1.1 	A bill for an act
1.2 	relating to taxation; increasing cigarette and tobacco
1.3 	taxes; repealing health care provider tax; dedicating
1.4 	a portion of the tax increases to health care access
1.5 	fund; amending Minnesota Statutes 2004, sections
1.6 	13.4963, subdivision 2; 62J.041, subdivision 1;
1.7 	62Q.095, subdivision 6; 214.16, subdivisions 2, 3;
1.8 	270B.14, subdivision 1; 297F.05, subdivisions 1, 3, 4;
1.9 	297F.10; repealing Minnesota Statutes 2004, sections
1.10 	13.4967, subdivision 3; 144.1484, subdivision 2;
1.11 	295.50; 295.51; 295.52; 295.53; 295.54; 295.55;
1.12 	295.56; 295.57; 295.58; 295.581; 295.582; 295.59.
1.13 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.14 	Section 1. Minnesota Statutes 2004, section 13.4963,
1.15 	subdivision 2, is amended to read:
1.16 		Subd. 2.Generally.  Classification and disclosure of tax
1.17 	data created, collected, or maintained by the Department of
1.18 	Revenue under chapter 115B, 289A (except for taxes imposed under
1.19 	sections 298.01, 298.015, and 298.24), 290, 290A, 291, 295,
1.20 	297A, or 297H, or any similar Indian tribal tax administered by
1.21 	the commissioner according to a tax agreement between the state
1.22 	and an Indian tribal government are governed by chapter 270B.
1.23 	
EFFECTIVE DATE. This section is effective January 1, 2006.

1.24 	Sec. 2. Minnesota Statutes 2004, section 62J.041,
1.25 	subdivision 1, is amended to read:
1.26 		Subdivision 1.Definitions.  (a) For purposes of this
1.27 	section, the following definitions apply.
1.28 	(b) "Health plan company" has the definition provided in
1.29 	section 62Q.01.
2.1 	(c) "Total expenditures" means incurred claims or
2.2 	expenditures on health care services, administrative expenses,
2.3 	charitable contributions, and all other payments made by health
2.4 	plan companies out of premium revenues.
2.5 	(d) "Net expenditures" means total expenditures minus
2.6 	exempted taxes and assessments and payments or allocations made
2.7 	to establish or maintain reserves.
2.8 	(e) "Exempted taxes and assessments" means direct payments
2.9 	for taxes to government agencies, contributions to the Minnesota
2.10 	Comprehensive Health Association, the medical assistance
2.11 	provider's surcharge under section 256.9657, the MinnesotaCare
2.12 	provider tax under Minnesota Statutes 2004,section 295.52,
2.13 	assessments by the Health Coverage Reinsurance Association,
2.14 	assessments by the Minnesota Life and Health Insurance Guaranty
2.15 	Association, assessments by the Minnesota Risk Adjustment
2.16 	Association, and any new assessments imposed by federal or state
2.17 	law.
2.18 	(f) "Consumer cost-sharing or subscriber liability" means
2.19 	enrollee coinsurance, co-payment, deductible payments, and
2.20 	amounts in excess of benefit plan maximums.
2.21 	
EFFECTIVE DATE. This section is effective January 1, 2006.

2.22 	Sec. 3. Minnesota Statutes 2004, section 62Q.095,
2.23 	subdivision 6, is amended to read:
2.24 		Subd. 6.Exemption.  A health plan company, to the extent
2.25 	that it operates as a staff model health plan company as defined
2.26 	in section 295.50, subdivision 12b,by employing allied
2.27 	independent health care providers to deliver health care
2.28 	services to enrollees, is exempt from this section. For
2.29 	purposes of this section, "staff model health plan company"
2.30 	means a health plan company as defined in section 62Q.01,
2.31 	subdivision 4, that employs one or more types of health care
2.32 	provider to deliver health care services to the health plan
2.33 	company's enrollees.
2.34 	
EFFECTIVE DATE. This section is effective January 1, 2006.

