, the taxpayer is 
13.7 	deemed to have paid employment-related expenses. If the child is 16 months old or younger 
13.8 	at the close of the taxable year, the amount of expenses deemed to have been paid equals 
13.9 	the maximum limit for one qualified individual under section 21(c) and (d) of the Internal 
13.10 	Revenue Code. If the child is older than 16 months of age but has not attained the age of 
13.11 	six years at the close of the taxable year, the amount of expenses deemed to have been paid 
13.12 	equals the amount the licensee would charge for the care of a child of the same age for the 
13.13 	same number of hours of care.
13.14 	(c) If a married couple:
13.15 	(1) has a child who has not attained the age of one year at the close of the taxable year;
13.16 	(2) files a joint tax return for the taxable year; and
13.17 	(3) does not participate in a dependent care assistance program as defined in section 129 
13.18 	of the Internal Revenue Code, in lieu of the actual employment related expenses paid for 
13.19 	that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i) 
13.20 	the combined earned income of the couple or (ii) the amount of the maximum limit for one 
13.21 	qualified individual under section 21(c) and (d) of the Internal Revenue Code will be deemed 
13.22 	to be the employment related expense paid for that child. The earned income limitation of 
13.23 	section 21(d) of the Internal Revenue Code shall not apply to this deemed amount. These 
13.24 	deemed amounts apply regardless of whether any employment-related expenses have been 
13.25 	paid.
13.26 	(d) If the taxpayer is not required and does not file a federal individual income tax return 
13.27 	for the tax year, no credit is allowed for any amount paid to any person unless:
13.28 	(1) the name, address, and taxpayer identification number of the person are included on 
13.29 	the return claiming the credit; or
13.30 	(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue 
13.31 	Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name 
13.32 	and address of the person are included on the return claiming the credit.
14.1 	In the case of a failure to provide the information required under the preceding sentence, 
14.2 	the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence 
14.3 	in attempting to provide the information required.
14.4 	(e) (b) In the case of a nonresident, part-year resident, or a person who has earned income 
14.5 	not subject to tax under this chapter including earned income excluded pursuant to section 
14.6 	290.0132, subdivision 10, the credit determined under section 21 of the Internal Revenue 
14.7 	Code this section must be allocated based on the ratio by which the earned income of the 
14.8 	claimant and the claimant's spouse from Minnesota sources bears to the total earned income 
14.9 	of the claimant and the claimant's spouse using the percentage calculated in section 290.06, 
14.10 	subdivision 2c, paragraph (e).
14.11 	(c) For the purposes of this section, the following terms have the meanings given:
14.12 	(1) "employment-related expenses" has the meaning given in section 21(b)(2) of the 
14.13 	Internal Revenue Code;
14.14 	(2) "qualifying individual" has the meaning given in section 21(b)(1) of the Internal 
14.15 	Revenue Code, except that in determining whether the child qualified as a dependent, income 
14.16 	received as a Minnesota family investment program grant or allowance to or on behalf of 
14.17 	the child must not be taken into account in determining whether the child received more 
14.18 	than half of the child's support from the taxpayer; and
14.19 	(3) "young child" means a qualifying individual who had not attained the age of five by 
14.20 	December 31 of the taxable year.
14.21 	(f) For residents of Minnesota, the subtractions for military pay under section 290.0132, 
14.22 	subdivisions 11 and 12, are not considered "earned income not subject to tax under this 
14.23 	chapter."
14.24 	(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the 
14.25 	Internal Revenue Code is not considered "earned income not subject to tax under this 
14.26 	chapter."
14.27 	(h) For taxpayers with federal adjusted gross income in excess of $52,230, the credit is 
14.28 	equal to the lesser of the credit otherwise calculated under this subdivision, or the amount 
14.29 	equal to $600 minus five percent of federal adjusted gross income in excess of $52,230 for 
14.30 	taxpayers with one qualified individual, or $1,200 minus five percent of federal adjusted 
14.31 	gross income in excess of $52,230 for taxpayers with two or more qualified individuals, 
14.32 	but in no case is the credit less than zero.
15.1 		Subd. 1a.Eligible dependent care expenses. (a) A taxpayer's eligible dependent care 
15.2 	expenses equals the amount of employment-related expenses incurred during the taxable 
15.3 	year, subject to the limitations in paragraph (b) and subdivision 1b.
15.4 	(b) Except as provided in subdivision 1b, a taxpayer's eligible dependent care expenses 
15.5 	are limited to:
15.6 	(1) $3,000 if there was one qualifying individual with respect to the taxpayer; or
15.7 	(2) $6,000 if there were two or more qualifying individuals with respect to the taxpayer.
15.8 		Subd. 1b.Eligible expenses for taxpayers with young children. For taxable years 
15.9 	beginning after December 31, 2022, and before January 1, 2031, for a taxpayer with a young 
15.10 	child, the limit in subdivision 1a, paragraph (b), is increased as follows:
15.11 	(1) for a taxpayer with one young child with respect to the taxpayer, the limit is increased 
15.12 	by $5,000;
15.13 	(2) for a taxpayer with two young children with respect to the taxpayer, the limit is 
15.14 	increased by $10,000; and
15.15 	(3) for a taxpayer with three or more young children with respect to the taxpayer, the 
15.16 	limit is increased by $15,000.
15.17 		Subd. 1c.Credit percentage. (a) The credit percentage equals 50 percent, subject to 
15.18 	the reductions in paragraphs (b) and (c).
15.19 	(b) A taxpayer's credit percentage is reduced by one percentage point for each $800, or 
15.20 	fraction thereof, by which the taxpayer's adjusted gross income exceeds $200,000.
15.21 	(c) For a married taxpayer filing a separate return, the credit percentage must be calculated 
15.22 	under paragraphs (a) and (b), except the adjusted gross income thresholds are one-half the 
15.23 	amounts for other married filers, as adjusted for inflation under subdivision 2b.
15.24 		Subd. 2b.Inflation adjustment. The commissioner shall annually adjust the dollar 
15.25 	amount of the income threshold at which the maximum credit percentage begins to be 
15.26 	reduced under subdivision 1 1c as provided in section 270C.22. The statutory year is taxable 
15.27 	year 2019 2023.
15.28 		Subd. 2c.Deemed expenses. (a) If a child who has not attained the age of six years at 
15.29 	the close of the taxable year is cared for at a licensed family day care home operated by the 
15.30 	child's parent, the taxpayer is deemed to have paid employment-related expenses. The 
15.31 	amount of expenses deemed to have been paid equals the amount the licensee would charge 
16.1 	for the care of a child of the same age for the same number of hours of care up to the 
16.2 	maximum eligible expenses allowed, as determined under subdivisions 1a and 1b.
16.3 	(b) If a taxpayer, regardless of filing status:
16.4 	(1) has a qualifying individual who has not attained the age of one year at the close of 
16.5 	the taxable year; and
16.6 	(2) used the deemed amount under paragraph (a) in lieu of the actual employment-related 
16.7 	expenses paid for that child, the amount of deemed employment-related expenses equals 
16.8 	the lesser of:
16.9 	(i) the earned income of the taxpayer; or
16.10 	(ii) the amount of the maximum limit for one qualified individual under subdivision 1a, 
16.11 	as increased by subdivision 1b.
16.12 	The earned income limitation of section 21(d) of the Internal Revenue Code shall not apply 
16.13 	to this deemed amount. These deemed amounts apply regardless of whether any 
16.14 	employment-related expenses have been paid.
16.15 		Subd. 3.Credit to be refundable. If the amount of credit which a claimant would be 
16.16 	eligible to receive pursuant to this subdivision exceeds the claimant's tax liability under 
16.17 	chapter 290, the excess amount of the credit shall be refunded to the claimant by the 
16.18 	commissioner of revenue. An amount sufficient to pay the refunds required by this section 
16.19 	is appropriated to the commissioner from the general fund.
16.20 		Subd. 4.Right to file claim. The right to file a claim under this section shall be personal 
16.21 	to the claimant and shall not survive death, but such right may be exercised on behalf of a 
16.22 	claimant by the claimant's legal guardian or attorney-in-fact. When a claimant dies after 
16.23 	having filed a timely claim the amount thereof shall be disbursed to another member of the 
16.24 	household as determined by the commissioner of revenue. If the claimant was the only 
16.25 	member of a household, the claim may be paid to the claimant's personal representative, 
16.26 	but if neither is appointed and qualified within two years of the filing of the claim, the 
16.27 	amount of the claim shall escheat to the state.
16.28 		Subd. 5.Employment-related expenses. For the purposes of determining 
16.29 	employment-related expenses, the provisions of section 21(d) of the Internal Revenue Code 
16.30 	apply.
16.31 		Subd. 6.Special rules. For purposes of this section, the special rules of section 21(e) 
16.32 	of the Internal Revenue Code apply, except the special rule in section 21(e)(2) of the Internal 
16.33 	Revenue Code, requiring married couples to file a joint return, does not apply.

17.1 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
17.2 	31, 2022.

17.3 	Sec. 10. Minnesota Statutes 2022, section 290.0671, subdivision 1, is amended to read:
17.4 		Subdivision 1.Credit allowed. (a) An individual who is a resident of Minnesota is 
17.5 	allowed a credit against the tax imposed by this chapter equal to a percentage of earned 
17.6 	income. To receive a credit, a taxpayer must be eligible for a credit under section 32 of the 
17.7 	Internal Revenue Code, except that:
17.8 	(1) a taxpayer with no qualifying children who has attained the age of 19, but not attained 
17.9 	age 65 before the close of the taxable year and is otherwise eligible for a credit under section 
17.10 	32 of the Internal Revenue Code may also receive a credit; and
17.11 	(2) a taxpayer who is otherwise eligible for a credit under section 32 of the Internal 
17.12 	Revenue Code remains eligible for the credit even if the taxpayer's earned income or adjusted 
17.13 	gross income exceeds the income limitation under section 32 of the Internal Revenue Code.; 
17.14 	and
17.15 	(3) the requirements of section 32(m) of the Internal Revenue Code do not apply.
17.16 	(b) For individuals with no qualifying children, the credit equals 3.9 percent of the first 
17.17 	$7,150 of earned income. The credit is reduced by 2.0 percent of earned income or adjusted 
17.18 	gross income, whichever is greater, in excess of the phaseout threshold, but in no case is 
17.19 	the credit less than zero.
17.20 	(c) For individuals with one qualifying child, the credit equals 9.35 percent of the first 
17.21 	$11,950 of earned income. The credit is reduced by 6.0 percent of earned income or adjusted 
17.22 	gross income, whichever is greater, in excess of the phaseout threshold, but in no case is 
17.23 	the credit less than zero.
17.24 	(d) For individuals with two qualifying children, the credit equals 11 percent of the first 
17.25 	$19,600 of earned income. The credit is reduced by 10.5 percent of earned income or adjusted 
17.26 	gross income, whichever is greater, in excess of the phaseout threshold, but in no case is 
17.27 	the credit less than zero.
17.28 	(e) For individuals with three or more qualifying children, the credit equals 12.5 percent 
17.29 	of the first $20,000 of earned income. The credit is reduced by 10.5 percent of earned income 
17.30 	or adjusted gross income, whichever is greater, in excess of the phaseout threshold, but in 
17.31 	no case is the credit less than zero.
18.1 	(f) For a part-year resident, the credit must be allocated based on the percentage calculated 
18.2 	under section 290.06, subdivision 2c, paragraph (e).
18.3 	(g) For a person who was a resident for the entire tax year and has earned income not 
18.4 	subject to tax under this chapter, including income excluded under section 290.0132, 
18.5 	subdivision 10, the credit must be allocated based on the ratio of federal adjusted gross 
18.6 	income reduced by the earned income not subject to tax under this chapter over federal 
18.7 	adjusted gross income. For purposes of this paragraph, the following clauses are not 
18.8 	considered "earned income not subject to tax under this chapter":
18.9 	(1) the subtractions for military pay under section 290.0132, subdivisions 11 and 12;
18.10 	(2) the exclusion of combat pay under section 112 of the Internal Revenue Code; and
18.11 	(3) income derived from an Indian reservation by an enrolled member of the reservation 
18.12 	while living on the reservation.
18.13 	(h) For the purposes of this section, the phaseout threshold equals:
18.14 	(1) $14,570 for married taxpayers filing joint returns with no qualifying children;
18.15 	(2) $8,730 for all other taxpayers with no qualifying children;
18.16 	(3) $28,610 for married taxpayers filing joint returns with one qualifying child;
18.17 	(4) $22,770 for all other taxpayers with one qualifying child;
18.18 	(5) $32,840 for married taxpayers filing joint returns with two qualifying children;
18.19 	(6) $27,000 for all other taxpayers with two qualifying children;
18.20 	(7) $33,140 for married taxpayers filing joint returns with three or more qualifying 
18.21 	children; and
18.22 	(8) $27,300 for all other taxpayers with three or more qualifying children.
18.23 	(i) The commissioner shall construct tables showing the amount of the credit at various 
18.24 	income levels and make them available to taxpayers. The tables shall follow the schedule 
18.25 	contained in this subdivision, except that the commissioner may graduate the transition 
18.26 	between income brackets.

18.27 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
18.28 	31, 2022.

19.1 	Sec. 11. Minnesota Statutes 2022, section 290.0674, subdivision 2, is amended to read:
19.2 		Subd. 2.Limitations. (a) For claimants with income not greater than $33,500 $59,210, 
19.3 	the maximum credit allowed for a family is $1,000 multiplied by the number of qualifying 
19.4 	children in kindergarten through grade 12 in the family. The maximum credit for families 
19.5 	with one qualifying child in kindergarten through grade 12 is reduced by $1 for each $4 of 
19.6 	household income over $33,500 $59,210, and the maximum credit for families with two or 
19.7 	more qualifying children in kindergarten through grade 12 is reduced by $2 for each $4 of 
19.8 	household income over $33,500 $59,210, but in no case is the credit less than zero.
19.9 	(b) In the case of a married claimant, a credit is not allowed unless a joint income tax 
19.10 	return is filed.
19.11 	(c) For a nonresident or part-year resident, the credit determined under subdivision 1 
19.12 	and the maximum credit amount in paragraph (a) must be allocated using the percentage 
19.13 	calculated in section 290.06, subdivision 2c, paragraph (e).

19.14 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
19.15 	31, 2022.

19.16 	Sec. 12. Minnesota Statutes 2022, section 290.0674, subdivision 2a, is amended to read:
19.17 		Subd. 2a.Income. (a) For purposes of this section, "income" means the sum of the 
19.18 	following:
19.19 	(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; 
19.20 	and.
19.21 	(2) the sum of the following amounts to the extent not included in clause (1):
19.22 	(i) all nontaxable income;
19.23 	(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, 
19.24 	paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss 
19.25 	carryover allowed under section 469(b) of the Internal Revenue Code;
19.26 	(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a 
19.27 	solvent individual excluded from gross income under section 108(g) of the Internal Revenue 
19.28 	Code;
19.29 	(iv) cash public assistance and relief;
19.30 	(v) any pension or annuity (including railroad retirement benefits, all payments received 
19.31 	under the federal Social Security Act, Supplemental Security Income, and veterans benefits), 
20.1 	which was not exclusively funded by the claimant or spouse, or which was funded exclusively 
20.2 	by the claimant or spouse and which funding payments were excluded from federal adjusted 
20.3 	gross income in the years when the payments were made;
20.4 	(vi) interest received from the federal or a state government or any instrumentality or 
20.5 	political subdivision thereof;
20.6 	(vii) workers' compensation;
20.7 	(viii) nontaxable strike benefits;
20.8 	(ix) the gross amounts of payments received in the nature of disability income or sick 
20.9 	pay as a result of accident, sickness, or other disability, whether funded through insurance 
20.10 	or otherwise;
20.11 	(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 
20.12 	1986, as amended through December 31, 1995;
20.13 	(xi) contributions made by the claimant to an individual retirement account, including 
20.14 	a qualified voluntary employee contribution; simplified employee pension plan; 
20.15 	self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of 
20.16 	the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal 
20.17 	Revenue Code;
20.18 	(xii) nontaxable scholarship or fellowship grants;
20.19 	(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;
20.20 	(xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue 
20.21 	Code;
20.22 	(xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue 
20.23 	Code; and
20.24 	(xvi) the amount deducted for certain expenses of elementary and secondary school 
20.25 	teachers under section 62(a)(2)(D) of the Internal Revenue Code.
20.26 	In the case of an individual who files an income tax return on a fiscal year basis, the 
20.27 	term "federal adjusted gross income" means federal adjusted gross income reflected in the 
20.28 	fiscal year ending in the next calendar year. Federal adjusted gross income may not be 
20.29 	reduced by the amount of a net operating loss carryback or carryforward or a capital loss 
20.30 	carryback or carryforward allowed for the year.
20.31 	(b) "Income" does not include:
21.1 	(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;
21.2 	(2) amounts of any pension or annuity that were exclusively funded by the claimant or 
21.3 	spouse if the funding payments were not excluded from federal adjusted gross income in 
21.4 	the years when the payments were made;
21.5 	(3) surplus food or other relief in kind supplied by a governmental agency;
21.6 	(4) relief granted under chapter 290A;
21.7 	(5) child support payments received under a temporary or final decree of dissolution or 
21.8 	legal separation; and
21.9 	(6) restitution payments received by eligible individuals and excludable interest as 
21.10 	defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, 
21.11 	Public Law 107-16.

