1.1 	A bill for an act
1.2 	relating to taxation; modifying the property tax abatement process as it applies 
1.3 	to certain electric generating facilities;amending Minnesota Statutes 2004, 
1.4 	sections 116J.993, subdivision 3; 469.1813, subdivisions 1, 6b, 8, 9, by adding a 
1.5 	subdivision; Minnesota Statutes 2005 Supplement, section 469.1813, subdivision 
1.6 	6.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 116J.993, subdivision 3, is amended to 
1.9 	read:
1.10 		Subd. 3.Business subsidy. "Business subsidy" or "subsidy" means a state or local 
1.11 	government agency grant, contribution of personal property, real property, infrastructure, 
1.12 	the principal amount of a loan at rates below those commercially available to the recipient, 
1.13 	any reduction or deferral of any tax or any fee, any guarantee of any payment under any 
1.14 	loan, lease, or other obligation, or any preferential use of government facilities given 
1.15 	to a business.
1.16 	The following forms of financial assistance are not a business subsidy:
1.17 	(1) a business subsidy of less than $25,000;
1.18 	(2) assistance that is generally available to all businesses or to a general class of 
1.19 	similar businesses, such as a line of business, size, location, or similar general criteria;
1.20 	(3) public improvements to buildings or lands owned by the state or local 
1.21 	government that serve a public purpose and do not principally benefit a single business or 
1.22 	defined group of businesses at the time the improvements are made;
1.23 	(4) redevelopment property polluted by contaminants as defined in section  116J.552, 
1.24 	subdivision 3; 
2.1 	(5) assistance provided for the sole purpose of renovating old or decaying building 
2.2 	stock or bringing it up to code and assistance provided for designated historic preservation 
2.3 	districts, provided that the assistance is equal to or less than 50 percent of the total cost;
2.4 	(6) assistance to provide job readiness and training services if the sole purpose of 
2.5 	the assistance is to provide those services;
2.6 	(7) assistance for housing;
2.7 	(8) assistance for pollution control or abatement, including assistance for a tax 
2.8 	increment financing hazardous substance subdistrict as defined under section  469.174, 
2.9 	subdivision 23; 
2.10 	(9) assistance for energy conservation;
2.11 	(10) tax reductions resulting from conformity with federal tax law;
2.12 	(11) workers' compensation and unemployment insurance;
2.13 	(12) benefits derived from regulation;
2.14 	(13) indirect benefits derived from assistance to educational institutions;
2.15 	(14) funds from bonds allocated under chapter 474A, bonds issued to refund 
2.16 	outstanding bonds, and bonds issued for the benefit of an organization described in section 
2.17 	501(c)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1999;
2.18 	(15) assistance for a collaboration between a Minnesota higher education institution 
2.19 	and a business;
2.20 	(16) assistance for a tax increment financing soils condition district as defined under 
2.21 	section  469.174, subdivision 19; 
2.22 	(17) redevelopment when the recipient's investment in the purchase of the site 
2.23 	and in site preparation is 70 percent or more of the assessor's current year's estimated 
2.24 	market value;
2.25 	(18) general changes in tax increment financing law and other general tax law 
2.26 	changes of a principally technical nature;
2.27 	(19) federal assistance until the assistance has been repaid to, and reinvested by, the 
2.28 	state or local government agency;
2.29 	(20) funds from dock and wharf bonds issued by a seaway port authority;
2.30 	(21) business loans and loan guarantees of $75,000 or less; and
2.31 	(22) federal loan funds provided through the United States Department of 
2.32 	Commerce, Economic Development Administration; and
2.33 	(23) property tax abatements granted under section 469.1813.