2.35 	Sec. 4. Minnesota Statutes 2004, section 214.16,
2.36 	subdivision 2, is amended to read:
3.1 		Subd. 2.Board cooperation required.  The board shall
3.2 	assist the commissioner of health in data collection activities
3.3 	required under Laws 1992, chapter 549, article 7, and shall
3.4 	assist the commissioner of revenue in activities related to
3.5 	collection of the health care provider tax required under Laws
3.6 	1992, chapter 549, article 9.  Upon the request of the
3.7 	commissioner or the commissioner of revenue, the board shall
3.8 	make available names and addresses of current licensees and
3.9 	provide other information or assistance as needed.
3.10 	
EFFECTIVE DATE. This section is effective January 1, 2006.

3.11 	Sec. 5. Minnesota Statutes 2004, section 214.16,
3.12 	subdivision 3, is amended to read:
3.13 		Subd. 3.Grounds for disciplinary action.  The board
3.14 	shall take disciplinary action, which may include license
3.15 	revocation, against a regulated person for:
3.16 	(1) intentional failure to provide the commissioner of
3.17 	health with the data required under chapter 62J;
3.18 	(2) intentional failure to provide the commissioner of
3.19 	revenue with data on gross revenue and other information
3.20 	required for the commissioner to implement sections 295.50 to
3.21 	295.58;
3.22 	(3) intentional failure to pay the health care provider tax
3.23 	required under section 295.52; and 
3.24 	(4) entering into a contract or arrangement that is
3.25 	prohibited under sections 62J.70 to 62J.73.
3.26 	
EFFECTIVE DATE. This section is effective January 1, 2006.

3.27 	Sec. 6. Minnesota Statutes 2004, section 270B.14,
3.28 	subdivision 1, is amended to read:
3.29 		Subdivision 1.Disclosure to commissioner of human
3.30 	services.  (a) On the request of the commissioner of human
3.31 	services, the commissioner shall disclose return information
3.32 	regarding taxes imposed by chapter 290, and claims for refunds
3.33 	under chapter 290A, to the extent provided in paragraph (b) and
3.34 	for the purposes set forth in paragraph (c).
3.35 	(b) Data that may be disclosed are limited to data relating
3.36 	to the identity, whereabouts, employment, income, and property
4.1 	of a person owing or alleged to be owing an obligation of child
4.2 	support.
4.3 	(c) The commissioner of human services may request data
4.4 	only for the purposes of carrying out the child support
4.5 	enforcement program and to assist in the location of parents who
4.6 	have, or appear to have, deserted their children.  Data received
4.7 	may be used only as set forth in section 256.978.
4.8 	(d) The commissioner shall provide the records and
4.9 	information necessary to administer the supplemental housing
4.10 	allowance to the commissioner of human services.
4.11 	(e) At the request of the commissioner of human services,
4.12 	the commissioner of revenue shall electronically match the
4.13 	Social Security numbers and names of participants in the
4.14 	telephone assistance plan operated under sections 237.69 to
4.15 	237.711, with those of property tax refund filers, and determine
4.16 	whether each participant's household income is within the
4.17 	eligibility standards for the telephone assistance plan.
4.18 	(f) The commissioner may provide records and information
4.19 	collected under Minnesota Statutes 2004,sections 295.50 to
4.20 	295.59,to the commissioner of human services for purposes of
4.21 	the Medicaid Voluntary Contribution and Provider-Specific Tax
4.22 	Amendments of 1991, Public Law 102-234.  Upon the written
4.23 	agreement by the United States Department of Health and Human
4.24 	Services to maintain the confidentiality of the data, the
4.25 	commissioner may provide records and information collected under
4.26 	sections 295.50 to 295.59 to the Centers for Medicare and
4.27 	Medicaid Services section of the United States Department of
4.28 	Health and Human Services for purposes of meeting federal
4.29 	reporting requirements.
4.30 	(g) The commissioner may provide records and information to
4.31 	the commissioner of human services as necessary to administer
4.32 	the early refund of refundable tax credits.
4.33 	(h) The commissioner may disclose information to the
4.34 	commissioner of human services necessary to verify income for
4.35 	eligibility and premium payment under the MinnesotaCare program,
4.36 	under section 256L.05, subdivision 2.
5.1 	(i) The commissioner may disclose information to the
5.2 	commissioner of human services necessary to verify whether
5.3 	applicants or recipients for the Minnesota family investment
5.4 	program, general assistance, food support, and Minnesota
5.5 	supplemental aid program have claimed refundable tax credits
5.6 	under chapter 290 and the property tax refund under chapter
5.7 	290A, and the amounts of the credits.
5.8 	
EFFECTIVE DATE. This section is effective January 1, 2006.