21.12 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
21.13 	31, 2022.

21.14 	Sec. 13. Minnesota Statutes 2022, section 290.0674, is amended by adding a subdivision 
21.15 	to read:
21.16 		Subd. 2b.Inflation adjustment. The commissioner shall annually adjust the dollar 
21.17 	amount of the income threshold at which the maximum credit begins to be reduced under 
21.18 	subdivision 2 as provided in section 270C.22. The statutory year is taxable year 2023.

21.19 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
21.20 	31, 2023.

21.21 	Sec. 14. Minnesota Statutes 2022, section 290.0677, subdivision 1, is amended to read:
21.22 		Subdivision 1.Credit allowed; current military service.  (a) An individual is allowed 
21.23 	a credit against the tax due under this chapter equal to $59 for each month or portion thereof 
21.24 	that the individual was in active military service in a designated area after September 11, 
21.25 	2001, and before January 1, 2009, while a Minnesota domiciliary.
21.26 	(b) An individual is allowed a credit against the tax due under this chapter equal to $120 
21.27 	for each month or portion thereof that the individual was in active military service in a 
21.28 	designated area after December 31, 2008, while a Minnesota domiciliary.
21.29 	(c) For active service performed after September 11, 2001, and before December 31, 
21.30 	2006, the individual may claim the credit in the taxable year beginning after December 31, 
21.31 	2005, and before January 1, 2007.
22.1 	(d) For active service performed after December 31, 2006, the individual may claim the 
22.2 	credit for the taxable calendar year in which the active service was performed.

22.3 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
22.4 	31, 2022.

22.5 	Sec. 15. Minnesota Statutes 2022, section 290.0681, subdivision 3, is amended to read:
22.6 		Subd. 3.Applications; allocations. (a) To qualify for a credit or grant under this section, 
22.7 	the developer of a project must apply to the office before the rehabilitation begins. The 
22.8 	application must contain the information and be in the form prescribed by the office. The 
22.9 	office may collect a fee for application of up to 0.5 percent of qualified rehabilitation 
22.10 	expenditures, up to $40,000, based on estimated qualified rehabilitation expenditures, to 
22.11 	offset costs associated with personnel and administrative expenses related to administering 
22.12 	the state or federal credit and preparing the economic impact report in subdivision 9. 
22.13 	Application fees are deposited in the account. The application must indicate if the application 
22.14 	is for a credit or a grant in lieu of the credit or a combination of the two and designate the 
22.15 	taxpayer qualifying for the credit or the recipient of the grant.
22.16 	(b) Upon approving an application for credit, the office shall issue allocation certificates 
22.17 	that:
22.18 	(1) verify eligibility for the credit or grant;
22.19 	(2) state the amount of credit or grant anticipated with the project, with the credit amount 
22.20 	equal to 100 percent and the grant amount equal to 90 percent of the federal credit anticipated 
22.21 	in the application;
22.22 	(3) state that the credit or grant allowed may increase or decrease if the federal credit 
22.23 	the project receives at the time it is placed in service is different than the amount anticipated 
22.24 	at the time the allocation certificate is issued; and
22.25 	(4) state the fiscal year in which the credit or grant is allocated, and that the taxpayer or 
22.26 	grant recipient is entitled to receive one-fifth of the total amount of either the credit or the 
22.27 	grant at the time the project is placed in service, provided that date is within three calendar 
22.28 	years following the issuance of the allocation certificate.
22.29 	(c) The office, in consultation with the commissioner, shall determine if the project is 
22.30 	eligible for a credit or a grant under this section and must notify the developer in writing 
22.31 	of its determination. Eligibility for the credit is subject to review and audit by the 
22.32 	commissioner.
23.1 	(d) The federal credit recapture and repayment requirements under section 50 of the 
23.2 	Internal Revenue Code do not apply to the credit allowed under this section.
23.3 	(e) Any decision of the office under paragraph (c) may be challenged as a contested case 
23.4 	under chapter 14. The contested case proceeding must be initiated within 45 days of the 
23.5 	date of written notification by the office.

23.6 	EFFECTIVE DATE. This section is effective July 1, 2023.

23.7 	Sec. 16. Minnesota Statutes 2022, section 290.0681, subdivision 10, is amended to read:
23.8 		Subd. 10.Sunset. This section expires after fiscal year 2022 2031, except that the office's 
23.9 	authority to issue credit certificates under subdivision 4 based on allocation certificates that 
23.10 	were issued before fiscal year 2023 2032 remains in effect through 2025 2035, and the 
23.11 	reporting requirements in subdivision 9 remain in effect through the year following the year 
23.12 	in which all allocation certificates have either been canceled or resulted in issuance of credit 
23.13 	certificates, or 2026 2036, whichever is earlier.

23.14 	EFFECTIVE DATE. This section is effective July 1, 2023.

23.15 	Sec. 17. [290.0687] MINNESOTA CHILD TAX CREDIT.
23.16 		Subdivision 1.Definitions. For purposes of this section, the following terms have the 
23.17 	meanings given:
23.18 	(1) "child" means a qualifying child, as defined in section 152(c) of the Internal Revenue 
23.19 	Code, who was under 18 years of age at the end of the taxable year;
23.20 	(2) "credit" means the Minnesota Child Tax Credit allowed by this section;
23.21 	(3) "disabled adult child" means a qualifying child, as defined in section 152(c) of the 
23.22 	Internal Revenue Code, who was:
23.23 	(i) at least 18 years of age at the end of the taxable year; and
23.24 	(ii) at any time during the taxable year was permanently and totally disabled, as defined 
23.25 	in section 22(e)(3) of the Internal Revenue Code; and
23.26 	(4) "threshold amount" means:
23.27 	(i) $33,300 for individuals who are not married;
23.28 	(ii) $50,000 for married taxpayers filing a joint return; and
23.29 	(iii) $25,000 for married taxpayers filing separate returns.
24.1 		Subd. 2.Credit allowed.  Residents and part-year residents are allowed a credit against 
24.2 	the tax due under this chapter in an amount equal to $1,000 per child or disabled adult child.
24.3 		Subd. 3.Limitations. (a) The maximum total credit allowed to a taxpayer for the taxable 
24.4 	year is $3,000.
24.5 	(b) The maximum credit, as determined in paragraph (a), is reduced by $100 for each 
24.6 	$1,000 by which the taxpayer's adjusted gross income exceeds the threshold amount. In no 
24.7 	case is the credit less than zero.
24.8 	(c) For part-year residents, the credit must be allocated based on the percentage calculated 
24.9 	under section 290.06, subdivision 2c, paragraph (e).
24.10 	(d) For purposes of this subdivision, marital status is determined under section 7703 of 
24.11 	the Internal Revenue Code.
24.12 		Subd. 4.Credit refundable. If the amount of credit which the claimant is eligible to 
24.13 	receive under this section exceeds the claimant's tax liability under this chapter, the 
24.14 	commissioner shall refund the excess to the claimant.
24.15 		Subd. 5.Inflation adjustment.  The commissioner must annually adjust the credit amount 
24.16 	under subdivision 2, the dollar amount of the income threshold at which the maximum credit 
24.17 	begins to be reduced under subdivision 3, and the maximum credit, as provided in section 
24.18 	270C.22. The statutory year is taxable year 2023.
24.19 		Subd. 6.Appropriation. An amount sufficient to pay the refunds required by this section 
24.20 	is appropriated to the commissioner from the general fund.
24.21 		Subd. 7.Sunset. This section expires for taxable years beginning after December 31, 
24.22 	2030. The expiration of this section does not affect the commissioner's authority to audit 
24.23 	or power of examination and assessment for credits claimed under this section.

24.24 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
24.25 	31, 2022.

24.26 	Sec. 18. Minnesota Statutes 2022, section 290.091, subdivision 2, as amended by Laws 
24.27 	2023, chapter 1, section 18, is amended to read:
24.28 		Subd. 2.Definitions. For purposes of the tax imposed by this section, the following 
24.29 	terms have the meanings given.
24.30 	(a) "Alternative minimum taxable income" means the sum of the following for the taxable 
24.31 	year:
25.1 	(1) the taxpayer's federal alternative minimum taxable income as defined in section 
25.2 	55(b)(1)(D) of the Internal Revenue Code;
25.3 	(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum 
25.4 	taxable income, but excluding:
25.5 	(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;
25.6 	(ii) the medical expense deduction;
25.7 	(iii) the casualty, theft, and disaster loss deduction; and
25.8 	(iv) the impairment-related work expenses of a person with a disability;
25.9 	(3) for depletion allowances computed under section 613A(c) of the Internal Revenue 
25.10 	Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), 
25.11 	to the extent not included in federal alternative minimum taxable income, the excess of the 
25.12 	deduction for depletion allowable under section 611 of the Internal Revenue Code for the 
25.13 	taxable year over the adjusted basis of the property at the end of the taxable year (determined 
25.14 	without regard to the depletion deduction for the taxable year);
25.15 	(4) to the extent not included in federal alternative minimum taxable income, the amount 
25.16 	of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue 
25.17 	Code determined without regard to subparagraph (E);
25.18 	(5) to the extent not included in federal alternative minimum taxable income, the amount 
25.19 	of interest income as provided by section 290.0131, subdivision 2;
25.20 	(6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;
25.21 	(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent 
25.22 	not included in the addition required under clause (6); and
25.23 	(8) to the extent not included in federal alternative minimum taxable income, the amount 
25.24 	of foreign-derived intangible income deducted under section 250 of the Internal Revenue 
25.25 	Code;
25.26 	less the sum of the amounts determined under the following:
25.27 	(i) interest income as defined in section 290.0132, subdivision 2;
25.28 	(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 
25.29 	3, to the extent included in federal alternative minimum taxable income;
25.30 	(iii) the amount of investment interest paid or accrued within the taxable year on 
25.31 	indebtedness to the extent that the amount does not exceed net investment income, as defined 
26.1 	in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted 
26.2 	in computing federal adjusted gross income;
26.3 	(iv) amounts subtracted from federal taxable or adjusted gross income as provided by 
26.4 	section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, 26 to 29, and 31;
26.5 	(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, 
26.6 	paragraph (c); and
26.7 	(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122, 
26.8 	subdivision 7.
26.9 	In the case of an estate or trust, alternative minimum taxable income must be computed 
26.10 	as provided in section 59(c) of the Internal Revenue Code, except alternative minimum 
26.11 	taxable income must be increased by the addition in section 290.0131, subdivision 16.
26.12 	(b) "Investment interest" means investment interest as defined in section 163(d)(3) of 
26.13 	the Internal Revenue Code.
26.14 	(c) "Net minimum tax" means the minimum tax imposed by this section.
26.15 	(d) "Regular tax" means the tax that would be imposed under this chapter (without regard 
26.16 	to this section and section sections 290.032 and 290.055), reduced by the sum of the 
26.17 	nonrefundable credits allowed under this chapter.
26.18 	(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income 
26.19 	after subtracting the exemption amount determined under subdivision 3.

26.20 	EFFECTIVE DATE. This section is effective for taxable years beginning after December 
26.21 	31, 2022.

26.22 	Sec. 19. Laws 2023, chapter 1, section 15, the effective date, is amended to read:

26.23 	EFFECTIVE DATE. This section is effective retroactively for taxable years beginning 
26.24 	after December 31, 2022 2019.

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

26.26 	Sec. 20. HISTORIC STRUCTURE REHABILITATION CREDIT; SPECIAL 
26.27 	PROVISION.
 26.28 	For the purposes of the credit under Minnesota Statutes, section 290.0681, projects that 
26.29 	have started rehabilitation work after June 30, 2022, and before July 1, 2023, that otherwise 
27.1 	meet all other requirements of Minnesota Statutes, section 290.0681, subdivision 3, may 
27.2 	be eligible for the credit if the application is received within 60 days of July 1, 2023.

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

27.4 	Sec. 21. REVIVAL AND REENACTMENT OF EXPIRED PROVISIONS.
 27.5 	(a) The expired provisions of Minnesota Statutes, section 116J.8737, subdivisions 1 to 
27.6 	9, 11, and 12, as amended by Laws 2021, First Special Session chapter 14, article 1, sections 
27.7 	1 and 2, and sections 1 and 2 of this article, are revived and reenacted.
27.8 	(b) The expired provisions of Minnesota Statutes, section 290.0692, are revived and 
27.9 	reenacted.
27.10 	(c) The expired provisions of Minnesota Statutes, section 290.0681, subdivisions 1 to 
27.11 	10, as amended by Laws 2021, First Special Session chapter 14, article 1, section 11, and 
27.12 	sections 13 to 18 of this article, are revived and reenacted.

27.13 	EFFECTIVE DATE. Paragraphs (a) and (b) are effective retroactively for taxable years 
27.14 	beginning after December 31, 2022. Paragraph (c) is effective for applications for allocation 
27.15 	certificates submitted beginning July 1, 2023.

27.16 	Sec. 22. REPEALER.
 27.17 	Minnesota Statutes 2022, section 290.0132, subdivision 33, as added by Laws 2023, 
27.18 	chapter 1, section 12, is repealed.

