as introduced - 83rd Legislature (2003 - 2004) Posted on 12/15/2009 12:00am
Engrossments | ||
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Introduction | Posted on 03/06/2003 |
1.1 A bill for an act 1.2 relating to taxation; making policy and administrative 1.3 changes to income, estate, property, sales and use, 1.4 cigarette and tobacco products, and other taxes and 1.5 tax provisions; conforming to certain changes in the 1.6 Internal Revenue Code; providing tax collection, 1.7 administration, and examination powers and procedures; 1.8 providing for civil and criminal penalties; amending 1.9 Minnesota Statutes 2002, sections 270.06; 270.701, 1.10 subdivision 2, by adding a subdivision; 270.72, 1.11 subdivision 2; 270A.03, subdivision 2; 273.05, 1.12 subdivision 1; 273.061, subdivision 1; 274.01, 1.13 subdivision 1; 274.13, subdivision 1; 275.025, 1.14 subdivision 4; 276.10; 276.11, subdivision 1; 282.01, 1.15 subdivisions 1b, 7a; 282.08; 289A.02, subdivision 7; 1.16 289A.10, subdivision 1; 289A.19, subdivision 4; 1.17 289A.31, by adding a subdivision; 289A.36, subdivision 1.18 7, by adding subdivisions; 289A.56, subdivision 3; 1.19 289A.60, subdivision 7, by adding a subdivision; 1.20 290.01, subdivisions 19, 31; 290.0679, subdivision 2; 1.21 290A.03, subdivision 15; 291.005, subdivision 1; 1.22 291.03, subdivision 1; 297A.61, subdivisions 3, 12, by 1.23 adding a subdivision; 297A.68, subdivision 5, by 1.24 adding a subdivision; 297A.69, subdivisions 2, 3, 4; 1.25 297B.025, subdivisions 1, 2; 297B.035, subdivision 1; 1.26 297F.01, subdivision 21a; 297F.06, subdivision 4; 1.27 297F.20, subdivisions 1, 2, 3, 6, 9; 352.15, 1.28 subdivision 1; 353.15, subdivision 1; 354.10, 1.29 subdivision 1; 354B.30; 354C.165; 469.1792, 1.30 subdivision 3; 477A.011, subdivision 30; Laws 2001, 1.31 First Special Session chapter 5, article 3, sections 1.32 61, 63; Laws 2001, First Special Session chapter 5, 1.33 article 9, section 12; proposing coding for new law in 1.34 Minnesota Statutes, chapters 270; 276; 290C; repealing 1.35 Minnesota Statutes 2002, section 270.691, subdivision 1.36 8. 1.37 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.38 ARTICLE 1 1.39 INCOME AND ESTATE TAXES 1.40 Section 1. Minnesota Statutes 2002, section 289A.10, 1.41 subdivision 1, is amended to read: 2.1 Subdivision 1. [RETURN REQUIRED.] In the case of a 2.2 decedent who has an interest in property with a situs in 2.3 Minnesota, the personal representative must submit a Minnesota 2.4 estate tax return to the commissioner, on a form prescribed by 2.5 the commissioner, if: 2.6 (1) a federal estate tax return is required to be filed; or 2.7 (2) the federal gross estate exceeds $700,000 for estates 2.8 of decedents dying after December 31, 2001, and before January 2.9 1, 2004; $850,000 for estates of decedents dying after December 2.10 31, 2003, and before January 1, 2005; $950,000 for estates of 2.11 decedents dying after December 31, 2004, and before January 1, 2.12 2006; and $1,000,000 for estates of decedents dying after 2.13 December 31, 2005. 2.14 The return must contain a computation of the Minnesota 2.15 estate tax due. The return must be signed by the personal 2.16 representative. 2.17 [EFFECTIVE DATE.] This section is effective for estates of 2.18 decedents dying after December 31, 2002. 2.19 Sec. 2. Minnesota Statutes 2002, section 289A.19, 2.20 subdivision 4, is amended to read: 2.21 Subd. 4. [ESTATE TAX RETURNS.] When in the commissioner's 2.22 judgment good cause exists, the commissioner may extend the time 2.23 for filing an estate tax return for not more than six months. 2.24 When an extension to file the federal estate tax return has been 2.25 granted under section 6081 of the Internal Revenue Code, the 2.26 time for filing the estate tax return is extended for that 2.27 period. 2.28 [EFFECTIVE DATE.] This section is effective for estates of 2.29 decedents dying after December 31, 2001. 2.30 Sec. 3. Minnesota Statutes 2002, section 289A.31, is 2.31 amended by adding a subdivision to read: 2.32 Subd. 8. [LIABILITY OF VENDOR FOR REPAYMENT OF REFUND.] If 2.33 an individual income tax refund resulting from claiming an 2.34 education credit under section 290.0674 is paid by means of 2.35 directly depositing the proceeds of the refund into a bank 2.36 account controlled by the vendor of the product or service upon 3.1 which the education credit is based, and the commissioner 3.2 subsequently disallows the credit, the commissioner may seek 3.3 repayment of the refund from the vendor. The amount of the 3.4 repayment must be assessed and collected in the same time and 3.5 manner as an erroneous refund under section 289A.37, subdivision 3.6 2. 3.7 [EFFECTIVE DATE.] This section is effective for refunds 3.8 paid to accounts controlled by a vendor on or after the day 3.9 following final enactment. 3.10 Sec. 4. Minnesota Statutes 2002, section 289A.56, 3.11 subdivision 3, is amended to read: 3.12 Subd. 3. [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 3.13 WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 3.14 TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 3.15 overpayments of withholding tax, entertainer withholding tax, or 3.16 withholding from payments to out-of-state contractors,or estate3.17tax,interest is computed from the date of payment to the date 3.18 the refund is paid or credited. For purposes of this 3.19 subdivision, the date of payment is the later of the date the 3.20 tax was finally due or was paid. 3.21 For the purposes of computing interest on estate tax 3.22 refunds, interest is paid from the later of the date of 3.23 overpayment, the date the estate tax return is due, or the date 3.24 the original estate tax return is filed to the date the refund 3.25 is paid. 3.26 For purposes of computing interest on sales and use tax 3.27 refunds, interest is paid from the date of payment to the date 3.28 the refund is paid or credited, if the refund claim includes a 3.29 detailed schedule reflecting the tax periods covered in the 3.30 claim. If the refund claim submitted does not include a 3.31 detailed schedule reflecting the tax periods covered in the 3.32 claim, interest is computed from the date the claim was filed. 3.33 [EFFECTIVE DATE.] This section is effective for estates of 3.34 decedents dying after December 31, 2003. 3.35 Sec. 5. Minnesota Statutes 2002, section 289A.60, 3.36 subdivision 7, is amended to read: 4.1 Subd. 7. [PENALTY FOR FRIVOLOUS RETURN.] If a taxpayer 4.2 files what purports to be a tax return or a claim for refund but 4.3 which does not contain information on which the substantial 4.4 correctness of the purported return or claim for refund may be 4.5 judged or contains information that on its face shows that the 4.6 purported return or claim for refund is substantially incorrect 4.7 and the conduct is due to a position that is frivolous or a 4.8 desire that appears on the purported return or claim for refund 4.9 to delay or impede the administration of Minnesota tax laws, 4.10 then the individual shall pay a penalty of$500the greater of 4.11 $1,000 or 25 percent of the amount of tax required to be shown 4.12 on the return. In a proceeding involving the issue of whether 4.13 or not a person is liable for this penalty, the burden of proof 4.14 is on the commissioner. 4.15 [EFFECTIVE DATE.] This section is effective for returns 4.16 filed after December 31, 2003. 4.17 Sec. 6. Minnesota Statutes 2002, section 290.0679, 4.18 subdivision 2, is amended to read: 4.19 Subd. 2. [CONDITIONS FOR ASSIGNMENT.] A qualifying 4.20 taxpayer may assign all or part of an anticipated refund for the 4.21 current and future taxable years to a financial institution or a 4.22 qualifying organization. A financial institution or qualifying 4.23 organization accepting assignment must pay the amount secured by 4.24 the assignment to a third-party vendor. The commissioner of 4.25 children, families, and learning shallprovide a list of4.26categories of, upon request from a third-party vendor, certify 4.27 that the vendor's products and servicesthatqualify for the 4.28 education creditto financial institutions and qualifying4.29organizations. A denial of a certification is subject to the 4.30 contested case procedure under chapter 14. A financial 4.31 institution or qualifying organization that accepts assignments 4.32 under this section must verify as part of the assignment 4.33 documentation that the product or service to be provided by the 4.34 third-party vendorqualifieshas been certified by the 4.35 commissioner of children, families, and learning as qualifying 4.36 for the education credit. The amount assigned for the current 5.1 and future taxable years may not exceed the maximum allowable 5.2 education credit for the current taxable year. Both the 5.3 taxpayer and spouse must consent to the assignment of a refund 5.4 from a joint return. 5.5 [EFFECTIVE DATE.] This section is effective for assignments 5.6 made on or after the day following final enactment. 5.7 Sec. 7. Minnesota Statutes 2002, section 291.005, 5.8 subdivision 1, is amended to read: 5.9 Subdivision 1. Unless the context otherwise clearly 5.10 requires, the following terms used in this chapter shall have 5.11 the following meanings: 5.12 (1) "Federal gross estate" means the gross estate of a 5.13 decedent as valued and otherwise determined for federal estate 5.14 tax purposes by federal taxing authorities pursuant to the 5.15 provisions of the Internal Revenue Code. 5.16 (2) "Minnesota gross estate" means the federal gross estate 5.17 of a decedent after (a) excluding therefrom any property 5.18 included therein which has its situs outside Minnesotaand5.19pensions exempt from tax under this chapter pursuant to section5.20352.15, subdivision 1; 353.15, subdivision 1; 354.10,5.21subdivision 1; 354B.30; or 354C.165, and (b) including therein 5.22 any property omitted from the federal gross estate which is 5.23 includable therein, has its situs in Minnesota, and was not 5.24 disclosed to federal taxing authorities. 5.25 (3) "Personal representative" means the executor, 5.26 administrator or other person appointed by the court to 5.27 administer and dispose of the property of the decedent. If 5.28 there is no executor, administrator or other person appointed, 5.29 qualified, and acting within this state, then any person in 5.30 actual or constructive possession of any property having a situs 5.31 in this state which is included in the federal gross estate of 5.32 the decedent shall be deemed to be a personal representative to 5.33 the extent of the property and the Minnesota estate tax due with 5.34 respect to the property. 5.35 (4) "Resident decedent" means an individual whose domicile 5.36 at the time of death was in Minnesota. 6.1 (5) "Nonresident decedent" means an individual whose 6.2 domicile at the time of death was not in Minnesota. 6.3 (6) "Situs of property" means, with respect to real 6.4 property, the state or country in which it is located; with 6.5 respect to tangible personal property, the state or country in 6.6 which it was normally kept or located at the time of the 6.7 decedent's death; and with respect to intangible personal 6.8 property, the state or country in which the decedent was 6.9 domiciled at death. 6.10 (7) "Commissioner" means the commissioner of revenue or any 6.11 person to whom the commissioner has delegated functions under 6.12 this chapter. 6.13 (8) "Internal Revenue Code" means the United States 6.14 Internal Revenue Code of 1986, as amended through December 31, 6.1520002002. 6.16 [EFFECTIVE DATE.] This section is effective for estates of 6.17 decedents dying after December 31, 2002. 6.18 Sec. 8. Minnesota Statutes 2002, section 291.03, 6.19 subdivision 1, is amended to read: 6.20 Subdivision 1. [TAX AMOUNT.] The tax imposed shall be an 6.21 amount equal to the proportion of the maximum credit computed 6.22 under section 2011 of the Internal Revenue Code, as amended 6.23 through December 31, 2000, for state death taxes as the 6.24 Minnesota gross estate bears to the value of the federal gross 6.25 estate.For a resident decedent, the tax shall be the maximum6.26credit computed under section 2011 of the Internal Revenue Code6.27reduced by the amount of the death tax paid the other state and6.28credited against the federal estate tax if this results in a6.29larger amount of tax than the proportionate amount of the6.30credit.The tax determined under this paragraph shall not be 6.31 greater than the federal estate tax computed under section 2001 6.32 of the Internal Revenue Code after the allowance of the federal 6.33 credits allowed under section 2010 of the Internal Revenue Code 6.34 of 1986, as amended through December 31, 2000. For the purposes 6.35 of this section, expenses which are deducted for federal income 6.36 tax purposes under section 642(g) of the Internal Revenue Code 7.1 as amended through December 31, 2002, are not allowable in 7.2 computing the tax under this chapter. 7.3 [EFFECTIVE DATE.] This section is effective for estates of 7.4 decedents dying after December 31, 2002. 7.5 Sec. 9. Minnesota Statutes 2002, section 352.15, 7.6 subdivision 1, is amended to read: 7.7 Subdivision 1. [EXEMPTION; EXCEPTIONS.] None of the money, 7.8 annuities, or other benefits mentioned in this chapter is 7.9 assignable either in law or in equity or subject tostate estate7.10tax, or toexecution, levy, attachment, garnishment, or other 7.11 legal process, except as provided in subdivision 1a or section 7.12 518.58, 518.581, or 518.6111. 7.13 [EFFECTIVE DATE.] This section is effective for estates of 7.14 decedents dying after December 31, 2002. 7.15 Sec. 10. Minnesota Statutes 2002, section 353.15, 7.16 subdivision 1, is amended to read: 7.17 Subdivision 1. [EXEMPTION; EXCEPTIONS.] No money, annuity, 7.18 or benefit provided for in this chapter is assignable or subject 7.19to any state estate tax, orto execution, levy, attachment, 7.20 garnishment, or legal process, except as provided in subdivision 7.21 2 or section 518.58, 518.581, or 518.6111. 7.22 [EFFECTIVE DATE.] This section is effective for estates of 7.23 decedents dying after December 31, 2002. 7.24 Sec. 11. Minnesota Statutes 2002, section 354.10, 7.25 subdivision 1, is amended to read: 7.26 Subdivision 1. [EXEMPTION; EXCEPTIONS.] The right of a 7.27 teacher to take advantage of the benefits provided by this 7.28 chapter, is a personal right only and is not assignable. All 7.29 money to the credit of a teacher's account in the fund or any 7.30 money payable to the teacher from the fund belongs to the state 7.31 of Minnesota until actually paid to the teacher or a beneficiary 7.32 under this chapter. The association may acknowledge a properly 7.33 completed power of attorney form. An assignment or attempted 7.34 assignment of a teacher's interest in the fund, or of the 7.35 beneficiary's interest in the fund, by a teacher or a 7.36 beneficiary is void and exemptfrom taxation under chapter 2918.1andfrom garnishment or levy under attachment or execution, 8.2 except as provided in subdivision 2 or 3, or section 518.58, 8.3 518.581, or 518.6111. 