HF 380

1st Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; making technical corrections to 
  1.3             income, property, sales, MinnesotaCare, and certain 
  1.4             special taxes; making technical corrections to certain 
  1.5             state tax administrative provisions; amending 
  1.6             Minnesota Statutes 1998, sections 60A.15, by adding a 
  1.7             subdivision; 271.01, subdivision 5; 271.21, 
  1.8             subdivision 2; 273.124, subdivision 13; 289A.40, 
  1.9             subdivision 1; 289A.60, subdivisions 3 and 21; 
  1.10            290.0671, subdivision 1; 290.0921, subdivision 5; 
  1.11            290.095, subdivision 3; 290.17, subdivision 4; 295.55, 
  1.12            subdivisions 2 and 3; 297A.15, subdivision 5; 297F.01, 
  1.13            subdivision 23; 297F.17, subdivision 6; and 297H.06, 
  1.14            subdivision 2; repealing Minnesota Statutes 1998, 
  1.15            sections 273.11, subdivision 10; 297E.12, subdivision 
  1.16            3; 297F.19, subdivision 4; and 297G.18, subdivision 4. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18                             ARTICLE 1
  1.19                     INCOME AND FRANCHISE TAXES
  1.20     Section 1.  Minnesota Statutes 1998, section 290.0671, 
  1.21  subdivision 1, is amended to read: 
  1.22     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
  1.23  allowed a credit against the tax imposed by this chapter equal 
  1.24  to a percentage of earned income.  To receive a credit, a 
  1.25  taxpayer must be eligible for a credit under section 32 of the 
  1.26  Internal Revenue Code.  
  1.27     (b) For individuals with no qualifying children, the credit 
  1.28  equals 1.1475 percent of the first $4,460 of earned income.  The 
  1.29  credit is reduced by 1.1475 percent of earned income or modified 
  1.30  adjusted gross income, whichever is greater, in excess of 
  1.31  $5,570, but in no case is the credit less than zero. 
  2.1      (c) For individuals with one qualifying child, the credit 
  2.2   equals 6.8 percent of the first $6,680 of earned income and 8.5 
  2.3   percent of earned income over $11,650 but less than $12,990.  
  2.4   The credit is reduced by 4.77 percent of earned income or 
  2.5   modified adjusted gross income, whichever is greater, in excess 
  2.6   of $14,560, but in no case is the credit less than zero. 
  2.7      (d) For individuals with two or more qualifying children, 
  2.8   the credit equals eight percent of the first $9,390 of earned 
  2.9   income and 20 percent of earned income over $14,350 but less 
  2.10  than $16,230.  The credit is reduced by 8.8 percent of earned 
  2.11  income or modified adjusted gross income, whichever is greater, 
  2.12  in excess of $17,280, but in no case is the credit less than 
  2.13  zero. 
  2.14     (e) For a nonresident or part-year resident, the credit 
  2.15  must be allocated based on the percentage calculated under 
  2.16  section 290.06, subdivision 2c, paragraph (e). 
  2.17     (f) For a person who was a resident for the entire tax year 
  2.18  and has earned income not subject to tax under this chapter, the 
  2.19  credit must be allocated based on the ratio of federal adjusted 
  2.20  gross income reduced by the earned income not subject to tax 
  2.21  under this chapter over federal adjusted gross income. 
  2.22     (g) The commissioner shall construct and make available to 
  2.23  taxpayers tables showing the amount of the credit at various 
  2.24  income levels.  The tables shall follow the schedule contained 
  2.25  in this subdivision, except that the commissioner may graduate 
  2.26  the transition between income brackets. 
  2.27     Sec. 2.  Minnesota Statutes 1998, section 290.0921, 
  2.28  subdivision 5, is amended to read: 
  2.29     Subd. 5.  [CHARITABLE CONTRIBUTIONS.] (a) A deduction from 
  2.30  alternative minimum taxable net income is allowed equal to 
  2.31  the contributions subject to the deduction for charitable 
  2.32  contributions under section 290.21, subdivision 3, without 
  2.33  application of the limitation in section 290.21, subdivision 3.  
  2.34  The deduction allowable for capital gain property is limited to 
  2.35  the adjusted basis of the property as defined in section 290.01, 
  2.36  subdivision 19f.  The term capital gain property has the meaning 
  3.1   given by section 170(b)(1)(C)(iv) of the Internal Revenue Code, 
  3.2   but does not include property to which an election under section 
  3.3   170(b)(1)(C)(iii) of the Internal Revenue Code applies. 