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

27.20 	ARTICLE 2
27.21 	ADVANCE PAYMENT AND ONE-TIME REFUNDABLE CREDIT

27.22 	Section 1. 2023 ADVANCE PAYMENT AND ONE-TIME REFUNDABLE CREDIT.
 27.23 		Subdivision 1.Credit allowed; eligibility. (a) An individual is allowed a credit against 
27.24 	the tax imposed under Minnesota Statutes, chapter 290. The credit equals $1,000 for an 
27.25 	individual who files an income tax return as a single person or as a married person who 
27.26 	files a married filing separate income tax return and $2,000 for all other income tax filers.
27.27 	(b) For an individual, or a married couple filing a joint income tax return, with a 
27.28 	dependent, as defined in sections 151 and 152 of the Internal Revenue Code, the credit is 
27.29 	increased by $200 per dependent up to a maximum additional credit of $600.
28.1 	(c) The maximum combined credit under this subdivision is $1,600 for an individual 
28.2 	who files an income tax return as a single person or as a married individual who files a 
28.3 	married filing separate income tax return and $2,600 for all other income tax filers.
28.4 	(d) The credit is not available to an individual who:
28.5 	(1) is not a resident of Minnesota, as defined in Minnesota Statutes, section 290.01, 
28.6 	subdivision 7, during any part of 2023;
28.7 	(2) is a dependent, as defined in sections 151 and 152 of the Internal Revenue Code, for 
28.8 	2023; and
28.9 	(3) has adjusted gross income, as defined in Minnesota Statutes, section 290.01, 
28.10 	subdivision 21a, for 2023 greater than:
28.11 	(i) $75,000 for an individual who files an income tax return as a single person or as a 
28.12 	married person who files a married filing separate income tax return; and
28.13 	(ii) $150,000 for all other income tax filers.
28.14 	(e) For an individual who was a Minnesota resident for only part of 2023, or for a married 
28.15 	couple filing a joint return where one or both individuals were Minnesota residents for only 
28.16 	part of 2023, the credit equals the credit allowed under paragraph (a) times the percentage 
28.17 	calculated under Minnesota Statutes, section 290.06, subdivision 2c, paragraph (e).
28.18 	(f) If the amount of the credit under this subdivision exceeds the individual's or the 
28.19 	married couple's liability for tax under Minnesota Statutes, chapter 290, the commissioner 
28.20 	shall refund the excess to the taxpayer.
28.21 	(g) The credit applies to taxable years beginning after December 31, 2022, and before 
28.22 	January 1, 2024.
28.23 		Subd. 2.Advance payment of credit. (a) The commissioner of revenue may issue a 
28.24 	taxpayer an advance payment of the credit provided in subdivision 1. To be eligible for an 
28.25 	advance payment, the commissioner must reasonably believe the taxpayer will be eligible 
28.26 	for the credit, and the taxpayer must have filed, before January 1, 2023:
28.27 	(1) an individual income tax return for tax year 2021; or
28.28 	(2) a property tax refund return under Minnesota Statutes, chapter 290A, based on 
28.29 	property taxes payable in 2022 or rent constituting property taxes paid in 2021.
28.30 	(b) The commissioner may contract with a third party to implement all or part of the 
28.31 	payment process.
29.1 	(c) The commissioner must not issue an advance payment to any taxpayer who:
29.2 	(1) was not a resident of Minnesota on December 31, 2021;
29.3 	(2) was a dependent, as defined in sections 151 and 152 of the Internal Revenue Code, 
29.4 	for 2021;
29.5 	(3) had adjusted gross income, as defined in Minnesota Statutes, section 290.01, 
29.6 	subdivision 21a, for 2021 greater than (i) $50,000 for an individual who filed an income 
29.7 	tax return as a single person or as a married individual who filed a married filing separate 
29.8 	income tax return, or (ii) $100,000 for all other income tax filers; or
29.9 	(4) died before January 1, 2023.
29.10 	(d) The advance payment under this section shall be paid by the commissioner of revenue 
29.11 	based on information available in the commissioner's records, and individuals are not 
29.12 	required to file a claim with the commissioner. The decision of the commissioner to not 
29.13 	make an advance payment to a taxpayer is not appealable.
29.14 	(e) The commissioner of revenue must make a joint advance payment to individuals 
29.15 	who filed a joint income tax return for 2021. If individuals who receive a joint advance 
29.16 	payment do not file a joint tax return with each other for 2023, each spouse is deemed to 
29.17 	have received an advance payment equal to one-half of the joint payment.
29.18 		Subd. 3.Payments to taxpayers who do not receive an advance payment. (a) A 
29.19 	taxpayer may claim any amount of unpaid credit on an individual income tax return for 
29.20 	2023 if the taxpayer was eligible for:
29.21 	(1) the credit under subdivision 1 and did not receive an advance payment under 
29.22 	subdivision 2; or
29.23 	(2) the additional credit under subdivision 1, paragraph (a), clause (2), and did not receive 
29.24 	an advance payment for the full amount of the credit.
29.25 	(b) The credit allowed to a taxpayer under this subdivision is reduced by any advance 
29.26 	payment received under subdivision 2. The credit allowed for married taxpayers who file 
29.27 	a joint return in 2023 is reduced by any advance payment received under subdivision 2 by 
29.28 	either spouse.
29.29 	(c) No credit under paragraph (a), clause (2), is allowed unless the TIN of the dependent, 
29.30 	as defined in section 7701(a)(41) of the Internal Revenue Code, is included on the tax return 
29.31 	that lists the individual as a dependent.
30.1 		Subd. 4.Repayment of advance payment. (a) An individual or married couple who 
30.2 	receives an advance payment under subdivision 2 but who does not meet eligibility for the 
30.3 	credit under subdivision 1, paragraph (a), or does not meet eligibility for the amount of the 
30.4 	advance payment of the credit allowed under subdivision (1), paragraph (b), must repay the 
30.5 	amount of the overpayment to the commissioner of revenue. Repayment is due on April 
30.6 	15, 2024.
30.7 	(b) All provisions not inconsistent with this section under Minnesota Statutes, chapters 
30.8 	270C and 289A, relating to collection, audit, assessment, refunds, penalty, interest, 
30.9 	enforcement, collection remedies, appeal, and administration of individual income tax apply 
30.10 	to this section.
30.11 	(c) The commissioner may issue an order of assessment under Minnesota Statutes, 
30.12 	section 270C.33, to recover an advance payment made under subdivision 2 that is issued 
30.13 	to a person not eligible for the credit. The assessment must be made within the period for 
30.14 	assessing tax for the 2023 individual income tax under Minnesota Statutes, section 289A.38.
30.15 		Subd. 5.Internal Revenue Code. References to the Internal Revenue Code in this 
30.16 	section are to the Internal Revenue Code of 1986, as amended, that is in effect under 
30.17 	Minnesota Statutes, section 290.01, for the taxable year to which the reference relates.
30.18 		Subd. 6.Data classification. Data classified as nonpublic data or private data on 
30.19 	individuals, including return information, as defined in Minnesota Statutes, section 270B.01, 
30.20 	subdivision 3, may be shared or disclosed between the commissioner of revenue and any 
30.21 	third-party vendor contracted with under this section, to the extent necessary to administer 
30.22 	advance payments under this section.
30.23 		Subd. 7.Advance payment not subject to set off. The commissioner of revenue must 
30.24 	not apply, and must not certify to another agency to apply, an advance payment to any 
30.25 	unpaid tax or nontax debt.
30.26 		Subd. 8.Not income. (a) An advance payment or refund of a credit under this section 
30.27 	is not considered income in determining Minnesota income tax, Minnesota income tax 
30.28 	credits, the Minnesota property tax refund, or the Minnesota senior citizen property tax 
30.29 	deferral.
30.30 	(b) Notwithstanding any law to the contrary, the advance payment or credit under this 
30.31 	section must not be considered income, assets, or personal property for purposes of 
30.32 	determining eligibility or recertifying eligibility for:
30.33 	(1) child care assistance programs under Minnesota Statutes, chapter 119B;
31.1 	(2) general assistance, Minnesota supplemental aid, and food support under Minnesota 
31.2 	Statutes, chapter 256D;
31.3 	(3) housing support under Minnesota Statutes, chapter 256I;
31.4 	(4) the Minnesota family investment program and diversionary work program under 
31.5 	Minnesota Statutes, chapter 256J; and
31.6 	(5) economic assistance programs under Minnesota Statutes, chapter 256P.
31.7 	(c) The commissioner of human services must not consider an advance payment or credit 
31.8 	under this section as income or assets under Minnesota Statutes, section 256B.056, 
31.9 	subdivisions 1a, paragraph (a); 3; or 3c, or for persons with eligibility determined under 
31.10 	Minnesota Statutes, section 256B.057, subdivisions 3, 3a, or 3b.
31.11 		Subd. 9.Procurement. The commissioner of revenue is exempt from the requirements 
31.12 	of Minnesota Statutes, section 16A.15, subdivision 3; 16B.97; and 16B.98, subdivisions 5, 
31.13 	7, and 8; and chapter 16C, and any other state procurement laws and procedures in 
31.14 	administering this section.
31.15 		Subd. 10.Appropriation. The amount necessary to make the advance payments and 
31.16 	refunds payable under this section is appropriated to the commissioner of revenue from the 
31.17 	general fund.

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

31.19 	ARTICLE 3
31.20 	SALES AND USE TAXES

31.21 	Section 1. Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision 
31.22 	to read:
31.23 		Subd. 59.Cannabis. "Cannabis" means any species of the genus cannabis plant, or any 
31.24 	mixture or preparation of any species of the genus cannabis plant, including whole plant 
31.25 	extracts and resins.

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

31.27 	Sec. 2. Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision to 
31.28 	read:
31.29 		Subd. 60.Adult-use cannabis. "Adult-use cannabis" means cannabis, including cannabis 
31.30 	extracts and resins, that produces or is advertised as producing intoxicating or mood-altering 
31.31 	effects when consumed by any route of administration. Adult-use cannabis does not include 
32.1 	a product dispensed by a registered medical cannabis manufacturer under sections 152.22 
32.2 	to 152.37.

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

32.4 	Sec. 3. Minnesota Statutes 2022, section 297A.61, is amended by adding a subdivision to 
32.5 	read:
32.6 		Subd. 61.Adult-use cannabis product.  "Adult-use cannabis product" means a cannabis 
32.7 	product that produces or is advertised as producing intoxicating or mood-altering effects 
32.8 	when consumed by any route of administration. Adult-use cannabis product does not include 
32.9 	a product dispensed by a registered medical cannabis manufacturer under sections 152.22 
32.10 	to 152.37.

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

32.12 	Sec. 4. Minnesota Statutes 2022, section 297A.67, subdivision 2, is amended to read:
32.13 		Subd. 2.Food and food ingredients. Except as otherwise provided in this subdivision, 
32.14 	food and food ingredients are exempt. For purposes of this subdivision, "food" and "food 
32.15 	ingredients" mean substances, whether in liquid, concentrated, solid, frozen, dried, or 
32.16 	dehydrated form, that are sold for ingestion or chewing by humans and are consumed for 
32.17 	their taste or nutritional value. Food and food ingredients exempt under this subdivision do 
32.18 	not include candy, soft drinks, dietary supplements, and prepared foods. Food and food 
32.19 	ingredients do not include alcoholic beverages and tobacco. Food and food ingredients do 
32.20 	not include adult-use cannabis and adult-use cannabis products. For purposes of this 
32.21 	subdivision, "alcoholic beverages" means beverages that are suitable for human consumption 
32.22 	and contain one-half of one percent or more of alcohol by volume. For purposes of this 
32.23 	subdivision, "tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item 
32.24 	that contains tobacco. For purposes of this subdivision, "dietary supplements" means any 
32.25 	product, other than tobacco, intended to supplement the diet that:
32.26 	(1) contains one or more of the following dietary ingredients:
32.27 	(i) a vitamin;
32.28 	(ii) a mineral;
32.29 	(iii) an herb or other botanical;
32.30 	(iv) an amino acid;
33.1 	(v) a dietary substance for use by humans to supplement the diet by increasing the total 
33.2 	dietary intake; and
33.3 	(vi) a concentrate, metabolite, constituent, extract, or combination of any ingredient 
33.4 	described in items (i) to (v);
33.5 	(2) is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, 
33.6 	or if not intended for ingestion in such form, is not represented as conventional food and is 
33.7 	not represented for use as a sole item of a meal or of the diet; and
33.8 	(3) is required to be labeled as a dietary supplement, identifiable by the supplement facts 
33.9 	box found on the label and as required pursuant to Code of Federal Regulations, title 21, 
33.10 	section 101.36.

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

33.12 	Sec. 5. Minnesota Statutes 2022, section 297A.67, subdivision 7, is amended to read:
33.13 		Subd. 7.Drugs; medical devices. (a) Sales of the following drugs and medical devices 
33.14 	for human use are exempt:
33.15 	(1) drugs, including over-the-counter drugs;
33.16 	(2) single-use finger-pricking devices for the extraction of blood and other single-use 
33.17 	devices and single-use diagnostic agents used in diagnosing, monitoring, or treating diabetes;
33.18 	(3) insulin and medical oxygen for human use, regardless of whether prescribed or sold 
33.19 	over the counter;
33.20 	(4) prosthetic devices;
33.21 	(5) durable medical equipment for home use only;
33.22 	(6) mobility enhancing equipment;
33.23 	(7) prescription corrective eyeglasses; and
33.24 	(8) kidney dialysis equipment, including repair and replacement parts.
33.25 	(b) Items purchased in transactions covered by:
33.26 	(1) Medicare as defined under title XVIII of the Social Security Act, United States Code, 
33.27 	title 42, section 1395, et seq.; or
33.28 	(2) Medicaid as defined under title XIX of the Social Security Act, United States Code, 
33.29 	title 42, section 1396, et seq.
33.30 	(c) For purposes of this subdivision:
34.1 	(1) "Drug" means a compound, substance, or preparation, and any component of a 
34.2 	compound, substance, or preparation, other than food and food ingredients, dietary 
34.3 	supplements, adult-use cannabis, adult-use cannabis products, or alcoholic beverages that 
34.4 	is:
34.5 	(i) recognized in the official United States Pharmacopoeia, official Homeopathic 
34.6 	Pharmacopoeia of the United States, or official National Formulary, and supplement to any 
34.7 	of them;
34.8 	(ii) intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease; 
34.9 	or
34.10 	(iii) intended to affect the structure or any function of the body.
34.11 	(2) "Durable medical equipment" means equipment, including repair and replacement 
34.12 	parts, including single-patient use items, but not including mobility enhancing equipment, 
34.13 	that:
34.14 	(i) can withstand repeated use;
34.15 	(ii) is primarily and customarily used to serve a medical purpose;
34.16 	(iii) generally is not useful to a person in the absence of illness or injury; and
34.17 	(iv) is not worn in or on the body.
34.18 	For purposes of this clause, "repair and replacement parts" includes all components or 
34.19 	attachments used in conjunction with the durable medical equipment, including repair and 
34.20 	replacement parts which are for single patient use only.
34.21 	(3) "Mobility enhancing equipment" means equipment, including repair and replacement 
34.22 	parts, but not including durable medical equipment, that:
34.23 	(i) is primarily and customarily used to provide or increase the ability to move from one 
34.24 	place to another and that is appropriate for use either in a home or a motor vehicle;
34.25 	(ii) is not generally used by persons with normal mobility; and
34.26 	(iii) does not include any motor vehicle or equipment on a motor vehicle normally 
34.27 	provided by a motor vehicle manufacturer.
34.28 	(4) "Over-the-counter drug" means a drug that contains a label that identifies the product 
34.29 	as a drug as required by Code of Federal Regulations, title 21, section 201.66. The label 
34.30 	must include a "drug facts" panel or a statement of the active ingredients with a list of those 
34.31 	ingredients contained in the compound, substance, or preparation. Over-the-counter drugs 
35.1 	do not include grooming and hygiene products, regardless of whether they otherwise meet 
35.2 	the definition. "Grooming and hygiene products" are soaps, cleaning solutions, shampoo, 
35.3 	toothpaste, mouthwash, antiperspirants, and suntan lotions and sunscreens.
35.4 	(5) "Prescribed" and "prescription" means a direction in the form of an order, formula, 
35.5 	or recipe issued in any form of oral, written, electronic, or other means of transmission by 
35.6 	a duly licensed health care professional.
35.7 	(6) "Prosthetic device" means a replacement, corrective, or supportive device, including 
35.8 	repair and replacement parts, worn on or in the body to:
35.9 	(i) artificially replace a missing portion of the body;
35.10 	(ii) prevent or correct physical deformity or malfunction; or
35.11 	(iii) support a weak or deformed portion of the body.
35.12 	Prosthetic device does not include corrective eyeglasses.
35.13 	(7) "Kidney dialysis equipment" means equipment that:
35.14 	(i) is used to remove waste products that build up in the blood when the kidneys are not 
35.15 	able to do so on their own; and
35.16 	(ii) can withstand repeated use, including multiple use by a single patient, notwithstanding 
35.17 	the provisions of clause (2).
35.18 	(8) A transaction is covered by Medicare or Medicaid if any portion of the cost of the 
35.19 	item purchased in the transaction is paid for or reimbursed by the federal government or 
35.20 	the state of Minnesota pursuant to the Medicare or Medicaid program, by a private insurance 
35.21 	company administering the Medicare or Medicaid program on behalf of the federal 
35.22 	government or the state of Minnesota, or by a managed care organization for the benefit of 
35.23 	a patient enrolled in a prepaid program that furnishes medical services in lieu of conventional 
35.24 	Medicare or Medicaid coverage pursuant to agreement with the federal government or the 
35.25 	state of Minnesota.

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

35.27 	Sec. 6. Minnesota Statutes 2022, section 297A.70, subdivision 2, is amended to read:
35.28 		Subd. 2.Sales to government. (a) All sales, except those listed in paragraph (b), to the 
35.29 	following governments and political subdivisions, or to the listed agencies or instrumentalities 
35.30 	of governments and political subdivisions, are exempt:
35.31 	(1) the United States and its agencies and instrumentalities;
36.1 	(2) school districts, local governments, the University of Minnesota, state universities, 
36.2 	community colleges, technical colleges, state academies, the Perpich Minnesota Center for 
36.3 	Arts Education, and an instrumentality of a political subdivision that is accredited as an 
36.4 	optional/special function school by the North Central Association of Colleges and Schools;
36.5 	(3) hospitals and nursing homes owned and operated by political subdivisions of the 
36.6 	state of tangible personal property and taxable services used at or by hospitals and nursing 
36.7 	homes;
36.8 	(4) notwithstanding paragraph (d), the sales and purchases by the Metropolitan Council 
36.9 	of vehicles and repair parts to equip operations provided for in section 473.4051 are exempt 
36.10 	through December 31, 2016;
36.11 	(5) other states or political subdivisions of other states, if the sale would be exempt from 
36.12 	taxation if it occurred in that state; and
36.13 	(6) public libraries, public library systems, multicounty, multitype library systems as 
36.14 	defined in section 134.001, county law libraries under chapter 134A, state agency libraries, 
36.15 	the state library under section 480.09, and the Legislative Reference Library.
36.16 	(b) This exemption does not apply to the sales of the following products and services:
36.17 	(1) building, construction, or reconstruction materials purchased by a contractor or a 
36.18 	subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed 
36.19 	maximum price covering both labor and materials for use in the construction, alteration, or 
36.20 	repair of a building or facility;
36.21 	(2) construction materials purchased by tax exempt entities or their contractors to be 
36.22 	used in constructing buildings or facilities which will not be used principally by the tax 
36.23 	exempt entities;
36.24 	(3) the leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except 
36.25 	for leases entered into by the United States or its agencies or instrumentalities;
36.26 	(4) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), 
36.27 	and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, 
36.28 	subdivision 2, adult-use cannabis, and adult-use cannabis products except for lodging, 
36.29 	prepared food, candy, soft drinks, and alcoholic beverages, adult-use cannabis, and adult-use 
36.30 	cannabis products purchased directly by the United States or its agencies or instrumentalities; 
36.31 	or
37.1 	(5) goods or services purchased by a local government as inputs to a liquor store, gas 
37.2 	or electric utility, solid waste hauling service, solid waste recycling service, landfill, golf 
37.3 	course, marina, campground, cafe, or laundromat.
37.4 	(c) As used in this subdivision, "school districts" means public school entities and districts 
37.5 	of every kind and nature organized under the laws of the state of Minnesota, and any 
37.6 	instrumentality of a school district, as defined in section 471.59.
37.7 	(d) For purposes of the exemption granted under this subdivision, "local governments" 
37.8 	has the following meaning:
37.9 	(1) for the period prior to January 1, 2017, local governments means statutory or home 
37.10 	rule charter cities, counties, and townships; and
37.11 	(2) beginning January 1, 2017, local governments means statutory or home rule charter 
37.12 	cities, counties, and townships; special districts as defined under section 6.465; any 
37.13 	instrumentality of a statutory or home rule charter city, county, or township as defined in 
37.14 	section 471.59; and any joint powers board or organization created under section 471.59.

