HF 1874

as introduced - 82nd Legislature (2001 - 2002) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; classifying data; providing 
  1.3             procedures for issuance of warrant for certain tax 
  1.4             return information; changing procedures for 
  1.5             disposition of seized contraband; defining certain 
  1.6             property as contraband; changing and providing civil 
  1.7             penalties; providing for a criminal penalty; 
  1.8             appropriating money; amending Minnesota Statutes 2000, 
  1.9             sections 16D.08, subdivision 2; 270A.11; 270B.02, 
  1.10            subdivisions 2 and 3; 270B.03, subdivision 6; 270B.16; 
  1.11            289A.55, subdivision 9; 289A.60, subdivisions 1, 2, 7, 
  1.12            and by adding a subdivision; 296A.24, subdivisions 1 
  1.13            and 2; 297A.91; 297E.16, subdivisions 1 and 2; 
  1.14            297F.20, subdivision 3; 297F.21, subdivisions 1, 2, 
  1.15            and 3; 297G.20, subdivisions 3 and 4; and 626.11; 
  1.16            repealing Minnesota Statutes 2000, sections 289A.60, 
  1.17            subdivision 3; 296A.24, subdivision 3; 297E.16, 
  1.18            subdivision 3; 297F.21, subdivision 4; and 297G.20, 
  1.19            subdivision 5. 
  1.20  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.21                             ARTICLE 1
  1.22                            REVENUE DATA
  1.23     Section 1.  Minnesota Statutes 2000, section 270A.11, is 
  1.24  amended to read: 
  1.25     270A.11 [DATA PRIVACY.] 
  1.26     Private and confidential data on individuals may be 
  1.27  exchanged among the department, the taxpayer's rights advocate, 
  1.28  the attorney general, the claimant agency, and the debtor as 
  1.29  necessary to accomplish and effectuate the intent of sections 
  1.30  270A.01 to 270A.12, as provided by section 13.05, subdivision 4, 
  1.31  clause (b).  The department may disclose to the claimant agency 
  1.32  only the debtor's name, address, social security number and the 
  2.1   amount of the refund, and in the case of a joint return, the 
  2.2   name of the debtor's spouse.  Any person employed by, or 
  2.3   formerly employed by, a claimant agency who discloses any such 
  2.4   information for any other purpose, shall be subject to the civil 
  2.5   and criminal penalties of section 270B.18.  Data collected by 
  2.6   the department from claimant agencies relating to claims filed 
  2.7   under this chapter are private data on individuals. 
  2.8      [EFFECTIVE DATE.] This section is effective the day 
  2.9   following final enactment. 
  2.10     Sec. 2.  Minnesota Statutes 2000, section 270B.02, 
  2.11  subdivision 2, is amended to read: 
  2.12     Subd. 2.  [PROTECTED NONPUBLIC DATA.] The following are 
  2.13  protected nonpublic data as defined in section 13.02, 
  2.14  subdivision 13: 
  2.15     (1) criteria for determining which computer processed 
  2.16  returns are selected for audit; 
  2.17     (2) criteria for determining which returns are selected for 
  2.18  an in-depth audit; and 
  2.19     (3) criteria for determining which accounts receivable 
  2.20  balances below a stated amount are written off or canceled; and 
  2.21     (4) criteria or information used in determining which 
  2.22  alleged criminal violations of any law administered by the 
  2.23  commissioner are selected for criminal investigation.  
  2.24     [EFFECTIVE DATE.] This section is effective the day 
  2.25  following final enactment. 
  2.26     Sec. 3.  Minnesota Statutes 2000, section 270B.02, 
  2.27  subdivision 3, is amended to read: 
  2.28     Subd. 3.  [CONFIDENTIAL DATA ON INDIVIDUALS; PROTECTED 
  2.29  NONPUBLIC DATA.] (a) Except as provided in paragraph (b), the 
  2.30  name or existence of an informer, informer letters, and other 
  2.31  unsolicited data, in whatever form, given to the department of 
  2.32  revenue by a person, other than the data subject, who informs 
  2.33  that a specific taxpayer is not or may not be in compliance with 
  2.34  tax laws, or nontax laws administered by the department of 
  2.35  revenue, including laws not listed in section 270B.01, 
  2.36  subdivision 8, are confidential data on individuals or protected 
  3.1   nonpublic data as defined in section 13.02, subdivisions 3 and 
  3.2   13. 
  3.3      (b) Data under paragraph (a) may be disclosed with the 
  3.4   consent of the informer or upon a written finding by a court 
  3.5   that the information provided by the informer was false and that 
  3.6   there is evidence that the information was provided in bad 
  3.7   faith.  This subdivision does not alter disclosure 
  3.8   responsibilities or obligations under the rules of criminal 
  3.9   procedure. 
  3.10     [EFFECTIVE DATE.] This section is effective the day 
  3.11  following final enactment. 
  3.12     Sec. 4.  Minnesota Statutes 2000, section 270B.03, 
  3.13  subdivision 6, is amended to read: 
  3.14     Subd. 6.  [INVESTIGATIVE DATA.] For purposes of any law 
  3.15  administered by the department of revenue, including laws not 
  3.16  listed in section 270B.01, subdivision 8, investigative data 
  3.17  collected or created by the department of revenue in order to 
  3.18  prepare a case against a person, whether known or unknown, for 
  3.19  the commission of a crime is confidential or protected nonpublic 
  3.20  during an investigation.  When the investigation becomes 
  3.21  inactive, as defined in section 13.82, subdivision 5, the 
  3.22  classifications otherwise applicable under any other laws become 
  3.23  effective data is private or nonpublic. 
  3.24     [EFFECTIVE DATE.] This section is effective the day 
  3.25  following final enactment. 
  3.26     Sec. 5.  Minnesota Statutes 2000, section 270B.16, is 
  3.27  amended to read: 
  3.28     270B.16 [DISCOVERY OF REVENUE DATA.] 
  3.29     Notwithstanding any law to the contrary, data collected by 
  3.30  the department of revenue are not subject to discovery or 
  3.31  subpoena in a legal action, other than an action or proceeding 
  3.32  in connection with tax administration, unless disclosure of the 
  3.33  data is authorized under this chapter or is made in response to 
  3.34  a duly issued search warrant accompanied by a separate judicial 
  3.35  order as required by section 626.11, subdivision 2.  
  3.36     [EFFECTIVE DATE.] This section is effective the day 
  4.1   following final enactment. 
  4.2      Sec. 6.  Minnesota Statutes 2000, section 626.11, is 
  4.3   amended to read: 
  4.4      626.11 [ISSUANCE OF WARRANT.] 
  4.5      Subdivision 1.  [PROCEDURE.] If the judge is satisfied of 
  4.6   the existence of the grounds of the application, or that there 
  4.7   is probable cause to believe their existence, the judge must 
  4.8   issue a signed search warrant, naming the judge's judicial 
  4.9   office, to a peace officer in the judge's county, to an agent of 
  4.10  the bureau of criminal apprehension, or to an agent of the 
  4.11  division of alcohol and gambling enforcement who is a licensed 
  4.12  peace officer as defined in section 626.84, subdivision 1, 
  4.13  paragraph (c).  The warrant shall direct the officer or agent to 
  4.14  search the person or place named for the property or things 
  4.15  specified, and to retain the property or things in the officer's 
  4.16  or agent's custody subject to order of the court issuing the 
  4.17  warrant. 