8.4 [EFFECTIVE DATE.] This section is effective for estates of 8.5 decedents dying after December 31, 2002. 8.6 Sec. 12. Minnesota Statutes 2002, section 354B.30, is 8.7 amended to read: 8.8 354B.30 [PROHIBITION ON LOANS OR PRETERMINATION 8.9 DISTRIBUTIONS.] 8.10 (a) No participant may obtain a loan from the plan or 8.11 obtain any distribution from the plan at a time before the 8.12 participant terminates the employment that gave rise to plan 8.13 coverage. 8.14 (b) No amounts to the credit of the plan are assignable 8.15 either in law or in equity,are subject to state estate tax,or 8.16 are subject to execution, levy, attachment, garnishment, or 8.17 other legal process, except as provided in section 518.58, 8.18 518.581, or 518.6111. 8.19 [EFFECTIVE DATE.] This section is effective for estates of 8.20 decedents dying after December 31, 2002. 8.21 Sec. 13. Minnesota Statutes 2002, section 354C.165, is 8.22 amended to read: 8.23 354C.165 [PROHIBITION ON LOANS OR PRETERMINATION 8.24 DISTRIBUTIONS.] 8.25 (a) Except as provided in paragraph (c), no participant may 8.26 obtain a loan or any distribution from the plan before the 8.27 participant terminates the employment that gave rise to plan 8.28 coverage. 8.29 (b) No amounts to the credit of the plan are assignable 8.30 either in law or in equity,are subject to state estate tax,or 8.31 are subject to execution, levy, attachment, garnishment, or 8.32 other legal process, except as provided in section 518.58, 8.33 518.581, or 518.6111. 8.34 (c) Unless prohibited by or subject to a penalty under 8.35 federal law, a teacher who is a participant in the supplemental 8.36 retirement plan may request, in writing, a transfer of all or a 9.1 portion of the funds accumulated in the person's supplemental 9.2 plan account to the teachers retirement association to purchase 9.3 service credit under sections 354.53, 354.533, 354.534, 354.535, 9.4 354.536, 354.537, and 354.538 or to the teachers retirement fund 9.5 association to purchase service credit under sections 354A.097, 9.6 354A.098, 354A.099, 354A.101, 354A.102, 354A.103, and 354A.104. 9.7 Upon receipt of a valid request, the board shall execute the 9.8 transfer. The transfer must be a fund-to-fund transfer, and in 9.9 no event shall the participant directly receive any of the funds 9.10 while still employed by the board. In no event may the board 9.11 transfer more than the participant's account balance. The 9.12 board, in cooperation with the executive director of the 9.13 teachers retirement association, shall develop the forms for 9.14 requesting a transfer and the procedures for executing the 9.15 requested transfers. 9.16 [EFFECTIVE DATE.] This section is effective for estates of 9.17 decedents dying after December 31, 2002. 9.18 Sec. 14. Laws 2001, First Special Session chapter 5, 9.19 article 9, section 12, the effective date, is amended to read: 9.20 [EFFECTIVE DATE.] This section is effective for assignment 9.21 of refunds filed with the commissioner after December 31, 2001. 9.22The time period for filing assignments expires December 31,9.232003, but assignments filed on or before that date remain in9.24effect until satisfied or canceled.9.25 ARTICLE 2 9.26 FEDERAL UPDATE 9.27 Section 1. Minnesota Statutes 2002, section 289A.02, 9.28 subdivision 7, is amended to read: 9.29 Subd. 7. [INTERNAL REVENUE CODE.] Unless specifically 9.30 defined otherwise, "Internal Revenue Code" means the Internal 9.31 Revenue Code of 1986, as amended throughMarch 15December 31, 9.32 2002. 9.33 [EFFECTIVE DATE.] This section is effective the day 9.34 following final enactment. 9.35 Sec. 2. Minnesota Statutes 2002, section 290.01, 9.36 subdivision 19, is amended to read: 10.1 Subd. 19. [NET INCOME.] The term "net income" means the 10.2 federal taxable income, as defined in section 63 of the Internal 10.3 Revenue Code of 1986, as amended through the date named in this 10.4 subdivision, incorporating any elections made by the taxpayer in 10.5 accordance with the Internal Revenue Code in determining federal 10.6 taxable income for federal income tax purposes, and with the 10.7 modifications provided in subdivisions 19a to 19f. 10.8 In the case of a regulated investment company or a fund 10.9 thereof, as defined in section 851(a) or 851(g) of the Internal 10.10 Revenue Code, federal taxable income means investment company 10.11 taxable income as defined in section 852(b)(2) of the Internal 10.12 Revenue Code, except that: 10.13 (1) the exclusion of net capital gain provided in section 10.14 852(b)(2)(A) of the Internal Revenue Code does not apply; 10.15 (2) the deduction for dividends paid under section 10.16 852(b)(2)(D) of the Internal Revenue Code must be applied by 10.17 allowing a deduction for capital gain dividends and 10.18 exempt-interest dividends as defined in sections 852(b)(3)(C) 10.19 and 852(b)(5) of the Internal Revenue Code; and 10.20 (3) the deduction for dividends paid must also be applied 10.21 in the amount of any undistributed capital gains which the 10.22 regulated investment company elects to have treated as provided 10.23 in section 852(b)(3)(D) of the Internal Revenue Code. 10.24 The net income of a real estate investment trust as defined 10.25 and limited by section 856(a), (b), and (c) of the Internal 10.26 Revenue Code means the real estate investment trust taxable 10.27 income as defined in section 857(b)(2) of the Internal Revenue 10.28 Code. 10.29 The net income of a designated settlement fund as defined 10.30 in section 468B(d) of the Internal Revenue Code means the gross 10.31 income as defined in section 468B(b) of the Internal Revenue 10.32 Code. 10.33 The provisions of sections 1113(a), 1117, 1206(a), 1313(a), 10.34 1402(a), 1403(a), 1443, 1450, 1501(a), 1605, 1611(a), 1612, 10.35 1616, 1617, 1704(l), and 1704(m) of the Small Business Job 10.36 Protection Act, Public Law Number 104-188, the provisions of 11.1 Public Law Number 104-117, the provisions of sections 313(a) and 11.2 (b)(1), 602(a), 913(b), 941, 961, 971, 1001(a) and (b), 1002, 11.3 1003, 1012, 1013, 1014, 1061, 1062, 1081, 1084(b), 1086, 1087, 11.4 1111(a), 1131(b) and (c), 1211(b), 1213, 1530(c)(2), 1601(f)(5) 11.5 and (h), and 1604(d)(1) of the Taxpayer Relief Act of 1997, 11.6 Public Law Number 105-34, the provisions of section 6010 of the 11.7 Internal Revenue Service Restructuring and Reform Act of 1998, 11.8 Public Law Number 105-206, the provisions of section 4003 of the 11.9 Omnibus Consolidated and Emergency Supplemental Appropriations 11.10 Act, 1999, Public Law Number 105-277, and the provisions of 11.11 section 318 of the Consolidated Appropriation Act of 2001, 11.12 Public Law Number 106-554, shall become effective at the time 11.13 they become effective for federal purposes. 11.14 The Internal Revenue Code of 1986, as amended through 11.15 December 31, 1996, shall be in effect for taxable years 11.16 beginning after December 31, 1996. 11.17 The provisions of sections 202(a) and (b), 221(a), 225, 11.18 312, 313, 913(a), 934, 962, 1004, 1005, 1052, 1063, 1084(a) and 11.19 (c), 1089, 1112, 1171, 1204, 1271(a) and (b), 1305(a), 1306, 11.20 1307, 1308, 1309, 1501(b), 1502(b), 1504(a), 1505, 1527, 1528, 11.21 1530, 1601(d), (e), (f), and (i) and 1602(a), (b), (c), and (e) 11.22 of the Taxpayer Relief Act of 1997, Public Law Number 105-34, 11.23 the provisions of sections 6004, 6005, 6012, 6013, 6015, 6016, 11.24 7002, and 7003 of the Internal Revenue Service Restructuring and 11.25 Reform Act of 1998, Public Law Number 105-206, the provisions of 11.26 section 3001 of the Omnibus Consolidated and Emergency 11.27 Supplemental Appropriations Act, 1999, Public Law Number 11.28 105-277, the provisions of section 3001 of the Miscellaneous 11.29 Trade and Technical Corrections Act of 1999, Public Law Number 11.30 106-36, and the provisions of section 316 of the Consolidated 11.31 Appropriation Act of 2001, Public Law Number 106-554, shall 11.32 become effective at the time they become effective for federal 11.33 purposes. 11.34 The Internal Revenue Code of 1986, as amended through 11.35 December 31, 1997, shall be in effect for taxable years 11.36 beginning after December 31, 1997. 12.1 The provisions of sections 5002, 6009, 6011, and 7001 of 12.2 the Internal Revenue Service Restructuring and Reform Act of 12.3 1998, Public Law Number 105-206, the provisions of section 9010 12.4 of the Transportation Equity Act for the 21st Century, Public 12.5 Law Number 105-178, the provisions of sections 1004, 4002, and 12.6 5301 of the Omnibus Consolidation and Emergency Supplemental 12.7 Appropriations Act, 1999, Public Law Number 105-277, the 12.8 provision of section 303 of the Ricky Ray Hemophilia Relief Fund 12.9 Act of 1998, Public Law Number 105-369, the provisions of 12.10 sections 532, 534, 536, 537, and 538 of the Ticket to Work and 12.11 Work Incentives Improvement Act of 1999, Public Law Number 12.12 106-170, the provisions of the Installment Tax Correction Act of 12.13 2000, Public Law Number 106-573, and the provisions of section 12.14 309 of the Consolidated Appropriation Act of 2001, Public Law 12.15 Number 106-554, shall become effective at the time they become 12.16 effective for federal purposes. 12.17 The Internal Revenue Code of 1986, as amended through 12.18 December 31, 1998, shall be in effect for taxable years 12.19 beginning after December 31, 1998. 12.20 The provisions of the FSC Repeal and Extraterritorial 12.21 Income Exclusion Act of 2000, Public Law Number 106-519, and the 12.22 provision of section 412 of the Job Creation and Worker 12.23 Assistance Act of 2002, Public Law Number 107-147, shall become 12.24 effective at the time it became effective for federal purposes. 12.25 The Internal Revenue Code of 1986, as amended through 12.26 December 31, 1999, shall be in effect for taxable years 12.27 beginning after December 31, 1999. The provisions of sections 12.28 306 and 401 of the Consolidated Appropriation Act of 2001, 12.29 Public Law Number 106-554, and the provision of section 12.30 632(b)(2)(A) of the Economic Growth and Tax Relief 12.31 Reconciliation Act of 2001, Public Law Number 107-16, and 12.32 provisions of sections 101 and 402 of the Job Creation and 12.33 Worker Assistance Act of 2002, Public Law Number 107-147, shall 12.34 become effective at the same time it became effective for 12.35 federal purposes. 12.36 The Internal Revenue Code of 1986, as amended through 13.1 December 31, 2000, shall be in effect for taxable years 13.2 beginning after December 31, 2000. The provisions of sections 13.3 659a and 671 of the Economic Growth and Tax Relief 13.4 Reconciliation Act of 2001, Public Law Number 107-16, the 13.5 provisions of sections 104, 105, and 111 of the Victims of 13.6 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, and 13.7 the provisions of sections 201, 403, 413, and 606 of the Job 13.8 Creation and Worker Assistance Act of 2002, Public Law Number 13.9 107-147, shall become effective at the same time it became 13.10 effective for federal purposes. 13.11 The Internal Revenue Code of 1986, as amended through March 13.12 15, 2002, shall be in effect for taxable years beginning after 13.13 December 31, 2001. 13.14 The provisions of sections 101 and 102 of the Victims of 13.15 Terrorism Tax Relief Act of 2001, Public Law Number 107-134, 13.16 shall become effective at the same time it becomes effective for 13.17 federal purposes. 13.18 The Internal Revenue Code of 1986, as amended through 13.19 December 31, 2002, shall be in effect for taxable years 13.20 beginning after December 31, 2002. 13.21 Except as otherwise provided, references to the Internal 13.22 Revenue Code in subdivisions 19a to 19g mean the code in effect 13.23 for purposes of determining net income for the applicable year. 13.24 [EFFECTIVE DATE.] This section is effective the day 13.25 following final enactment. 13.26 Sec. 3. Minnesota Statutes 2002, section 290.01, 13.27 subdivision 31, is amended to read: 13.28 Subd. 31. [INTERNAL REVENUE CODE.] Unless specifically 13.29 defined otherwise, "Internal Revenue Code" means the Internal 13.30 Revenue Code of 1986, as amended throughMarch 15December 31, 13.31 2002. 13.32 [EFFECTIVE DATE.] This section is effective the day 13.33 following final enactment. 13.34 Sec. 4. Minnesota Statutes 2002, section 290A.03, 13.35 subdivision 15, is amended to read: 13.36 Subd. 15. [INTERNAL REVENUE CODE.] "Internal Revenue Code" 14.1 means the Internal Revenue Code of 1986, as amended 14.2 throughMarch 15December 31, 2002. 14.3 [EFFECTIVE DATE.] This section is effective for refunds 14.4 payable for rents paid in 2003 and thereafter and property taxes 14.5 payable in 2004 and thereafter. 14.6 ARTICLE 3 14.7 PROPERTY TAXES 14.8 Section 1. Minnesota Statutes 2002, section 270.06, is 14.9 amended to read: 14.10 270.06 [POWERS AND DUTIES.] 