37.15 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
37.16 	30, 2023.

37.17 	Sec. 7. Minnesota Statutes 2022, section 297A.70, subdivision 4, is amended to read:
37.18 		Subd. 4.Sales to nonprofit groups. (a) All sales, except those listed in paragraph (b), 
37.19 	to the following "nonprofit organizations" are exempt:
37.20 	(1) a corporation, society, association, foundation, or institution organized and operated 
37.21 	exclusively for charitable, religious, or educational purposes if the item purchased is used 
37.22 	in the performance of charitable, religious, or educational functions;
37.23 	(2) any senior citizen group or association of groups that:
37.24 	(i) in general limits membership to persons who are either age 55 or older, or persons 
37.25 	with a physical disability;
37.26 	(ii) is organized and operated exclusively for pleasure, recreation, and other nonprofit 
37.27 	purposes, not including housing, no part of the net earnings of which inures to the benefit 
37.28 	of any private shareholders; and
37.29 	(iii) is an exempt organization under section 501(c) of the Internal Revenue Code; and
37.30 	(3) an organization that qualifies for an exemption for memberships under subdivision 
37.31 	12 if the item is purchased and used in the performance of the organization's mission.
38.1 	For purposes of this subdivision, charitable purpose includes the maintenance of a cemetery 
38.2 	owned by a religious organization.
38.3 	(b) This exemption does not apply to the following sales:
38.4 	(1) building, construction, or reconstruction materials purchased by a contractor or a 
38.5 	subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed 
38.6 	maximum price covering both labor and materials for use in the construction, alteration, or 
38.7 	repair of a building or facility;
38.8 	(2) construction materials purchased by tax-exempt entities or their contractors to be 
38.9 	used in constructing buildings or facilities that will not be used principally by the tax-exempt 
38.10 	entities;
38.11 	(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), 
38.12 	and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, 
38.13 	subdivision 2, except wine purchased by an established religious organization for sacramental 
38.14 	purposes or as allowed under subdivision 9a, adult-use cannabis, and adult-use cannabis 
38.15 	products; and
38.16 	(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as 
38.17 	provided in paragraph (c).
38.18 	(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01, 
38.19 	subdivision 11, only if the vehicle is:
38.20 	(1) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a 
38.21 	passenger automobile, as defined in section 168.002, if the automobile is designed and used 
38.22 	for carrying more than nine persons including the driver; and
38.23 	(2) intended to be used primarily to transport tangible personal property or individuals, 
38.24 	other than employees, to whom the organization provides service in performing its charitable, 
38.25 	religious, or educational purpose.
38.26 	(d) A limited liability company also qualifies for exemption under this subdivision if 
38.27 	(1) it consists of a sole member that would qualify for the exemption, and (2) the items 
38.28 	purchased qualify for the exemption.

38.29 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
38.30 	30, 2023.

39.1 	Sec. 8. Minnesota Statutes 2022, section 297A.70, subdivision 18, is amended to read:
39.2 		Subd. 18.Nursing homes and boarding care homes. (a) All sales, except those listed 
39.3 	in paragraph (b), to a nursing home licensed under section 144A.02 or a boarding care home 
39.4 	certified as a nursing facility under title 19 of the Social Security Act are exempt if the 
39.5 	facility:
39.6 	(1) is exempt from federal income taxation pursuant to section 501(c)(3) of the Internal 
39.7 	Revenue Code; and
39.8 	(2) is certified to participate in the medical assistance program under title 19 of the Social 
39.9 	Security Act, or certifies to the commissioner that it does not discharge residents due to the 
39.10 	inability to pay.
39.11 	(b) This exemption does not apply to the following sales:
39.12 	(1) building, construction, or reconstruction materials purchased by a contractor or a 
39.13 	subcontractor as a part of a lump-sum contract or similar type of contract with a guaranteed 
39.14 	maximum price covering both labor and materials for use in the construction, alteration, or 
39.15 	repair of a building or facility;
39.16 	(2) construction materials purchased by tax-exempt entities or their contractors to be 
39.17 	used in constructing buildings or facilities that will not be used principally by the tax-exempt 
39.18 	entities;
39.19 	(3) lodging as defined under section 297A.61, subdivision 3, paragraph (g), clause (2), 
39.20 	and prepared food, candy, soft drinks, and alcoholic beverages as defined in section 297A.67, 
39.21 	subdivision 2, adult-use cannabis, and adult-use cannabis products; and
39.22 	(4) leasing of a motor vehicle as defined in section 297B.01, subdivision 11, except as 
39.23 	provided in paragraph (c).
39.24 	(c) This exemption applies to the leasing of a motor vehicle as defined in section 297B.01, 
39.25 	subdivision 11, only if the vehicle is:
39.26 	(1) a truck, as defined in section 168.002; a bus, as defined in section 168.002; or a 
39.27 	passenger automobile, as defined in section 168.002, if the automobile is designed and used 
39.28 	for carrying more than nine persons including the driver; and
39.29 	(2) intended to be used primarily to transport tangible personal property or residents of 
39.30 	the nursing home or boarding care home.

39.31 	EFFECTIVE DATE. This section is effective for sales and purchases made after June 
39.32 	30, 2023.

40.1 	Sec. 9. Minnesota Statutes 2022, section 297A.71, is amended by adding a subdivision to 
40.2 	read:
40.3 		Subd. 54.Construction materials purchased by contractors; exemption for certain 
40.4 	entities. (a) Materials and supplies used or consumed in and equipment incorporated into 
40.5 	the construction, reconstruction, repair, maintenance, or improvement of buildings or 
40.6 	facilities used principally by the following entities are exempt if purchased after June 30, 
40.7 	2021, and before January 1, 2025:
40.8 	(1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c);
40.9 	(2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d);
40.10 	(3) hospitals and nursing homes owned and operated by political subdivisions of the 
40.11 	state, as described under section 297A.70, subdivision 2, paragraph (a), clause (3);
40.12 	(4) county law libraries under chapter 134A and public libraries, regional public library 
40.13 	systems, and multicounty, multitype library systems, as defined in section 134.001;
40.14 	(5) nonprofit groups, as defined under section 297A.70, subdivision 4;
40.15 	(6) hospitals, outpatient surgical centers, and critical access dental providers, as defined 
40.16 	under section 297A.70, subdivision 7; and
40.17 	(7) nursing homes and boarding care homes, as defined under section 297A.70, 
40.18 	subdivision 18.
40.19 	(b) Materials and supplies used or consumed in and equipment incorporated into the 
40.20 	construction, reconstruction, repair, maintenance, or improvement of public infrastructure 
40.21 	of any kind, including but not limited to roads, bridges, culverts, drinking water facilities, 
40.22 	and wastewater facilities, purchased by a contractor, subcontractor, or builder as part of a 
40.23 	contract with the following entities are exempt if purchased after June 30, 2021, and before 
40.24 	January 1, 2025:
40.25 	(1) school districts, as defined under section 297A.70, subdivision 2, paragraph (c); or
40.26 	(2) local governments, as defined under section 297A.70, subdivision 2, paragraph (d).
40.27 	(c) The tax on purchases exempt under this subdivision must be imposed and collected 
40.28 	as if the rate under section 297A.62, subdivision 1, applied, and then refunded in the manner 
40.29 	provided in section 297A.75. Claims for refund for sales tax paid on eligible purchases must 
40.30 	be filed by February 28, 2025. Refunds for eligible purchases must not be issued after June 
40.31 	30, 2025.

41.1 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
41.2 	made after June 30, 2021, and before January 1, 2025.

41.3 	Sec. 10. Minnesota Statutes 2022, section 297A.75, subdivision 1, is amended to read:
41.4 		Subdivision 1.Tax collected. The tax on the gross receipts from the sale of the following 
41.5 	exempt items must be imposed and collected as if the sale were taxable and the rate under 
41.6 	section 297A.62, subdivision 1, applied. The exempt items include:
41.7 	(1) building materials for an agricultural processing facility exempt under section 
41.8 	297A.71, subdivision 13;
41.9 	(2) building materials for mineral production facilities exempt under section 297A.71, 
41.10 	subdivision 14;
41.11 	(3) building materials for correctional facilities under section 297A.71, subdivision 3;
41.12 	(4) building materials used in a residence for veterans with a disability exempt under 
41.13 	section 297A.71, subdivision 11;
41.14 	(5) elevators and building materials exempt under section 297A.71, subdivision 12;
41.15 	(6) materials and supplies for qualified low-income housing under section 297A.71, 
41.16 	subdivision 23;
41.17 	(7) materials, supplies, and equipment for municipal electric utility facilities under 
41.18 	section 297A.71, subdivision 35;
41.19 	(8) equipment and materials used for the generation, transmission, and distribution of 
41.20 	electrical energy and an aerial camera package exempt under section 297A.68, subdivision 
41.21 	37;
41.22 	(9) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph 
41.23 	(a), clause (10);
41.24 	(10) materials, supplies, and equipment for construction or improvement of projects and 
41.25 	facilities under section 297A.71, subdivision 40;
41.26 	(11) materials, supplies, and equipment for construction, improvement, or expansion of 
41.27 	a biopharmaceutical manufacturing facility exempt under section 297A.71, subdivision 45;
41.28 	(12) enterprise information technology equipment and computer software for use in a 
41.29 	qualified data center exempt under section 297A.68, subdivision 42;
41.30 	(13) materials, supplies, and equipment for qualifying capital projects under section 
41.31 	297A.71, subdivision 44, paragraph (a), clause (1), and paragraph (b);
42.1 	(14) items purchased for use in providing critical access dental services exempt under 
42.2 	section 297A.70, subdivision 7, paragraph (c);
42.3 	(15) items and services purchased under a business subsidy agreement for use or 
42.4 	consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 
42.5 	44;
42.6 	(16) building materials, equipment, and supplies for constructing or replacing real 
42.7 	property exempt under section 297A.71, subdivisions 49; 50, paragraph (b); and 51;
42.8 	(17) building materials, equipment, and supplies for qualifying capital projects under 
42.9 	section 297A.71, subdivision 52; and
42.10 	(18) building materials, equipment, and supplies for constructing, remodeling, expanding, 
42.11 	or improving a fire station, police station, or related facilities exempt under section 297A.71, 
42.12 	subdivision 53.; and
42.13 	(19) building construction or reconstruction materials, supplies, and equipment exempt 
42.14 	under section 297A.71, subdivision 54.

42.15 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
42.16 	made after June 30, 2021, and before January 1, 2025.

42.17 	Sec. 11. Minnesota Statutes 2022, section 297A.75, subdivision 2, is amended to read:
42.18 		Subd. 2.Refund; eligible persons. Upon application on forms prescribed by the 
42.19 	commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must 
42.20 	be paid to the applicant. Only the following persons may apply for the refund:
42.21 	(1) for subdivision 1, clauses (1), (2), and (14), the applicant must be the purchaser;
42.22 	(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;
42.23 	(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits 
42.24 	provided in United States Code, title 38, chapter 21;
42.25 	(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead 
42.26 	property;
42.27 	(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;
42.28 	(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a 
42.29 	joint venture of municipal electric utilities;
42.30 	(7) for subdivision 1, clauses (8), (11), (12), and (15), the owner of the qualifying 
42.31 	business;
43.1 	(8) for subdivision 1, clauses (9), (10), (13), (17), and (18), the applicant must be the 
43.2 	governmental entity that owns or contracts for the project or facility; and
43.3 	(9) for subdivision 1, clause (16), the applicant must be the owner or developer of the 
43.4 	building or project.; and
43.5 	(10) for subdivision 1, clause (19), the applicant must be the entity:
43.6 	(i) listed in section 297A.71, subdivision 54, paragraph (a), that principally uses the 
43.7 	building or facility; or
43.8 	(ii) listed in section 297A.71, subdivision 54, paragraph (b), that contracts with a 
43.9 	contractor, subcontractor, or builder for the public infrastructure project.

43.10 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
43.11 	made after June 30, 2021, and before January 1, 2025.

43.12 	Sec. 12. Minnesota Statutes 2022, section 297A.75, subdivision 3, is amended to read:
43.13 		Subd. 3.Application. (a) The application must include sufficient information to permit 
43.14 	the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor, 
43.15 	or builder, under subdivision 1, clauses (3) to (13) or (15) to (18) (19), the contractor, 
43.16 	subcontractor, or builder must furnish to the refund applicant a statement including the cost 
43.17 	of the exempt items and the taxes paid on the items unless otherwise specifically provided 
43.18 	by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under 
43.19 	this section.
43.20 	(b) An applicant may not file more than two applications per calendar year for refunds 
43.21 	for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

43.22 	EFFECTIVE DATE. This section is effective retroactively for sales and purchases 
43.23 	made after June 30, 2021, and before January 1, 2025.