  3.4      (b) The amount of the deduction may not exceed 15 percent 
  3.5   of alternative minimum taxable net income less the deduction 
  3.6   allowed under subdivision 6. 
  3.7      Sec. 3.  Minnesota Statutes 1998, section 290.095, 
  3.8   subdivision 3, is amended to read: 
  3.9      Subd. 3.  [CARRYOVER.] (a) A net operating loss incurred in 
  3.10  a taxable year:  (i) beginning after December 31, 1986, shall be 
  3.11  a net operating loss carryover to each of the 15 taxable years 
  3.12  following the taxable year of such loss; (ii) beginning before 
  3.13  January 1, 1987, shall be a net operating loss carryover to each 
  3.14  of the five taxable years following the taxable year of such 
  3.15  loss subject to the provisions of Minnesota Statutes 1986, 
  3.16  section 290.095; and (iii) beginning before January 1, 1987, 
  3.17  shall be a net operating loss carryback to each of the three 
  3.18  taxable years preceding the loss year subject to the provisions 
  3.19  of Minnesota Statutes 1986, section 290.095. 
  3.20     (b) The entire amount of the net operating loss for any 
  3.21  taxable year shall be carried to the earliest of the taxable 
  3.22  years to which such loss may be carried.  The portion of such 
  3.23  loss which shall be carried to each of the other taxable years 
  3.24  shall be the excess, if any, of the amount of such loss over the 
  3.25  sum of the taxable net income, adjusted by the modifications 
  3.26  specified in subdivision 4, for each of the taxable years to 
  3.27  which such loss may be carried. 
  3.28     (c) Where a corporation does business both within and 
  3.29  without Minnesota, and apportions its income under the 
  3.30  provisions of section 290.191, the net operating loss deduction 
  3.31  incurred in any taxable year shall be allowed to the extent of 
  3.32  the apportionment ratio of the loss year. 
  3.33     (d) The provisions of sections 381, 382, and 384 of the 
  3.34  Internal Revenue Code apply to carryovers in certain corporate 
  3.35  acquisitions and special limitations on net operating loss 
  3.36  carryovers.  The limitation amount determined under section 382 
  4.1   shall be applied to net income, before apportionment, in each 
  4.2   post change year to which a loss is carried. 
  4.3      Sec. 4.  Minnesota Statutes 1998, section 290.17, 
  4.4   subdivision 4, is amended to read: 
  4.5      Subd. 4.  [UNITARY BUSINESS PRINCIPLE.] (a) If a trade or 
  4.6   business conducted wholly within this state or partly within and 
  4.7   partly without this state is part of a unitary business, the 
  4.8   entire income of the unitary business is subject to 
  4.9   apportionment pursuant to section 290.191.  Notwithstanding 
  4.10  subdivision 2, paragraph (c), none of the income of a unitary 
  4.11  business is considered to be derived from any particular source 
  4.12  and none may be allocated to a particular place except as 
  4.13  provided by the applicable apportionment formula.  The 
  4.14  provisions of this subdivision do not apply to farm income 
  4.15  subject to subdivision 5, paragraph (a), business income subject 
  4.16  to subdivision 5, paragraph (b) or (c), income of an insurance 
  4.17  company determined under section 290.35, or income of an 
  4.18  investment company determined under section 290.36. 
  4.19     (b) The term "unitary business" means business activities 
  4.20  or operations which are of mutual benefit, dependent upon, or 
  4.21  contributory to one another, individually or as a group.  The 
  4.22  term may be applied within a single legal entity or between 
  4.23  multiple entities and without regard to whether each entity is a 
  4.24  corporation, a partnership or a trust.  
  4.25     (c) Unity is presumed whenever there is unity of ownership, 
  4.26  operation, and use, evidenced by centralized management or 
  4.27  executive force, centralized purchasing, advertising, 
  4.28  accounting, or other controlled interaction, but the absence of 
  4.29  these centralized activities will not necessarily evidence a 
  4.30  nonunitary business. 
  4.31     (d) Where a business operation conducted in Minnesota is 
  4.32  owned by a business entity that carries on business activity 
  4.33  outside the state different in kind from that conducted within 
  4.34  this state, and the other business is conducted entirely outside 
  4.35  the state, it is presumed that the two business operations are 
  4.36  unitary in nature, interrelated, connected, and interdependent 
  5.1   unless it can be shown to the contrary.  