14.11 The commissioner of revenue shall: 14.12 (1) have and exercise general supervision over the 14.13 administration of the assessment and taxation laws of the state, 14.14 over assessors, town, county, and city boards of review and 14.15 equalization, and all other assessing officers in the 14.16 performance of their duties, to the end that all assessments of 14.17 property be made relatively just and equal in compliance with 14.18 the laws of the state; 14.19 (2) confer with, advise, and give the necessary 14.20 instructions and directions to local assessors and local boards 14.21 of review throughout the state as to their duties under the laws 14.22 of the state; 14.23 (3) direct proceedings, actions, and prosecutions to be 14.24 instituted to enforce the laws relating to the liability and 14.25 punishment of public officers and officers and agents of 14.26 corporations for failure or negligence to comply with the 14.27 provisions of the laws of this state governing returns of 14.28 assessment and taxation of property, and cause complaints to be 14.29 made against local assessors, members of boards of equalization, 14.30 members of boards of review, or any other assessing or taxing 14.31 officer, to the proper authority, for their removal from office 14.32 for misconduct or negligence of duty; 14.33 (4) require county attorneys to assist in the commencement 14.34 of prosecutions in actions or proceedings for removal, 14.35 forfeiture and punishment for violation of the laws of this 14.36 state in respect to the assessment and taxation of property in 15.1 their respective districts or counties; 15.2 (5) require town, city, county, and other public officers 15.3 to report information as to the assessment of property, 15.4 collection of taxes received from licenses and other sources, 15.5 and such other information as may be needful in the work of the 15.6 department of revenue, in such form and upon such blanks as the 15.7 commissioner may prescribe; 15.8 (6) require individuals, copartnerships, companies, 15.9 associations, and corporations to furnish information concerning 15.10 their capital, funded or other debt, current assets and 15.11 liabilities, earnings, operating expenses, taxes, as well as all 15.12 other statements now required by law for taxation purposes; 15.13 (7) subpoena witnesses, at a time and place reasonable 15.14 under the circumstances, to appear and give testimony, and to 15.15 produce books, records, papers and documents for inspection and 15.16 copying relating to any matter which the commissioner may have 15.17 authority to investigate or determine; 15.18 (8) issue a subpoena which does not identify the person or 15.19 persons with respect to whose liability the subpoena is issued, 15.20 but only if (a) the subpoena relates to the investigation of a 15.21 particular person or ascertainable group or class of persons, 15.22 (b) there is a reasonable basis for believing that such person 15.23 or group or class of persons may fail or may have failed to 15.24 comply with any law administered by the commissioner, (c) the 15.25 information sought to be obtained from the examination of the 15.26 records (and the identity of the person or persons with respect 15.27 to whose liability the subpoena is issued) is not readily 15.28 available from other sources, (d) the subpoena is clear and 15.29 specific as to the information sought to be obtained, and (e) 15.30 the information sought to be obtained is limited solely to the 15.31 scope of the investigation. Provided further that the party 15.32 served with a subpoena which does not identify the person or 15.33 persons with respect to whose tax liability the subpoena is 15.34 issued shall have the right, within 20 days after service of the 15.35 subpoena, to petition the district court for the judicial 15.36 district in which lies the county in which that party is located 16.1 for a determination as to whether the commissioner of revenue 16.2 has complied with all the requirements in (a) to (e), and thus, 16.3 whether the subpoena is enforceable. If no such petition is 16.4 made by the party served within the time prescribed, the 16.5 subpoena shall have the force and effect of a court order; 16.6 (9) cause the deposition of witnesses residing within or 16.7 without the state, or absent therefrom, to be taken, upon notice 16.8 to the interested party, if any, in like manner that depositions 16.9 of witnesses are taken in civil actions in the district court, 16.10 in any matter which the commissioner may have authority to 16.11 investigate or determine; 16.12 (10) investigate the tax laws of other states and countries 16.13 and to formulate and submit to the legislature such legislation 16.14 as the commissioner may deem expedient to prevent evasions of 16.15 assessment and taxing laws, and secure just and equal taxation 16.16 and improvement in the system of assessment and taxation in this 16.17 state; 16.18 (11) consult and confer with the governor upon the subject 16.19 of taxation, the administration of the laws in regard thereto, 16.20 and the progress of the work of the department of revenue, and 16.21 furnish the governor, from time to time, such assistance and 16.22 information as the governor may require relating to tax matters; 16.23 (12) transmit to the governor, on or before the third 16.24 Monday in December of each even-numbered year, and to each 16.25 member of the legislature, on or before November 15 of each 16.26 even-numbered year, the report of the department of revenue for 16.27 the preceding years, showing all the taxable property in the 16.28 state and the value of the same, in tabulated form; 16.29 (13) inquire into the methods of assessment and taxation 16.30 and ascertain whether the assessors faithfully discharge their 16.31 duties, particularly as to their compliance with the laws 16.32 requiring the assessment of all property not exempt from 16.33 taxation; 16.34 (14) administer and enforce the assessment and collection 16.35 of state taxes and fees, including the use of any remedy 16.36 available to nongovernmental creditors, and, from time to time, 17.1 make, publish, and distribute rules for the administration and 17.2 enforcement ofassessments and feeslaws administered by the 17.3 commissioner and state tax laws. The rules have the force of 17.4 law; 17.5 (15) prepare blank forms for the returns required by state 17.6 tax law and distribute them throughout the state, furnishing 17.7 them subject to charge on application; 17.8 (16) prescribe rules governing the qualification and 17.9 practice of agents, attorneys, or other persons representing 17.10 taxpayers before the commissioner. The rules may require that 17.11 those persons, agents, and attorneys show that they are of good 17.12 character and in good repute, have the necessary qualifications 17.13 to give taxpayers valuable services, and are otherwise competent 17.14 to advise and assist taxpayers in the presentation of their case 17.15 before being recognized as representatives of taxpayers. After 17.16 due notice and opportunity for hearing, the commissioner may 17.17 suspend and bar from further practice before the commissioner 17.18 any person, agent, or attorney who is shown to be incompetent or 17.19 disreputable, who refuses to comply with the rules, or who with 17.20 intent to defraud, willfully or knowingly deceives, misleads, or 17.21 threatens a taxpayer or prospective taxpayer, by words, 17.22 circular, letter, or by advertisement. This clause does not 17.23 curtail the rights of individuals to appear in their own behalf 17.24 or partners or corporations' officers to appear in behalf of 17.25 their respective partnerships or corporations; 17.26 (17) appoint agents as the commissioner considers necessary 17.27 to make examinations and determinations. The agents have the 17.28 rights and powers conferred on the commissioner to subpoena, 17.29 examine, and copy books, records, papers, or memoranda, subpoena 17.30 witnesses, administer oaths and affirmations, and take 17.31 testimony. In addition to administrative subpoenas of the 17.32 commissioner and the agents, upon demand of the commissioner or 17.33 an agent, the court administrator of any district court shall 17.34 issue a subpoena for the attendance of a witness or the 17.35 production of books, papers, records, or memoranda before the 17.36 agent for inspection and copying. Disobedience of a court 18.1 administrator's subpoena shall be punished by the district court 18.2 of the district in which the subpoena is issued, or in the case 18.3 of a subpoena issued by the commissioner or an agent, by the 18.4 district court of the district in which the party served with 18.5 the subpoena is located, in the same manner as contempt of the 18.6 district court; 18.7 (18) appoint and employ additional help, purchase supplies 18.8 or materials, or incur other expenditures in the enforcement of 18.9 state tax laws as considered necessary. The salaries of all 18.10 agents and employees provided for in this chapter shall be fixed 18.11 by the appointing authority, subject to the approval of the 18.12 commissioner of administration; 18.13 (19) execute and administer any agreement with the 18.14 secretary of the treasury of the United States or a 18.15 representative of another state regarding the exchange of 18.16 information and administration of the tax laws; 18.17 (20) authorize the use of unmarked motor vehicles to 18.18 conduct seizures or criminal investigations pursuant to the 18.19 commissioner's authority; and 18.20 (21) exercise other powers and perform other duties 18.21 required of or imposed upon the commissioner of revenue by law. 18.22 [EFFECTIVE DATE.] This section is effective the day 18.23 following final enactment. 18.24 Sec. 2. Minnesota Statutes 2002, section 273.05, 18.25 subdivision 1, is amended to read: 18.26 Subdivision 1. [APPOINTMENT OF TOWN AND CITY ASSESSORS.] 18.27 Notwithstanding any other provision of law all town assessors 18.28 shall be appointed by the town board, and notwithstanding any 18.29 charter provisions to the contrary, all city assessors shall be 18.30 appointed by the city council or other appointing authority as 18.31 provided by law or charter.Such assessors shall be residents18.32of the state but need not be a resident of the town or city for18.33which they are appointed.They shall be selected and appointed 18.34 because of their knowledge and training in the field of property 18.35 taxation. All town and statutory city assessors shall be 18.36 appointed for indefinite terms. A town or statutory city 19.1 assessor who is an employee may be dismissed by the appointing 19.2 authority for cause. The term of the town or city assessors may 19.3 be terminated at any time by the town board or city council on 19.4 charges by the commissioner of revenue of inefficiency or 19.5 neglect of duty. Vacancies in the office of town or city 19.6 assessor shall be filled within 90 days by appointment of the 19.7 respective appointing authority indicated above. If the vacancy 19.8 is not filled within 90 days, the office shall be terminated. 19.9 When a vacancy in the office of town or city assessor is not 19.10 filled by appointment, and it is imperative that the office of 19.11 assessor be filled, the county auditor shall appoint some 19.12 resident of the county as assessor for such town or city. The 19.13 county auditor may appoint the county assessor as assessor for 19.14 such town or city, in which case the town or city shall pay to 19.15 the county treasurer the amount determined by the county auditor 19.16 to be due for the services performed and expenses incurred by 19.17 the county assessor in acting as assessor for such town or 19.18 city. The term of any town or statutory city assessor in a 19.19 county electing in accordance with section 273.052 shall be 19.20 terminated as provided in section 273.055. 19.21 The commissioner of revenue may recommend to the state 19.22 board of assessors the nonrenewal, suspension, or revocation of 19.23 an assessor's license as provided in sections 270.41 to 270.53. 19.24 [EFFECTIVE DATE.] This section is effective the day 19.25 following final enactment and applies to every town or city 19.26 assessor whether that assessor was appointed before, on, or 19.27 after the effective date. 19.28 Sec. 3. Minnesota Statutes 2002, section 273.061, 19.29 subdivision 1, is amended to read: 19.30 Subdivision 1. [OFFICE CREATED; APPOINTMENT, 19.31 QUALIFICATIONS.] Every county in this state shall have a county 19.32 assessor. The county assessor shall be appointed by the board 19.33 of county commissioners. The assessor shall be selected and 19.34 appointed because of knowledge and training in the field of 19.35 property taxation and appointment shall be approved by the 19.36 commissioner of revenue before the same shall become effective. 20.1 Upon receipt by the county commissioners of the commissioner of 20.2 revenue's refusal to approve an appointment, the term of the 20.3 appointee shall terminate at the end of that day. 20.4 The commissioner of revenue may grant approval on a 20.5 probationary basis for a period of two years. The commissioner 20.6 must base the decision to impose a probationary period on 20.7 objective and consistent criteria. At the end of the two-year 20.8 probationary period, the commissioner may either refuse to 20.9 approve the person's appointment for the remainder of the 20.10 person's four-year term, approve the person's appointment but 20.11 only for another two-year probationary period, or 20.12 unconditionally approve the person's appointment for the 20.13 remainder of the four-year term for which the person was 20.14 originally appointed by the county board. The criteria shall 20.15 not be considered rules and are not subject to the 20.16 Administrative Procedure Act. 20.17 Notwithstanding any law to the contrary, a county assessor 20.18 must have senior accreditation from the state board of assessors 20.19 by January 1, 1992, or within two years of the assessor's first 20.20 appointment under this section, whichever is later. 20.21 The person appointed as the county assessor may not also be 20.22 the county auditor, the county attorney, or a county board 20.23 member for the same county. The person appointed as the county 20.24 assessor may not also be a city council member for a city in the 20.25 same county. The person appointed as the city assessor may not 20.26 also be a city council member for the same city. An assessor 20.27 who accepts such a position is deemed to have resigned from the 20.28 assessor position on January 2, 2004, or on the day the person 20.29 takes the oath of office for the other office, whichever is 20.30 later. 20.31 [EFFECTIVE DATE.] This section is effective January 2, 20.32 2004, and thereafter. 20.33 Sec. 4. Minnesota Statutes 2002, section 274.01, 20.34 subdivision 1, is amended to read: 20.35 Subdivision 1. [ORDINARY BOARD; MEETINGS, DEADLINES, 20.36 GRIEVANCES.] (a) The town board of a town, or the council or 21.1 other governing body of a city, is the board of appeal and 21.2 equalization except (1) in cities whose charters provide for a 21.3 board of equalization or (2) in any city or town that has 21.4 transferred its local board of review power and duties to the 21.5 county board as provided in subdivision 3. The county assessor 21.6 shall fix a day and time when the board or the board of 21.7 equalization shall meet in the assessment districts of the 21.8 county. Notwithstanding any law or city charter to the 21.9 contrary, a city board of equalization shall be referred to as a 21.10 board of appeal and equalization. On or before February 15 of 21.11 each year the assessor shall give written notice of the time to 21.12 the city or town clerk. Notwithstanding the provisions of any 21.13 charter to the contrary, the meetings must be held between April 21.14 1 and May 31 each year. The clerk shall give published and 21.15 posted notice of the meeting at least ten days before the date 21.16 of the meeting. 