43.24 	ARTICLE 4
43.25 	PROPERTY TAXES, AIDS, AND CREDITS

43.26 	Section 1. Minnesota Statutes 2022, section 273.124, subdivision 6, is amended to read:
43.27 		Subd. 6.Leasehold cooperatives. When one or more dwellings or one or more buildings 
43.28 	which each contain several dwelling units is owned by a nonprofit corporation subject to 
43.29 	the provisions of chapter 317A and qualifying under section 501(c)(3) or 501(c)(4) of the 
43.30 	Internal Revenue Code, or a limited partnership which corporation or partnership operates 
43.31 	the property in conjunction with a cooperative association, and has received public financing, 
44.1 	homestead treatment may be claimed by the cooperative association on behalf of the members 
44.2 	of the cooperative for each dwelling unit occupied by a member of the cooperative. The 
44.3 	cooperative association must provide the assessor with the Social Security numbers or 
44.4 	individual taxpayer identification numbers of those members. To qualify for the treatment 
44.5 	provided by this subdivision, the following conditions must be met:
44.6 	(a) the cooperative association must be organized under chapter 308A or 308B and all 
44.7 	voting members of the board of directors must be resident tenants of the cooperative and 
44.8 	must be elected by the resident tenants of the cooperative;
44.9 	(b) the cooperative association must have a lease for occupancy of the property for a 
44.10 	term of at least 20 years, which permits the cooperative association, while not in default on 
44.11 	the lease, to participate materially in the management of the property, including material 
44.12 	participation in establishing budgets, setting rent levels, and hiring and supervising a 
44.13 	management agent;
44.14 	(c) to the extent permitted under state or federal law, the cooperative association must 
44.15 	have a right under a written agreement with the owner to purchase the property if the owner 
44.16 	proposes to sell it; if the cooperative association does not purchase the property it is offered 
44.17 	for sale, the owner may not subsequently sell the property to another purchaser at a price 
44.18 	lower than the price at which it was offered for sale to the cooperative association unless 
44.19 	the cooperative association approves the sale;
44.20 	(d) a minimum of 40 percent of the cooperative association's members must have incomes 
44.21 	at or less than 60 percent of area median gross income as determined by the United States 
44.22 	Secretary of Housing and Urban Development under section 142(d)(2)(B) of the Internal 
44.23 	Revenue Code. For purposes of this clause, "member income" means the income of a member 
44.24 	existing at the time the member acquires cooperative membership;
44.25 	(e) if a limited partnership owns the property, it must include as the managing general 
44.26 	partner a nonprofit organization operating under the provisions of chapter 317A and 
44.27 	qualifying under section 501(c)(3) or 501(c)(4) of the Internal Revenue Code and the limited 
44.28 	partnership agreement must provide that the managing general partner have sufficient powers 
44.29 	so that it materially participates in the management and control of the limited partnership;
44.30 	(f) prior to becoming a member of a leasehold cooperative described in this subdivision, 
44.31 	a person must have received notice that (1) describes leasehold cooperative property in plain 
44.32 	language, including but not limited to the effects of classification under this subdivision on 
44.33 	rents, property taxes and tax credits or refunds, and operating expenses, and (2) states that 
44.34 	copies of the articles of incorporation and bylaws of the cooperative association, the lease 
45.1 	between the owner and the cooperative association, a sample sublease between the 
45.2 	cooperative association and a tenant, and, if the owner is a partnership, a copy of the limited 
45.3 	partnership agreement, can be obtained upon written request at no charge from the owner, 
45.4 	and the owner must send or deliver the materials within seven days after receiving any 
45.5 	request;
45.6 	(g) if a dwelling unit of a building was occupied on the 60th day prior to the date on 
45.7 	which the unit became leasehold cooperative property described in this subdivision, the 
45.8 	notice described in paragraph (f) must have been sent by first class mail to the occupant of 
45.9 	the unit at least 60 days prior to the date on which the unit became leasehold cooperative 
45.10 	property. For purposes of the notice under this paragraph, the copies of the documents 
45.11 	referred to in paragraph (f) may be in proposed version, provided that any subsequent 
45.12 	material alteration of those documents made after the occupant has requested a copy shall 
45.13 	be disclosed to any occupant who has requested a copy of the document. Copies of the 
45.14 	articles of incorporation and certificate of limited partnership shall be filed with the secretary 
45.15 	of state after the expiration of the 60-day period unless the change to leasehold cooperative 
45.16 	status does not proceed;
45.17 	(h) the county attorney of the county in which the property is located must certify to the 
45.18 	assessor that the property meets the requirements of this subdivision;
45.19 	(i) the public financing received must be from at least one of the following sources:
45.20 	(1) tax increment financing proceeds used for the acquisition or rehabilitation of the 
45.21 	building or interest rate write-downs relating to the acquisition of the building;
45.22 	(2) government issued bonds exempt from taxes under section 103 of the Internal Revenue 
45.23 	Code, the proceeds of which are used for the acquisition or rehabilitation of the building;
45.24 	(3) programs under section 221(d)(3), 202, or 236, of Title II of the National Housing 
45.25 	Act;
45.26 	(4) rental housing program funds under Section 8 of the United States Housing Act of 
45.27 	1937, as amended, or the market rate family graduated payment mortgage program funds 
45.28 	administered by the Minnesota Housing Finance Agency that are used for the acquisition 
45.29 	or rehabilitation of the building;
45.30 	(5) low-income housing credit under section 42 of the Internal Revenue Code;
45.31 	(6) public financing provided by a local government used for the acquisition or 
45.32 	rehabilitation of the building, including grants or loans from (i) federal community 
46.1 	development block grants; (ii) HOME block grants; or (iii) residential rental bonds issued 
46.2 	under chapter 474A; or
46.3 	(7) other rental housing program funds provided by the Minnesota Housing Finance 
46.4 	Agency for the acquisition or rehabilitation of the building;
46.5 	(j) at the time of the initial request for homestead classification or of any transfer of 
46.6 	ownership of the property, the governing body of the municipality in which the property is 
46.7 	located must hold a public hearing and make the following findings:
46.8 	(1) that the granting of the homestead treatment of the apartment's units will facilitate 
46.9 	safe, clean, affordable housing for the cooperative members that would otherwise not be 
46.10 	available absent the homestead designation;
46.11 	(2) that the owner has presented information satisfactory to the governing body showing 
46.12 	that the savings garnered from the homestead designation of the units will be used to reduce 
46.13 	tenant's rents or provide a level of furnishing or maintenance not possible absent the 
46.14 	designation; and
46.15 	(3) that the requirements of paragraphs (b), (d), and (i) have been met.
46.16 	Homestead treatment must be afforded to units occupied by members of the cooperative 
46.17 	association and the units must be assessed as provided in subdivision 3, provided that any 
46.18 	unit not so occupied shall be classified and assessed pursuant to the appropriate class. No 
46.19 	more than three acres of land may, for assessment purposes, be included with each dwelling 
46.20 	unit that qualifies for homestead treatment under this subdivision.
46.21 	When dwelling units no longer qualify under this subdivision, the current owner must 
46.22 	notify the assessor within 60 days. Failure to notify the assessor within 60 days shall result 
46.23 	in the loss of benefits under this subdivision for taxes payable in the year that the failure is 
46.24 	discovered. For these purposes, "benefits under this subdivision" means the difference in 
46.25 	the net tax capacity of the units which no longer qualify as computed under this subdivision 
46.26 	and as computed under the otherwise applicable law, times the local tax rate applicable to 
46.27 	the building for that taxes payable year. Upon discovery of a failure to notify, the assessor 
46.28 	shall inform the auditor of the difference in net tax capacity for the building or buildings in 
46.29 	which units no longer qualify, and the auditor shall calculate the benefits under this 
46.30 	subdivision. Such amount, plus a penalty equal to 100 percent of that amount, shall then be 
46.31 	demanded of the building's owner. The property owner may appeal the county's determination 
46.32 	by serving copies of a petition for review with county officials as provided in section 278.01
46.33 	and filing a proof of service as provided in section 278.01 with the Minnesota Tax Court 
46.34 	within 60 days of the date of the notice from the county. The appeal shall be governed by 
47.1 	the Tax Court procedures provided in chapter 271, for cases relating to the tax laws as 
47.2 	defined in section 271.01, subdivision 5; disregarding sections 273.125, subdivision 5, and 
47.3 	278.03, but including section 278.05, subdivision 2. If the amount of the benefits under this 
47.4 	subdivision and penalty are not paid within 60 days, and if no appeal has been filed, the 
47.5 	county auditor shall certify the amount of the benefit and penalty to the succeeding year's 
47.6 	tax list to be collected as part of the property taxes on the affected buildings.

47.7 	EFFECTIVE DATE. This section is effective retroactively for homestead applications 
47.8 	filed in 2023 and thereafter.

47.9 	Sec. 2. Minnesota Statutes 2022, section 273.124, subdivision 13, is amended to read:
47.10 		Subd. 13.Homestead application. (a) A person who meets the homestead requirements 
47.11 	under subdivision 1 must file a homestead application with the county assessor to initially 
47.12 	obtain homestead classification.
47.13 	(b) The commissioner shall prescribe the content, format, and manner of the homestead 
47.14 	application required to be filed under this chapter pursuant to section 270C.30. The 
47.15 	application must clearly inform the taxpayer that this application must be signed by all 
47.16 	owners who occupy the property or by the qualifying relative and returned to the county 
47.17 	assessor in order for the property to receive homestead treatment.
47.18 	(c) Every property owner applying for homestead classification must furnish to the 
47.19 	county assessor the Social Security number or individual taxpayer identification number of 
47.20 	each occupant who is listed as an owner of the property on the deed of record, the name 
47.21 	and address of each owner who does not occupy the property, and the name and Social 
47.22 	Security number or individual taxpayer identification number of the spouse of each occupying 
47.23 	owner. The application must be signed by each owner who occupies the property and by 
47.24 	each owner's spouse who occupies the property, or, in the case of property that qualifies as 
47.25 	a homestead under subdivision 1, paragraph (c), by the qualifying relative.
47.26 	If a property owner occupies a homestead, the property owner's spouse may not claim 
47.27 	another property as a homestead unless the property owner and the property owner's spouse 
47.28 	file with the assessor an affidavit or other proof required by the assessor stating that the 
47.29 	property qualifies as a homestead under subdivision 1, paragraph (e).
47.30 	Owners or spouses occupying residences owned by their spouses and previously occupied 
47.31 	with the other spouse, either of whom fail to include the other spouse's name and Social 
47.32 	Security number or individual taxpayer identification number on the homestead application 
47.33 	or provide the affidavits or other proof requested, will be deemed to have elected to receive 
48.1 	only partial homestead treatment of their residence. The remainder of the residence will be 
48.2 	classified as nonhomestead residential. When an owner or spouse's name and Social Security 
48.3 	number or individual taxpayer identification number appear on homestead applications for 
48.4 	two separate residences and only one application is signed, the owner or spouse will be 
48.5 	deemed to have elected to homestead the residence for which the application was signed.
48.6 	(d) If residential real estate is occupied and used for purposes of a homestead by a relative 
48.7 	of the owner and qualifies for a homestead under subdivision 1, paragraph (c), in order for 
48.8 	the property to receive homestead status, a homestead application must be filed with the 
48.9 	assessor. The Social Security number or individual taxpayer identification number of each 
48.10 	relative occupying the property and the name and Social Security number or individual 
48.11 	taxpayer identification number of the spouse of a relative occupying the property shall be 
48.12 	required on the homestead application filed under this subdivision. If a different relative of 
48.13 	the owner subsequently occupies the property, the owner of the property must notify the 
48.14 	assessor within 30 days of the change in occupancy. The Social Security number or individual 
48.15 	taxpayer identification number of a relative occupying the property or the spouse of a relative 
48.16 	occupying the property is private data on individuals as defined by section 13.02, subdivision 
48.17 	12, but may be disclosed to the commissioner of revenue, or, for the purposes of proceeding 
48.18 	under the Revenue Recapture Act to recover personal property taxes owing, to the county 
48.19 	treasurer.
48.20 	(e) The homestead application shall also notify the property owners that if the property 
48.21 	is granted homestead status for any assessment year, that same property shall remain 
48.22 	classified as homestead until the property is sold or transferred to another person, or the 
48.23 	owners, the spouse of the owner, or the relatives no longer use the property as their 
48.24 	homestead. Upon the sale or transfer of the homestead property, a certificate of value must 
48.25 	be timely filed with the county auditor as provided under section 272.115. Failure to notify 
48.26 	the assessor within 30 days that the property has been sold, transferred, or that the owner, 
48.27 	the spouse of the owner, or the relative is no longer occupying the property as a homestead, 
48.28 	shall result in the penalty provided under this subdivision and the property will lose its 
48.29 	current homestead status.
48.30 	(f) If a homestead application has not been filed with the county by December 31, the 
48.31 	assessor shall classify the property as nonhomestead for the current assessment year for 
48.32 	taxes payable in the following year, provided that the owner may be entitled to receive the 
48.33 	homestead classification by proper application under section 375.192.

48.34 	EFFECTIVE DATE. This section is effective retroactively for homestead applications 
48.35 	filed in 2023 and thereafter.

49.1 	Sec. 3. Minnesota Statutes 2022, section 273.124, subdivision 13a, is amended to read:
49.2 		Subd. 13a.Occupant list.  At the request of the commissioner, each county must give 
49.3 	the commissioner a list that includes the name and Social Security number or individual 
49.4 	taxpayer identification number of each occupant of homestead property who is the property 
49.5 	owner, property owner's spouse, qualifying relative of a property owner, or a spouse of a 
49.6 	qualifying relative. The commissioner shall use the information provided on the lists as 
49.7 	appropriate under the law, including for the detection of improper claims by owners, or 
49.8 	relatives of owners, under chapter 290A.

49.9 	EFFECTIVE DATE. This section is effective for homestead data provided to the 
49.10 	commissioner in 2024 and thereafter.

49.11 	Sec. 4. Minnesota Statutes 2022, section 273.124, subdivision 13c, is amended to read:
49.12 		Subd. 13c.Property lists.  In addition to lists of homestead properties, the commissioner 
49.13 	may ask the counties to furnish lists of all properties and the record owners. The Social 
49.14 	Security numbers, individual taxpayer identification numbers, and federal identification 
49.15 	numbers that are maintained by a county or city assessor for property tax administration 
49.16 	purposes, and that may appear on the lists retain their classification as private or nonpublic 
49.17 	data; but may be viewed, accessed, and used by the county auditor or treasurer of the same 
49.18 	county for the limited purpose of assisting the commissioner in the preparation of microdata 
49.19 	samples under section 270C.12. The commissioner shall use the information provided on 
49.20 	the lists as appropriate under the law, including for the detection of improper claims by 
49.21 	owners, or relatives of owners, under chapter 290A.

49.22 	EFFECTIVE DATE. This section is effective for homestead data provided to the 
49.23 	commissioner in 2024 and thereafter.

49.24 	Sec. 5. Minnesota Statutes 2022, section 273.124, subdivision 13d, is amended to read:
49.25 		Subd. 13d.Homestead data.  On or before April 30 each year beginning in 2007, each 
49.26 	county must provide the commissioner with the following data for each parcel of homestead 
49.27 	property by electronic means as defined in section 289A.02, subdivision 8:
49.28 	(1) the property identification number assigned to the parcel for purposes of taxes payable 
49.29 	in the current year;
49.30 	(2) the name and Social Security number or individual taxpayer identification number 
49.31 	of each occupant of homestead property who is the property owner or qualifying relative 
50.1 	of a property owner, and the spouse of the property owner who occupies homestead property 
50.2 	or spouse of a qualifying relative of a property owner who occupies homestead property;
50.3 	(3) the classification of the property under section 273.13 for taxes payable in the current 
50.4 	year and in the prior year;
50.5 	(4) an indication of whether the property was classified as a homestead for taxes payable 
50.6 	in the current year because of occupancy by a relative of the owner or by a spouse of a 
50.7 	relative;
50.8 	(5) the property taxes payable as defined in section 290A.03, subdivision 13, for the 
50.9 	current year and the prior year;
50.10 	(6) the market value of improvements to the property first assessed for tax purposes for 
50.11 	taxes payable in the current year;
50.12 	(7) the assessor's estimated market value assigned to the property for taxes payable in 
50.13 	the current year and the prior year;
50.14 	(8) the taxable market value assigned to the property for taxes payable in the current 
50.15 	year and the prior year;
50.16 	(9) whether there are delinquent property taxes owing on the homestead;
50.17 	(10) the unique taxing district in which the property is located; and
50.18 	(11) such other information as the commissioner decides is necessary.
50.19 	The commissioner shall use the information provided on the lists as appropriate under 
50.20 	the law, including for the detection of improper claims by owners, or relatives of owners, 
50.21 	under chapter 290A.

50.22 	EFFECTIVE DATE. This section is effective for homestead data provided to the 
50.23 	commissioner in 2024 and thereafter.