  4.18     Subd. 2.  [EXCEPTION FOR TAX RETURN INFORMATION.] No search 
  4.19  warrant that relates to a nontax criminal investigation and 
  4.20  seeks tax returns or return information maintained by the 
  4.21  department of revenue and classified as not public data under 
  4.22  sections 270B.01 to 270B.19 may be issued unless the judge 
  4.23  determines at the time the warrant is applied for that the 
  4.24  following factors are present:  
  4.25     (1) there is reasonable cause to believe, based upon 
  4.26  information believed to be reliable, that a specific criminal 
  4.27  act has been committed; 
  4.28     (2) there is reasonable cause to believe that the return or 
  4.29  return information is or may be relevant to a matter relating to 
  4.30  the commission of that act; 
  4.31     (3) the return or return information is sought exclusively 
  4.32  for use in a state criminal investigation or proceeding 
  4.33  concerning that act; and 
  4.34     (4) the information sought to be disclosed cannot 
  4.35  reasonably be obtained, under the circumstances, from any other 
  4.36  source.  
  5.1      The determination of the judge shall be stated in a court 
  5.2   order separate from the search warrant, a copy of which must be 
  5.3   attached to the warrant at the time of issuance. 
  5.4      [EFFECTIVE DATE.] This section is effective the day 
  5.5   following final enactment. 
  5.6                              ARTICLE 2 
  5.7                        SEIZURES OF CONTRABAND 
  5.8      Section 1.  Minnesota Statutes 2000, section 296A.24, 
  5.9   subdivision 1, is amended to read: 
  5.10     Subdivision 1.  [SEIZURE.] The commissioner or authorized 
  5.11  agents may seize gasoline or special fuel being transported for 
  5.12  delivery in violation of section 296A.03, subdivision 1, and any 
  5.13  vehicle or other method of conveyance used for transporting the 
  5.14  gasoline or special fuel.  Any untaxed motor vehicle fuel that 
  5.15  is received by a person other than a licensee is subject to 
  5.16  seizure along with the vehicle or other means of transportation 
  5.17  used to transport the motor vehicle fuel.  Any motor vehicle 
  5.18  fuel, along with the transporting vehicle, brought into the 
  5.19  state of Minnesota by a transporter for use, distribution, 
  5.20  storage, or sale that is not supported by a manifest, bill of 
  5.21  lading, or invoice, reflecting the licensed distributor 
  5.22  responsible for the tax and/or fees is subject to seizure by the 
  5.23  Minnesota department of revenue.  Property seized under this 
  5.24  subdivision is subject to forfeiture as provided in subdivisions 
  5.25  subdivision 2 and 3. 
  5.26     [EFFECTIVE DATE.] This section is effective for seizures 
  5.27  made on or after July 1, 2001. 
  5.28     Sec. 2.  Minnesota Statutes 2000, section 296A.24, 
  5.29  subdivision 2, is amended to read: 
  5.30     Subd. 2.  [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten 
  5.31  days after the seizure of gasoline or special fuel, the person 
  5.32  making the seizure shall deliver serve by certified mail an 
  5.33  inventory of the vehicle or property seized to on the person 
  5.34  from whom the seizure was made, if known, and on any person 
  5.35  known or believed to have any right, title, interest, or lien on 
  5.36  the vehicle or property, at the last known address, and file a 
  6.1   copy with the office of the commissioner.  The notice must 
  6.2   include an explanation of the right to demand a judicial 
  6.3   forfeiture determination. 
  6.4      (b) Within ten 60 days after the date of service of the 
  6.5   inventory, which is the date of mailing, the person from whom 
  6.6   the vehicle or property was seized or any person claiming an 
  6.7   interest in the property it may file with the commissioner a 
  6.8   demand for a judicial determination of whether the vehicle or 
  6.9   property was lawfully subject to seizure and forfeiture.  The 
  6.10  commissioner, within 60 days of demand for a judicial 
  6.11  determination, shall begin an action in the district court of 
  6.12  the county where the seizure was made to determine the issue of 
  6.13  forfeiture. 
  6.14     (b) The action must be brought in the name of the state and 
  6.15  prosecuted by the county attorney or by the attorney 
  6.16  general.  The demand must be in the form of a civil complaint 
  6.17  and must be filed with the court administrator in the county in 
  6.18  which the seizure occurred, together with proof of service of a 
  6.19  copy of the complaint on the commissioner of revenue, and the 
  6.20  standard filing fee for civil actions unless the petitioner has 
  6.21  the right to sue in forma pauperis under section 563.01.  If the 
  6.22  value of the seized property or vehicle is $7,500 or less, the 
  6.23  claimant may file an action in conciliation court for its 
  6.24  recovery.  If the value of the seized property or vehicle is 
  6.25  less than $500, the claimant does not have to pay the 
  6.26  conciliation court filing fee. 
  6.27     (c) The complaint must be captioned in the name of the 
  6.28  claimant as plaintiff and the seized property or vehicle as 
  6.29  defendant, and must state with specificity the grounds on which 
  6.30  the claimant alleges the property or vehicle was improperly 
  6.31  seized and the plaintiff's interest in the property or vehicle 
  6.32  seized.  No responsive pleading is required of the commissioner 
  6.33  and no court fees may be charged for the commissioner's 
  6.34  appearance in the matter.  The proceedings are governed by the 
  6.35  Rules of Civil Procedure.  Notwithstanding any law to the 
  6.36  contrary, an action for the return of property or a vehicle 
  7.1   seized under this section may not be maintained by or on behalf 
  7.2   of any person who has been served with an inventory unless the 
  7.3   person has complied with this subdivision.  The court shall hear 
  7.4   the action without a jury and shall try and determine the issues 
  7.5   of fact and law involved. 
  7.6      (c) (d) When a judgment of forfeiture is entered, the 
  7.7   commissioner may, unless the judgment is stayed pending an 
  7.8   appeal, either: 
  7.9      (1) cause the forfeited property gasoline or special fuel 
  7.10  to be destroyed; or 
  7.11     (2) cause it the forfeited property in clause (1) or 
  7.12  vehicle to be sold at public auction as provided by 
  7.13  law.  Proceeds of a sale, after deducting the expense of keeping 
  7.14  the gasoline or special fuel and costs of the sale, must be paid 
  7.15  into the state treasury.  The commissioner shall reimburse 
  7.16  designees for costs incurred.  After deducting the expense of 
  7.17  keeping the property and vehicle and the costs of the sale, the 
  7.18  commissioner shall pay from the funds collected all liens 
  7.19  according to their priority, which are established as being bona 
  7.20  fide and as existing without the lienor having any notice or 
  7.21  knowledge that the property or vehicle was being used or was 
  7.22  intended to be used for or in connection with any violation, and 
  7.23  shall pay the balance of the proceeds into the general fund.  