21.17 The board shall meet at the office of the clerk to review 21.18 the assessment and classification of property in the town or 21.19 city. No changes in valuation or classification which are 21.20 intended to correct errors in judgment by the county assessor 21.21 may be made by the county assessor after the board has adjourned 21.22 in those cities or towns that hold a local board of review; 21.23 however, corrections of errors that are merely clerical in 21.24 nature or changes that extend homestead treatment to property 21.25 are permitted after adjournment until the tax extension date for 21.26 that assessment year. The changes must be fully documented and 21.27 maintained in the assessor's office and must be available for 21.28 review by any person. A copy of the changes made during this 21.29 period in those cities or towns that hold a local board of 21.30 review must be sent to the county board no later than December 21.31 31 of the assessment year. 21.32 (b) The board shall determine whether the taxable property 21.33 in the town or city has been properly placed on the list and 21.34 properly valued by the assessor. If real or personal property 21.35 has been omitted, the board shall place it on the list with its 21.36 market value, and correct the assessment so that each tract or 22.1 lot of real property, and each article, parcel, or class of 22.2 personal property, is entered on the assessment list at its 22.3 market value. No assessment of the property of any person may 22.4 be raised unless the person has been duly notified of the intent 22.5 of the board to do so. On application of any person feeling 22.6 aggrieved, the board shall review the assessment or 22.7 classification, or both, and correct it as appears just. The 22.8 board may not make an individual market value adjustment or 22.9 classification change that would benefit the property in cases 22.10 where the owner or other person having control over the property 22.11 will not permit the assessor to inspect the property and the 22.12 interior of any buildings or structures. 22.13 (c) A local board may reduce assessments upon petition of 22.14 the taxpayer but the total reductions must not reduce the 22.15 aggregate assessment made by the county assessor by more than 22.16 one percent. If the total reductions would lower the aggregate 22.17 assessments made by the county assessor by more than one 22.18 percent, none of the adjustments may be made. The assessor 22.19 shall correct any clerical errors or double assessments 22.20 discovered by the board without regard to the one percent 22.21 limitation. 22.22 (d) A local board does not have authority to grant an 22.23 exemption or to order property removed from the tax rolls. 22.24 (e) A majority of the members may act at the meeting, and 22.25 adjourn from day to day until they finish hearing the cases 22.26 presented. The assessor shall attend, with the assessment books 22.27 and papers, and take part in the proceedings, but must not 22.28 vote. The county assessor, or an assistant delegated by the 22.29 county assessor shall attend the meetings. The board shall list 22.30 separately, on a form appended to the assessment book, all 22.31 omitted property added to the list by the board and all items of 22.32 property increased or decreased, with the market value of each 22.33 item of property, added or changed by the board, placed opposite 22.34 the item. The county assessor shall enter all changes made by 22.35 the board in the assessment book. 22.36(e)(f) Except as provided in subdivision 3, if a person 23.1 fails to appear in person, by counsel, or by written 23.2 communication before the board after being duly notified of the 23.3 board's intent to raise the assessment of the property, or if a 23.4 person feeling aggrieved by an assessment or classification 23.5 fails to apply for a review of the assessment or classification, 23.6 the person may not appear before the county board of appeal and 23.7 equalization for a review of the assessment or classification. 23.8 This paragraph does not apply if an assessment was made after 23.9 the local board meeting, as provided in section 273.01, or if 23.10 the person can establish not having received notice of market 23.11 value at least five days before the local board meeting. 23.12(f)(g) The local board must complete its work and adjourn 23.13 within 20 days from the time of convening stated in the notice 23.14 of the clerk, unless a longer period is approved by the 23.15 commissioner of revenue. No action taken after that date is 23.16 valid. All complaints about an assessment or classification 23.17 made after the meeting of the board must be heard and determined 23.18 by the county board of equalization. A nonresident may, at any 23.19 time, before the meeting of the board file written objections to 23.20 an assessment or classification with the county assessor. The 23.21 objections must be presented to the board at its meeting by the 23.22 county assessor for its consideration. 23.23 [EFFECTIVE DATE.] This section is effective the day 23.24 following final enactment. 23.25 Sec. 5. Minnesota Statutes 2002, section 274.13, 23.26 subdivision 1, is amended to read: 23.27 Subdivision 1. [MEMBERS; MEETINGS; RULES FOR EQUALIZING 23.28 ASSESSMENTS.] The county commissioners, or a majority of them, 23.29 with the county auditor, or, if the auditor cannot be present, 23.30 the deputy county auditor, or, if there is no deputy, the court 23.31 administrator of the district court, shall form a board for the 23.32 equalization of the assessment of the property of the county, 23.33 including the property of all cities whose charters provide for 23.34 a board of equalization. This board shall be referred to as the 23.35 county board of appeal and equalization. The board shall meet 23.36 annually, on the date specified in section 274.14, at the office 24.1 of the auditor. Each member shall take an oath to fairly and 24.2 impartially perform duties as a member. The board shall examine 24.3 and compare the returns of the assessment of property of the 24.4 towns or districts, and equalize them so that each tract or lot 24.5 of real property and each article or class of personal property 24.6 is entered on the assessment list at its market value, subject 24.7 to the following rules: 24.8 (1) The board shall raise the valuation of each tract or 24.9 lot of real property which in its opinion is returned below its 24.10 market value to the sum believed to be its market value. The 24.11 board must first give notice of intention to raise the valuation 24.12 to the person in whose name it is assessed, if the person is a 24.13 resident of the county. The notice must fix a time and place 24.14 for a hearing. 24.15 (2) The board shall reduce the valuation of each tract or 24.16 lot which in its opinion is returned above its market value to 24.17 the sum believed to be its market value. 24.18 (3) The board shall raise the valuation of each class of 24.19 personal property which in its opinion is returned below its 24.20 market value to the sum believed to be its market value. It 24.21 shall raise the aggregate value of the personal property of 24.22 individuals, firms, or corporations, when it believes that the 24.23 aggregate valuation, as returned, is less than the market value 24.24 of the taxable personal property possessed by the individuals, 24.25 firms, or corporations, to the sum it believes to be the market 24.26 value. The board must first give notice to the persons of 24.27 intention to do so. The notice must set a time and place for a 24.28 hearing. 24.29 (4) The board shall reduce the valuation of each class of 24.30 personal property that is returned above its market value to the 24.31 sum it believes to be its market value. Upon complaint of a 24.32 party aggrieved, the board shall reduce the aggregate valuation 24.33 of the individual's personal property, or of any class of 24.34 personal property for which the individual is assessed, which in 24.35 its opinion has been assessed at too large a sum, to the sum it 24.36 believes was the market value of the individual's personal 25.1 property of that class. 25.2 (5) The board must not reduce the aggregate value of all 25.3 the property of its county, as submitted to the county board of 25.4 equalization, with the additions made by the auditor under this 25.5 chapter, by more than one percent of its whole valuation. The 25.6 board may raise the aggregate valuation of real property, and of 25.7 each class of personal property, of the county, or of any town 25.8 or district of the county, when it believes it is below the 25.9 market value of the property, or class of property, to the 25.10 aggregate amount it believes to be its market value. 25.11 (6) The board shall change the classification of any 25.12 property which in its opinion is not properly classified. 25.13 (7) The board does not have the authority to grant an 25.14 exemption or to order property removed from the tax rolls. 25.15 [EFFECTIVE DATE.] This section is effective the day 25.16 following final enactment. 25.17 Sec. 6. Minnesota Statutes 2002, section 275.025, 25.18 subdivision 4, is amended to read: 25.19 Subd. 4. [APPORTIONMENT AND LEVY OF STATE GENERAL TAX.] 25.20 The state general tax must be distributed among the counties by 25.21 applying a uniform rate to each county's commercial-industrial 25.22 tax capacity and its seasonal residential recreational tax 25.23 capacity. Within each county, the tax must be levied by 25.24 applying a uniform rate against commercial-industrial tax 25.25 capacity and seasonal residential recreational tax capacity.By25.26 On or before November 1 each year, the commissioner of revenue 25.27 shall certifythea preliminary state general levy rate to each 25.28 county auditor that must be used to prepare the notices of 25.29 proposed property taxes for taxes payable in the following 25.30 year. By January 1 of each year, the commissioner shall certify 25.31 the final state general levy rate to each county auditor that 25.32 shall be used in spreading taxes. 25.33 [EFFECTIVE DATE.] This section is effective for taxes 25.34 payable in 2004 and thereafter, except that the change from 25.35 "seasonal recreational tax capacity" to "seasonal residential 25.36 recreational tax capacity" is effective the day following final 26.1 enactment. 26.2 Sec. 7. Minnesota Statutes 2002, section 276.10, is 26.3 amended to read: 26.4 276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 26.5 On the settlement day determined in section 276.09 for each 26.6 year, the county auditor and county treasurer shall distribute 26.7 all undistributed funds in the treasury. The funds must be 26.8 apportioned as provided by law, and credited to thestate,town, 26.9 city, school district, special district and each county fund. 26.10 Within 20 days after the distribution is completed, the county 26.11 auditor shall report to the state auditor in the form prescribed 26.12 by the state auditor. The county auditor shall issue a warrant 26.13 for the payment of money in the county treasury to the credit of 26.14 thestate,town, city, school district, or special districts on 26.15 application of the persons entitled to receive the payment. The 26.16 county auditor may apply the local tax rate from the year before 26.17 the year of distribution when apportioning and distributing 26.18 delinquent tax proceeds, if the composition of the previous 26.19 year's local tax rate between taxing districts is not 26.20 significantly different from the local tax rate that existed for 26.21 the year of the delinquency. 26.22 [EFFECTIVE DATE.] This section is effective for taxes 26.23 payable in 2004 and thereafter. 26.24 Sec. 8. Minnesota Statutes 2002, section 276.11, 26.25 subdivision 1, is amended to read: 26.26 Subdivision 1. [GENERALLY.] As soon as practical after the 26.27 settlement day determined in section 276.09, the county 26.28 treasurer shall pay tothe state treasurer orthe treasurer of a 26.29 town, city, school district, or special district, on the warrant 26.30 of the county auditor, all receipts of taxes levied by the 26.31 taxing district and deliver up all orders and other evidences of 26.32 indebtedness of the taxing district, taking triplicate receipts 26.33 for them. The treasurer shall file one of the receipts with the 26.34 county auditor, and shall return one by mail on the day of its 26.35 receipt to the clerk of the town, city, school district, or 26.36 special district to which payment was made. The clerk shall 27.1 keep the receipt in the clerk's office. Upon written request of 27.2 the taxing district, to the extent practicable, the county 27.3 treasurer shall make partial payments of amounts collected 27.4 periodically in advance of the next settlement and 27.5 distribution. A statement prepared by the county treasurer must 27.6 accompany each payment. It must state the years for which taxes 27.7 included in the payment were collected and, for each year, the 27.8 amount of the taxes and any penalties on the tax. Upon written 27.9 request of a taxing district, except school districts, the 27.10 county treasurer shall pay at least 70 percent of the estimated 27.11 collection within 30 days after the settlement date determined 27.12 in section 276.09. Within seven business days after the due 27.13 date, or 28 calendar days after the postmark date on the 27.14 envelopes containing real or personal property tax statements, 27.15 whichever is latest, the county treasurer shall pay to the 27.16 treasurer of the school districts 50 percent of the estimated 27.17 collections arising from taxes levied by and belonging to the 27.18 school district, unless the school district elects to receive 50 27.19 percent of the estimated collections arising from taxes levied 27.20 by and belonging to the school district after making a 27.21 proportionate reduction to reflect any loss in collections as 27.22 the result of any delay in mailing tax statements. In that 27.23 case, 50 percent of those adjusted, estimated collections shall 27.24 be paid by the county treasurer to the treasurer of the school 27.25 district within seven business days of the due date. The 27.26 remaining 50 percent of the estimated collections must be paid 27.27 to the treasurer of the school district within the next seven 27.28 business days of the later of the dates in the preceding 27.29 sentence, unless the school district elects to receive the 27.30 remainder of its estimated collections after a proportionate 27.31 reduction has been made to reflect any loss in collections as 27.32 the result of any delay in mailing tax statements. In that 27.33 case, the remaining 50 percent of those adjusted, estimated 27.34 collections shall be paid by the county treasurer to the 27.35 treasurer of the school district within 14 days of the due 27.36 date. The treasurer shall pay the balance of the amounts 28.1 collectedto the state before June 30, orto a municipal 28.2 corporation or other body within 60 days after the settlement 28.3 date determined in section 276.09. After 45 days interest at an 28.4 annual rate of eight percent accrues and must be paid to the 28.5 taxing district. Interest must be paid upon appropriation from 28.6 the general revenue fund of the county. If not paid, it may be 28.7 recovered by the taxing district, in a civil action. 