  5.2      (e) Unity of ownership is not deemed to exist when a 
  5.3   corporation is involved unless that corporation is a member of a 
  5.4   group of two or more business entities and more than 50 percent 
  5.5   of the voting stock of each member of the group is directly or 
  5.6   indirectly owned by a common owner or by common owners, either 
  5.7   corporate or noncorporate, or by one or more of the member 
  5.8   corporations of the group.  For this purpose, the term "voting 
  5.9   stock" shall include membership interests of mutual insurance 
  5.10  holding companies formed under section 60A.077.  
  5.11     (f) The net income and apportionment factors under section 
  5.12  290.191 or 290.20 of foreign corporations and other foreign 
  5.13  entities which are part of a unitary business shall not be 
  5.14  included in the net income or the apportionment factors of the 
  5.15  unitary business.  A foreign corporation or other foreign entity 
  5.16  which is required to file a return under this chapter shall file 
  5.17  on a separate return basis.  The net income and apportionment 
  5.18  factors under section 290.191 or 290.20 of foreign operating 
  5.19  corporations shall not be included in the net income or the 
  5.20  apportionment factors of the unitary business except as provided 
  5.21  in paragraph (g). 
  5.22     (g) The adjusted net income of a foreign operating 
  5.23  corporation shall be deemed to be paid as a dividend on the last 
  5.24  day of its taxable year to each shareholder thereof, in 
  5.25  proportion to each shareholder's ownership, with which such 
  5.26  corporation is engaged in a unitary business.  Such deemed 
  5.27  dividend shall be treated as a dividend under section 290.21, 
  5.28  subdivision 4. 
  5.29     Dividends actually paid by a foreign operating corporation 
  5.30  to a corporate shareholder which is a member of the same unitary 
  5.31  business as the foreign operating corporation shall be 
  5.32  eliminated from the net income of the unitary business in 
  5.33  preparing a combined report for the unitary business.  The 
  5.34  adjusted net income of a foreign operating corporation shall be 
  5.35  its net income adjusted as follows: 
  5.36     (1) any taxes paid or accrued to a foreign country, the 
  6.1   commonwealth of Puerto Rico, or a United States possession or 
  6.2   political subdivision of any of the foregoing shall be a 
  6.3   deduction; and 
  6.4      (2) the subtraction from federal taxable income for 
  6.5   payments received from foreign corporations or foreign operating 
  6.6   corporations under section 290.01, subdivision 19d, clause (11), 
  6.7   shall not be allowed. 
  6.8      If a foreign operating corporation incurs a net loss, 
  6.9   neither income nor deduction from that corporation shall be 
  6.10  included in determining the net income of the unitary business. 
  6.11     (h) For purposes of determining the net income of a unitary 
  6.12  business and the factors to be used in the apportionment of net 
  6.13  income pursuant to section 290.191 or 290.20, there must be 
  6.14  included only the income and apportionment factors of domestic 
  6.15  corporations or other domestic entities other than foreign 
  6.16  operating corporations that are determined to be part of the 
  6.17  unitary business pursuant to this subdivision, notwithstanding 
  6.18  that foreign corporations or other foreign entities might be 
  6.19  included in the unitary business.  
  6.20     (i) Deductions for expenses, interest, or taxes otherwise 
  6.21  allowable under this chapter that are connected with or 
  6.22  allocable against dividends, deemed dividends described in 
  6.23  paragraph (g), or royalties, fees, or other like income 
  6.24  described in section 290.01, subdivision 19d, clause (11), shall 
  6.25  not be disallowed. 
  6.26     (j) Each corporation or other entity that is part of a 
  6.27  unitary business must file combined reports as the commissioner 
  6.28  determines.  On the reports, all intercompany transactions 
  6.29  between entities included pursuant to paragraph (h) must be 
  6.30  eliminated and the entire net income of the unitary business 
  6.31  determined in accordance with this subdivision is apportioned 
  6.32  among the entities by using each entity's Minnesota factors for 
  6.33  apportionment purposes in the numerators of the apportionment 
  6.34  formula and the total factors for apportionment purposes of all 
  6.35  entities included pursuant to paragraph (h) in the denominators 
  6.36  of the apportionment formula. 
  7.1      (k) If a corporation has been divested from a unitary 
  7.2   business and is included in a combined report for a fractional 
  7.3   part of the common accounting period of the combined report:  
  7.4      (1) its income includable in the combined report is its 
  7.5   income incurred for that part of the year determined by 
  7.6   proration or separate accounting; and 
  7.7      (2) its sales, property, and payroll included in the 
  7.8   apportionment formula must be prorated or accounted for 
  7.9   separately. 