2.34 	Sec. 2. Minnesota Statutes 2004, section 469.1813, subdivision 1, is amended to read:
3.1 		Subdivision 1.Authority. The governing body of a political subdivision may grant 
3.2 	an a current or prospective abatement, by contract or otherwise, of the taxes imposed by 
3.3 	the political subdivision on a parcel of property, which may include personal property 
3.4 	and machinery, or defer the payments of the taxes and abate the interest and penalty 
3.5 	that otherwise would apply, if:
3.6 	(a)(1) it expects the benefits to the political subdivision of the proposed abatement 
3.7 	agreement to at least equal the costs to the political subdivision of the proposed agreement 
3.8 	or intends the abatement to phase in a property tax increase, as provided in clause (b)(7); 
3.9 	and
3.10 	(b)(2) it finds that doing so is in the public interest because it will:
3.11 	(1)(i) increase or preserve tax base;
3.12 	(2)(ii) provide employment opportunities in the political subdivision;
3.13 	(3)(iii) provide or help acquire or construct public facilities;
3.14 	(4)(iv) help redevelop or renew blighted areas;
3.15 	(5)(v) help provide access to services for residents of the political subdivision;
3.16 	(6)(vi) finance or provide public infrastructure; or
3.17 	(7)(vii) phase in a property tax increase on the parcel resulting from an increase of 
3.18 	50 percent or more in one year on the estimated market value of the parcel, other than 
3.19 	increase attributable to improvement of the parcel; or
3.20 	(viii) stabilize the tax base through equalization of property tax revenues for a 
3.21 	specified period of time with respect to a taxpayer whose real and personal property is 
3.22 	subject to valuation under Minnesota Rules, chapter 8100.

3.23 	Sec. 3. Minnesota Statutes 2005 Supplement, section 469.1813, subdivision 6, is 
3.24 	amended to read:
3.25 		Subd. 6.Duration limit. (a) A political subdivision may grant an abatement for a 
3.26 	period no longer than 15 years, except as provided under paragraph (b). The abatement 
3.27 	period will commence in the first year in which the abatement granted is either paid or 
3.28 	retained in accordance with section 469.1815, subdivision 2. The subdivision may specify 
3.29 	in the abatement resolution a shorter duration. If the resolution does not specify a period 
3.30 	of time, the abatement is for eight years. If an abatement has been granted to a parcel of 
3.31 	property and the period of the abatement has expired, the political subdivision that granted 
3.32 	the abatement may not grant another abatement for eight years after the expiration of the 
3.33 	first abatement. This prohibition does not apply to improvements added after and not 
3.34 	subject to the first abatement. Economic abatement agreements for real and personal 
4.1 	property subject to valuation under Minnesota Rules, chapter 8100, are not subject to this 
4.2 	prohibition and may be granted successively.
4.3 	(b) A political subdivision proposing to abate taxes for a parcel may request, in 
4.4 	writing, that the other political subdivisions in which the parcel is located grant an 
4.5 	abatement for the property. If one of the other political subdivisions declines, in writing, 
4.6 	to grant an abatement or if 90 days pass after receipt of the request to grant an abatement 
4.7 	without a written response from one of the political subdivisions, the duration limit 
4.8 	for an abatement for the parcel by the requesting political subdivision and any other 
4.9 	participating political subdivision is increased to 20 years. If the political subdivision 
4.10 	which declined to grant an abatement later grants an abatement for the parcel, the 20-year 
4.11 	duration limit is reduced by one year for each year that the declining political subdivision 
4.12 	grants an abatement for the parcel during the period of the abatement granted by the 
4.13 	requesting political subdivision. The duration limit may not be reduced below the limit 
4.14 	under paragraph (a).

