1.1                          A bill for an act 
  1.2             relating to taxation; providing for disclosure or 
  1.3             inspection of certain data or return information; 
  1.4             limiting disclosure of certain data under subpoena; 
  1.5             providing criminal penalties; amending Minnesota 
  1.6             Statutes 1996, sections 270.66, subdivision 3; 
  1.7             270B.01, subdivision 8; 270B.03, subdivisions 1, 3, 
  1.8             and 4; 270B.08, subdivision 1; 270B.085, subdivision 
  1.9             1; 270B.09; 270B.12, subdivision 7; 270B.14, 
  1.10            subdivision 1, and by adding subdivisions; 270B.16; 
  1.11            and 287.34; proposing coding for new law in Minnesota 
  1.12            Statutes, chapter 270B. 
  1.13  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.14     Section 1.  Minnesota Statutes 1996, section 270.66, 
  1.15  subdivision 3, is amended to read: 
  1.16     Subd. 3.  [AGENCIES SHALL MAINTAIN RECORDS.] 
  1.17  Notwithstanding any provision to the contrary, every person, 
  1.18  organization, or corporation doing business (hereafter called 
  1.19  vendor) with the state of Minnesota or any of its departments, 
  1.20  agencies, or educational institutions including the University 
  1.21  of Minnesota (all hereafter called agency) shall provide that 
  1.22  agency with either their social security number, federal 
  1.23  taxpayer identification number, or Minnesota tax identification 
  1.24  number.  The commissioner may verify to the agency the 
  1.25  identifying information provided by a vendor.  The agency shall 
  1.26  maintain records of this information, and shall make these 
  1.27  records available, on request, to the commissioner for the sole 
  1.28  purpose of identifying people who have not filed state tax 
  1.29  returns or who have not paid uncontested state tax liabilities 
  2.1   (hereafter called delinquent taxpayer).  When an agency is 
  2.2   notified by the commissioner that a vendor is a delinquent 
  2.3   taxpayer, payments shall not be made by the agency to the vendor 
  2.4   until the commissioner notifies the agency that the vendor no 
  2.5   longer is a delinquent taxpayer.  Furthermore, if the vendor has 
  2.6   an uncontested delinquent tax liability, the setoff provided in 
  2.7   subdivision 1 may be implemented.  The commissioner shall 
  2.8   determine that a vendor no longer is a delinquent taxpayer when 
  2.9   the vendor has filed all delinquent state tax returns, paid all 
  2.10  uncontested state tax liabilities or entered into an agreement 
  2.11  with the commissioner which provides for the payment of these 
  2.12  liabilities.  
  2.13     Sec. 2.  Minnesota Statutes 1996, section 270B.01, 
  2.14  subdivision 8, is amended to read: 
  2.15     Subd. 8.  [MINNESOTA TAX LAWS.] For purposes of this 
  2.16  chapter only, "Minnesota tax laws" means the taxes, refunds, and 
  2.17  fees administered by or paid to the commissioner under 
  2.18  chapters 115B (except taxes imposed under sections 115B.21 to 
  2.19  115B.24), 289A (except taxes imposed under sections 298.01, 
  2.20  298.015, and 298.24), 290, 290A, 291, and 297A and sections 
  2.21  295.50 to 295.59, or any similar Indian tribal tax administered 
  2.22  by the commissioner pursuant to any tax agreement between the 
  2.23  state and the Indian tribal government, and includes any laws 
  2.24  for the assessment, collection, and enforcement of those taxes, 
  2.25  refunds, and fees. 