  7.24     (d) If a demand for judicial determination is made and no 
  7.25  action is commenced as provided in this subdivision, the 
  7.26  property must be released by the commissioner and redelivered to 
  7.27  the person entitled to it.  (e) If no demand for judicial 
  7.28  determination is made, the property or vehicle seized must be 
  7.29  considered forfeited to the state by operation of law and may be 
  7.30  disposed of by the commissioner as provided where there has been 
  7.31  a judgment of forfeiture.  When the commissioner is satisfied 
  7.32  that a person from whom property is seized under this chapter 
  7.33  was acting in good faith and without intent to evade the tax, 
  7.34  the commissioner shall release the property seized, without 
  7.35  further legal proceedings. 
  7.36     [EFFECTIVE DATE.] This section is effective for seizures 
  8.1   made on or after July 1, 2001. 
  8.2      Sec. 3.  Minnesota Statutes 2000, section 297A.91, is 
  8.3   amended to read: 
  8.4      297A.91 [SEIZURE; COURT REVIEW.] 
  8.5      Subdivision 1.  [SEIZURE OF PROPERTY USED IN ILLEGAL 
  8.6   TRANSPORT.] (a) If the retailer does not have a sales or use tax 
  8.7   permit and has been engaging in transporting personal property 
  8.8   into the state without payment of the tax, the commissioner of 
  8.9   revenue or the commissioner's agents may seize in the name of 
  8.10  the state any truck, automobile, or means of transportation not 
  8.11  owned or operated by a common carrier, used in the illegal 
  8.12  importation and transportation of any tangible personal property 
  8.13  by a retailer or the retailer's agent or employee.  The 
  8.14  commissioner may demand the forfeiture and sale of the truck, 
  8.15  automobile, or other means of transportation together with the 
  8.16  property being transported illegally, unless the owner 
  8.17  establishes to the satisfaction of the commissioner or the court 
  8.18  that the owner had no notice or knowledge or reason to believe 
  8.19  that the vehicle was used or intended to be used in any such 
  8.20  violation. 
  8.21     (b) Within two ten days after the seizure, the person 
  8.22  making the seizure shall deliver serve by certified mail an 
  8.23  inventory of the vehicle and property seized to on the person 
  8.24  from whom the seizure was made, if known, and to on any person 
  8.25  known or believed to have any right, title, interest, or lien on 
  8.26  the vehicle or property, at the last known address.  The person 
  8.27  making the seizure shall also file a copy of the inventory with 
  8.28  the commissioner.  The notice must include an explanation of the 
  8.29  right to demand a judicial forfeiture determination.  
  8.30     Subd. 2.  [COURT REVIEW OF FORFEITURE.] (a) Within ten 60 
  8.31  days after the date of service of the inventory, which is the 
  8.32  date of mailing, the person from whom the vehicle and property 
  8.33  were seized or any person claiming an interest in the vehicle or 
  8.34  property may file with the commissioner a demand for a judicial 
  8.35  determination of the question of whether the vehicle or property 
  8.36  was lawfully subject to seizure and forfeiture.  The 
  9.1   commissioner, within 30 days, shall institute an action in the 
  9.2   district court of the county where the seizure was made to 
  9.3   determine the issue of forfeiture. 
  9.4      (b) The action must be brought in the name of the state and 
  9.5   prosecuted by the county attorney or the attorney general.  The 
  9.6   demand must be in the form of a civil complaint and must be 
  9.7   filed with the court administrator in the county in which the 
  9.8   seizure occurred, together with proof of service or a copy of 
  9.9   the complaint on the commissioner of revenue, and the standard 
  9.10  filing fee for civil actions unless the petitioner has the right 
  9.11  to sue in forma pauperis under section 563.01.  If the value of 
  9.12  the seized property or vehicle is $7,500 or less, the claimant 
  9.13  may file an action in conciliation court for its recovery.  If 
  9.14  the value of the seized property or vehicle is less than $500, 
  9.15  the claimant does not have to pay the conciliation court filing 
  9.16  fee.  
  9.17     (c) The complaint must be captioned in the name of the 
  9.18  claimant as plaintiff and the seized property or vehicle as 
  9.19  defendant, and must state with specificity the grounds on which 
  9.20  the claimant alleges the property or vehicle was improperly 
  9.21  seized and the plaintiff's interest in the property or vehicle 
  9.22  seized.  No responsive pleading is required of the commissioner, 
  9.23  and no court fees may be charged for the commissioner's 
  9.24  appearance in the matter.  The proceedings are governed by the 
  9.25  Rules of Civil Procedure.  Notwithstanding any law to the 
  9.26  contrary, an action for the return of property or a vehicle 
  9.27  seized under this subdivision may not be maintained by or on 
  9.28  behalf of any person who has been served with an inventory 
  9.29  unless the person has complied with this subdivision.  The court 
  9.30  shall hear the action without a jury and shall determine the 
  9.31  issues of fact and law involved.  If a judgment of forfeiture is 
  9.32  entered and is not stayed pending an appeal, the commissioner 
  9.33  may have the forfeited vehicle and property sold at public 
  9.34  auction as provided by law.  
  9.35     Subd. 3.  [TREATMENT OF SEIZED PROPERTY.] If a demand for 
  9.36  judicial determination is made and no action is commenced as 
 10.1   provided in this subdivision, the vehicle and property must be 
 10.2   released by the commissioner and redelivered to the person 
 10.3   entitled to it.  If no demand for judicial determination is 
 10.4   made, the vehicle and property seized are considered forfeited 
 10.5   to the state by operation of law and may be disposed of by the 
 10.6   commissioner as if there were a judgment of forfeiture.  The 
 10.7   forfeiture and sale of the automobile, truck, or other means of 
 10.8   transportation, and of the property being transported illegally 
 10.9   in it, are a penalty for the violation of this chapter.  After 
 10.10  deducting the expense of keeping the vehicle and property, the 
 10.11  fee for seizure, and the costs of the sale, the commissioner 
 10.12  shall pay liens from the funds collected.  The commissioner 
 10.13  shall pay all liens, according to their priority, that are 
 10.14  established at the hearing as being bona fide and as existing 
 10.15  without the lienor having any notice or knowledge that the 
 10.16  vehicle or property was being used or was intended to be used 
 10.17  for or in connection with any such violation as specified in the 
 10.18  order of the court.  The commissioner shall pay the balance of 
 10.19  the proceeds into the state treasury to be credited to the 
 10.20  general fund.  The state is not liable for any liens in excess 
 10.21  of the proceeds from the sale after allowable deductions.  A 
 10.22  sale under this section frees the vehicle and property sold from 
 10.23  all liens.  The order of the district court may be appealed as 
 10.24  in other civil cases.  
 10.25     [EFFECTIVE DATE.] This section is effective for seizures 
 10.26  made on or after July 1, 2001. 