50.24 	Sec. 6. Minnesota Statutes 2022, section 273.124, subdivision 14, is amended to read:
50.25 		Subd. 14.Agricultural homesteads; special provisions. (a) Real estate of less than ten 
50.26 	acres that is the homestead of its owner must be classified as class 2a under section 273.13, 
50.27 	subdivision 23, paragraph (a), if:
50.28 	(1) the parcel on which the house is located is contiguous on at least two sides to (i) 
50.29 	agricultural land, (ii) land owned or administered by the United States Fish and Wildlife 
50.30 	Service, or (iii) land administered by the Department of Natural Resources on which in lieu 
50.31 	taxes are paid under sections 477A.11 to 477A.14 or section 477A.17;
51.1 	(2) its owner also owns a noncontiguous parcel of agricultural land that is at least 20 
51.2 	acres;
51.3 	(3) the noncontiguous land is located not farther than four townships or cities, or a 
51.4 	combination of townships or cities from the homestead; and
51.5 	(4) the agricultural use value of the noncontiguous land and farm buildings is equal to 
51.6 	at least 50 percent of the market value of the house, garage, and one acre of land.
51.7 	Homesteads initially classified as class 2a under the provisions of this paragraph shall 
51.8 	remain classified as class 2a, irrespective of subsequent changes in the use of adjoining 
51.9 	properties, as long as the homestead remains under the same ownership, the owner owns a 
51.10 	noncontiguous parcel of agricultural land that is at least 20 acres, and the agricultural use 
51.11 	value qualifies under clause (4). Homestead classification under this paragraph is limited 
51.12 	to property that qualified under this paragraph for the 1998 assessment.
51.13 	(b)(i) Agricultural property shall be classified as the owner's homestead, to the same 
51.14 	extent as other agricultural homestead property, if all of the following criteria are met:
51.15 	(1) the agricultural property consists of at least 40 acres including undivided government 
51.16 	lots and correctional 40's;
51.17 	(2) the owner, the owner's spouse, or a grandchild, child, sibling, or parent of the owner 
51.18 	or of the owner's spouse, is actively farming the agricultural property, either on the person's 
51.19 	own behalf as an individual or on behalf of a partnership operating a family farm, family 
51.20 	farm corporation, joint family farm venture, or limited liability company of which the person 
51.21 	is a partner, shareholder, or member;
51.22 	(3) both the owner of the agricultural property and the person who is actively farming 
51.23 	the agricultural property under clause (2), are Minnesota residents;
51.24 	(4) neither the owner nor the spouse of the owner claims another agricultural homestead 
51.25 	in Minnesota; and
51.26 	(5) neither the owner nor the person actively farming the agricultural property lives 
51.27 	farther than four townships or cities, or a combination of four townships or cities, from the 
51.28 	agricultural property, except that if the owner or the owner's spouse is required to live in 
51.29 	employer-provided housing, the owner or owner's spouse, whichever is actively farming 
51.30 	the agricultural property, may live more than four townships or cities, or combination of 
51.31 	four townships or cities from the agricultural property.
51.32 	The relationship under this paragraph may be either by blood or marriage.
52.1 	(ii) Property containing the residence of an owner who owns qualified property under 
52.2 	clause (i) shall be classified as part of the owner's agricultural homestead, if that property 
52.3 	is also used for noncommercial storage or drying of agricultural crops.
52.4 	(iii) As used in this paragraph, "agricultural property" means class 2a property and any 
52.5 	class 2b property that is contiguous to and under the same ownership as the class 2a property.
52.6 	(c) Noncontiguous land shall be included as part of a homestead under section 273.13, 
52.7 	subdivision 23, paragraph (a), only if the homestead is classified as class 2a and the detached 
52.8 	land is located in the same township or city, or not farther than four townships or cities or 
52.9 	combination thereof from the homestead. Any taxpayer of these noncontiguous lands must 
52.10 	notify the county assessor that the noncontiguous land is part of the taxpayer's homestead, 
52.11 	and, if the homestead is located in another county, the taxpayer must also notify the assessor 
52.12 	of the other county.
52.13 	(d) Agricultural land used for purposes of a homestead and actively farmed by a person 
52.14 	holding a vested remainder interest in it must be classified as a homestead under section 
52.15 	273.13, subdivision 23, paragraph (a). If agricultural land is classified class 2a, any other 
52.16 	dwellings on the land used for purposes of a homestead by persons holding vested remainder 
52.17 	interests who are actively engaged in farming the property, and up to one acre of the land 
52.18 	surrounding each homestead and reasonably necessary for the use of the dwelling as a home, 
52.19 	must also be assessed class 2a.
52.20 	(e) Agricultural land and buildings that were class 2a homestead property under section 
52.21 	273.13, subdivision 23, paragraph (a), for the 1997 assessment shall remain classified as 
52.22 	agricultural homesteads for subsequent assessments if:
52.23 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
52.24 	homestead as a result of the April 1997 floods;
52.25 	(2) the property is located in the county of Polk, Clay, Kittson, Marshall, Norman, or 
52.26 	Wilkin;
52.27 	(3) the agricultural land and buildings remain under the same ownership for the current 
52.28 	assessment year as existed for the 1997 assessment year and continue to be used for 
52.29 	agricultural purposes;
52.30 	(4) the dwelling occupied by the owner is located in Minnesota and is within 30 miles 
52.31 	of one of the parcels of agricultural land that is owned by the taxpayer; and
52.32 	(5) the owner notifies the county assessor that the relocation was due to the 1997 floods, 
52.33 	and the owner furnishes the assessor any information deemed necessary by the assessor in 
53.1 	verifying the change in dwelling. Further notifications to the assessor are not required if the 
53.2 	property continues to meet all the requirements in this paragraph and any dwellings on the 
53.3 	agricultural land remain uninhabited.
53.4 	(f) Agricultural land and buildings that were class 2a homestead property under section 
53.5 	273.13, subdivision 23, paragraph (a), for the 1998 assessment shall remain classified 
53.6 	agricultural homesteads for subsequent assessments if:
53.7 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
53.8 	homestead as a result of damage caused by a March 29, 1998, tornado;
53.9 	(2) the property is located in the county of Blue Earth, Brown, Cottonwood, Le Sueur, 
53.10 	Nicollet, Nobles, or Rice;
53.11 	(3) the agricultural land and buildings remain under the same ownership for the current 
53.12 	assessment year as existed for the 1998 assessment year;
53.13 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles of 
53.14 	one of the parcels of agricultural land that is owned by the taxpayer; and
53.15 	(5) the owner notifies the county assessor that the relocation was due to a March 29, 
53.16 	1998, tornado, and the owner furnishes the assessor any information deemed necessary by 
53.17 	the assessor in verifying the change in homestead dwelling. For taxes payable in 1999, the 
53.18 	owner must notify the assessor by December 1, 1998. Further notifications to the assessor 
53.19 	are not required if the property continues to meet all the requirements in this paragraph and 
53.20 	any dwellings on the agricultural land remain uninhabited.
53.21 	(g) Agricultural property of a family farm corporation, joint family farm venture, family 
53.22 	farm limited liability company, or partnership operating a family farm as described under 
53.23 	subdivision 8 shall be classified homestead, to the same extent as other agricultural homestead 
53.24 	property, if all of the following criteria are met:
53.25 	(1) the property consists of at least 40 acres including undivided government lots and 
53.26 	correctional 40's;
53.27 	(2) a shareholder, member, or partner of that entity is actively farming the agricultural 
53.28 	property;
53.29 	(3) that shareholder, member, or partner who is actively farming the agricultural property 
53.30 	is a Minnesota resident;
53.31 	(4) neither that shareholder, member, or partner, nor the spouse of that shareholder, 
53.32 	member, or partner claims another agricultural homestead in Minnesota; and
54.1 	(5) that shareholder, member, or partner does not live farther than four townships or 
54.2 	cities, or a combination of four townships or cities, from the agricultural property.
54.3 	Homestead treatment applies under this paragraph even if:
54.4 	(i) the shareholder, member, or partner of that entity is actively farming the agricultural 
54.5 	property on the shareholder's, member's, or partner's own behalf; or
54.6 	(ii) the family farm is operated by a family farm corporation, joint family farm venture, 
54.7 	partnership, or limited liability company other than the family farm corporation, joint family 
54.8 	farm venture, partnership, or limited liability company that owns the land, provided that:
54.9 	(A) the shareholder, member, or partner of the family farm corporation, joint family 
54.10 	farm venture, partnership, or limited liability company that owns the land who is actively 
54.11 	farming the land is a shareholder, member, or partner of the family farm corporation, joint 
54.12 	family farm venture, partnership, or limited liability company that is operating the farm; 
54.13 	and
54.14 	(B) more than half of the shareholders, members, or partners of each family farm 
54.15 	corporation, joint family farm venture, partnership, or limited liability company are persons 
54.16 	or spouses of persons who are a qualifying relative under section 273.124, subdivision 1, 
54.17 	paragraphs (c) and (d).
54.18 	Homestead treatment applies under this paragraph for property leased to a family farm 
54.19 	corporation, joint farm venture, limited liability company, or partnership operating a family 
54.20 	farm if legal title to the property is in the name of an individual who is a member, shareholder, 
54.21 	or partner in the entity.
54.22 	(h) To be eligible for the special agricultural homestead under this subdivision, an initial 
54.23 	full application must be submitted to the county assessor where the property is located. 
54.24 	Owners and the persons who are actively farming the property shall be required to complete 
54.25 	only a one-page abbreviated version of the application in each subsequent year provided 
54.26 	that none of the following items have changed since the initial application:
54.27 	(1) the day-to-day operation, administration, and financial risks remain the same;
54.28 	(2) the owners and the persons actively farming the property continue to live within the 
54.29 	four townships or city criteria and are Minnesota residents;
54.30 	(3) the same operator of the agricultural property is listed with the Farm Service Agency;
54.31 	(4) a Schedule F or equivalent income tax form was filed for the most recent year;
54.32 	(5) the property's acreage is unchanged; and
55.1 	(6) none of the property's acres have been enrolled in a federal or state farm program 
55.2 	since the initial application.
55.3 	The owners and any persons who are actively farming the property must include the 
55.4 	appropriate Social Security numbers or individual taxpayer identification numbers, and sign 
55.5 	and date the application. If any of the specified information has changed since the full 
55.6 	application was filed, the owner must notify the assessor, and must complete a new 
55.7 	application to determine if the property continues to qualify for the special agricultural 
55.8 	homestead. The commissioner of revenue shall prepare a standard reapplication form for 
55.9 	use by the assessors.
55.10 	(i) Agricultural land and buildings that were class 2a homestead property under section 
55.11 	273.13, subdivision 23, paragraph (a), for the 2007 assessment shall remain classified 
55.12 	agricultural homesteads for subsequent assessments if:
55.13 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
55.14 	homestead as a result of damage caused by the August 2007 floods;
55.15 	(2) the property is located in the county of Dodge, Fillmore, Houston, Olmsted, Steele, 
55.16 	Wabasha, or Winona;
55.17 	(3) the agricultural land and buildings remain under the same ownership for the current 
55.18 	assessment year as existed for the 2007 assessment year;
55.19 	(4) the dwelling occupied by the owner is located in this state and is within 50 miles of 
55.20 	one of the parcels of agricultural land that is owned by the taxpayer; and
55.21 	(5) the owner notifies the county assessor that the relocation was due to the August 2007 
55.22 	floods, and the owner furnishes the assessor any information deemed necessary by the 
55.23 	assessor in verifying the change in homestead dwelling. For taxes payable in 2009, the 
55.24 	owner must notify the assessor by December 1, 2008. Further notifications to the assessor 
55.25 	are not required if the property continues to meet all the requirements in this paragraph and 
55.26 	any dwellings on the agricultural land remain uninhabited.
55.27 	(j) Agricultural land and buildings that were class 2a homestead property under section 
55.28 	273.13, subdivision 23, paragraph (a), for the 2008 assessment shall remain classified as 
55.29 	agricultural homesteads for subsequent assessments if:
55.30 	(1) the property owner abandoned the homestead dwelling located on the agricultural 
55.31 	homestead as a result of the March 2009 floods;
55.32 	(2) the property is located in the county of Marshall;
56.1 	(3) the agricultural land and buildings remain under the same ownership for the current 
56.2 	assessment year as existed for the 2008 assessment year and continue to be used for 
56.3 	agricultural purposes;
56.4 	(4) the dwelling occupied by the owner is located in Minnesota and is within 50 miles 
56.5 	of one of the parcels of agricultural land that is owned by the taxpayer; and
56.6 	(5) the owner notifies the county assessor that the relocation was due to the 2009 floods, 
56.7 	and the owner furnishes the assessor any information deemed necessary by the assessor in 
56.8 	verifying the change in dwelling. Further notifications to the assessor are not required if the 
56.9 	property continues to meet all the requirements in this paragraph and any dwellings on the 
56.10 	agricultural land remain uninhabited.

56.11 	EFFECTIVE DATE. This section is effective retroactively for homestead applications 
56.12 	filed in 2023 and thereafter.

56.13 	Sec. 7. Minnesota Statutes 2022, section 273.1245, subdivision 1, is amended to read:
56.14 		Subdivision 1.Private or nonpublic data. The following data are private or nonpublic 
56.15 	data as defined in section 13.02, subdivisions 9 and 12, when they are submitted to a county 
56.16 	or local assessor under section 273.124, 273.13, or another section, to support a claim for 
56.17 	the property tax homestead classification under section 273.13, or other property tax 
56.18 	classification or benefit:
56.19 	(1) Social Security numbers;
56.20 	(2) individual taxpayer identification numbers;
56.21 	(2) (3) copies of state or federal income tax returns; and
56.22 	(3) (4) state or federal income tax return information, including the federal income tax 
56.23 	schedule F.

56.24 	EFFECTIVE DATE. This section is effective retroactively for homestead applications 
56.25 	filed in 2023 and thereafter.

56.26 	Sec. 8. Minnesota Statutes 2022, section 273.1315, subdivision 2, is amended to read:
56.27 		Subd. 2.Class 1b homestead declaration 2009 and thereafter. (a) Any property owner 
56.28 	seeking classification and assessment of the owner's homestead as class 1b property pursuant 
56.29 	to section 273.13, subdivision 22, paragraph (b), after October 1, 2008, shall file with the 
56.30 	county assessor a class 1b homestead declaration, on a form prescribed by the commissioner 
56.31 	of revenue. The declaration must contain the following information:
57.1 	(1) the information necessary to verify that, on or before June 30 of the filing year, the 
57.2 	property owner or the owner's spouse satisfies the requirements of section 273.13, subdivision 
57.3 	22, paragraph (b), for class 1b classification; and
57.4 	(2) any additional information prescribed by the commissioner.
57.5 	(b) The declaration must be filed on or before October 1 to be effective for property 
57.6 	taxes payable during the succeeding calendar year. The Social Security numbers, individual 
57.7 	taxpayer identification numbers, and income and medical information received from the 
57.8 	property owner pursuant to this subdivision are private data on individuals as defined in 
57.9 	section 13.02. If approved by the assessor, the declaration remains in effect until the property 
57.10 	no longer qualifies under section 273.13, subdivision 22, paragraph (b). Failure to notify 
57.11 	the assessor within 30 days that the property no longer qualifies under that paragraph because 
57.12 	of a sale, change in occupancy, or change in the status or condition of an occupant shall 
57.13 	result in the penalty provided in section 273.124, subdivision 13b, computed on the basis 
57.14 	of the class 1b benefits for the property, and the property shall lose its current class 1b 
57.15 	classification.

57.16 	EFFECTIVE DATE. This section is effective retroactively for homestead applications 
57.17 	filed in 2023 and thereafter.

57.18 	Sec. 9. Minnesota Statutes 2022, section 273.1387, subdivision 2, is amended to read:
57.19 		Subd. 2.Credit amount. For each qualifying property, the school building bond 
57.20 	agricultural credit is equal to the credit percent multiplied by the property's eligible net tax 
57.21 	capacity multiplied by the school debt tax rate determined under section 275.08, subdivision 
57.22 	1b. For property taxes payable prior to 2020, the credit percent is equal to 40 percent. For 
57.23 	property taxes payable in 2020, the credit percent is equal to 50 percent. For property taxes 
57.24 	payable in 2021, the credit percent is equal to 55 percent. For property taxes payable in 
57.25 	2022, the credit percent is equal to 60 percent. For property taxes payable in 2023 and 
57.26 	thereafter 2024, the credit percent is equal to 70 percent. For property taxes payable in 2025 
57.27 	and thereafter, the credit percent is equal to 80 percent.

57.28 	EFFECTIVE DATE. This section is effective beginning with property taxes payable 
57.29 	in 2025 and thereafter.

57.30 	Sec. 10. Minnesota Statutes 2022, section 290B.03, subdivision 1, is amended to read:
57.31 		Subdivision 1.Program qualifications. The qualifications for the senior citizens' 
57.32 	property tax deferral program are as follows:
58.1 	(1) the property must be owned and occupied as a homestead by a person 65 years of 
58.2 	age or older. In the case of a married couple, at least one of the spouses must be at least 65 
58.3 	years old at the time the first property tax deferral is granted, regardless of whether the 
58.4 	property is titled in the name of one spouse or both spouses, or titled in another way that 
58.5 	permits the property to have homestead status, and the other spouse must be at least 62 years 
58.6 	of age;
58.7 	(2) the total household income of the qualifying homeowners, as defined in section 
58.8 	290A.03, subdivision 5, for the calendar year preceding the year of the initial application 
58.9 	may not exceed $60,000 $75,000;
58.10 	(3) the homestead must have been owned and occupied as the homestead of at least one 
58.11 	of the qualifying homeowners for at least 15 five years prior to the year the initial application 
58.12 	is filed;
58.13 	(4) there are no state or federal tax liens or judgment liens on the homesteaded property;
58.14 	(5) there are no mortgages or other liens on the property that secure future advances, 
58.15 	except for those subject to credit limits that result in compliance with clause (6); and
58.16 	(6) the total unpaid balances of debts secured by mortgages and other liens on the 
58.17 	property, including unpaid and delinquent special assessments and interest and any delinquent 
58.18 	property taxes, penalties, and interest, but not including property taxes payable during the 
58.19 	year or debts secured by a residential PACE lien, as defined in section 216C.435, subdivision 
58.20 	10d, does not exceed 75 percent of the assessor's estimated market value for the year.

58.21 	EFFECTIVE DATE. This section is effective for the deferral of taxes payable in 2024 
58.22 	and thereafter.

58.23 	Sec. 11. Minnesota Statutes 2022, section 290B.04, subdivision 3, is amended to read:
58.24 		Subd. 3.Excess-income certification by taxpayer. A taxpayer whose initial application 
58.25 	has been approved under subdivision 2 shall notify the commissioner of revenue in writing 
58.26 	by July 1 if the taxpayer's household income for the preceding calendar year exceeded 
58.27 	$60,000 $75,000. The certification must state the homeowner's total household income for 
58.28 	the previous calendar year. No property taxes may be deferred under this chapter in any 
58.29 	year following the year in which a program participant filed or should have filed an 
58.30 	excess-income certification under this subdivision, unless the participant has filed a 
58.31 	resumption of eligibility certification as described in subdivision 4.

58.32 	EFFECTIVE DATE. This section is effective for the deferral of taxes payable in 2024 
58.33 	and thereafter.

59.1 	Sec. 12. Minnesota Statutes 2022, section 290B.04, subdivision 4, is amended to read:
59.2 		Subd. 4.Resumption of eligibility certification by taxpayer. A taxpayer who has 
59.3 	previously filed an excess-income certification under subdivision 3 may resume program 
59.4 	participation if the taxpayer's household income for a subsequent year is $60,000 $75,000
59.5 	or less. If the taxpayer chooses to resume program participation, the taxpayer must notify 
59.6 	the commissioner of revenue in writing by July 1 of the year following a calendar year in 
59.7 	which the taxpayer's household income is $60,000 $75,000 or less. The certification must 
59.8 	state the taxpayer's total household income for the previous calendar year. Once a taxpayer 
59.9 	resumes participation in the program under this subdivision, participation will continue until 
59.10 	the taxpayer files a subsequent excess-income certification under subdivision 3 or until 
59.11 	participation is terminated under section 290B.08, subdivision 1.