  2.26     Sec. 3.  Minnesota Statutes 1996, section 270B.03, 
  2.27  subdivision 1, is amended to read: 
  2.28     Subdivision 1.  [WHO MAY INSPECT.] Returns and return 
  2.29  information must, on written request, be made open to inspection 
  2.30  by or disclosure to the data subject.  For purposes of this 
  2.31  chapter, the following are the data subject: 
  2.32     (1) in the case of an individual return, that individual; 
  2.33     (2) in the case of an income tax return filed jointly, 
  2.34  either of the individuals with respect to whom the return is 
  2.35  filed; 
  2.36     (3) in the case of a partnership return, any person who was 
  3.1   a member of the partnership during any part of the period 
  3.2   covered by the return; 
  3.3      (4) in the case of the return of a corporation or its 
  3.4   subsidiary: 
  3.5      (i) any person designated by resolution of the board of 
  3.6   directors or other similar governing body; 
  3.7      (ii) any officer or employee of the corporation upon 
  3.8   written request signed by any officer and attested to by the 
  3.9   secretary or another officer; 
  3.10     (iii) any bona fide shareholder of record owning one 
  3.11  percent or more of the outstanding stock of the corporation; 
  3.12     (iv) if the corporation is a corporation that has made an 
  3.13  election under section 1362 of the Internal Revenue Code of 
  3.14  1986, as amended through December 31, 1988, any person who was a 
  3.15  shareholder during any part of the period covered by the return 
  3.16  during which an election was in effect; or 
  3.17     (v) if the corporation has been dissolved, any person 
  3.18  authorized by state law to act for the corporation or any person 
  3.19  who would have been authorized if the corporation had not been 
  3.20  dissolved; 
  3.21     (5) in the case of an estate return: 
  3.22     (i) the personal representative or trustee of the estate; 
  3.23  and 
  3.24     (ii) any heir at law, next of kin, or beneficiary of the 
  3.25  estate, but only if the commissioner finds that the heir at law, 
  3.26  next of kin, or beneficiary has a material interest that will be 
  3.27  affected by information contained in the return as shown on the 
  3.28  federal estate tax return; 
  3.29     (6) in the case of a trust return: 
  3.30     (i) the trustee or trustees, jointly or separately; and 
  3.31     (ii) any beneficiary of the trust, but only if the 
  3.32  commissioner finds that the beneficiary has a material interest 
  3.33  that will be affected by information contained in the return as 
  3.34  shown in the trust instrument; 
  3.35     (7) if liability has been assessed to a transferee under 
  3.36  section 289A.31, subdivision 3, the transferee is the data 
  4.1   subject with regard to the returns and return information 
  4.2   relating to the assessed liability; 
  4.3      (8) in the case of an Indian tribal government or an Indian 
  4.4   tribal government-owned entity, 
  4.5      (i) the chair of the tribal government, or 
  4.6      (ii) any person authorized by the tribal government; and 
  4.7      (9) in the case of a successor as defined in section 
  4.8   270.102, subdivision 1, paragraph (b), the successor is the data 
  4.9   subject and information may be disclosed as provided by section 
  4.10  270.102, subdivision 4.  
  4.11     Sec. 4.  Minnesota Statutes 1996, section 270B.03, 
  4.12  subdivision 3, is amended to read: 
  4.13     Subd. 3.  [DECEASED INDIVIDUALS.] Notwithstanding section 
  4.14  13.10, a return filed by or on behalf of a decedent is open to 
  4.15  inspection by or disclosure to: 
  4.16     (1) the personal representative of the decedent's estate or 
  4.17  trustee appointed under section 573.02, subdivision 3, or a 
  4.18  similar law of another state; and 
  4.19     (2) any heir at law, next of kin, or beneficiary under the 
  4.20  will of the decedent, or a donee of property, but only if the 
  4.21  commissioner finds that the heir at law, next of kin, 
  4.22  beneficiary, or donee has a material interest that will be 
  4.23  affected by information contained in the return a claimant under 
  4.24  section 290A.18, subdivision 1.  
  4.25     Sec. 5.  Minnesota Statutes 1996, section 270B.03, 
  4.26  subdivision 4, is amended to read: 
  4.27     Subd. 4.  [TITLE 11 OF THE UNITED STATES CODE AND 
  4.28  RECEIVERSHIP PROCEEDINGS.] (a) If the commissioner finds that 
  4.29  the trustee or receiver, in that person's fiduciary capacity, 
  4.30  has a material interest that will be affected by information 
  4.31  contained in the return, A return is open to inspection by or 
  4.32  disclosure to the trustee or receiver if: 
  4.33     (1) there is a trustee in a title 11 (United States 
  4.34  Bankruptcy Code) case in which the debtor is the person with 
  4.35  respect to whom the return is filed; or 
  4.36     (2) substantially all of the property of the person with 
  5.1   respect to whom the return is filed is in the hands of a 
  5.2   receiver. 
  5.3      (b) In an involuntary bankruptcy case of an individual, no 
  5.4   disclosure may be made under paragraph (a) until the order for 
  5.5   relief has been entered by the court having jurisdiction of the 
  5.6   case, unless the court finds that disclosure is appropriate for 
  5.7   purposes of determining whether an order for relief should be 
  5.8   entered. 