  7.10     Sec. 5.  [EFFECTIVE DATE.] 
  7.11     Section 1 is effective for tax years beginning after 
  7.12  December 31, 1997.  Sections 2 to 4 are effective for tax years 
  7.13  beginning on or after the day following final enactment. 
  7.14                             ARTICLE 2 
  7.15                           PROPERTY TAXES 
  7.16     Section 1.  Minnesota Statutes 1998, section 271.01, 
  7.17  subdivision 5, is amended to read: 
  7.18     Subd. 5.  [JURISDICTION.] The tax court shall have 
  7.19  statewide jurisdiction.  Except for an appeal to the supreme 
  7.20  court or any other appeal allowed under this subdivision, the 
  7.21  tax court shall be the sole, exclusive, and final authority for 
  7.22  the hearing and determination of all questions of law and fact 
  7.23  arising under the tax laws of the state, as defined in this 
  7.24  subdivision, in those cases that have been appealed to the tax 
  7.25  court and in any case that has been transferred by the district 
  7.26  court to the tax court.  The tax court shall have no 
  7.27  jurisdiction in any case that does not arise under the tax laws 
  7.28  of the state or in any criminal case or in any case determining 
  7.29  or granting title to real property or in any case that is under 
  7.30  the probate jurisdiction of the district court.  The small 
  7.31  claims division of the tax court shall have no jurisdiction in 
  7.32  any case dealing with property valuation or assessment for 
  7.33  property tax purposes until the taxpayer has appealed the 
  7.34  valuation or assessment to the county board of equalization, and 
  7.35  in those towns and cities which have not transferred their 
  7.36  duties to the county, the town or city board of equalization, 
  8.1   except for:  (i) those taxpayers whose original assessments are 
  8.2   determined by the commissioner of revenue; and (ii) those 
  8.3   taxpayers appealing a denial of a current year application for 
  8.4   the homestead classification for their property and the denial 
  8.5   was not reflected on a valuation notice issued in the year.  The 
  8.6   tax court shall have no jurisdiction in any case involving an 
  8.7   order of the state board of equalization unless a taxpayer 
  8.8   contests the valuation of property.  Laws governing taxes, aids, 
  8.9   and related matters administered by the commissioner of revenue, 
  8.10  laws dealing with property valuation, assessment or taxation of 
  8.11  property for property tax purposes, and any other laws that 
  8.12  contain provisions authorizing review of taxes, aids, and 
  8.13  related matters by the tax court shall be considered tax laws of 
  8.14  this state subject to the jurisdiction of the tax court.  This 
  8.15  subdivision shall not be construed to prevent an appeal, as 
  8.16  provided by law, to an administrative agency, board of 
  8.17  equalization, review under section 274.13, subdivision 1c, or to 
  8.18  the commissioner of revenue.  Wherever used in this chapter, the 
  8.19  term commissioner shall mean the commissioner of revenue, unless 
  8.20  otherwise specified. 
  8.21     Sec. 2.  Minnesota Statutes 1998, section 271.21, 
  8.22  subdivision 2, is amended to read: 
  8.23     Subd. 2.  [JURISDICTION.] At the election of the taxpayer, 
  8.24  the small claims division shall have jurisdiction only in the 
  8.25  following matters: 
  8.26     (a) in cases involving valuation, assessment, or taxation 
  8.27  of real or personal property, if the taxpayer has satisfied the 
  8.28  requirements of section 271.01, subdivision 5, and:  (i) the 
  8.29  issue is a denial of a current year application for the 
  8.30  homestead classification for the taxpayer's property and the 
  8.31  denial was not reflected on a valuation notice issued in the 
  8.32  year; or (ii) in the case of nonhomestead property, the 
  8.33  assessor's estimated market value is less than $100,000; or 
  8.34     (b) any other case concerning the tax laws as defined in 
  8.35  section 271.01, subdivision 5, in which the amount in 
  8.36  controversy does not exceed $5,000, including penalty and 
  9.1   interest. 
  9.2      Sec. 3.  Minnesota Statutes 1998, section 273.124, 
  9.3   subdivision 13, is amended to read: 
  9.4      Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
  9.5   the homestead requirements under subdivision 1 must file a 
  9.6   homestead application with the county assessor to initially 
  9.7   obtain homestead classification. 