28.8 [EFFECTIVE DATE.] This section is effective for taxes 28.9 payable in 2004 and thereafter. 28.10 Sec. 9. [276.112] [STATE PROPERTY TAXES; COUNTY 28.11 TREASURER.] 28.12 On or before January 25 each year, for the period ending 28.13 December 31 of the prior year, and on or before June 29 each 28.14 year, for the period ending on the most recent settlement day 28.15 determined in section 276.09, the county treasurer must make 28.16 full settlement with the county auditor according to sections 28.17 276.09, 276.10, and 276.111 for all receipts of state property 28.18 taxes levied under section 275.025, and must transmit those 28.19 receipts to the commissioner of revenue by electronic means. 28.20 [EFFECTIVE DATE.] This section is effective the day 28.21 following final enactment. 28.22 Sec. 10. Minnesota Statutes 2002, section 282.01, 28.23 subdivision 1b, is amended to read: 28.24 Subd. 1b. [CONVEYANCE; TARGETED NEIGHBORHOOD LANDS.] (a) 28.25 Notwithstanding subdivision 1a, in the case of tax-forfeited 28.26 lands located in a targeted neighborhood, as defined in section 28.27 469.201, subdivision 10, and section 473.121, subdivision 2, the 28.28 commissioner of revenue shall convey by deed in the name of the 28.29 state any tract of tax-forfeited land held in trust in favor of 28.30 the taxing districts, to a political subdivision that submits an 28.31 application to the commissioner of revenue and, in the case of 28.32 targeted neighborhoods located outside of the metropolitan area 28.33 as defined in section 473.121, the recommendation of the county 28.34 board. 28.35 (b) The application under paragraph (a) must include a 28.36 statement of facts as to the use to be made of the tract, the 29.1 need therefor, and a resolution, adopted by the governing body 29.2 of the political subdivision, finding that the conveyance of a 29.3 tract of tax-forfeited land to the political subdivision is 29.4 necessary to provide for the redevelopment of land as productive 29.5 taxable property. Deeds of conveyance issued under paragraph 29.6 (a) are not conditioned on continued use of the property for the 29.7 use stated in the application. 29.8 [EFFECTIVE DATE.] This section is effective for deeds 29.9 issued on or after July 1, 2003. 29.10 Sec. 11. Minnesota Statutes 2002, section 282.01, 29.11 subdivision 7a, is amended to read: 29.12 Subd. 7a. [CITY SALES; ALTERNATE PROCEDURES.] Land located 29.13 in a home rule charter or statutory city, or in a town which 29.14 cannot be improved because of noncompliance with local 29.15 ordinances regarding minimum area, shape, frontage or access may 29.16 be sold by the county auditor pursuant to this subdivision if 29.17 the auditor determines that a nonpublic sale will encourage the 29.18 approval of sale of the land by the city or town and promote its 29.19 return to the tax rolls. If the physical characteristics of the 29.20 land indicate that its highest and best use will be achieved by 29.21 combining it with an adjoining parcel and the city or town has 29.22 not adopted a local ordinance governing minimum area, shape, 29.23 frontage, or access, the land may also be sold pursuant to this 29.24 subdivision. If the property consists of an undivided interest 29.25 in land or land and improvements, the property may also be sold 29.26 to the other owners under this subdivision. The sale of land 29.27 pursuant to this subdivision shall be subject to any conditions 29.28 imposed by the county board pursuant to section 282.03. The 29.29 governing body of the city or town may recommend to the county 29.30 board conditions to be imposed on the sale. The county auditor 29.31 may restrict the sale to owners of lands adjoining the land to 29.32 be sold. The county auditor shall conduct the sale by sealed 29.33 bid or may select another means of sale. The land shall be sold 29.34 to the highest bidder but in no event shall the land be sold for 29.35 less than its appraised value. All owners of land adjoining the 29.36 land to be sold shall be given a written notice at least 30 days 30.1 prior to the sale. 30.2 This subdivision shall be liberally construed to encourage 30.3 the sale and utilization of tax-forfeited land, to eliminate 30.4 nuisances and dangerous conditions and to increase compliance 30.5 with land use ordinances. 30.6 [EFFECTIVE DATE.] This section is effective for sales 30.7 occurring on or after the day following final enactment. 30.8 Sec. 12. Minnesota Statutes 2002, section 282.08, is 30.9 amended to read: 30.10 282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 30.11 The net proceeds from the sale or rental of any parcel of 30.12 forfeited land, or from the sale of products from the forfeited 30.13 land, must be apportioned by the county auditor to the taxing 30.14 districts interested in the land, as follows: 30.15 (1) the amounts necessary to pay the state general tax levy 30.16 against the parcel for taxes payable in the year for which the 30.17 tax judgment was entered, and for each subsequent payable year 30.18 up to and including the year of forfeiture, must be apportioned 30.19 to the state; 30.20 (2) the portion required to pay any amounts included in the 30.21 appraised value under section 282.01, subdivision 3, as 30.22 representing increased value due to any public improvement made 30.23 after forfeiture of the parcel to the state, but not exceeding 30.24 the amount certified by the clerk of the municipality must be 30.25 apportioned to the municipal subdivision entitled to it; 30.26(2)(3) the portion required to pay any amount included in 30.27 the appraised value under section 282.019, subdivision 5, 30.28 representing increased value due to response actions taken after 30.29 forfeiture of the parcel to the state, but not exceeding the 30.30 amount of expenses certified by the pollution control agency or 30.31 the commissioner of agriculture, must be apportioned to the 30.32 agency or the commissioner of agriculture and deposited in the 30.33 fund from which the expenses were paid; 30.34(3)(4) the portion of the remainder required to discharge 30.35 any special assessment chargeable against the parcel for 30.36 drainage or other purpose whether due or deferred at the time of 31.1 forfeiture, must be apportioned to the municipal subdivision 31.2 entitled to it; and 31.3(4)(5) any balance must be apportioned as follows: 31.4 (i) The county board may annually by resolution set aside 31.5 no more than 30 percent of the receipts remaining to be used for 31.6 timber development on tax-forfeited land and dedicated memorial 31.7 forests, to be expended under the supervision of the county 31.8 board. It must be expended only on projects approved by the 31.9 commissioner of natural resources. 31.10 (ii) The county board may annually by resolution set aside 31.11 no more than 20 percent of the receipts remaining to be used for 31.12 the acquisition and maintenance of county parks or recreational 31.13 areas as defined in sections 398.31 to 398.36, to be expended 31.14 under the supervision of the county board. 31.15 (iii) Any balance remaining must be apportioned as 31.16 follows: county, 40 percent; town or city, 20 percent; and 31.17 school district, 40 percent, provided, however, that in 31.18 unorganized territory that portion which would have accrued to 31.19 the township must be administered by the county board of 31.20 commissioners. 31.21 [EFFECTIVE DATE.] This section is effective for taxes 31.22 payable in 2004 and thereafter. 31.23 Sec. 13. [290C.12] [DEATH OF CLAIMANT.] 31.24 Within one year after the death of the claimant, the 31.25 claimant's heir, devisee, or estate must either: 31.26 (1) notify the commissioner of election to terminate 31.27 enrollment in the sustainable forest incentive program; or 31.28 (2) make an application under this chapter to continue 31.29 enrollment of the land in the program. 31.30 Upon notification under clause (1), the commissioner shall 31.31 terminate the enrollment and issue a document releasing the land 31.32 from the covenant as provided in section 290C.04, paragraph 31.33 (c). Penalties under section 290C.11 shall not apply. If the 31.34 application under clause (2) is approved, the land is enrolled 31.35 in the program without a break. If the commissioner does not 31.36 receive notification within one year after the date of death, 32.1 enrollment in the program shall be terminated and penalties 32.2 under section 290C.11 shall not apply. 32.3 [EFFECTIVE DATE.] This section is effective the day 32.4 following final enactment, except in the case of claimants dying 32.5 prior to the day following final enactment, heirs, devisees, or 32.6 estates may make the election either six months after the 32.7 effective date of this provision or one year after the death of 32.8 the claimant, whichever is later. 32.9 Sec. 14. Minnesota Statutes 2002, section 469.1792, 32.10 subdivision 3, is amended to read: 32.11 Subd. 3. [ACTIONS AUTHORIZED.] (a) An authority with a 32.12 district qualifying under this section may take either or both 32.13 of the following actions for any or all of its preexisting 32.14 districts: 32.15 (1) the authority may elect that the original local tax 32.16 rate under section 469.177, subdivision 1a, does not apply to 32.17 the district; and 32.18 (2) the authority may elect the fiscal disparities 32.19 contribution will be computed under section 469.177, subdivision 32.20 3, paragraph (a), regardless of the election that was made for 32.21 the district. 32.22 (b) The authority may take action under this subdivision 32.23 only after the municipality approves the action, by resolution, 32.24 after notice and public hearing in the manner provided under 32.25 section 469.175, subdivision 2. To be effective for taxes 32.26 payable in the following year, the resolution must be adopted 32.27 and the county auditor must be notified of the adoption on or 32.28 before July 1. 32.29 [EFFECTIVE DATE.] This section is effective for taxes 32.30 payable in 2004 and thereafter. 32.31 Sec. 15. Minnesota Statutes 2002, section 477A.011, 32.32 subdivision 30, is amended to read: 32.33 Subd. 30. [PRE-1940 HOUSING PERCENTAGE.] "Pre-1940 housing 32.34 percentage" for a city is 100 times themost recent1990 federal 32.35 census count of all housing units in the city built before 1940, 32.36 divided by the total number of all housing units in the city. 33.1 Housing units includes both occupied and vacant housing units as 33.2 defined by the federal census. 33.3 [EFFECTIVE DATE.] This section is effective for aids 33.4 payable in 2003 and thereafter. 33.5 Sec. 16. Laws 2001, First Special Session chapter 5, 33.6 article 3, section 61, the effective date, is amended to read: 33.7 [EFFECTIVE DATE.] This section is effective August 1, 2001, 33.8 for deeds issued on or after August 1, 2001. This section is 33.9 effective August 1, 2003, for deeds issued before August 1, 2001. 33.10 Sec. 17. Laws 2001, First Special Session chapter 5, 33.11 article 3, section 63, the effective date, is amended to read: 33.12 [EFFECTIVE DATE.] This section is effective August 1, 2001, 33.13 for deeds issued on or after August 1, 2001. This section is 33.14 effective August 1, 2003, for deeds issued before August 1, 2001. 33.15 ARTICLE 4 33.16 SALES AND USE TAXES 33.17 Section 1. Minnesota Statutes 2002, section 289A.60, is 33.18 amended by adding a subdivision to read: 33.19 Subd. 25. [PENALTY FOR FAILURE TO PROPERLY COMPLETE SALES 33.20 TAX RETURN.] A person who fails to report local sales tax on a 33.21 sales tax return or who fails to report local sales tax on 33.22 separate tax lines on the sales tax return is subject to a 33.23 penalty of five percent of the amount of tax not properly 33.24 reported on the return. A person who files a consolidated tax 33.25 return but fails to report location information is subject to a 33.26 $500 penalty for each return not containing location 33.27 information. In addition, the commissioner may revoke the 33.28 privilege for a taxpayer to file consolidated returns and may 33.29 require the taxpayer to separately register each location and to 33.30 file a tax return for each location. 33.31 [EFFECTIVE DATE.] This section is effective for returns 33.32 filed after June 30, 2003. 33.33 Sec. 2. Minnesota Statutes 2002, section 297A.61, 33.34 subdivision 3, is amended to read: 33.35 Subd. 3. [SALE AND PURCHASE.] (a) "Sale" and "purchase" 33.36 include, but are not limited to, each of the transactions listed 34.1 in this subdivision. 34.2 (b) Sale and purchase include: 34.3 (1) any transfer of title or possession, or both, of 34.4 tangible personal property, whether absolutely or conditionally, 34.5 for a consideration in money or by exchange or barter; and 34.6 (2) the leasing of or the granting of a license to use or 34.7 consume, for a consideration in money or by exchange or barter, 34.8 tangible personal property, other than a manufactured home used 34.9 for residential purposes for a continuous period of 30 days or 34.10 more. 34.11 (c) Sale and purchase include the production, fabrication, 34.12 printing, or processing of tangible personal property for a 34.13 consideration for consumers who furnish either directly or 34.14 indirectly the materials used in the production, fabrication, 34.15 printing, or processing. 34.16 (d) Sale and purchase include the preparing for a 34.17 consideration of food. Notwithstanding section 297A.67, 34.18 subdivision 2, taxable food includes, but is not limited to, the 34.19 following: 34.20 (1) prepared food sold by the retailer; 34.21 (2) soft drinks; 34.22 (3) candy; and 34.23 (4) all food sold through vending machines. 34.24 (e) A sale and a purchase includes the furnishing for a 34.25 consideration of electricity, gas, water, or steam for use or 34.26 consumption within this state. 34.27 (f) A sale and a purchase includes the transfer for a 34.28 consideration of computer software. 