59.12 	EFFECTIVE DATE. This section is effective for the deferral of taxes payable in 2024 
59.13 	and thereafter.

59.14 	Sec. 13. Minnesota Statutes 2022, section 290B.05, subdivision 1, is amended to read:
59.15 		Subdivision 1.Determination by commissioner. The commissioner shall determine 
59.16 	each qualifying homeowner's "annual maximum property tax amount" following approval 
59.17 	of the homeowner's initial application and following the receipt of a resumption of eligibility 
59.18 	certification. The "annual maximum property tax amount" equals three percent of the 
59.19 	homeowner's total household income for the year preceding either the initial application or 
59.20 	the resumption of eligibility certification, whichever is applicable. Following approval of 
59.21 	the initial application, the commissioner shall determine the qualifying homeowner's 
59.22 	"maximum allowable deferral." No tax may be deferred relative to the appropriate assessment 
59.23 	year for any homeowner whose total household income for the previous year exceeds 
59.24 	$60,000 $75,000. No tax shall be deferred in any year in which the homeowner does not 
59.25 	meet the program qualifications in section 290B.03. The maximum allowable total deferral 
59.26 	is equal to 75 percent of the assessor's estimated market value for the year, less the balance 
59.27 	of any mortgage loans and other amounts secured by liens against the property at the time 
59.28 	of application, including any unpaid and delinquent special assessments and interest and 
59.29 	any delinquent property taxes, penalties, and interest, but not including property taxes 
59.30 	payable during the year.

59.31 	EFFECTIVE DATE. This section is effective for the deferral of taxes payable in 2024 
59.32 	and thereafter.

60.1 	Sec. 14. Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision 
60.2 	to read:
60.3 		Subd. 3b.Population age 65 and over. "Population age 65 and over" means the 
60.4 	population age 65 and over established as of July 15 in an aid calculation year by the most 
60.5 	recent federal census, by a special census conducted under contract with the United States 
60.6 	Bureau of the Census, by a population estimate made by the Metropolitan Council, or by a 
60.7 	population estimate of the state demographer made pursuant to section 4A.02, whichever 
60.8 	is the most recent as to the stated date of the count or estimate for the preceding calendar 
60.9 	year and which has been certified to the commissioner of revenue on or before July 15 of 
60.10 	the aid calculation year. A revision to an estimate or count is effective for these purposes 
60.11 	only if certified to the commissioner on or before July 15 of the aid calculation year. Clerical 
60.12 	errors in the certification or use of estimates and counts established as of July 15 in the aid 
60.13 	calculation year are subject to correction within the time periods allowed under section 
60.14 	477A.014.

60.15 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
60.16 	and thereafter.

60.17 	Sec. 15. Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision 
60.18 	to read:
60.19 		Subd. 3c.Transformed population. "Transformed population" means the logarithm to 
60.20 	the base 10 of the population.

60.21 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
60.22 	and thereafter.

60.23 	Sec. 16. Minnesota Statutes 2022, section 477A.011, subdivision 34, is amended to read:
60.24 		Subd. 34.City revenue need. (a) For a city with a population equal to or greater than 
60.25 	10,000, "city revenue need" is 1.15 times the sum of (1) 4.59 8.559 times the pre-1940 
60.26 	housing percentage; plus (2) 0.622 times the percent of housing built between 1940 and 
60.27 	1970 7.629 times the city age index; plus (3) 169.415 times the jobs per capita 5.461 times 
60.28 	the commercial industrial utility percentage; plus (4) the sparsity adjustment 8.481 times 
60.29 	peak population decline; plus (5) 307.664 297.789.
60.30 	(b) For a city with a population equal to or greater than 2,500 and less than 10,000, "city 
60.31 	revenue need" is 1.15 times the sum of (1) 572.62 502.094; plus (2) 5.026 4.285 times the 
60.32 	pre-1940 housing percentage; minus plus (3) 53.768 times household size 6.699 times the 
61.1 	commercial industrial utility percentage; plus (4) 14.022 17.645 times peak population 
61.2 	decline; plus (5) the sparsity adjustment.
61.3 	(c) For a city with a population less than 2,500, "city revenue need" is the sum of (1) 
61.4 	410 79.351; plus (2) 0.367 246.428 times the city's transformed population over 100; plus 
61.5 	(3) the sparsity adjustment. The city revenue need for a city under this paragraph shall not 
61.6 	exceed 630 plus the city's sparsity adjustment.
61.7 	(d) For a city with a population of at least 2,500 but less than 3,000, the "city revenue 
61.8 	need" equals (1) the transition factor times the city's revenue need calculated in paragraph 
61.9 	(b); plus (2) 630 the city's revenue need calculated under the formula in paragraph (c) times 
61.10 	the difference between one and the transition factor. For a city with a population of at least 
61.11 	10,000 but less than 11,000, the "city revenue need" equals (1) the transition factor times 
61.12 	the city's revenue need calculated in paragraph (a); plus (2) the city's revenue need calculated 
61.13 	under the formula in paragraph (b) times the difference between one and the transition 
61.14 	factor. For purposes of the first sentence of this paragraph "transition factor" is 0.2 percent 
61.15 	times the amount that the city's population exceeds the minimum threshold. For purposes 
61.16 	of the second sentence of this paragraph, "transition factor" is 0.1 percent times the amount 
61.17 	that the city's population exceeds the minimum threshold.
61.18 	(e) The city revenue need cannot be less than zero.
61.19 	(f) For calendar year 2015 2024 and subsequent years, the city revenue need for a city, 
61.20 	as determined in paragraphs (a) to (e), is multiplied by the ratio of the annual implicit price 
61.21 	deflator for government consumption expenditures and gross investment for state and local 
61.22 	governments as prepared by the United States Department of Commerce, for the most 
61.23 	recently available year to the 2013 2020 implicit price deflator for state and local government 
61.24 	purchases.

61.25 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
61.26 	and thereafter.

61.27 	Sec. 17. Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision 
61.28 	to read:
61.29 		Subd. 46.City age index. "City age index" means 100 times the ratio of (1) the population 
61.30 	age 65 and over within the city, to (2) the population of the city.

61.31 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
61.32 	and thereafter.

62.1 	Sec. 18. Minnesota Statutes 2022, section 477A.011, is amended by adding a subdivision 
62.2 	to read:
62.3 		Subd. 47.Commercial industrial utility percentage. The "commercial industrial utility 
62.4 	percentage" for a city is 100 times the ratio of (1) the sum of the estimated market values 
62.5 	of all real and personal property in the city classified as class 3 under section 273.13, 
62.6 	subdivision 24, to (2) the total market value of all taxable real and personal property in the 
62.7 	city. The market values are the amounts computed before any adjustments for fiscal 
62.8 	disparities under section 276A.06 or 473F.08. The market values used for this subdivision 
62.9 	are not equalized.

62.10 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
62.11 	and thereafter.

62.12 	Sec. 19. Minnesota Statutes 2022, section 477A.0124, subdivision 2, is amended to read:
62.13 		Subd. 2.Definitions. (a) For the purposes of this section, the following terms have the 
62.14 	meanings given them.
62.15 	(b) "County program aid" means the sum of "county need aid," "county tax base 
62.16 	equalization aid," and "county transition aid."
62.17 	(c) "Age-adjusted population" means a county's population multiplied by the county age 
62.18 	index.
62.19 	(d) "County age index" means the percentage of the population age 65 and over within 
62.20 	the county divided by the percentage of the population age 65 and over within the state, 
62.21 	except that the age index for any county may not be greater than 1.8 nor less than 0.8.
62.22 	(e) "Population age 65 and over" means the population age 65 and over established as 
62.23 	of July 15 in an aid calculation year by the most recent federal census, by a special census 
62.24 	conducted under contract with the United States Bureau of the Census, by a population 
62.25 	estimate made by the Metropolitan Council, or by a population estimate of the state 
62.26 	demographer made pursuant to section 4A.02, whichever is the most recent as to the stated 
62.27 	date of the count or estimate for the preceding calendar year and which has been certified 
62.28 	to the commissioner of revenue on or before July 15 of the aid calculation year. A revision 
62.29 	to an estimate or count is effective for these purposes only if certified to the commissioner 
62.30 	on or before July 15 of the aid calculation year. Clerical errors in the certification or use of 
62.31 	estimates and counts established as of July 15 in the aid calculation year are subject to 
62.32 	correction within the time periods allowed under section 477A.014 has the meaning given 
62.33 	in section 477A.011, subdivision 3b.
63.1 	(f) "Part I crimes" means the three-year average annual number of Part I crimes reported 
63.2 	for each county by the Department of Public Safety for the most recent years available. By 
63.3 	July 1 of each year, the commissioner of public safety shall certify to the commissioner of 
63.4 	revenue the number of Part I crimes reported for each county for the three most recent 
63.5 	calendar years available.
63.6 	(g) "Households receiving Supplemental Nutrition Assistance Program (SNAP) benefits" 
63.7 	means the average monthly number of households receiving SNAP benefits for the three 
63.8 	most recent years for which data is available. By July 1 of each year, the commissioner of 
63.9 	human services must certify to the commissioner of revenue the average monthly number 
63.10 	of households in the state and in each county that receive SNAP benefits, for the three most 
63.11 	recent calendar years available.
63.12 	(h) "County net tax capacity" means the county's adjusted net tax capacity under section 
63.13 	273.1325.

63.14 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
63.15 	and thereafter.

63.16 	Sec. 20. Minnesota Statutes 2022, section 477A.013, subdivision 8, is amended to read:
63.17 		Subd. 8.City formula aid. (a) For aids payable in 2018 2024 and thereafter, the formula 
63.18 	aid for a city is equal to the product of (1) the difference between its unmet need and its 
63.19 	certified aid in the previous year and before any aid adjustment under subdivision 13, and 
63.20 	(2) the aid gap percentage.
63.21 	(b) The applicable aid gap percentage must be calculated by the Department of Revenue 
63.22 	so that the total of the aid under subdivision 9 equals the total amount available for aid under 
63.23 	section 477A.03. The aid gap percentage must be the same for all cities subject to paragraph 
63.24 	(a). Data used in calculating aids to cities under sections 477A.011 to 477A.013 shall be 
63.25 	the most recently available data as of January 1 in the year in which the aid is calculated.

63.26 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
63.27 	and thereafter.

63.28 	Sec. 21. Minnesota Statutes 2022, section 477A.013, subdivision 9, is amended to read:
63.29 		Subd. 9.City aid distribution. (a) In calendar year 2018 2024 and thereafter, if a city's 
63.30 	certified aid before any aid adjustment under subdivision 13 for the previous year is less 
63.31 	than its current unmet need, the city shall receive an aid distribution equal to the sum of (1) 
63.32 	its certified aid in the previous year before any aid adjustment under subdivision 13, and 
64.1 	(2) the city formula aid under subdivision 8, and (3) its aid adjustment under subdivision 
64.2 	13.
64.3 	(b) For aids payable in 2020 only, no city's aid amount before any adjustment under 
64.4 	subdivision 13 may be less than its pay 2019 certified aid amount, less any aid adjustment 
64.5 	under subdivision 13 for that year. For aids payable in 2020 2024 and thereafter, if a city's 
64.6 	certified aid before any aid adjustment under subdivision 13 for the previous year is equal 
64.7 	to or greater than its current unmet need, the total aid for a city is equal to the greater of (1) 
64.8 	its unmet need plus any aid adjustment under subdivision 13, or (2) the amount it was 
64.9 	certified to receive in the previous year minus the sum of (i) any adjustment under subdivision 
64.10 	13 that was paid in the previous year but has expired, and (ii) the lesser of (i) $10 multiplied 
64.11 	by its population, or (ii) five percent of its net levy in the year prior to the aid distribution. 
64.12 	No city may have a total aid amount less than $0.

64.13 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
64.14 	and thereafter.

64.15 	Sec. 22. Minnesota Statutes 2022, section 477A.03, subdivision 2a, is amended to read:
64.16 		Subd. 2a.Cities. For aids payable in 2016 and 2017, the total aid paid under section 
64.17 	477A.013, subdivision 9, is $519,398,012. For aids payable in 2018 and 2019, the total aid 
64.18 	paid under section 477A.013, subdivision 9, is $534,398,012. For aids payable in 2020, the 
64.19 	total aid paid under section 477A.013, subdivision 9, is $560,398,012. For aids payable in 
64.20 	2021 and thereafter through 2023, the total aid payable under section 477A.013, subdivision 
64.21 	9, is $564,398,012. For aids payable in 2024 and thereafter, the total aid payable under 
64.22 	section 477A.013, subdivision 9, is $594,398,012.

64.23 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
64.24 	and thereafter.

64.25 	Sec. 23. Minnesota Statutes 2022, section 477A.03, subdivision 2b, is amended to read:
64.26 		Subd. 2b.Counties. (a) For aids payable in 2018 and 2019, the total aid payable under 
64.27 	section 477A.0124, subdivision 3, is $103,795,000, of which $3,000,000 shall be allocated 
64.28 	as required under Laws 2014, chapter 150, article 4, section 6. For aids payable in 2020, 
64.29 	the total aid payable under section 477A.0124, subdivision 3, is $116,795,000, of which 
64.30 	$3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 
64.31 	6. For aids payable in 2021 through 2024 2023, the total aid payable under section 
64.32 	477A.0124, subdivision 3, is $118,795,000, of which $3,000,000 shall be allocated as 
64.33 	required under Laws 2014, chapter 150, article 4, section 6. For aids payable in 2024, the 
65.1 	total aid payable under section 477A.0124, subdivision 3, is $132,070,770, of which 
65.2 	$3,000,000 shall be allocated as required under Laws 2014, chapter 150, article 4, section 
65.3 	6. For aids payable in 2025 and thereafter, the total aid payable under section 477A.0124, 
65.4 	subdivision 3, is $115,795,000 $129,070,770. On or before the first installment date provided 
65.5 	in section 477A.015, paragraph (a), $500,000 of this appropriation shall be transferred each 
65.6 	year by the commissioner of revenue to the Board of Public Defense for the payment of 
65.7 	services under section 611.27. Any transferred amounts not expended or encumbered in a 
65.8 	fiscal year shall be certified by the Board of Public Defense to the commissioner of revenue 
65.9 	on or before October 1, and shall be included in the next certification of county need aid.
65.10 	(b) For aids payable in 2018 and 2019, the total aid under section 477A.0124, subdivision 
65.11 	4, is $130,873,444. For aids payable in 2020, the total aid under section 477A.0124, 
65.12 	subdivision 4, is $143,873,444. For aids payable in 2021 and thereafter through 2023, the 
65.13 	total aid under section 477A.0124, subdivision 4, is $145,873,444. For aids payable in 2024 
65.14 	and thereafter, the total aid under section 477A.0124, subdivision 4, is $162,597,674. The 
65.15 	commissioner of revenue shall transfer to the Legislative Budget Office $207,000 annually 
65.16 	for the cost of preparation of local impact notes as required by section 3.987, and other local 
65.17 	government activities. The commissioner of revenue shall transfer to the commissioner of 
65.18 	education $7,000 annually for the cost of preparation of local impact notes for school districts 
65.19 	as required by section 3.987. The commissioner of revenue shall deduct the amounts 
65.20 	transferred under this paragraph from the appropriation under this paragraph. The amounts 
65.21 	transferred are appropriated to the Legislative Coordinating Commission and the 
65.22 	commissioner of education respectively.

65.23 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
65.24 	and thereafter.

65.25 	Sec. 24. [477A.23] SOIL AND WATER CONSERVATION DISTRICT AID.
65.26 		Subdivision 1.Definitions. For purposes of this section, the following terms have the 
65.27 	meanings given:
65.28 	(1) "nonpublic land" means tract, lot, parcel, and piece or parcel of land as defined by 
65.29 	section 272.03, subdivision 6, that is not owned by the federal government, the state, or a 
65.30 	local government unit; and
65.31 	(2) "soil and water conservation district" means a district under chapter 103C that is 
65.32 	implementing the duties under that chapter as determined by the Board of Water and Soil 
65.33 	Resources as of the date the board provides the certification to the commissioner of revenue 
65.34 	required by subdivision 4.
66.1 		Subd. 2.Purpose. The purpose of this section is to provide ongoing financial support 
66.2 	to soil and water conservation districts to aid in the execution of chapter 103C and other 
66.3 	duties and services prescribed by statute.
66.4 		Subd. 3.Distribution. The Board of Water and Soil Resources must calculate the amount 
66.5 	of aid to be distributed to the certified soil and water conservation districts from the 
66.6 	appropriation in subdivision 7 as follows:
66.7 	(1) 70 percent of the appropriation must be distributed equally among the districts; and
66.8 	(2) 30 percent of the appropriation must be distributed proportionally among the districts 
66.9 	according to the amount of nonpublic land located in a district as compared to the amount 
66.10 	of nonpublic land in the state.
66.11 		Subd. 4.Certification to commissioner. On or before June 1 each year, the Board of 
66.12 	Water and Soil Resources must certify to the commissioner of revenue the soil and water 
66.13 	conservation districts that will receive a payment under this section and the amount of each 
66.14 	payment.
66.15 		Subd. 5.Use of proceeds. (a) Notwithstanding section 103C.401, subdivision 2, a soil 
66.16 	and water conservation district that receives a distribution under this section must use the 
66.17 	proceeds to implement chapter 103C and other duties and services prescribed by statute.
66.18 	(b) The board of each soil and water conservation district must establish, by resolution, 
66.19 	annual guidelines for using payments received under this section. Current year guidelines 
66.20 	and guidelines from the year immediately prior must be posted on the district website.
66.21 	(c) A soil and water conservation district that receives a payment under this section may 
66.22 	appropriate any portion of the payment to a governmental unit with which the district has 
66.23 	a cooperative agreement under section 103C.231. Any payment received under this section 
66.24 	and appropriated by the district must be used as required by this section.
66.25 		Subd. 6.Payments. The commissioner of revenue must distribute soil and water 
66.26 	conservation district aid in the same manner and at the same times as aid payments provided 
66.27 	under section 477A.015.
66.28 		Subd. 7.Appropriation. $12,000,000 is annually appropriated from the general fund 
66.29 	to the commissioner of revenue to make the payments required under his section.
66.30 		Subd. 8.Aid amount corrections. If, due to a clerical error, the amount certified by the 
66.31 	Board of Soil and Water Resources to the commissioner of revenue is less than the amount 
66.32 	to which the district is entitled under this section, the Board of Water and Soil Resources 
66.33 	shall recertify the correct amount to the commissioner of revenue and communicate the 
67.1 	error and the corrected amount to the affected soil and water conservation district as soon 
67.2 	as practical after the error is discovered.