5.9 	Sec. 7. Minnesota Statutes 2004, section 297F.05,
5.10 	subdivision 1, is amended to read:
5.11 		Subdivision 1.Rates; cigarettes.  A tax is imposed upon
5.12 	the sale of cigarettes in this state, upon having cigarettes in
5.13 	possession in this state with intent to sell, upon any person
5.14 	engaged in business as a distributor, and upon the use or
5.15 	storage by consumers, at the following rates:
5.16 	(1) on cigarettes weighing not more than three pounds per
5.17 	thousand, 24 74 mills on each such cigarette; and
5.18 	(2) on cigarettes weighing more than three pounds per
5.19 	thousand, 48 148 mills on each such cigarette.
5.20 	
EFFECTIVE DATE. This section is effective January 1, 2006.

5.21 	Sec. 8. Minnesota Statutes 2004, section 297F.05,
5.22 	subdivision 3, is amended to read:
5.23 		Subd. 3.Rates; tobacco products.  A tax is imposed upon
5.24 	all tobacco products in this state and upon any person engaged
5.25 	in business as a distributor, at the rate of 35 108 percent of
5.26 	the wholesale sales price of the tobacco products.  The tax is
5.27 	imposed at the time the distributor:
5.28 	(1) brings, or causes to be brought, into this state from
5.29 	outside the state tobacco products for sale;
5.30 	(2) makes, manufactures, or fabricates tobacco products in
5.31 	this state for sale in this state; or
5.32 	(3) ships or transports tobacco products to retailers in
5.33 	this state, to be sold by those retailers.
5.34 	
EFFECTIVE DATE. This section is effective January 1, 2006.

5.35 	Sec. 9. Minnesota Statutes 2004, section 297F.05,
5.36 	subdivision 4, is amended to read:
6.1 		Subd. 4.Use tax; tobacco products.  A tax is imposed
6.2 	upon the use or storage by consumers of tobacco products in this
6.3 	state, and upon such consumers, at the rate of 35 108 percent of
6.4 	the cost to the consumer of the tobacco products.
6.5 	
EFFECTIVE DATE. This section is effective January 1, 2006.

6.6 	Sec. 10. Minnesota Statutes 2004, section 297F.10, is
6.7 	amended to read:
6.8 	297F.10 DEPOSIT OF PROCEEDS.
6.9 		Subdivision 1.Tax and use tax on cigarettes. Revenue
6.10 	received from cigarette taxes, as well as related penalties,
6.11 	interest, license fees, and miscellaneous sources of revenue
6.12 	shall be deposited by the commissioner in the state treasury and
6.13 	credited as follows:
6.14 	(1) the revenue produced by 3.25 3.95 mills of the tax on
6.15 	cigarettes weighing not more than three pounds a thousand and
6.16 	6.5 7.90 mills of the tax on cigarettes weighing more than three
6.17 	pounds a thousand must be credited to the Academic Health Center
6.18 	special revenue fund hereby created and is annually appropriated
6.19 	to the Board of Regents at the University of Minnesota for
6.20 	Academic Health Center funding at the University of Minnesota;
6.21 	and
6.22 	(2) the revenue produced by 1.25 1.52 mills of the tax on
6.23 	cigarettes weighing not more than three pounds a thousand and
6.24 	2.5 3.04 mills of the tax on cigarettes weighing more than three
6.25 	pounds a thousand must be credited to the medical education and
6.26 	research costs account hereby created in the special revenue
6.27 	fund and is annually appropriated to the commissioner of health
6.28 	for distribution under section 62J.692, subdivision 4; and
6.29 	(3) the revenue produced by 46.53 mills of the tax on
6.30 	cigarettes weighing not more than three pounds per thousand and
6.31 	the revenue produced by 93.06 mills of the tax on cigarettes
6.32 	weighing more than three pounds, and the revenue produced by 62
6.33 	percent of the wholesale price of tobacco products shall be
6.34 	deposited in the health care access fund under section 295.58;
6.35 	and 
6.36 	(4) the balance of the revenues derived from taxes,
7.1 	penalties, and interest (under this chapter) and from license
7.2 	fees and miscellaneous sources of revenue shall be credited to
7.3 	the general fund.
7.4 		Subd. 2.Tax and use tax on tobacco products. The 
7.5 	revenue received from taxes on produced by 46 percent of the
7.6 	wholesale price of tobacco products, as well as related
7.7 	penalties, interest, and license fees shall be deposited by the
7.8 	commissioner in the state treasury and credited to the general
7.9 	fund.
7.10 	
EFFECTIVE DATE. This section is effective January 1, 2006.