 10.27     Sec. 4.  Minnesota Statutes 2000, section 297E.16, 
 10.28  subdivision 1, is amended to read: 
 10.29     Subdivision 1.  [SEIZURE.] Contraband may be seized by the 
 10.30  commissioner or by any sheriff or other police officer, 
 10.31  hereinafter referred to as the "seizing authority," with or 
 10.32  without process, and is subject to forfeiture as provided in 
 10.33  subdivisions subdivision 2 and 3.  
 10.34     [EFFECTIVE DATE.] This section is effective for seizures 
 10.35  made on or after July 1, 2001. 
 10.36     Sec. 5.  Minnesota Statutes 2000, section 297E.16, 
 11.1   subdivision 2, is amended to read: 
 11.2      Subd. 2.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
 11.3   DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
 11.4   seizure of alleged contraband described in section 349.2125, 
 11.5   subdivision 1, the person making the seizure shall make 
 11.6   available serve by certified mail an inventory of the property 
 11.7   seized to on the person from whom the property was seized, if 
 11.8   known, and on any person known or believed to have any right, 
 11.9   title, interest, or lien in the property, at the last known 
 11.10  address, and file a copy with the commissioner or the director 
 11.11  of alcohol and gambling enforcement.  The notice must include an 
 11.12  explanation of the right to demand a judicial forfeiture 
 11.13  determination. 
 11.14     (b) Within ten 60 days after the date of service of the 
 11.15  inventory, which is the date of mailing, the person from whom 
 11.16  the property was seized or any person claiming an interest in 
 11.17  the property may file with the seizing authority a demand for 
 11.18  judicial determination of whether the property was lawfully 
 11.19  subject to seizure and forfeiture.  Within 60 days after the 
 11.20  date of filing of the demand, the seizing authority must bring 
 11.21  an action in the district court of the county where seizure was 
 11.22  made to determine the issue of forfeiture.  The action must be 
 11.23  brought in the name of the state and be prosecuted by the county 
 11.24  attorney or by the attorney general.  The demand must be in the 
 11.25  form of a civil complaint and must be filed with the court 
 11.26  administrator in the county in which the seizure occurred, 
 11.27  together with proof of service of a copy of the complaint on the 
 11.28  commissioner of revenue or the director of alcohol and gambling 
 11.29  enforcement, and the standard filing fee for civil actions 
 11.30  unless the petitioner has the right to sue in forma pauperis 
 11.31  under section 563.01.  If the value of the seized property is 
 11.32  $7,500 or less, the claimant may file an action in conciliation 
 11.33  court for recovery of the property.  If the value of the seized 
 11.34  property is less than $500, the claimant does not have to pay 
 11.35  the conciliation court filing fee.  
 11.36     (c) The complaint must be captioned in the name of the 
 12.1   claimant as plaintiff and the seized property as defendant, and 
 12.2   must state with specificity the grounds on which the claimant 
 12.3   alleges the property was improperly seized and the plaintiff's 
 12.4   interest in the property seized.  No responsive pleading is 
 12.5   required of the commissioner or director, and no court fees may 
 12.6   be charged for the commissioner's or director's appearance in 
 12.7   the matter.  The proceedings are governed by the Rules of Civil 
 12.8   Procedure.  Notwithstanding any law to the contrary, an action 
 12.9   for the return of property seized under this section may not be 
 12.10  maintained by or on behalf of any person who has been served 
 12.11  with an inventory unless the person has complied with this 
 12.12  subdivision.  The court shall hear the action without a jury and 
 12.13  determine the issues of fact and law involved.  
 12.14     (d) If a judgment of forfeiture is entered, the seizing 
 12.15  authority may, unless the judgment is stayed pending an appeal, 
 12.16  either (1) cause the forfeited property, other than a vehicle, 
 12.17  to be destroyed; or (2) cause it to be sold at a public auction 
 12.18  as provided by law.  The person making a sale, after deducting 
 12.19  the expense of keeping the property, the fee for seizure, and 
 12.20  the costs of the sale, shall pay all liens according to their 
 12.21  priority, which are established as being bona fide and as 
 12.22  existing without the lienor having any notice or knowledge that 
 12.23  the property was being used or was intended to be used for or in 
 12.24  connection with the violation.  The balance of the proceeds must 
 12.25  be paid 70 percent to the seizing authority for deposit as a 
 12.26  supplement to its operating fund or similar fund for official 
 12.27  use, and 20 percent to the county attorney or other prosecuting 
 12.28  agency that handled the court proceeding, if there is one, for 
 12.29  deposit as a supplement to its operating fund or similar fund 
 12.30  for prosecutorial purposes.  The remaining ten percent of the 
 12.31  proceeds must be forwarded within 60 days after resolution of 
 12.32  the forfeiture to the department of human services to fund 
 12.33  programs for the treatment of compulsive gamblers.  If there is 
 12.34  no prosecuting authority involved in the forfeiture, the 20 
 12.35  percent of the proceeds otherwise designated for the prosecuting 
 12.36  authority must be deposited into the general fund.  
 13.1      If demand for judicial determination is made and no action 
 13.2   is commenced by the seizing authority as provided in this 
 13.3   subdivision, the property must be released by the seizing 
 13.4   authority and delivered to the person entitled to it.  (e) If no 
 13.5   demand for judicial determination is made, the property seized 
 13.6   is considered forfeited to the seizing authority by operation of 
 13.7   law and may be disposed of by the seizing authority as provided 
 13.8   where there has been a judgment of forfeiture.  When the seizing 
 13.9   authority is satisfied that a person from whom property is 
 13.10  seized was acting in good faith and without intent to evade the 
 13.11  tax imposed by section 297E.02, the seizing authority shall 
 13.12  release the property seized without further legal proceedings. 
 13.13     [EFFECTIVE DATE.] This section is effective for seizures 
 13.14  made on or after July 1, 2001. 
 13.15     Sec. 6.  Minnesota Statutes 2000, section 297F.21, 
 13.16  subdivision 1, is amended to read: 
 13.17     Subdivision 1.  [CONTRABAND DEFINED.] The following are 
 13.18  declared to be contraband and therefore subject to civil and 
 13.19  criminal penalties under this chapter: 
 13.20     (a) Cigarette packages which do not have stamps affixed to 
 13.21  them as provided in this chapter, including but not limited to 
 13.22  (i) packages with illegible stamps and packages with stamps that 
 13.23  are not complete or whole even if the stamps are legible, and 
 13.24  (ii) all devices for the vending of cigarettes in which packages 
 13.25  as defined in item (i) are found, including all contents 
 13.26  contained within the devices. 
 13.27     (b) A device for the vending of cigarettes and all packages 
 13.28  of cigarettes, where the device does not afford at least partial 
 13.29  visibility of contents.  Where any package exposed to view does 
 13.30  not carry the stamp required by this chapter, it shall be 
 13.31  presumed that all packages contained in the device are unstamped 
 13.32  and contraband. 
 13.33     (c) A device for the vending of cigarettes to which the 
 13.34  commissioner or authorized agents have been denied access for 
 13.35  the inspection of contents.  In lieu of seizure, the 
 13.36  commissioner or an agent may seal the device to prevent its use 
 14.1   until inspection of contents is permitted. 