  9.8      (b) On or before January 2, 1993, each county assessor 
  9.9   shall mail a homestead application to the owner of each parcel 
  9.10  of property within the county which was classified as homestead 
  9.11  for the 1992 assessment year.  The format and contents of a 
  9.12  uniform homestead application shall be prescribed by the 
  9.13  commissioner of revenue.  The commissioner shall consult with 
  9.14  the chairs of the house and senate tax committees on the 
  9.15  contents of the homestead application form.  The application 
  9.16  must clearly inform the taxpayer that this application must be 
  9.17  signed by all owners who occupy the property or by the 
  9.18  qualifying relative and returned to the county assessor in order 
  9.19  for the property to continue receiving homestead treatment.  The 
  9.20  envelope containing the homestead application shall clearly 
  9.21  identify its contents and alert the taxpayer of its necessary 
  9.22  immediate response. 
  9.23     (c) Every property owner applying for homestead 
  9.24  classification must furnish to the county assessor the social 
  9.25  security number of each occupant who is listed as an owner of 
  9.26  the property on the deed of record, the name and address of each 
  9.27  owner who does not occupy the property, and the name and social 
  9.28  security number of each owner's spouse who occupies the 
  9.29  property.  The application must be signed by each owner who 
  9.30  occupies the property and by each owner's spouse who occupies 
  9.31  the property, or, in the case of property that qualifies as a 
  9.32  homestead under subdivision 1, paragraph (c), by the qualifying 
  9.33  relative. 
  9.34     If a property owner occupies a homestead, the property 
  9.35  owner's spouse may not claim another property as a homestead 
  9.36  unless the property owner and the property owner's spouse file 
 10.1   with the assessor an affidavit or other proof required by the 
 10.2   assessor stating that the property qualifies as a homestead 
 10.3   under subdivision 1, paragraph (e). 
 10.4      Owners or spouses occupying residences owned by their 
 10.5   spouses and previously occupied with the other spouse, either of 
 10.6   whom fail to include the other spouse's name and social security 
 10.7   number on the homestead application or provide the affidavits or 
 10.8   other proof requested, will be deemed to have elected to receive 
 10.9   only partial homestead treatment of their residence.  The 
 10.10  remainder of the residence will be classified as nonhomestead 
 10.11  residential.  When an owner or spouse's name and social security 
 10.12  number appear on homestead applications for two separate 
 10.13  residences and only one application is signed, the owner or 
 10.14  spouse will be deemed to have elected to homestead the residence 
 10.15  for which the application was signed. 
 10.16     The social security numbers or affidavits or other proofs 
 10.17  of the property owners and spouses are private data on 
 10.18  individuals as defined by section 13.02, subdivision 12, but, 
 10.19  notwithstanding that section, the private data may be disclosed 
 10.20  to the commissioner of revenue, or, for purposes of proceeding 
 10.21  under the Revenue Recapture Act to recover personal property 
 10.22  taxes owing, to the county treasurer. 
 10.23     (d) If residential real estate is occupied and used for 
 10.24  purposes of a homestead by a relative of the owner and qualifies 
 10.25  for a homestead under subdivision 1, paragraph (c), in order for 
 10.26  the property to receive homestead status, a homestead 
 10.27  application must be filed with the assessor.  The social 
 10.28  security number of each relative occupying the property and the 
 10.29  social security number of each owner who is related to an 
 10.30  occupant of the property shall be required on the homestead 
 10.31  application filed under this subdivision.  If a different 
 10.32  relative of the owner subsequently occupies the property, the 
 10.33  owner of the property must notify the assessor within 30 days of 
 10.34  the change in occupancy.  The social security number of a 
 10.35  relative occupying the property is private data on individuals 
 10.36  as defined by section 13.02, subdivision 12, but may be 
 11.1   disclosed to the commissioner of revenue.  
 11.2      (e) The homestead application shall also notify the 
 11.3   property owners that the application filed under this section 
 11.4   will not be mailed annually and that if the property is granted 
 11.5   homestead status for the 1993 assessment, or any assessment year 
 11.6   thereafter, that same property shall remain classified as 
 11.7   homestead until the property is sold or transferred to another 
 11.8   person, or the owners, the spouse of the owner, or the relatives 
 11.9   no longer use the property as their homestead.  Upon the sale or 
 11.10  transfer of the homestead property, a certificate of value must 
 11.11  be timely filed with the county auditor as provided under 
 11.12  section 272.115.  Failure to notify the assessor within 30 days 
 11.13  that the property has been sold, transferred, or that the owner, 
 11.14  the spouse of the owner, or the relative is no longer occupying 
 11.15  the property as a homestead, shall result in the penalty 
 11.16  provided under this subdivision and the property will lose its 
 11.17  current homestead status. 