  5.9      Sec. 6.  Minnesota Statutes 1996, section 270B.08, 
  5.10  subdivision 1, is amended to read: 
  5.11     Subdivision 1.  [PERMIT INFORMATION.] The commissioner may 
  5.12  disclose to any person making an inquiry regarding the issuance 
  5.13  of a sales tax permit to a specific retailer whether a permit 
  5.14  has been issued to the retailer, the name and address of the 
  5.15  permit holder, the business name and location, the sales and use 
  5.16  tax account number, and the date of issuance of the permit, and 
  5.17  whether the permit has been canceled under section 297A.065. 
  5.18     Sec. 7.  [270B.081] [SALES TAX EXEMPTION CERTIFICATES.] 
  5.19     The commissioner may disclose to any person making inquiry 
  5.20  regarding the issuance of direct pay permits or certificates of 
  5.21  exemption issued by the commissioner to a taxpayer whether the 
  5.22  permit or certificate has been issued to the taxpayer, the 
  5.23  business name and location, the permit or certificate number, 
  5.24  the date of issuance of the permit or certificate, and whether 
  5.25  the certificate is currently valid. 
  5.26     Sec. 8.  Minnesota Statutes 1996, section 270B.085, 
  5.27  subdivision 1, is amended to read: 
  5.28     Subdivision 1.  [SEIZURE INFORMATION.] Following the 
  5.29  execution of a writ of entry under section 16D.08, subdivision 
  5.30  2, or 270.70, the commissioner may disclose information 
  5.31  identifying the individual or business subject to the writ, the 
  5.32  basis for the writ, and the results of the execution, including 
  5.33  lists of property seized. 
  5.34     Sec. 9.  Minnesota Statutes 1996, section 270B.09, is 
  5.35  amended to read: 
  5.36     270B.09 [CONTRACTS WITH THE STATE OR POLITICAL SUBDIVISION; 
  6.1   SETOFF.] 
  6.2      The commissioner may disclose to the department of finance 
  6.3   or any state agency or political or governmental subdivision of 
  6.4   the state making payment to a vendor as described in section 
  6.5   270.66 or a contractor or subcontractor as described in section 
  6.6   290.97 whether the vendor, contractor, or subcontractor has an 
  6.7   uncontested delinquent tax liability owed to the commissioner 
  6.8   and the amount of any liability.  The commissioner may also 
  6.9   disclose taxpayer identity information to the department of 
  6.10  finance, to the department of human services, to an agency 
  6.11  requesting verification pursuant to section 270.66, subdivision 
  6.12  3, and to the University of Minnesota, solely for vendor setoff 
  6.13  purposes. 
  6.14     Sec. 10.  Minnesota Statutes 1996, section 270B.12, 
  6.15  subdivision 7, is amended to read: 
  6.16     Subd. 7.  [LOTTERY DIVISION.] (a) The commissioner of 
  6.17  revenue may disclose to the lottery the amount of delinquent 
  6.18  state taxes, or debt as defined in section 270A.03, subdivision 
  6.19  5, of a winner of a lottery prize of $1,000 $600 or more, to the 
  6.20  extent necessary to administer section 349A.08, subdivision 8. 
  6.21     (b) The commissioner of revenue may disclose to the lottery 
  6.22  division that a retailer owes $500 or more in delinquent taxes 
  6.23  as defined in section 270.72, to the extent necessary to 
  6.24  administer section 349A.06, subdivision 2.  
  6.25     Sec. 11.  Minnesota Statutes 1996, section 270B.14, 
  6.26  subdivision 1, is amended to read: 
  6.27     Subdivision 1.  [DISCLOSURE TO COMMISSIONER OF HUMAN 
  6.28  SERVICES.] (a) On the request of the commissioner of human 
  6.29  services, the commissioner shall disclose return information 
  6.30  regarding taxes imposed by chapter 290, and claims for refunds 
  6.31  under chapter 290A, to the extent provided in paragraph (b) and 
  6.32  for the purposes set forth in paragraph (c). 
  6.33     (b) Data that may be disclosed are limited to data relating 
  6.34  to the identity, whereabouts, employment, income, and property 
  6.35  of a person owing or alleged to be owing an obligation of child 
  6.36  support. 
  7.1      (c) The commissioner of human services may request data 
  7.2   only for the purposes of carrying out the child support 
  7.3   enforcement program and to assist in the location of parents who 
  7.4   have, or appear to have, deserted their children.  Data received 
  7.5   may be used only as set forth in section 256.978. 