 14.2      (d) A device for the vending of cigarettes which does not 
 14.3   carry the name and address of the owner, plainly marked and 
 14.4   visible from the front of the machine. 
 14.5      (e) A device including, but not limited to, motor vehicles, 
 14.6   trailers, snowmobiles, airplanes, and boats used with the 
 14.7   knowledge of the owner or of a person operating with the consent 
 14.8   of the owner for the storage or transportation of more than 
 14.9   5,000 cigarettes which are contraband under this subdivision.  
 14.10  When cigarettes are being transported in the course of 
 14.11  interstate commerce, or are in movement from either a public 
 14.12  warehouse to a distributor upon orders from a manufacturer or 
 14.13  distributor, or from one distributor to another, the cigarettes 
 14.14  are not contraband, notwithstanding the provisions of clause (a).
 14.15     (f) A device including, but not limited to, motor vehicles, 
 14.16  trailers, snowmobiles, airplanes, and boats used with the 
 14.17  knowledge of the owner, or of a person operating with the 
 14.18  consent of the owner, for the storage or transportation of 
 14.19  untaxed tobacco products intended for sale in Minnesota other 
 14.20  than those in the possession of a licensed distributor on or 
 14.21  before the due date for payment of the tax under section 
 14.22  297F.09, subdivision 2. 
 14.23     (g) Cigarette packages or tobacco products obtained from an 
 14.24  unlicensed seller. 
 14.25     (g) (h) Cigarette packages offered for sale or held as 
 14.26  inventory in violation of section 297F.20, subdivision 7. 
 14.27     (h) (i) Tobacco products on which the tax has not been paid 
 14.28  by a licensed distributor. 
 14.29     (i) (j) Any cigarette packages or tobacco products offered 
 14.30  for sale or held as inventory for which there is not an invoice 
 14.31  from a licensed seller as required under section 297F.13, 
 14.32  subdivision 4.  
 14.33     (j) (k) Cigarette packages which have been imported into 
 14.34  the United States in violation of United States Code, title 26, 
 14.35  section 5754.  All cigarettes held in violation of that section 
 14.36  shall be presumed to have entered the United States after 
 15.1   December 31, 1999, in the absence of proof to the contrary. 
 15.2      [EFFECTIVE DATE.] This section is effective for seizures 
 15.3   made on or after July 1, 2001. 
 15.4      Sec. 7.  Minnesota Statutes 2000, section 297F.21, 
 15.5   subdivision 2, is amended to read: 
 15.6      Subd. 2.  [SEIZURE.] Cigarettes, tobacco products, or other 
 15.7   property made contraband by subdivision 1 may be seized by the 
 15.8   commissioner or authorized agents or by any sheriff or other 
 15.9   police officer, with or without process, and are subject to 
 15.10  forfeiture as provided in subdivisions subdivision 3 and 4. 
 15.11     [EFFECTIVE DATE.] This section is effective for seizures 
 15.12  made on or after July 1, 2001. 
 15.13     Sec. 8.  Minnesota Statutes 2000, section 297F.21, 
 15.14  subdivision 3, is amended to read: 
 15.15     Subd. 3.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
 15.16  DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
 15.17  seizure of any alleged contraband, the person making the seizure 
 15.18  shall make available serve by certified mail an inventory of the 
 15.19  property seized to on the person from whom the seizure was made, 
 15.20  if known, and on any person known or believed to have any right, 
 15.21  title, interest, or lien in the property, at the last known 
 15.22  address, and file a copy with the commissioner.  The notice must 
 15.23  include an explanation of the right to demand a judicial 
 15.24  forfeiture determination. 
 15.25     (b) Within ten 60 days after the date of service of the 
 15.26  inventory, which is the date of mailing, the person from whom 
 15.27  the property was seized or any person claiming an interest in 
 15.28  the property may file with the commissioner a demand for a 
 15.29  judicial determination of the question as to whether the 
 15.30  property was lawfully subject to seizure and forfeiture.  The 
 15.31  commissioner, within 60 days, shall institute an action in the 
 15.32  district court of the county where the seizure was made to 
 15.33  determine the issue of forfeiture.  The demand must be in the 
 15.34  form of a civil complaint and must be filed with the court 
 15.35  administrator in the county in which the seizure occurred, 
 15.36  together with proof of service of a copy of the complaint on the 
 16.1   commissioner of revenue, and the standard filing fee for civil 
 16.2   actions unless the petitioner has the right to sue in forma 
 16.3   pauperis under section 563.01.  If the value of the seized 
 16.4   property is $7,500 or less, the claimant may file an action in 
 16.5   conciliation court for recovery of the property.  If the value 
 16.6   of the seized property is less than $500, the claimant does not 
 16.7   have to pay the conciliation court filing fee. 
 16.8      (c) The complaint must be captioned in the name of the 
 16.9   claimant as plaintiff and the seized property as defendant, and 
 16.10  must state with specificity the grounds on which the claimant 
 16.11  alleges the property was improperly seized and the plaintiff's 
 16.12  interest in the property seized.  No responsive pleading is 
 16.13  required of the commissioner, and no court fees may be charged 
 16.14  for the commissioner's appearance in the matter.  The 
 16.15  proceedings are governed by the Rules of Civil Procedure.  
 16.16  Notwithstanding any law to the contrary, an action for the 
 16.17  return of property seized under this section may not be 
 16.18  maintained by or on behalf of any person who has been served 
 16.19  with an inventory unless the person has complied with this 
 16.20  subdivision.  The court shall decide whether the alleged 
 16.21  contraband is contraband, as defined in subdivision 1. 
 16.22     (b) The action must be brought in the name of the state and 
 16.23  must be prosecuted by the county attorney or by the attorney 
 16.24  general.  The court shall hear the action without a jury and 
 16.25  shall try and determine the issues of fact and law involved. 
 16.26     (c) (d) When a judgment of forfeiture is entered, the 
 16.27  commissioner may, unless the judgment is stayed pending an 
 16.28  appeal, either: 
 16.29     (1) deliver the forfeited property cigarette packages or 
 16.30  tobacco products to the commissioner of human services for use 
 16.31  by patients in state institutions; 
 16.32     (2) cause it the property in clause (1) to be destroyed; or 
 16.33     (3) cause it the forfeited property to be sold at public 
 16.34  auction as provided by law.  
 16.35  The person making a sale, after deducting the expense of keeping 
 16.36  the property, the fee for seizure, and the costs of the sale, 
 17.1   shall pay all liens according to their priority, which are 
 17.2   established as being bona fide and as existing without the 
 17.3   lienor having any notice or knowledge that the property was 
 17.4   being used or was intended to be used for or in connection with 
 17.5   the violation.  The balance of the proceeds must be paid 75 
 17.6   percent to the department of revenue for deposit as a supplement 
 17.7   to its operating fund or similar fund for official use, and 25 
 17.8   percent to the county attorney or other prosecuting agency that 
 17.9   handled the court proceeding, if there is one, for deposit as a 
 17.10  supplement to its operating fund or similar fund for 
 17.11  prosecutorial purposes.  If there is no prosecuting authority 
 17.12  involved in the forfeiture, the 25 percent of the proceeds 
 17.13  otherwise designated for the prosecuting authority must be 
 17.14  deposited into the general fund.  