34.29 (g) A sale and a purchase includes the furnishing for a 34.30 consideration of the following services: 34.31 (1) the privilege of admission to places of amusement, 34.32 recreational areas, or athletic events, and the making available 34.33 of amusement devices, tanning facilities, reducing salons, steam 34.34 baths, turkish baths, health clubs, and spas or athletic 34.35 facilities; 34.36 (2) lodging and related services by a hotel, rooming house, 35.1 resort, campground, motel, or trailer camp and the granting of 35.2 any similar license to use real property other than the renting 35.3 or leasing of it for a continuous period of 30 days or more; 35.4 (3) nonresidential parking services, whether on a 35.5 contractual, hourly, or other periodic basis, except for parking 35.6 at a meter; 35.7 (4) the granting of membership in a club, association, or 35.8 other organization if: 35.9 (i) the club, association, or other organization makes 35.10 available for the use of its members sports and athletic 35.11 facilities, without regard to whether a separate charge is 35.12 assessed for use of the facilities; and 35.13 (ii) use of the sports and athletic facility is not made 35.14 available to the general public on the same basis as it is made 35.15 available to members. 35.16 Granting of membership means both onetime initiation fees and 35.17 periodic membership dues. Sports and athletic facilities 35.18 include golf courses; tennis, racquetball, handball, and squash 35.19 courts; basketball and volleyball facilities; running tracks; 35.20 exercise equipment; swimming pools; and other similar athletic 35.21 or sports facilities; 35.22 (5) delivery of aggregate materials and concrete block by a 35.23 third party if the delivery would be subject to the sales tax if 35.24 provided by the seller of the aggregate material or concrete 35.25 block; and 35.26 (6) services as provided in this clause: 35.27 (i) laundry and dry cleaning services including cleaning, 35.28 pressing, repairing, altering, and storing clothes, linen 35.29 services and supply, cleaning and blocking hats, and carpet, 35.30 drapery, upholstery, and industrial cleaning. Laundry and dry 35.31 cleaning services do not include services provided by coin 35.32 operated facilities operated by the customer; 35.33 (ii) motor vehicle washing, waxing, and cleaning services, 35.34 including services provided by coin operated facilities operated 35.35 by the customer, and rustproofing, undercoating, and towing of 35.36 motor vehicles; 36.1 (iii) building and residential cleaning, maintenance, and 36.2 disinfecting and exterminating services; 36.3 (iv) detective, security, burglar, fire alarm, and armored 36.4 car services; but not including services performed within the 36.5 jurisdiction they serve by off-duty licensed peace officers as 36.6 defined in section 626.84, subdivision 1, or services provided 36.7 by a nonprofit organization for monitoring and electronic 36.8 surveillance of persons placed on in-home detention pursuant to 36.9 court order or under the direction of the Minnesota department 36.10 of corrections; 36.11 (v) pet grooming services; 36.12 (vi) lawn care, fertilizing, mowing, spraying and sprigging 36.13 services; garden planting and maintenance; tree, bush, and shrub 36.14 pruning, bracing, spraying, and surgery; indoor plant care; 36.15 tree, bush, shrub, and stump removal; and tree trimming for 36.16 public utility lines. Services performed under a construction 36.17 contract for the installation of shrubbery, plants, sod, trees, 36.18 bushes, and similar items are not taxable; 36.19 (vii) massages, except when provided by a licensed health 36.20 care facility or professional or upon written referral from a 36.21 licensed health care facility or professional for treatment of 36.22 illness, injury, or disease; and 36.23 (viii) the furnishing of lodging, board, and care services 36.24 for animals in kennels and other similar arrangements, but 36.25 excluding veterinary and horse boarding services. 36.26 In applying the provisions ofthis chapter,this clause 36.27 (6), items (i) to (vi) and (viii), the following conditions 36.28 apply. The terms "tangible personal property" and "sales at 36.29 retail" include taxable services and the provision of taxable 36.30 services, unless specifically provided otherwise. Services 36.31 performed by an employee for an employer are not taxable. 36.32 Services performed by a partnership or association for another 36.33 partnership or association are not taxable if one of the 36.34 entities owns or controls more than 80 percent of the voting 36.35 power of the equity interest in the other entity. Services 36.36 performed between members of an affiliated group of corporations 37.1 are not taxable. For purposes ofthis sectionthe preceding 37.2 sentence, "affiliated group of corporations" includes those 37.3 entities that would be classified as members of an affiliated 37.4 group under United States Code, title 26, section 1504, and that 37.5 are eligible to file a consolidated tax return for federal 37.6 income tax purposes. 37.7 (h) A sale and a purchase includes the furnishing for a 37.8 consideration of tangible personal property or taxable services 37.9 by the United States or any of its agencies or 37.10 instrumentalities, or the state of Minnesota, its agencies, 37.11 instrumentalities, or political subdivisions. 37.12 (i) A sale and a purchase includes the furnishing for a 37.13 consideration of telecommunications services, including cable 37.14 television services and direct satellite services. 37.15 Telecommunications services are taxed to the extent allowed 37.16 under federal law if those services: 37.17 (1) either (i) originate and terminate in this state; or 37.18 (ii) originate in this state and terminate outside the state and 37.19 the service is charged to atelephone numbertelecommunications 37.20 customer located in this state or to the account of any 37.21 transmission instrument in this state; or (iii) originate 37.22 outside this state and terminate in this state and the service 37.23 is charged to atelephone numbertelecommunications customer 37.24 located in this state or to the account of any transmission 37.25 instrument in this state; or 37.26 (2) are rendered by providing a private communications 37.27 service for which the customer has one or more locations within 37.28 Minnesota connected to the service and the service is charged to 37.29 atelephone numbertelecommunications customer located in this 37.30 state or to the account of any transmission instrument in this 37.31 state. 37.32 All charges for mobile telecommunications services, as 37.33 defined in United States Code, title 4, section 124, are deemed 37.34 to be provided by the customer's home service provider and 37.35 sourced to the customer's place of primary use and are subject 37.36 to tax based upon the customer's place of primary use in 38.1 accordance with the Mobile Telecommunications Sourcing Act, 38.2 United States Code, title 4, sections 116 to 126. All other 38.3 definitions and provisions of the Mobile Telecommunications 38.4 Sourcing Act as provided in United States Code, title 4, are 38.5 hereby adopted. 38.6 (j) A sale and a purchase includes the furnishing for a 38.7 consideration of installation if the installation charges would 38.8 be subject to the sales tax if the installation were provided by 38.9 the seller of the item being installed. 38.10 [EFFECTIVE DATE.] This section is effective the day 38.11 following final enactment. 38.12 Sec. 3. Minnesota Statutes 2002, section 297A.61, 38.13 subdivision 12, is amended to read: 38.14 Subd. 12. [FARM MACHINERY.] (a) "Farm machinery" means new 38.15 or used machinery, equipment, implements, accessories, and 38.16 contrivances used directly and principally intheagricultural 38.17 productionfor sale, but not including the processing, of38.18livestock, dairy animals, dairy products, poultry and poultry38.19products, fruits, vegetables, trees and shrubs, plants, forage,38.20grains, and bees and apiary products.38.21(b) Farm machinery includesincluding, but not limited to: 38.22 (1) machinery for the preparation, seeding, or cultivation 38.23 of soil for growing agricultural cropsand sod, for the38.24harvesting and threshing of agricultural products, or for the38.25harvesting or mowing of sod; 38.26 (2) barn cleaners, milking systems, grain dryers, feeding 38.27 systems including stationary feed bunks, and similar 38.28 installations, whether or not the equipment is installed by the 38.29 seller and becomes part of the real property; and 38.30 (3) irrigation equipment sold for exclusively agricultural 38.31 use, including pumps, pipe fittings, valves, sprinklers, and 38.32 other equipment necessary to the operation of an irrigation 38.33 system when sold as part of an irrigation system, whether or not 38.34 the equipment is installed by the seller and becomes part of the 38.35 real property;. 38.36(4) logging equipment, including chain saws used for39.1commercial logging;39.2(5) fencing used for the containment of farmed cervidae, as39.3defined in section 17.451, subdivision 2;39.4(6) primary and backup generator units used to generate39.5electricity for the purpose of operating farm machinery, as39.6defined in this subdivision, or providing light or space heating39.7necessary for the production of livestock, dairy animals, dairy39.8products, or poultry and poultry products;39.9(7) aquaculture production equipment as defined in39.10subdivision 13; and39.11(8) equipment used for maple syrup harvesting.39.12(c)(b) Farm machinery does not include: 39.13 (1) repair or replacement parts; 39.14 (2) tools, shop equipment, grain bins, fencing material 39.15 except fencing material covered by paragraph (b), clause (5), 39.16 communication equipment, and other farm supplies; 39.17 (3) motor vehicles taxed under chapter 297B; 39.18 (4) snowmobiles or snow blowers; or 39.19 (5) lawn mowers except those used in the production of sod 39.20 for sale, or garden-type tractors or garden tillers. 39.21 [EFFECTIVE DATE.] This section is effective for sales and 39.22 purchases made after June 30, 2003. 39.23 Sec. 4. Minnesota Statutes 2002, section 297A.61, is 39.24 amended by adding a subdivision to read: 39.25 Subd. 35. [AGRICULTURAL PRODUCTION.] "Agricultural 39.26 production" includes, but is not limited to, horticulture, 39.27 floriculture, maple syrup harvesting, and the raising of pets, 39.28 livestock as defined in section 17A.03, subdivision 5, poultry, 39.29 fur-bearing animals, research animals, and horses. 39.30 [EFFECTIVE DATE.] This section is effective for sales and 39.31 purchases made after June 30, 2003. 39.32 Sec. 5. Minnesota Statutes 2002, section 297A.68, 39.33 subdivision 5, is amended to read: 39.34 Subd. 5. [CAPITAL EQUIPMENT.] (a) Capital equipment is 39.35 exempt. The tax must be imposed and collected as if the rate 39.36 under section 297A.62, subdivision 1, applied, and then refunded 40.1 in the manner provided in section 297A.75. 40.2 "Capital equipment" means machinery and equipment purchased 40.3 or leased, and used in this state by the purchaser or lessee 40.4 primarily for manufacturing, fabricating, mining, or refining 40.5 tangible personal property to be sold ultimately at retail if 40.6 the machinery and equipment are essential to the integrated 40.7 production process of manufacturing, fabricating, mining, or 40.8 refining. Capital equipment also includes machinery and 40.9 equipment used to electronically transmit results retrieved by a 40.10 customer of an online computerized data retrieval system. 40.11 (b) Capital equipment includes, but is not limited to: 40.12 (1) machinery and equipment used to operate, control, or 40.13 regulate the production equipment; 40.14 (2) machinery and equipment used for research and 40.15 development, design, quality control, and testing activities; 40.16 (3) environmental control devices that are used to maintain 40.17 conditions such as temperature, humidity, light, or air pressure 40.18 when those conditions are essential to and are part of the 40.19 production process; 40.20 (4) materials and supplies used to construct and install 40.21 machinery or equipment; 40.22 (5) repair and replacement parts, including accessories, 40.23 whether purchased as spare parts, repair parts, or as upgrades 40.24 or modifications to machinery or equipment; 40.25 (6) materials used for foundations that support machinery 40.26 or equipment; 40.27 (7) materials used to construct and install special purpose 40.28 buildings used in the production process; and 40.29 (8) ready-mixed concretetrucksequipment in which the 40.30 ready-mixed concrete is mixed as part of the delivery 40.31 process regardless if mounted on a chassis and leases of 40.32 ready-mixed concrete trucks. 40.33 (c) Capital equipment does not include the following: 40.34 (1) motor vehicles taxed under chapter 297B; 40.35 (2) machinery or equipment used to receive or store raw 40.36 materials; 41.1 (3) building materials, except for materials included in 41.2 paragraph (b), clauses (6) and (7); 41.3 (4) machinery or equipment used for nonproduction purposes, 41.4 including, but not limited to, the following: plant security, 41.5 fire prevention, first aid, and hospital stations; support 41.6 operations or administration; pollution control; and plant 41.7 cleaning, disposal of scrap and waste, plant communications, 41.8 space heating, cooling, lighting, or safety; 41.9 (5) farm machinery and aquaculture production equipment as 41.10 defined by section 297A.61, subdivisions 12 and 13; 41.11 (6) machinery or equipment purchased and installed by a 41.12 contractor as part of an improvement to real property; or 41.13 (7) any other item that is not essential to the integrated 41.14 process of manufacturing, fabricating, mining, or refining. 41.15 (d) For purposes of this subdivision: 41.16 (1) "Equipment" means independent devices or tools separate 41.17 from machinery but essential to an integrated production 41.18 process, including computers and computer software, used in 41.19 operating, controlling, or regulating machinery and equipment; 41.20 and any subunit or assembly comprising a component of any 41.21 machinery or accessory or attachment parts of machinery, such as 41.22 tools, dies, jigs, patterns, and molds. 41.23 (2) "Fabricating" means to make, build, create, produce, or 41.24 assemble components or property to work in a new or different 41.25 manner. 