  7.6      (d) The commissioner shall provide the records and 
  7.7   information necessary to administer the supplemental housing 
  7.8   allowance to the commissioner of human services.  
  7.9      (e) At the request of the commissioner of human services, 
  7.10  the commissioner of revenue shall electronically match the 
  7.11  social security numbers and names of participants in the 
  7.12  telephone assistance plan operated under sections 237.69 to 
  7.13  237.711, with those of property tax refund filers, and determine 
  7.14  whether each participant's household income is within the 
  7.15  eligibility standards for the telephone assistance plan. 
  7.16     (f) The commissioner may provide records and information 
  7.17  collected under sections 295.50 to 295.59 to the commissioner of 
  7.18  human services for purposes of the Medicaid Voluntary 
  7.19  Contribution and Provider-Specific Tax Amendments of 1991, 
  7.20  Public Law Number 102-234.  Upon the written agreement by the 
  7.21  United States Department of Health and Human Services to 
  7.22  maintain the confidentiality of the data, the commissioner may 
  7.23  provide records and information collected under sections 295.50 
  7.24  to 295.59 to the Health Care Financing Administration section of 
  7.25  the United States Department of Health and Human Services for 
  7.26  purposes of meeting federal reporting requirements.  
  7.27     (g) The commissioner may provide records and information to 
  7.28  the commissioner of human services as necessary to administer 
  7.29  the early refund of refundable tax credits. 
  7.30     (h) The commissioner may disclose information to the 
  7.31  commissioner of human services necessary to verify income for 
  7.32  eligibility and premium payment under the MinnesotaCare program, 
  7.33  pursuant to section 256.9355, subdivision 2. 
  7.34     Sec. 12.  Minnesota Statutes 1996, section 270B.14, is 
  7.35  amended by adding a subdivision to read: 
  7.36     Subd. 15.  [DISCLOSURE TO COMMISSIONER OF THE POLLUTION 
  8.1   CONTROL AGENCY.] For purposes of administering and enforcing the 
  8.2   dry cleaning and environmental response and reimbursement law of 
  8.3   sections 115B.47 to 115B.51, the commissioner may disclose to 
  8.4   the commissioner of the pollution control agency the names and 
  8.5   addresses of the facilities, owners, and operators collected by 
  8.6   the commissioner under section 115B.49, subdivision 4. 
  8.7      Sec. 13.  Minnesota Statutes 1996, section 270B.14, is 
  8.8   amended by adding a subdivision to read: 
  8.9      Subd. 16.  [DISCLOSURE TO LAW ENFORCEMENT 
  8.10  AUTHORITIES.] Under circumstances involving threat of death or 
  8.11  physical injury to any individual, the commissioner may disclose 
  8.12  return information to the extent necessary to apprise 
  8.13  appropriate federal, state, or local law enforcement authorities 
  8.14  of those circumstances.  Section 13.82 applies to the data that 
  8.15  are received by a law enforcement authority under this 
  8.16  subdivision. 
  8.17     Sec. 14.  Minnesota Statutes 1996, section 270B.16, is 
  8.18  amended to read: 
  8.19     270B.16 [DISCOVERY OF REVENUE DATA.] 
  8.20     Notwithstanding any law to the contrary, data collected by 
  8.21  the department of revenue are not subject to discovery or 
  8.22  subpoena in a legal action, other than an action or proceeding 
  8.23  in connection with tax administration, unless disclosure of the 
  8.24  data is authorized under this chapter.  
  8.25     Sec. 15.  Minnesota Statutes 1996, section 287.34, is 
  8.26  amended to read: 
  8.27     287.34 [VIOLATIONS.] 
  8.28     Any person who in any manner knowingly and willfully 
  8.29  attempts to evade the a tax imposed by sections 287.21 to 287.33 
  8.30  this chapter, or who knowingly and willfully aids or abets in 
  8.31  the evasion or attempted evasion of the such tax or who 
  8.32  knowingly violates the provisions of sections 287.21 to 287.33 
  8.33  shall be guilty of a misdemeanor felony.  
  8.34     Sec. 16.  [EFFECTIVE DATE.] 
  8.35     Sections 1 to 14 are effective the day following final 
  8.36  enactment.  Section 15 is effective for deeds executed and 
  9.1   delivered, and mortgages submitted for recording, on or after 
  9.2   July 1, 1997.