 17.15     (d) If a demand for judicial determination is made and no 
 17.16  action commenced as provided in this subdivision, the property 
 17.17  must be released by the commissioner and returned to the person 
 17.18  entitled to it.  (e) If no demand for judicial determination is 
 17.19  made, the property seized is considered forfeited to the state 
 17.20  by operation of law and may be disposed of by the commissioner 
 17.21  as provided in the case of a judgment of forfeiture. 
 17.22     [EFFECTIVE DATE.] This section is effective for seizures 
 17.23  made on or after July 1, 2001. 
 17.24     Sec. 9.  Minnesota Statutes 2000, section 297G.20, 
 17.25  subdivision 3, is amended to read: 
 17.26     Subd. 3.  [SEIZURE.] Distilled spirits, wine, fermented 
 17.27  malt beverages, or other property made contraband by subdivision 
 17.28  1 may be seized by the commissioner of revenue or public safety 
 17.29  and their authorized agents or by any sheriff or other police 
 17.30  officer, with or without process, and are subject to forfeiture 
 17.31  as provided in subdivisions subdivision 4 and 5. 
 17.32     [EFFECTIVE DATE.] This section is effective for seizures 
 17.33  made on or after July 1, 2001. 
 17.34     Sec. 10.  Minnesota Statutes 2000, section 297G.20, 
 17.35  subdivision 4, is amended to read: 
 17.36     Subd. 4.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
 18.1   DISPOSITION OF SEIZED PROPERTY.] (a) Within ten days after the 
 18.2   seizure of alleged contraband, the person making the seizure 
 18.3   shall make available serve by certified mail an inventory of the 
 18.4   property seized to on the person from whom the property was 
 18.5   seized, if known, and on any person known or believed to have 
 18.6   any right, title, interest, or lien in the property, at the last 
 18.7   known address, and file a copy with both the commissioners of 
 18.8   revenue and public safety.  The notice must include an 
 18.9   explanation of the right to demand a judicial forfeiture 
 18.10  determination. 
 18.11     (b) Within ten 60 days after the date of service of the 
 18.12  inventory, which is the date of mailing, the person from whom 
 18.13  the property was seized or any person claiming an interest in 
 18.14  the property may file with the seizing authority a demand for 
 18.15  judicial determination of whether the property was lawfully 
 18.16  subject to seizure and forfeiture.  Within 60 days after the 
 18.17  date of the filing of the demand, the seizing authority must 
 18.18  bring an action in the district court of the county where 
 18.19  seizure was made to determine the issue of forfeiture.  The 
 18.20  demand must be in the form of a civil complaint and must be 
 18.21  filed with the court administrator in the county in which the 
 18.22  seizure occurred, together with proof of service of a copy of 
 18.23  the complaint on the commissioner of revenue or public safety, 
 18.24  and the standard filing fee for civil actions unless the 
 18.25  petitioner has the right to sue in forma pauperis under section 
 18.26  563.01.  If the value of the seized property or vehicle is 
 18.27  $7,500 or less, the claimant may file an action in conciliation 
 18.28  court for recovery of the property.  If the value of the seized 
 18.29  property is less than $500, the claimant does not have to pay 
 18.30  the conciliation court filing fee.  
 18.31     (c) The complaint must be captioned in the name of the 
 18.32  claimant as plaintiff and the seized property as defendant, and 
 18.33  must state with specificity the grounds on which the claimant 
 18.34  alleges the property was improperly seized and the plaintiff's 
 18.35  interest in the property seized.  No responsive pleading is 
 18.36  required of the commissioner of revenue or public safety and no 
 19.1   court fees may be charged for either commissioner's appearance 
 19.2   in the matter.  The proceedings are governed by the Rules of 
 19.3   Civil Procedure.  Notwithstanding any law to the contrary, an 
 19.4   action for the return of property seized under this section may 
 19.5   not be maintained by or on behalf of any person who has been 
 19.6   served with an inventory unless the person has complied with 
 19.7   this subdivision.  
 19.8      (b) The action must be brought in the name of the state and 
 19.9   must be prosecuted by the county attorney or by the attorney 
 19.10  general.  The court shall hear the action without a jury and 
 19.11  determine the issues of fact and law involved. 
 19.12     (c) (d) If a judgment of forfeiture is entered, the seizing 
 19.13  authority may, unless the judgment is stayed pending an appeal, 
 19.14  either: 
 19.15     (1) cause the forfeited property, other than a vehicle, to 
 19.16  be destroyed; or 
 19.17     (2) cause it to be sold at a public auction as provided by 
 19.18  law.  
 19.19     The person making a sale, after deducting the expense of 
 19.20  keeping the property, the fee for seizure, and the costs of the 
 19.21  sale, shall pay all liens according to their priority, which are 
 19.22  established as being bona fide and as existing without the 
 19.23  lienor having any notice or knowledge that the property was 
 19.24  being used or was intended to be used for or in connection with 
 19.25  the violation.  The balance of the proceeds must be paid 75 
 19.26  percent to the seizing authority for deposit as a supplement to 
 19.27  its operating fund or similar fund for official use, and 25 
 19.28  percent to the county attorney or other prosecuting agency that 
 19.29  handled the court proceeding, if there is one, for deposit as a 
 19.30  supplement to its operating fund or similar fund for 
 19.31  prosecutorial purposes.  If there is no prosecuting authority 
 19.32  involved in the forfeiture, the 25 percent of the proceeds 
 19.33  otherwise designated for the prosecuting authority must be 
 19.34  deposited into the general fund.  
 19.35     (d) If demand for judicial determination is made and no 
 19.36  action is commenced by the seizing authority as provided in this 
 20.1   subdivision, the property must be released by the seizing 
 20.2   authority and delivered to the person entitled to it.  (e) If no 
 20.3   demand is made, the property seized is considered forfeited to 
 20.4   the seizing authority by operation of law and may be disposed of 
 20.5   by the seizing authority as provided for a judgment of 
 20.6   forfeiture.  When the seizing authority is satisfied that a 
 20.7   person from whom property is seized was acting in good faith and 
 20.8   without intent to evade the tax imposed by this chapter, the 
 20.9   seizing authority shall release the property seized without 
 20.10  further legal proceedings. 
 20.11     [EFFECTIVE DATE.] This section is effective for seizures 
 20.12  made on or after July 1, 2001. 
 20.13     Sec. 11.  [REPEALER.] 
 20.14     Minnesota Statutes 2000, sections 296A.24, subdivision 3; 
 20.15  297E.16, subdivision 3; 297F.21, subdivision 4; and 297G.20, 
 20.16  subdivision 5, are repealed. 
 20.17     [EFFECTIVE DATE.] This section is effective for seizures 
 20.18  made on or after July 1, 2001. 