41.26 (3) "Integrated production process" means a process or 41.27 series of operations through which tangible personal property is 41.28 manufactured, fabricated, mined, or refined. For purposes of 41.29 this clause, (i) manufacturing begins with the removal of raw 41.30 materials from inventory and ends when the last process prior to 41.31 loading for shipment has been completed; (ii) fabricating begins 41.32 with the removal from storage or inventory of the property to be 41.33 assembled, processed, altered, or modified and ends with the 41.34 creation or production of the new or changed product; (iii) 41.35 mining begins with the removal of overburden from the site of 41.36 the ores, minerals, stone, peat deposit, or surface materials 42.1 and ends when the last process before stockpiling is completed; 42.2 and (iv) refining begins with the removal from inventory or 42.3 storage of a natural resource and ends with the conversion of 42.4 the item to an intermediate or finished item of tangible 42.5 personal property. 42.6 (4) "Machinery" means mechanical, electronic, or electrical 42.7 devices, including computers and computer software, that are 42.8 purchased or constructed to be used for the activities set forth 42.9 in paragraph (a), beginning with the removal of raw materials 42.10 from inventory through completion of the product, including 42.11 packaging of the product. 42.12(4)(5) "Machinery and equipment used for pollution control" 42.13 means machinery and equipment used solely to eliminate, prevent, 42.14 or reduce pollution resulting from an activity described in 42.15 paragraph (a). 42.16(5)(6) "Manufacturing" means an operation or series of 42.17 operations where raw materials are changed in form, composition, 42.18 or condition by machinery and equipment and which results in the 42.19 production of a new article of tangible personal property. For 42.20 purposes of this subdivision, "manufacturing" includes the 42.21 generation of electricity or steam to be sold at retail. 42.22(6)(7) "Mining" means the extraction of minerals, ores, 42.23 stone, or peat. 42.24(7)(8) "Online data retrieval system" means a system whose 42.25 cumulation of information is equally available and accessible to 42.26 all its customers. 42.27(8)(9) "Primarily" means machinery and equipment used 50 42.28 percent or more of the time in an activity described in 42.29 paragraph (a). 42.30(9)(10) "Refining" means the process of converting a 42.31 natural resource to a product, including the treatment of water 42.32 to be sold at retail. 42.33 [EFFECTIVE DATE.] This section is effective for sales and 42.34 purchases made after December 31, 2003. 42.35 Sec. 6. Minnesota Statutes 2002, section 297A.68, is 42.36 amended by adding a subdivision to read: 43.1 Subd. 39. [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 43.2 tangible personal property or services is exempt from tax for a 43.3 period of six months from the effective date of the law change 43.4 that results in the imposition of the tax under this chapter if: 43.5 (1) the act imposing the tax does not have transitional 43.6 effective date language for existing construction contracts and 43.7 construction bids; and 43.8 (2) the requirements of paragraph (b) are met. 43.9 (b) A sale is tax exempt under paragraph (a) if it meets 43.10 the requirements of either clause (1) or (2): 43.11 (1) For a construction contract: 43.12 (i) the goods or services sold must be used for the 43.13 performance of a bona fide written lump sum or fixed price 43.14 construction contract; 43.15 (ii) the contract must be entered into before the date the 43.16 goods or services become subject to the sales tax; 43.17 (iii) the contract must not provide for allocation of 43.18 future taxes; and 43.19 (iv) for each qualifying contract the contractor must give 43.20 the seller documentation of the contract on which an exemption 43.21 is to be claimed. 43.22 (2) For a bid: 43.23 (i) the goods or services sold must be used pursuant to an 43.24 obligation of a bid or bids; 43.25 (ii) the bid or bids must be submitted and accepted before 43.26 the date the goods or services became subject to the sales tax; 43.27 (iii) the bid or bids must not be able to be withdrawn, 43.28 modified, or changed without forfeiting a bond; and 43.29 (iv) for each qualifying bid, the contractor must give the 43.30 seller documentation of the bid on which an exemption is to be 43.31 claimed. 43.32 [EFFECTIVE DATE.] This section is effective the day 43.33 following final enactment. 43.34 Sec. 7. Minnesota Statutes 2002, section 297A.69, 43.35 subdivision 2, is amended to read: 43.36 Subd. 2. [MATERIALS CONSUMED IN AGRICULTURAL PRODUCTION.] 44.1(a)Materials stored, used, or consumed in agricultural 44.2 production of personal property intended to be sold ultimately 44.3 at retail are exempt, whether or not the item becomes an 44.4 ingredient or constituent part of the property produced. 44.5 Materials that qualify for this exemption include, but are not 44.6 limited to, the following: 44.7 (1) feeds, seeds, trees, fertilizers, and herbicides, 44.8 including when purchased for use by farmers in a federal or 44.9 state farm or conservation program; 44.10 (2) materials sold to a veterinarian to be used or consumed 44.11 in the care, medication, and treatment of agricultural 44.12 production animals and horses; 44.13 (3) chemicals, including chemicals used for cleaning food 44.14 processing machinery and equipment; 44.15 (4) materials, including chemicals, fuels, and electricity 44.16 purchased by persons engaged in agricultural production to treat 44.17 waste generated as a result of the production process; 44.18 (5) fuels, electricity, gas, and steam used or consumed in 44.19 the production process, except that electricity, gas, or steam 44.20 used for space heating, cooling, or lighting is exempt if (i) it 44.21 is in excess of the average climate control or lighting for the 44.22 production area, and (ii) it is necessary to produce that 44.23 particular product; 44.24 (6) petroleum products and lubricants; 44.25 (7) packaging materials, including returnable containers 44.26 used in packaging food and beverage products; and 44.27 (8) accessory tools and equipment that are separate 44.28 detachable units with an ordinary useful life of less than 12 44.29 months used in producing a direct effect upon the product. 44.30 Machinery, equipment, implements, tools, accessories, 44.31 appliances, contrivances, and furniture and fixtures, except 44.32 those listed in this clause are not included within this 44.33 exemption. 44.34(b) For purposes of this subdivision, "agricultural44.35production" includes, but is not limited to, horticulture,44.36floriculture, maple syrup harvesting, and the raising of pets,45.1fur-bearing animals, research animals, horses, farmed cervidae45.2as defined in section 17.451, subdivision 2, llamas as defined45.3in section 17.455, subdivision 2, and ratitae as defined in45.4section 17.453, subdivision 3.45.5 [EFFECTIVE DATE.] This section is effective for sales and 45.6 purchases made after December 31, 2003. 45.7 Sec. 8. Minnesota Statutes 2002, section 297A.69, 45.8 subdivision 3, is amended to read: 45.9 Subd. 3. [FARM MACHINERYREPAIR AND REPLACEMENT PARTS.] 45.10 Repair and replacement parts, except tires, used for maintenance 45.11 or repair of farm machinery, logging equipment, maple syrup 45.12 harvesting equipment, and aquaculture production equipment are 45.13 exempt, if the part replaces afarmmachinery part assigned a 45.14 specific or generic part number by the manufacturer of thefarm45.15 machinery. 45.16 [EFFECTIVE DATE.] This section is effective for sales and 45.17 purchases made after June 30, 2003. 45.18 Sec. 9. Minnesota Statutes 2002, section 297A.69, 45.19 subdivision 4, is amended to read: 45.20 Subd. 4. [FARMMACHINERY, EQUIPMENT, AND FENCING.] The 45.21 following machinery, equipment, and fencing is exempt: 45.22 (1) farm machineryis exempt.; 45.23 (2) logging equipment, including chain saws used for 45.24 commercial logging; 45.25 (3) fencing used for the containment of farmed cervidae, as 45.26 defined in section 17.451, subdivision 2; 45.27 (4) primary and backup generator units used to generate 45.28 electricity for the purpose of operating farm machinery, maple 45.29 syrup harvesting equipment, aquacultural production equipment, 45.30 or logging equipment, or providing light or space heating 45.31 necessary for the production of livestock, dairy animals, dairy 45.32 products, or poultry and poultry products; 45.33 (5) aquaculture production equipment; and 45.34 (6) equipment used for maple syrup harvesting. 45.35 [EFFECTIVE DATE.] This section is effective for sales and 45.36 purchases made after June 30, 2003. 46.1 Sec. 10. Minnesota Statutes 2002, section 297B.025, 46.2 subdivision 1, is amended to read: 46.3 Subdivision 1. [NONCOLLECTOR VEHICLE.] Purchase or use of 46.4 a passenger automobile as defined in section 168.011, 46.5 subdivision 7, shall be taxed pursuant to section 297B.02, 46.6 subdivision 2, if the passenger automobileis(1) is in the 46.7 tenth or subsequent year of vehicle life, and (2)is not an46.8above-market automobile as designated by the registrar of motor46.9vehiclesdoes not have a resale value of $3,000 or more, as 46.10 determined using nationally recognized sources of information on 46.11 automobile resale values. 46.12The registrar of motor vehicles shall prepare, and46.13distribute to all deputy motor vehicle registrars by July 15,46.141985, a listing by make, model, and year of above-market46.15automobiles. Except as provided by subdivision 2, the registrar46.16must include in the list all automobiles with a resale value of46.17$3,000 or more, as determined using nationally recognized46.18sources of information on automobile resale values. The46.19registrar shall revise the list by February 1 of each year. The46.20initial list and all subsequent revisions must include only46.21those automobiles which are in the tenth or subsequent year of46.22vehicle life.46.23 [EFFECTIVE DATE.] This section is effective for vehicles 46.24 purchased after June 30, 2003. 46.25 Sec. 11. Minnesota Statutes 2002, section 297B.025, 46.26 subdivision 2, is amended to read: 46.27 Subd. 2. [COLLECTOR VEHICLE.] A passenger automobile that 46.28 is registered under section 168.10, subdivision 1a, 1b, 1c, 1d, 46.29 or 1h, or a fire truck registered under section 168.10, 46.30 subdivision 1c, shall be taxed under section 297B.02, 46.31 subdivision 3, and the registrar shall not designate as an46.32above-market automobile a passenger automobile or a fire truck46.33registered under those subdivisions. If the vehicle is 46.34 subsequently registered in another class not under section 46.35 168.10, subdivision 1a, 1b, 1c, 1d, or 1h, within one year of 46.36 the date of registration under those subdivisions, it shall be 47.1 subject to the full excise tax imposed under subdivision 1. 47.2 [EFFECTIVE DATE.] This section is effective for vehicles 47.3 purchased after December 31, 2003. 47.4 Sec. 12. Minnesota Statutes 2002, section 297B.035, 47.5 subdivision 1, is amended to read: 47.6 Subdivision 1. [ORDINARY COURSE OF BUSINESS.] Except as 47.7 provided in this section, motor vehicles purchased for resale in 47.8 the ordinary course of businessor usedby any motor vehicle 47.9 dealer, as defined in section 168.011, subdivision 21, who is 47.10 licensed under section 168.27, subdivision 2 or 3, which bear 47.11 dealer plates as authorized by section 168.27, subdivision 16, 47.12 shall be exempt from the provisions of this chapter. 47.13 [EFFECTIVE DATE.] This section is effective the day 47.14 following final enactment. 47.15 ARTICLE 5 47.16 CIGARETTE AND TOBACCO PRODUCTS TAXES 47.17 Section 1. Minnesota Statutes 2002, section 297F.01, 47.18 subdivision 21a, is amended to read: 47.19 Subd. 21a. [UNLICENSED SELLER.] "Unlicensed seller" means 47.20 anyone who is not licensed under section 297F.03or 461.12to 47.21 sell the particular product to the purchaser or possessor of the 47.22 product. 47.23 [EFFECTIVE DATE.] This section is effective July 1, 2003. 47.24 Sec. 2. Minnesota Statutes 2002, section 297F.06, 47.25 subdivision 4, is amended to read: 47.26 Subd. 4. [TOBACCO PRODUCTS USE TAX.] The tobacco products 47.27 use tax does not apply to the possession, use, or storage of 47.28 tobacco productsin quantities of:that have an aggregate cost 47.29 in any calendar month to the consumer of $100 or less. 47.30(1) not more than 50 cigars;47.31(2) not more than ten ounces snuff or snuff powder;47.32(3) not more than one pound smoking or chewing tobacco or47.33any other tobacco product in the possession of any one consumer.47.34 [EFFECTIVE DATE.] This section is effective July 1, 2003. 47.35 Sec. 3. Minnesota Statutes 2002, section 297F.20, 47.36 subdivision 1, is amended to read: 48.1 Subdivision 1. [PENALTIES FOR FAILURE TO FILE OR PAY.] (a) 48.2 A person or consumer required to file a return, report, or other 48.3 document with the commissioner who fails to do so is guilty of a 48.4 misdemeanor. 48.5 (b) A person or consumer required to pay or to collect and 48.6 remit a tax under this chapter, who fails to do so when 48.7 required, is guilty of a misdemeanor. 48.8 [EFFECTIVE DATE.] This section is effective for acts 48.9 committed on or after July 1, 2003. 48.10 Sec. 4. Minnesota Statutes 2002, section 297F.20, 48.11 subdivision 2, is amended to read: 48.12 Subd. 2. [PENALTIES FOR KNOWING FAILURE TO FILE OR PAY.] 48.13 (a) A person or consumer required to file a return, report, or 48.14 other document with the commissioner, who knowingly, rather than 48.15 accidentally, inadvertently, or negligently, fails to file it 48.16 when required, is guilty of a gross misdemeanor. 48.17 (b) A person or consumer required to pay or to collect and 48.18 remit a tax under this chapter, who knowingly, rather than 48.19 accidentally, inadvertently, or negligently, fails to file it 48.20 when required, is guilty of a gross misdemeanor. 48.21 [EFFECTIVE DATE.] This section is effective for acts 48.22 committed on or after July 1, 2003. 48.23 Sec. 5. Minnesota Statutes 2002, section 297F.20, 48.24 subdivision 3, is amended to read: 48.25 Subd. 3. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 48.26 person or consumer who files with the commissioner a return, 48.27 report, or other document, or who maintains or provides invoices 48.28 subject to review by the commissioner under this chapter, known 48.29 by the person or consumer to be fraudulent or false concerning a 48.30 material matter, is guilty of a felony. 48.31 (b) A person or consumer who knowingly aids or assists in, 48.32 or advises in the preparation or presentation of a return, 48.33 report, invoice, or other document that is fraudulent or false 48.34 concerning a material matter, whether or not the falsity or 48.35 fraud is committed with the knowledge or consent of the 48.36 person or consumer authorized or required to present the return, 49.1 report, invoice, or other document, is guilty of a felony. 