67.3 	EFFECTIVE DATE. This section is effective beginning with aids payable in calendar 
67.4 	year 2023 and thereafter.

67.5 	Sec. 25. [477A.31] MAHNOMEN PROPERTY TAX REIMBURSEMENT AID.
67.6 		Subdivision 1. Aid appropriation. (a) The commissioner of revenue shall make 
67.7 	reimbursement aid payments to compensate for the loss of property tax revenue related to 
67.8 	the trust conversion application of the Shooting Star Casino. The commissioner shall pay 
67.9 	the county of Mahnomen, $900,000; the city of Mahnomen, $320,000; and Independent 
67.10 	School District No. 432, Mahnomen, $140,000.
67.11 	(b) The payments shall be made annually on July 20.
67.12 		Subd. 2.Appropriation. An amount sufficient to pay reimbursement aid under this 
67.13 	section is annually appropriated from the general fund to the commissioner of revenue.

67.14 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
67.15 	and thereafter.

67.16 	Sec. 26. Laws 2006, chapter 259, article 11, section 3, as amended by Laws 2008, chapter 
67.17 	154, article 1, section 4, and Laws 2013, chapter 143, article 2, section 33, is amended to 
67.18 	read:
67.19 	Sec. 3. MAHNOMEN COUNTY; COUNTY, CITY, SCHOOL DISTRICT, 
67.20 	PROPERTY TAX REIMBURSEMENT.
 67.21 		Subdivision 1. Aid appropriation. (a) $1,200,000 is appropriated annually from the 
67.22 	general fund to the commissioner of revenue to be used to make payments to compensate 
67.23 	for the loss of property tax revenue related to the trust conversion application of the Shooting 
67.24 	Star Casino. The commissioner shall pay the county of Mahnomen, $900,000; the city of 
67.25 	Mahnomen, $160,000; and Independent School District No. 432, Mahnomen, $140,000. 
67.26 	The payments shall be made on July 20, of 2013 and each subsequent year.
67.27 	(b) This section expires after aids payable year 2023.

67.28 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
67.29 	and thereafter.

68.1 	Sec. 27. PUBLIC SAFETY AID.
 68.2 		Subdivision 1.Definitions. For purposes of this section, the following terms have the 
68.3 	meanings given:
68.4 	(1) "City" means a statutory or home rule charter city that directly employs at least one 
68.5 	peace officer as defined by section 477C.01, subdivision 7, clauses (1) and (3) to (4).
68.6 	(2) "City per capita aid amount" equals the amount appropriated to every city by 
68.7 	subdivision 7, divided by the total population of every city.
68.8 	(3) "County per capita aid amount" equals the amount appropriated to counties and 
68.9 	Tribal governments by subdivision 7, divided by the sum of the total population of every 
68.10 	county plus the total Tribal population but excluding the total population of every city.
68.11 	(4) "Population" means population estimates made or conducted by the United States 
68.12 	Bureau of the Census, the Metropolitan Council pursuant to section 473.24, or by the state 
68.13 	demographer pursuant to section 4A.02, paragraph (d), whichever is the most recent estimate 
68.14 	and available as of January 1, 2023.
68.15 	(5) "Tribal governments" has the meaning given to "Minnesota Tribal governments" in 
68.16 	section 10.65, subdivision 2.
68.17 	(6) "Tribal population" means population estimates made or conducted by the United 
68.18 	States Bureau of the Census of the federally recognized American Indian reservations and 
68.19 	off-reservation trust lands in Minnesota, whichever is the most recent estimate and available 
68.20 	as of January 1, 2023.
68.21 		Subd. 2.Distribution. The commissioner of revenue will distribute payments under this 
68.22 	section as follows:
68.23 	(1) A county's public safety aid amount equals:
68.24 	(i) the county's population minus the total population of every city located in that county, 
68.25 	times;
68.26 	(ii) the county per capita aid amount.
68.27 	(2) A Tribal government's public safety aid amount equals:
68.28 	(i) the Tribe's population, times;
68.29 	(ii) the county per capita aid amount.
68.30 	(3) A city's public safety aid amount equals:
68.31 	(i) the city's population, times;
69.1 	(ii) the city per capita aid amount.
69.2 		Subd. 3.Certifications to commissioner. The commissioner of public safety must 
69.3 	certify to the commissioner of revenue, on or before July 1, 2023, each city that meets the 
69.4 	definition of city in subdivision 1 as of January 1, 2023.
69.5 		Subd. 4.Use of proceeds. (a) Counties, Tribal governments, and cities that receive a 
69.6 	distribution under this section must use the proceeds to provide public safety. Use of proceeds 
69.7 	may include, but is not limited to, paying personnel and equipment costs.
69.8 	(b) Counties must consult with their county sheriff in determining how to use the 
69.9 	proceeds.
69.10 	(c) Counties, Tribal governments, and cities that receive a distribution under this section 
69.11 	may not apply the proceeds toward:
69.12 	(1) their employer contribution to the public employees police and fire fund, if that 
69.13 	county, Tribal government, or city received police state aid under chapter 477C in the year 
69.14 	immediately prior to a distribution under this section; or
69.15 	(2) any costs associated with alleged wrongdoing or misconduct.
69.16 		Subd. 5.Payments. The commissioner shall certify the amount to be paid in 2023 to 
69.17 	each county, Tribal government, and city by August 1, 2023, and the full 2023 payment to 
69.18 	the counties, Tribal governments, and cities must be made by December 26, 2023.
69.19 		Subd. 6.Appropriation. $300,000,000 is appropriated from the general fund to the 
69.20 	commissioner of revenue to make payments required under this section as follows: (1) 
69.21 	$90,000,000 to counties and Tribal governments; and (2) $210,000,000 to cities.

69.22 	EFFECTIVE DATE. This section is effective for aids payable in 2023.

69.23 	Sec. 28. TRIBAL NATION HOUSING AND HOMELESSNESS AID.
 69.24 	(a) $44,000,000 in fiscal year 2024 is appropriated from the general fund to the 
69.25 	commissioner of revenue for direct aid to Tribal Nations for homelessness prevention, 
69.26 	emergency shelter, and other needs related to housing instability and homelessness.
69.27 	(b) The commissioner of revenue may pay aid under this section to the governing body 
69.28 	of the:
69.29 	(1) Fond du Lac Band;
69.30 	(2) Grand Portage Band;
69.31 	(3) Mille Lacs Band;
70.1 	(4) White Earth Band;
70.2 	(5) Bois Forte Band;
70.3 	(6) Leech Lake Band;
70.4 	(7) Red Lake Nation;
70.5 	(8) Upper Sioux Community;
70.6 	(9) Lower Sioux Community;
70.7 	(10) Shakopee Mdewakanton Sioux Community; and
70.8 	(11) Prairie Island Mdewakanton Dakota Community.
70.9 	(c) To receive aid under this section, a Tribal Nation must apply in writing to the 
70.10 	commissioner of revenue on or before July 1, 2023. As part of the application, the Tribal 
70.11 	Nation must agree to spend the aid money for homelessness prevention, emergency shelter, 
70.12 	and other needs related to housing instability and homelessness.
70.13 	(d) Each Tribal Nation must be paid an amount equal to the amount appropriated in 
70.14 	paragraph (a) divided by the number of Tribal Nations that timely applied for aid. The 
70.15 	commissioner of revenue shall certify the amount of aid payable to each Tribal Nation on 
70.16 	or before August 1, 2023.
70.17 	(e) The commissioner of revenue must distribute all aid payable under this section on 
70.18 	December 26, 2023.
70.19 	(f) On or before February 1, 2024, a recipient of aid under this section must provide a 
70.20 	report to the commissioner of revenue in the form prescribed by the commissioner of revenue. 
70.21 	The commissioner of revenue must compile and provide the reports to the chairs and ranking 
70.22 	minority members of the legislative committees with jurisdiction over taxes.
70.23 	(g) The appropriation under this section is onetime.

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

70.25 	Sec. 29. REPEALER.
 70.26 	Minnesota Statutes 2022, sections 477A.011, subdivisions 30a, 38, 42, and 45; and 
70.27 	477A.013, subdivision 13, are repealed.

70.28 	EFFECTIVE DATE. This section is effective for aids payable in calendar year 2024 
70.29 	and thereafter.

71.1 	ARTICLE 5
71.2 	MISCELLANEOUS

71.3 	Section 1. Minnesota Statutes 2022, section 270C.52, subdivision 2, is amended to read:
71.4 		Subd. 2.Payment agreements. (a) When any portion of any tax payable to the 
71.5 	commissioner together with interest and penalty thereon, if any, has not been paid, the 
71.6 	commissioner may extend the time for payment for a further period. When the authority of 
71.7 	this section is invoked, the extension shall be evidenced by written agreement signed by 
71.8 	the taxpayer and the commissioner, stating the amount of the tax with penalty and interest, 
71.9 	if any, and providing for the payment of the amount in installments.
71.10 	(b) The agreement may contain a confession of judgment for the amount and for any 
71.11 	unpaid portion thereof. If the agreement contains a confession of judgment, the confession 
71.12 	of judgment must provide that the commissioner may enter judgment against the taxpayer 
71.13 	in the district court of the county of residence as shown upon the taxpayer's tax return for 
71.14 	the unpaid portion of the amount specified in the extension agreement.
71.15 	(c) The agreement shall provide that it can be terminated, after notice by the 
71.16 	commissioner, if information provided by the taxpayer prior to the agreement was inaccurate 
71.17 	or incomplete, collection of the tax covered by the agreement is in jeopardy, there is a 
71.18 	subsequent change in the taxpayer's financial condition, the taxpayer has failed to make a 
71.19 	payment due under the agreement, or the taxpayer has failed to pay any other tax or file a 
71.20 	tax return coming due after the agreement.
71.21 	(d) The notice must be given at least 14 calendar days prior to termination, and shall 
71.22 	advise the taxpayer of the right to request a reconsideration from the commissioner of 
71.23 	whether termination is reasonable and appropriate under the circumstances. A request for 
71.24 	reconsideration does not stay collection action beyond the 14-day notice period. If the 
71.25 	commissioner has reason to believe that collection of the tax covered by the agreement is 
71.26 	in jeopardy, the commissioner may proceed under section 270C.36 and terminate the 
71.27 	agreement without regard to the 14-day period.
71.28 	(e) The commissioner may accept other collateral the commissioner considers appropriate 
71.29 	to secure satisfaction of the tax liability. The principal sum specified in the agreement shall 
71.30 	bear interest at the rate specified in section 270C.40 on all unpaid portions thereof until the 
71.31 	same has been fully paid or the unpaid portion thereof has been entered as a judgment. The 
71.32 	judgment shall bear interest at the rate specified in section 270C.40.
71.33 	(f) If it appears to the commissioner that the tax reported by the taxpayer is in excess of 
71.34 	the amount actually owing by the taxpayer, the extension agreement or the judgment entered 
72.1 	pursuant thereto shall be corrected. If after making the extension agreement or entering 
72.2 	judgment with respect thereto, the commissioner determines that the tax as reported by the 
72.3 	taxpayer is less than the amount actually due, the commissioner shall assess a further tax 
72.4 	in accordance with the provisions of law applicable to the tax.
72.5 	(g) The authority granted to the commissioner by this section is in addition to any other 
72.6 	authority granted to the commissioner by law to extend the time of payment or the time for 
72.7 	filing a return and shall not be construed in limitation thereof.
72.8 	(h) The commissioner shall charge a fee for entering into payment agreements. The fee 
72.9 	is set at $50 and is charged for entering into a payment agreement, for entering into a new 
72.10 	payment agreement after the taxpayer has defaulted on a prior agreement, and for entering 
72.11 	into a new payment agreement as a result of renegotiation of the terms of an existing 
72.12 	agreement. The fee is paid to the commissioner before the payment agreement becomes 
72.13 	effective and does not reduce the amount of the liability.

72.14 	EFFECTIVE DATE; APPLICATION. This section is effective the day following 
72.15 	final enactment and applies to payment plans entered into 30 days after that date.

72.16 	Sec. 2. ADMINISTRATIVE APPROPRIATION.
 72.17 	$2,589,000 in fiscal year 2023, $20,085,000 in fiscal year 2024, and $4,548,000 in fiscal 
72.18 	year 2025 are appropriated from the general fund to the commissioner of revenue to 
72.19 	administer this act. The base funding is $335,000 in fiscal year 2026 and $192,000 in fiscal 
72.20 	year 2027.

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

APPENDIX 

Repealed Minnesota Statutes: 23-00320 

290.0132 INDIVIDUALS, ESTATES, AND TRUSTS; SUBTRACTIONS FROM FEDERAL TAXABLE INCOME OR FEDERAL ADJUSTED GROSS INCOME.
No active language found for: 290.0132.33 

477A.011 DEFINITIONS.Subd. 30a.Percent of housing built between 1940 and 1970. 
"Percent of housing built between 1940 and 1970" is equal to 100 times the most recent count by the United States Bureau of the Census of all housing units in the city built after 1939 but before 1970, divided by the total number of all housing units in the city. Housing units includes both occupied and vacant housing units as defined by the federal census. 

Subd. 38.Household size. 
"Household size" means the average number of persons per household in the jurisdiction as most recently estimated and reported by the state demographer and Metropolitan Council as of July 15 of the aid calculation year. A revision to an estimate or enumeration is effective for these purposes only if it is certified to the commissioner on or before July 15 of the aid calculation year. Clerical errors in the certification or use of estimates and counts established as of July 15 in the aid calculation year are subject to correction within the time periods allowed under section 477A.014. 

Subd. 42.Jobs per capita in the city. 
 "Jobs per capita in the city" means (1) the average annual number of employees in the city based on the data from the Quarterly Census of Employment and Wages, as reported by the Department of Employment and Economic Development, for the most recent calendar year available November 1 of every odd-numbered year, divided by (2) the city's population for the same calendar year as the employment data. The commissioner of the Department of Employment and Economic Development shall certify to the city the average annual number of employees for each city by January 1 of every even-numbered year beginning with January 1, 2014. A city may challenge an estimate under this paragraph by filing its specific objection, including the names of employers that it feels may have misreported data, in writing with the commissioner by December 1 of every odd-numbered year. The commissioner shall make every reasonable effort to address the specific objection and adjust the data as necessary. The commissioner shall certify the estimates of the annual employment to the commissioner of revenue by January 1 of all even-numbered years, including any estimates still under objection. 

Subd. 45.Sparsity adjustment. 
For a city with a population of 10,000 or more, the sparsity adjustment is 100 for any city with an average population density less than 150 per square mile, according to the most recent federal census. For a city with a population less than 10,000, the sparsity adjustment is 200 for any city with an average population density less than 30 per square mile, according to the most recent federal census. The sparsity adjustment is zero for all other cities. 

477A.013 MUNICIPAL GOVERNMENT DISTRIBUTIONS.Subd. 13.Certified aid adjustments. 
(a) A city that received an aid base increase under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (e), shall have its total aid under subdivision 9 increased by an amount equal to $150,000 for aids payable in 2014 through 2018. 

(b) A city that received an aid base increase under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (r), shall have its total aid under subdivision 9 increased by an amount equal to $160,000 for aids payable in 2014 and thereafter. 

(c) A city that received a temporary aid increase under Minnesota Statutes 2012, section 477A.011, subdivision 36, paragraph (o), shall have its total aid under subdivision 9 increased by an amount equal to $1,000,000 for aids payable in 2014 only.