 20.19                             ARTICLE 3
 20.20                        CIVIL PENALTY REFORM 
 20.21     Section 1.  Minnesota Statutes 2000, section 289A.60, 
 20.22  subdivision 1, is amended to read: 
 20.23     Subdivision 1.  [PENALTY FOR FAILURE TO PAY TAX.] (a) If a 
 20.24  tax other than a withholding or sales or use tax is not paid 
 20.25  within the time specified for payment, a penalty must be added 
 20.26  to the amount required to be shown as tax.  The penalty is three 
 20.27  percent of the tax not paid on or before the date specified for 
 20.28  payment of the tax if the failure is for not more than 30 days, 
 20.29  with an additional penalty of three percent of the amount of tax 
 20.30  remaining unpaid during each additional 30 days or fraction of 
 20.31  30 days during which the failure continues, not exceeding 24 
 20.32  percent in the aggregate.  If a corporate franchise, fiduciary 
 20.33  income, mining company, estate, partnership, S corporation, or 
 20.34  nonresident entertainer tax is not paid within the time 
 20.35  specified for payment, a penalty of six percent is added to the 
 20.36  unpaid tax, except that if a corporation or mining company meets 
 21.1   the requirements of section 289A.19, subdivision 2, the penalty 
 21.2   is not imposed.  
 21.3      (b) For the taxes listed in paragraph (a), in addition to 
 21.4   the penalty in that paragraph, whether imposed or not, if a 
 21.5   return or amended return is filed after the due date, without 
 21.6   regard to extensions, and any tax reported as remaining due is 
 21.7   not remitted with the return or amended return, a penalty of 
 21.8   five percent of the tax not paid is added to the tax.  If the 
 21.9   commissioner issues an order assessing additional tax for a tax 
 21.10  listed in paragraph (a), and the tax is not paid within 60 days 
 21.11  after the mailing of the order or, if appealed, within 60 days 
 21.12  after final resolution of the appeal, a penalty of five percent 
 21.13  of the tax is added to the tax. 
 21.14     (c) If an individual files a state individual income tax 
 21.15  return and pays all of the state individual income tax with the 
 21.16  filing of a return within six months of the date the return is 
 21.17  due and the amount paid by the due date of the return is at 
 21.18  least 90 percent of the amount of tax due, as shown on the 
 21.19  return, the individual is presumed to have reasonable cause for 
 21.20  the late payment.  If an individual income tax is not paid 
 21.21  within the time specified for payment, a penalty of four percent 
 21.22  is added to the unpaid tax.  There is a presumption of 
 21.23  reasonable cause for the late payment if the individual:  (i) 
 21.24  pays by the due date of the return at least 90 percent of the 
 21.25  amount of tax, after credits other than withholding and 
 21.26  estimated payments, shown owing on the return; (ii) files the 
 21.27  return within six months after the due date; and (iii) pays the 
 21.28  remaining balance of the reported tax when the return is filed. 
 21.29     (d) If the commissioner issues an order assessing 
 21.30  additional individual income tax, and the tax is not paid within 
 21.31  60 days after the mailing of the order or, if appealed, within 
 21.32  60 days after final resolution of the appeal, a penalty of four 
 21.33  percent of the unpaid tax is added to the tax.  
 21.34     (b) (e) If a withholding or sales or use tax is not paid 
 21.35  within the time specified for payment, a penalty must be added 
 21.36  to the amount required to be shown as tax.  The penalty is five 
 22.1   percent of the tax not paid on or before the date specified for 
 22.2   payment of the tax if the failure is for not more than 30 days, 
 22.3   with an additional penalty of five percent of the amount of tax 
 22.4   remaining unpaid during each additional 30 days or fraction of 
 22.5   30 days during which the failure continues, not exceeding 15 
 22.6   percent in the aggregate. 
 22.7      [EFFECTIVE DATE.] This section is effective for tax years 
 22.8   beginning after December 31, 2000, and for estate tax returns 
 22.9   due after January 1, 2002. 
 22.10     Sec. 2.  Minnesota Statutes 2000, section 289A.60, 
 22.11  subdivision 2, is amended to read: 
 22.12     Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
 22.13  a taxpayer fails to make and file a return other than an income 
 22.14  tax return of an individual, a withholding return, or sales or 
 22.15  use tax return, within the time prescribed or an extension, a 
 22.16  penalty is added to the tax.  The penalty is three percent of 
 22.17  the amount of tax not paid on or before the date prescribed for 
 22.18  payment of the tax including any extensions if the failure is 
 22.19  for not more than 30 days, with an additional five percent of 
 22.20  the amount of tax remaining unpaid during each additional 30 
 22.21  days or fraction of 30 days, during which the failure continues, 
 22.22  not exceeding 23 percent in the aggregate. 
 22.23     If a taxpayer fails to file an individual income tax return 
 22.24  within six months after the date prescribed for filing of the 
 22.25  return, a penalty of ten percent of the amount of tax not paid 
 22.26  by the end of that six-month period is added to the tax.  
 22.27     If a taxpayer fails to file a withholding or sales or use 
 22.28  tax return within the time prescribed, including an extension, a 
 22.29  penalty of five percent of the amount of tax not timely paid by 
 22.30  the end of that period is added to the tax.  
 22.31     [EFFECTIVE DATE.] This section is effective for tax years 
 22.32  beginning after December 31, 2000, and for estate tax returns 
 22.33  due after January 1, 2002. 
 22.34     Sec. 3.  Minnesota Statutes 2000, section 289A.60, is 
 22.35  amended by adding a subdivision to read: 
 22.36     Subd. 2a.  [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 
 23.1   individual income tax is not paid within 180 days after the date 
 23.2   of filing of a return or, in the case of taxes assessed by the 
 23.3   commissioner, within 180 days after the assessment date or, if 
 23.4   appealed, within 180 days after final resolution of the appeal, 
 23.5   an extended delinquency penalty of five percent of the tax 
 23.6   remaining unpaid is added to the amount due.  
 23.7      (b) If a corporate franchise, fiduciary income, mining 
 23.8   company, estate, partnership, S corporation, or nonresident 
 23.9   entertainer tax return is not filed within 30 days after written 
 23.10  demand for the filing of a delinquent return, an extended 
 23.11  delinquency penalty of five percent of the tax not paid prior to 
 23.12  the demand is added to the tax, or in the case of an individual 
 23.13  income tax return, a minimum penalty of $100 or the five percent 
 23.14  penalty is imposed, whichever amount is greater. 
 23.15     [EFFECTIVE DATE.] This section is effective for tax years 
 23.16  beginning after December 31, 2000, and for estate tax returns 
 23.17  due after January 1, 2002. 
 23.18     Sec. 4.  [APPROPRIATION.] 
 23.19     $545,000 in fiscal year 2002 and $25,000 in fiscal year 
 23.20  2003 is appropriated from the general fund to the commissioner 
 23.21  of revenue to implement sections 1 to 3.  $520,000 of the 
 23.22  appropriation in fiscal year 2002 is for a one-time expenditure 
 23.23  related to system programming costs.  This appropriation is 
 23.24  available for expenditure until June 30, 2003. 