49.2 [EFFECTIVE DATE.] This section is effective for acts 49.3 committed on or after July 1, 2003. 49.4 Sec. 6. Minnesota Statutes 2002, section 297F.20, 49.5 subdivision 6, is amended to read: 49.6 Subd. 6. [UNSTAMPED CIGARETTES; UNTAXED TOBACCO PRODUCTS.] 49.7 (a) A person, other than a licensed distributor or a consumer, 49.8 who possesses, receives, or transportsmore than 200 butfewer 49.9 than 5,000 unstamped cigarettes, or up to$100$350 worth of 49.10 untaxed tobacco products is guilty of a misdemeanor. 49.11 (b) A person, other than a licensed distributor or a 49.12 consumer, who possesses, receives, or transports 5,000 or more, 49.13 but fewer than 20,001 unstamped cigarettes, orup to $500more 49.14 than $350 but less than $1,400 worth of untaxed tobacco products 49.15 is guilty of a gross misdemeanor. 49.16 (c) A person, other than a licensed distributor or a 49.17 consumer, who possesses, receives, or transports more than 49.18 20,000 unstamped cigarettes, or$500$1,400 or more worth of 49.19 untaxed tobacco products is guilty of a felony. 49.20 (d) For purposes of this subdivision, an individual in 49.21 possession of more than 4,999 unstamped cigarettes, or more than 49.22 $350 worth of untaxed tobacco products, is presumed not to be a 49.23 consumer. 49.24 [EFFECTIVE DATE.] This section is effective for acts 49.25 committed on or after July 1, 2003. 49.26 Sec. 7. Minnesota Statutes 2002, section 297F.20, 49.27 subdivision 9, is amended to read: 49.28 Subd. 9. [PURCHASES FROM UNLICENSED SELLERS.] (a) No 49.29 retailer or subjobber shall purchase cigarettes or tobacco 49.30 products from any person who is not licensed under section 49.31 297F.03 as a licensed distributor or subjobber. 49.32 (b) A retailer,or subjobber, or consumerwho purchases 49.33 from an unlicensed sellermore than 200 butfewer than 5,000 49.34 cigarettes or up to$100$350 worth of tobacco products is 49.35 guilty of a misdemeanor. 49.36(b)(c) A retailer,or subjobber, or consumerwho 50.1 purchases from an unlicensed seller 5,000 or more, but fewer 50.2 than 20,001 cigarettes orup to $500more than $350 but less 50.3 than $1,400 worth ofuntaxedtobacco products is guilty of a 50.4 gross misdemeanor. 50.5(c)(d) A retailer,or subjobber, or consumerwho 50.6 purchases from an unlicensed seller more than 20,000 cigarettes 50.7 or$500$1,400 or more worth of tobacco products is guilty of a 50.8 felony. 50.9 [EFFECTIVE DATE.] This section is effective for acts 50.10 committed on or after July 1, 2003. 50.11 ARTICLE 6 50.12 COLLECTIONS AND COMPLIANCE 50.13 Section 1. [270.278] [PENALTY FOR FILING CERTAIN DOCUMENTS 50.14 AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 50.15 Subdivision 1. [DEFINITIONS.] (a) "Recording office" means 50.16 a county recorder, registrar of titles, or secretary of state in 50.17 this state or another state. 50.18 (b) "Filing party" means the person or persons requesting 50.19 or causing another person to request that the recording office 50.20 accept documents or instruments for recording or filing. 50.21 Subd. 2. [INVALID DOCUMENTS NAMING THE COMMISSIONER OR 50.22 DEPARTMENT OF REVENUE EMPLOYEES.] Filing a document, including a 50.23 nonconsensual common law lien under section 514.99, that 50.24 purports to create a claim against the commissioner of revenue 50.25 or an employee of the department of revenue based on performance 50.26 or nonperformance of duties by the commissioner or employee is 50.27 invalid unless accompanied by a specific order from a court of 50.28 competent jurisdiction authorizing the filing of the document or 50.29 unless a specific statute authorizes the filing of the document. 50.30 Subd. 3. [CIVIL PENALTY.] If a filing party causes a 50.31 document described in subdivision 2 to be recorded in a 50.32 recording office, the commissioner may assess a penalty against 50.33 the filing party of $1,000 per document filed, payable to the 50.34 general fund. An order assessing a penalty under this section 50.35 is reviewable administratively under section 289A.65 and is 50.36 appealable to tax court under chapter 271. The penalty is 51.1 collected and paid in the same manner as income tax. The 51.2 penalty is in addition to any other remedy available to the 51.3 commissioner of revenue or to an employee of the department of 51.4 revenue against whom the document has been filed. 51.5 [EFFECTIVE DATE.] This section is effective for documents 51.6 filed on or after July 1, 2003. 51.7 Sec. 2. Minnesota Statutes 2002, section 270.701, 51.8 subdivision 2, is amended to read: 51.9 Subd. 2. [NOTICE OF SALE.] The commissioner shall as soon 51.10 as practicable after the seizure of the property give notice of 51.11 sale of the property to the owner, in the manner of service 51.12 prescribed in subdivision 1. In the case of personal property, 51.13 the notice shall be served at least 10 days prior to the sale. 51.14 In the case of real property, the notice shall be served at 51.15 least four weeks prior to the sale. The commissioner shall also 51.16 cause public notice of each sale to be made. In the case of 51.17 personal property, notice shall be posted at least 10 days prior 51.18 to the sale at the county courthouse for the county where the 51.19 seizure is made, and in not less than two other public 51.20 places. For purposes of this requirement, the Internet is a 51.21 public place for posting the information. In the case of real 51.22 property, six weeks' published notice shall be given prior to 51.23 the sale, in a newspaper published or generally circulated in 51.24 the county. The notice of sale provided in this subdivision 51.25 shall specify the property to be sold, and the time, place, 51.26 manner and conditions of the sale. Whenever levy is made 51.27 without regard to the 30-day period provided in section 270.70, 51.28 subdivision 2, public notice of sale of the property seized 51.29 shall not be made within the 30-day period unless section 51.30 270.702 (relating to sale of perishable goods) is applicable. 51.31 [EFFECTIVE DATE.] This section is effective for notices of 51.32 sales posted on or after the day following final enactment. 51.33 Sec. 3. Minnesota Statutes 2002, section 270.701, is 51.34 amended by adding a subdivision to read: 51.35 Subd. 7. [SALE OF SEIZED SECURITIES.] (a) At the time of 51.36 levy on securities, the commissioner shall provide notice to the 52.1 taxpayer that the securities may be sold after ten days from the 52.2 date of seizure. 52.3 (b) If the commissioner levies upon nonexempt publicly 52.4 traded securities and the value of the securities is less than 52.5 or equal to the total obligation for which the levy is done, 52.6 after ten days the person who possesses or controls the 52.7 securities shall liquidate the securities in a commercially 52.8 reasonable manner. After liquidation, the person shall transfer 52.9 the proceeds to the commissioner, less any applicable 52.10 commissions or fees, or both, which are charged in the normal 52.11 course of business. 52.12 (c) If the commissioner levies upon nonexempt publicly 52.13 traded securities and the value of the securities exceeds the 52.14 total amount of the levy, the owner of the securities may, 52.15 within seven days after receipt of the department's notice of 52.16 levy given pursuant to subdivision 1, instruct the person who 52.17 possesses or controls the securities which securities are to be 52.18 sold to satisfy the obligation. If the owner does not provide 52.19 instructions for liquidation, the person who possesses or 52.20 controls the securities shall liquidate the securities in an 52.21 amount sufficient to pay the obligation, plus any applicable 52.22 commissions or fees, or both, which are charged in the normal 52.23 course of business, beginning with the nonexempt securities 52.24 purchased most recently. After liquidation, the person who 52.25 possesses or controls the securities shall transfer to the 52.26 commissioner the amount of money needed to satisfy the levy. 52.27 [EFFECTIVE DATE.] This section is effective for sales of 52.28 securities seized on or after the day following final enactment. 52.29 Sec. 4. Minnesota Statutes 2002, section 270.72, 52.30 subdivision 2, is amended to read: 52.31 Subd. 2. [DEFINITIONS.] For purposes of this section, the 52.32 following terms have the meanings given. 52.33 (a) "Taxes"aremean all taxes payable to the commissioner 52.34 including penalties and interest due on the taxes. 52.35 (b) "Delinquent taxes" do not include a tax liability if 52.36 (i) an administrative or court action which contests the amount 53.1 or validity of the liability has been filed or served, (ii) the 53.2 appeal period to contest the tax liability has not expired, or 53.3 (iii) the applicant has entered into a payment agreement and is 53.4 current with the payments. 53.5 (c) "Applicant" means an individual if the license is 53.6 issued to or in the name of an individual or the corporation or 53.7 partnership if the license is issued to or in the name of a 53.8 corporation or partnership. "Applicant" also means an officer 53.9 of a corporation, a member of a partnership, or an individual 53.10 who is liable for delinquent taxes, either for the entity for 53.11 which the license is at issue or for another entity for which 53.12 the liability was incurred, or personally as a licensee. In the 53.13 case of a license transfer, "applicant" also means both the 53.14 transferor and the transferee of the license. "Applicant" also 53.15 means any holder of a license. 53.16 (d) "License"includesmeans any permit, registration, 53.17 certification, or other form of approval authorized by statute 53.18 or rule to be issued by the state or a political subdivision of 53.19 the state as a condition of doing business or conducting a 53.20 trade, profession, or occupation in Minnesota, specifically 53.21 including, but not limited to, a contract for space rental at 53.22 the Minnesota state fair and authorization to operate 53.23 concessions or rides at county and local fairs, festivals, or 53.24 events. 53.25 (e) "Licensing authority" includes the Minnesota state fair 53.26 board and county and local boards or governing bodies. 53.27 [EFFECTIVE DATE.] This section is effective the day 53.28 following final enactment. 53.29 Sec. 5. Minnesota Statutes 2002, section 270A.03, 53.30 subdivision 2, is amended to read: 53.31 Subd. 2. [CLAIMANT AGENCY.] "Claimant agency" means any 53.32 state agency, as defined by section 14.02, subdivision 2, the 53.33 regents of the University of Minnesota, any district court of 53.34 the state, any county, any statutory or home rule charter city 53.35 presenting a claim for a municipal hospital or a public library 53.36 or a municipal ambulance service, a hospital district, a private 54.1 nonprofit hospital that leases its building from the county in 54.2 which it is located, any public agency responsible for child 54.3 support enforcement, any public agency responsible for the 54.4 collection of court-ordered restitution, and any public agency 54.5 established by general or special law that is responsible for 54.6 the administration of a low-income housing program, and the 54.7 Minnesota collection enterprise as defined in section 16D.02, 54.8 subdivision 8, for the purpose of collecting the costs imposed 54.9 under section 16D.11. 54.10 [EFFECTIVE DATE.] This section is effective the day 54.11 following final enactment. 54.12 Sec. 6. Minnesota Statutes 2002, section 289A.36, 54.13 subdivision 7, is amended to read: 54.14 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 54.15 SUBPOENA.] (a) Disobedience of subpoenas issued under this 54.16 section shall be punished by the district court of the district 54.17 in which the party served with the subpoena is located, in the 54.18 same manner as contempt of the district court. 54.19 (b) Disobedience of a subpoena issued under subdivision 9 54.20 shall be punished by the district court for Ramsey County in the 54.21 same manner as contempt of the district court. In addition to 54.22 contempt remedies, the court may issue any order the court deems 54.23 reasonably necessary to enforce compliance with the subpoena. 54.24 [EFFECTIVE DATE.] This section is effective the day 54.25 following final enactment. 54.26 Sec. 7. Minnesota Statutes 2002, section 289A.36, is 54.27 amended by adding a subdivision to read: 54.28 Subd. 9. [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 54.29 OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 54.30 determine whether a business located outside the state of 54.31 Minnesota is required to file a return under this chapter, the 54.32 commissioner may examine the relevant records and files of the 54.33 business. 54.34 (b) To the full extent permitted by the Minnesota and 54.35 United States constitutions, the commissioner may compel 54.36 production of those relevant records and files by subpoena. The 55.1 subpoena may be served on the secretary of state along with the 55.2 address to which service of the subpoena is to be sent and a fee 55.3 of $50. The secretary of state shall forward a copy of the 55.4 subpoena to the business using the procedures for service of 55.5 process in section 5.25, subdivision 6. 55.6 (c) The commissioner shall pay the reasonable cost of 55.7 producing records subject to subpoena under this subdivision if: 55.8 (1) the subpoenaed party cannot produce the records without 55.9 undue burden; and 55.10 (2) the examination made pursuant to paragraph (a) shows 55.11 that the subpoenaed party is not required to file a return under 55.12 this chapter. 55.13 [EFFECTIVE DATE.] This section is effective the day 55.14 following final enactment. 55.15 Sec. 8. Minnesota Statutes 2002, section 289A.36, is 55.16 amended by adding a subdivision to read: 55.17 Subd. 10. [PENALTY.] In addition to sanctions imposed 55.18 under subdivision 7, a penalty of $250 per day is imposed on any 55.19 business that is in violation of a court order to comply with a 55.20 subpoena that is seeking information necessary for the 55.21 commissioner to be able to determine whether the business is 55.22 required to file a return or pay a tax. The maximum penalty is 55.23 $25,000. Upon the request of the commissioner, the court shall 55.24 determine the amount of the penalty and enter it as a judgment 55.25 in favor of the commissioner. The penalty is not payable until 55.26 the judgment is entered. 55.27 [EFFECTIVE DATE.] This section is effective for violations 55.28 of court orders to enforce subpoenas issued on or after the day 55.29 following final enactment. 55.30 Sec. 9. [REPEALER.] 55.31 Minnesota Statutes 2002, section 270.691, subdivision 8, is 55.32 repealed effective the day following final enactment.