4.15 	Sec. 4. Minnesota Statutes 2004, section 469.1813, subdivision 6b, is amended to read:
4.16 		Subd. 6b.Extended duration limit. (a) Notwithstanding the provisions of 
4.17 	subdivision 6, a political subdivision may grant an abatement for a period of up to 20 
4.18 	years, if the abatement is for a qualified business.
4.19 	(b) To be a qualified business for purposes of this subdivision, at least 50 percent of 
4.20 	the payroll of the operations of the business that qualify for the abatement must be for 
4.21 	employees engaged in one of the following lines of business or any combination of them:
4.22 	(1) manufacturing;
4.23 	(2) agricultural processing;
4.24 	(3) mining;
4.25 	(4) research and development;
4.26 	(5) warehousing; or
4.27 	(6) qualified high technology.
4.28 	Alternatively, a qualified business also includes a taxpayer whose real and personal 
4.29 	property is subject to valuation under Minnesota Rules, chapter 8100.
4.30 	(c)(1) "Manufacturing" means the material staging and production of tangible 
4.31 	personal property by procedures commonly regarded as manufacturing, processing, 
4.32 	fabrication, or assembling which changes some existing material into new shapes, new 
4.33 	qualities, or new combinations.
4.34 	(2) "Mining" has the meaning given in section 613(c) of the Internal Revenue Code 
4.35 	of 1986.
5.1 	(3) "Agricultural processing" means transforming, packaging, sorting, or grading 
5.2 	livestock or livestock products, agricultural commodities, or plants or plant products into 
5.3 	goods that are used for intermediate or final consumption including goods for nonfood use.
5.4 	(4) "Research and development" means qualified research as defined in section 
5.5 	41(d) of the Internal Revenue Code of 1986.
5.6 	(5) "Qualified high technology" means one or more of the following activities:
5.7 	(i) advanced computing, which is any technology used in the design and 
5.8 	development of any of the following:
5.9 	(A) computer hardware and software;
5.10 	(B) data communications; and
5.11 	(C) information technologies;
5.12 	(ii) advanced materials, which are materials with engineered properties created 
5.13 	through the development of specialized process and synthesis technology;
5.14 	(iii) biotechnology, which is any technology that uses living organisms, cells, 
5.15 	macromolecules, microorganisms, or substances from living organisms to make or modify 
5.16 	a product, improve plants or animals, or develop microorganisms for useful purposes;
5.17 	(iv) electronic device technology, which is any technology that involves 
5.18 	microelectronics, semiconductors, electronic equipment, and instrumentation, radio 
5.19 	frequency, microwave, and millimeter electronics, and optical and optic-electrical devices, 
5.20 	or data and digital communications and imaging devices;
5.21 	(v) engineering or laboratory testing related to the development of a product;
5.22 	(vi) technology that assists in the assessment or prevention of threats or damage to 
5.23 	human health or the environment, including, but not limited to, environmental cleanup 
5.24 	technology, pollution prevention technology, or development of alternative energy sources;
5.25 	(vii) medical device technology, which is any technology that involves medical 
5.26 	equipment or products other than a pharmaceutical product that has therapeutic or 
5.27 	diagnostic value and is regulated; or
5.28 	(viii) advanced vehicles technology which is any technology that involves electric 
5.29 	vehicles, hybrid vehicles, or alternative fuel vehicles, or components used in the 
5.30 	construction of electric vehicles, hybrid vehicles, or alternative fuel vehicles. An electric 
5.31 	vehicle is a road vehicle that draws propulsion energy only from an on-board source of 
5.32 	electrical energy. A hybrid vehicle is a road vehicle that can draw propulsion energy from 
5.33 	both a consumable fuel and a rechargeable energy storage system.
5.34 	(d) The authority to grant new abatements under this subdivision expires on July 1, 
5.35 	2004, except that the authority to grant new abatements for real and personal property 
5.36 	subject to valuation under Minnesota Rules, chapter 8100, does not expire.

6.1 	Sec. 5. Minnesota Statutes 2004, section 469.1813, subdivision 8, is amended to read:
6.2 		Subd. 8.Limitation on abatements. In any year, the total amount of property taxes 
6.3 	abated by a political subdivision under this section may not exceed (1) ten percent of 
6.4 	the current levy, or (2) $200,000, whichever is greater. The limit under this subdivision 
6.5 	does not apply to:
6.6 	(1) an uncollected abatement from a prior year that is added to the abatement levy; or
6.7 	(2) a taxpayer whose real and personal property is subject to valuation under 
6.8 	Minnesota Rules, chapter 8100.

6.9 	Sec. 6. Minnesota Statutes 2004, section 469.1813, subdivision 9, is amended to read:
6.10 		Subd. 9.Consent of property owner not required. A political subdivision may 
6.11 	abate the taxes on a parcel under sections  469.1812 to  469.1815 without obtaining the 
6.12 	consent of the property owner. This subdivision does not apply to abatements granted to a 
6.13 	taxpayer whose real and personal property is valued under Minnesota Rules, chapter 8100.

6.14 	Sec. 7. Minnesota Statutes 2004, section 469.1813, is amended by adding a subdivision 
6.15 	to read:
6.16 		Subd. 10.Applicability to utility properties. When this statute is applied or 
6.17 	utilized with respect to a taxpayer whose real and personal property is subject to valuation 
6.18 	under Minnesota Rules, chapter 8100, the provisions of this section and sections 469.1814 
6.19 	and 469.1815 shall apply only to property specified or described in the abatement contract 
6.20 	or agreement.

6.21 	Sec. 8. EFFECTIVE DATE.
 6.22 	Sections 1 to 7 are effective for abatements granted after June 30, 2006.