7.11 	Sec. 11. FLOOR STOCKS TAX.
 7.12 		Subdivision 1.Cigarettes. (a) A floor stocks tax is
7.13 	imposed on every person engaged in business in this state as a
7.14 	distributor, retailer, subjobber, vendor, manufacturer, or
7.15 	manufacturer's representative of cigarettes, on the stamped
7.16 	cigarettes and unaffixed stamps in the person's possession or
7.17 	under the person's control at 12:01 a.m. on January 1, 2006.
7.18 	The tax is imposed at the following rates:
7.19 	(1) on cigarettes weighing not more than three pounds per
7.20 	thousand, 50 mills on each cigarette; and 
7.21 	(2) on cigarettes weighing more than three pounds per
7.22 	thousand, 100 mills on each cigarette.
7.23 	(b) Each distributor, by January 8, 2006, shall file a
7.24 	report with the commissioner of revenue, in the form the
7.25 	commissioner prescribes, showing the stamped cigarettes and
7.26 	unaffixed stamps on hand at 12:01 a.m. on January 1, 2006, and
7.27 	the amount of tax due on the cigarettes and unaffixed stamps.
7.28 	The tax imposed by this section is due and payable by February
7.29 	1, 2006, and after that date bears interest as provided in
7.30 	Minnesota Statutes, section 270.75.  Each retailer, subjobber,
7.31 	vendor, manufacturer, or manufacturer's representative shall
7.32 	file a return with the commissioner, in the form the
7.33 	commissioner prescribes, showing the cigarettes on hand at 12:01
7.34 	a.m. on January 1, 2006, and pay the tax due on them by February
7.35 	1, 2006.  Tax not paid by the due date bears interest as
7.36 	provided in Minnesota Statutes, section 270.75.
8.1 		Subd. 2.Tobacco products. A floor stocks tax is imposed
8.2 	on every person engaged in business in this state as a
8.3 	distributor of tobacco products, at the rate of 73 percent of
8.4 	the wholesale sales price of each tobacco product in the
8.5 	person's possession or under the person's control at 12:01 a.m.
8.6 	on January 1, 2006, and the amount of tax due on them.  The tax
8.7 	imposed by this section is due and payable by February 1, 2006,
8.8 	and thereafter bears interest as provided in Minnesota Statutes,
8.9 	section 270.75.
8.10 		Subd. 3.Audit and enforcement. The tax imposed by this
8.11 	section is subject to the audit, assessment, and collection
8.12 	provisions applicable to the taxes imposed under Minnesota
8.13 	Statutes, chapter 297F.  The commissioner shall deposit the
8.14 	revenues from the tax imposed under this section in the health
8.15 	care access fund in the state treasury.
8.16 	
EFFECTIVE DATE. This section is effective January 1, 2006.

8.17 	Sec. 12. REPEALER.
 8.18 	Minnesota Statutes 2004, sections 13.4967, subdivision 3;
8.19 	144.1484, subdivision 2; 295.50; 295.51; 295.52; 295.53; 295.54;
8.20 	295.55; 295.56; 295.57; 295.58; 295.581; 295.582; and 295.59.

8.21 	EFFECTIVE DATE. This section is effective for gross
8.22 	revenues received after January 1, 2006.