 23.25     [EFFECTIVE DATE.] This section is effective July 1, 2001. 
 23.26     Sec. 5.  [REPEALER.] 
 23.27     Minnesota Statutes 2000, section 289A.60, subdivision 3, is 
 23.28  repealed. 
 23.29     [EFFECTIVE DATE.] This section is effective for tax years 
 23.30  beginning after December 31, 2000, and for estate tax returns 
 23.31  due after January 1, 2002. 
 23.32                             ARTICLE 4
 23.33                          CRIMINAL PENALTY 
 23.34     Section 1.  Minnesota Statutes 2000, section 297F.20, 
 23.35  subdivision 3, is amended to read: 
 23.36     Subd. 3.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
 24.1   person who files with the commissioner a return, report, or 
 24.2   other document, or who maintains or provides invoices subject to 
 24.3   review by the commissioner under this chapter, known by the 
 24.4   person to be fraudulent or false concerning a material matter, 
 24.5   is guilty of a felony. 
 24.6      (b) A person who knowingly aids or assists in, or advises 
 24.7   in the preparation or presentation of a return, report, invoice, 
 24.8   or other document that is fraudulent or false concerning a 
 24.9   material matter, whether or not the falsity or fraud is 
 24.10  committed with the knowledge or consent of the person authorized 
 24.11  or required to present the return, report, invoice, or other 
 24.12  document, is guilty of a felony. 
 24.13     [EFFECTIVE DATE.] This section is effective for crimes 
 24.14  occurring on or after July 1, 2001. 
 24.15                             ARTICLE 5 
 24.16                           MISCELLANEOUS 
 24.17     Section 1.  Minnesota Statutes 2000, section 16D.08, 
 24.18  subdivision 2, is amended to read: 
 24.19     Subd. 2.  [POWERS.] (a) In addition to the collection 
 24.20  remedies available to private collection agencies in this state, 
 24.21  the commissioner, with legal assistance from the attorney 
 24.22  general, may utilize any statutory authority granted to a 
 24.23  referring agency for purposes of collecting debt owed to that 
 24.24  referring agency.  The commissioner may also delegate to the 
 24.25  enterprise the tax collection remedies in sections 270.06, 
 24.26  clauses (7) and (17), excluding the power to subpoena witnesses; 
 24.27  270.66; 270.69, excluding subdivisions 7 and 13; 270.70, 
 24.28  excluding subdivision 14; 270.7001 to 270.72; and 290.92, 
 24.29  subdivision 23, except that a continuous wage levy under section 
 24.30  290.92, subdivision 23, is only effective for 70 days, unless no 
 24.31  competing wage garnishments, executions, or levies are served 
 24.32  within the 70-day period, in which case a wage levy is 
 24.33  continuous until a competing garnishment, execution, or levy is 
 24.34  served in the second or a succeeding 70-day period, in which 
 24.35  case a continuous wage levy is effective for the remainder of 
 24.36  that period.  A debtor who qualifies for cancellation of 
 25.1   collection costs under section 16D.11, subdivision 3, clause 
 25.2   (1), can apply to the commissioner for reduction or release of a 
 25.3   continuous wage levy, if the debtor establishes that the debtor 
 25.4   needs all or a portion of the wages being levied upon to pay for 
 25.5   essential living expenses, such as food, clothing, shelter, 
 25.6   medical care, or expenses necessary for maintaining employment.  
 25.7   The commissioner's determination not to reduce or release a 
 25.8   continuous wage levy is appealable to district court.  The word 
 25.9   "tax" or "taxes" when used in the tax collection statutes listed 
 25.10  in this subdivision also means debts referred under this chapter.
 25.11     (b) For debts other than state taxes or, child support, or 
 25.12  student loans, before any of the tax collection remedies listed 
 25.13  in this subdivision can be used, except for the remedies in 
 25.14  section 270.06, clauses (7) and (17), if the referring agency 
 25.15  has not already obtained a judgment or filed a lien, the 
 25.16  commissioner must first obtain a judgment against the debtor.  
 25.17  For student loans when the referring agency has not obtained a 
 25.18  judgment or filed a lien, before using the tax collection 
 25.19  remedies listed in this subdivision, except for the remedies in 
 25.20  section 270.06, clauses (7) and (17), the commissioner shall 
 25.21  give the debtor 30 days' notice in writing, which may be served 
 25.22  in any manner permitted in section 270.68 for service of a 
 25.23  summons and complaint.  The notice must advise the debtor of the 
 25.24  debtor's right to request that the commissioner commence a court 
 25.25  action, and that if no such request is made within 30 days after 
 25.26  service of the notice, the commissioner may use these tax 
 25.27  collection remedies.  If a timely request is made, the 
 25.28  commissioner shall obtain a judgment before using these tax 
 25.29  collection remedies. 
 25.30     [EFFECTIVE DATE.] This section is effective for student 
 25.31  loans referred to the commissioner for collection on or after 
 25.32  July 1, 2001. 
 25.33     Sec. 2.  Minnesota Statutes 2000, section 289A.55, 
 25.34  subdivision 9, is amended to read: 
 25.35     Subd. 9.  [INTEREST ON PENALTIES.] (a) A penalty imposed 
 25.36  under section 289A.60, subdivision 1, 2, 3, 2a, 4, 5, 6, or 21 
 26.1   bears interest from the date the return or payment was required 
 26.2   to be filed or paid, including any extensions, to the date of 
 26.3   payment of the penalty. 
 26.4      (b) A penalty not included in paragraph (a) bears interest 
 26.5   only if it is not paid within 60 days from the date of notice.  
 26.6   In that case interest is imposed from the date of notice to the 
 26.7   date of payment. 
 26.8      [EFFECTIVE DATE.] This section is effective for tax years 
 26.9   beginning after December 31, 2000, and for estate tax returns 
 26.10  due after January 1, 2002. 
 26.11     Sec. 3.  Minnesota Statutes 2000, section 289A.60, 
 26.12  subdivision 7, is amended to read: 
 26.13     Subd. 7.  [PENALTY FOR FRIVOLOUS RETURN.] If an individual 
 26.14  a taxpayer files what purports to be a tax return required by 
 26.15  chapter 290 or a claim for refund but which does not contain 
 26.16  information on which the substantial correctness of 
 26.17  the assessment purported return or claim for refund may be 
 26.18  judged or contains information that on its face shows that the 
 26.19  assessment purported return or claim for refund is substantially 
 26.20  incorrect and the conduct is due to a position that is frivolous 
 26.21  or a desire that appears on the purported return or claim for 
 26.22  refund to delay or impede the administration of Minnesota tax 
 26.23  laws, then the individual shall pay a penalty of $500.  In a 
 26.24  proceeding involving the issue of whether or not a person is 
 26.25  liable for this penalty, the burden of proof is on the 
 26.26  commissioner.  
 26.27     [EFFECTIVE DATE.] This section is effective for returns or 
 26.28  claims for refunds filed on or after the day following final 
 26.29  enactment.