 11.18     (f) If the homestead application is not returned within 30 
 11.19  days, the county will send a second application to the present 
 11.20  owners of record.  The notice of proposed property taxes 
 11.21  prepared under section 275.065, subdivision 3, shall reflect the 
 11.22  property's classification.  Beginning with assessment year 1993 
 11.23  for all properties, if a homestead application has not been 
 11.24  filed with the county by December 15, the assessor shall 
 11.25  classify the property as nonhomestead for the current assessment 
 11.26  year for taxes payable in the following year, provided that the 
 11.27  owner may be entitled to receive the homestead classification by 
 11.28  proper application under section 375.192. 
 11.29     (g) At the request of the commissioner, each county must 
 11.30  give the commissioner a list that includes the name and social 
 11.31  security number of each property owner and the property owner's 
 11.32  spouse occupying the property, or relative of a property owner, 
 11.33  applying for homestead classification under this subdivision.  
 11.34  The commissioner shall use the information provided on the lists 
 11.35  as appropriate under the law, including for the detection of 
 11.36  improper claims by owners, or relatives of owners, under chapter 
 12.1   290A.  
 12.2      (h) If the commissioner finds that a property owner may be 
 12.3   claiming a fraudulent homestead, the commissioner shall notify 
 12.4   the appropriate counties.  Within 90 days of the notification, 
 12.5   the county assessor shall investigate to determine if the 
 12.6   homestead classification was properly claimed.  If the property 
 12.7   owner does not qualify, the county assessor shall notify the 
 12.8   county auditor who will determine the amount of homestead 
 12.9   benefits that had been improperly allowed.  For the purpose of 
 12.10  this section, "homestead benefits" means the tax reduction 
 12.11  resulting from the classification as a homestead under section 
 12.12  273.13, the taconite homestead credit under section 273.135, and 
 12.13  the supplemental homestead credit under section 273.1391. 
 12.14     The county auditor shall send a notice to the person who 
 12.15  owned the affected property at the time the homestead 
 12.16  application related to the improper homestead was filed, 
 12.17  demanding reimbursement of the homestead benefits plus a penalty 
 12.18  equal to 100 percent of the homestead benefits.  The person 
 12.19  notified may appeal the county's determination by serving copies 
 12.20  of a petition for review with county officials as provided in 
 12.21  section 278.01 and filing proof of service as provided in 
 12.22  section 278.01 with the Minnesota tax court within 60 days of 
 12.23  the date of the notice from the county.  Procedurally, the 
 12.24  appeal is governed by the provisions in chapter 271 which apply 
 12.25  to the appeal of a property tax assessment or levy, but without 
 12.26  requiring any prepayment of the amount in controversy.  If the 
 12.27  amount of homestead benefits and penalty is not paid within 60 
 12.28  days, and if no appeal has been filed, the county auditor shall 
 12.29  certify the amount of taxes and penalty to the county 
 12.30  treasurer.  The county treasurer will add interest to the unpaid 
 12.31  homestead benefits and penalty amounts at the rate provided in 
 12.32  section 279.03 for real property taxes becoming delinquent in 
 12.33  the calendar year during which the amount remains unpaid.  
 12.34  Interest may be assessed for the period beginning 60 days after 
 12.35  demand for payment was made. 
 12.36     If the person notified is the current owner of the 
 13.1   property, the treasurer may add the total amount of benefits, 
 13.2   penalty, interest, and costs to the ad valorem taxes otherwise 
 13.3   payable on the property by including the amounts on the property 
 13.4   tax statements under section 276.04, subdivision 3.  The amounts 
 13.5   added under this paragraph to the ad valorem taxes shall include 
 13.6   interest accrued through December 31 of the year preceding the 
 13.7   taxes payable year for which the amounts are first added.  These 
 13.8   amounts, when added to the property tax statement, become 
 13.9   subject to all the laws for the enforcement of real or personal 
 13.10  property taxes for that year, and for any subsequent year. 
 13.11     If the person notified is not the current owner of the 
 13.12  property, the treasurer may collect the amounts due under the 
 13.13  Revenue Recapture Act in chapter 270A, or use any of the powers 
 13.14  granted in sections 277.20 and 277.21 without exclusion, to 
 13.15  enforce payment of the benefits, penalty, interest, and costs, 
 13.16  as if those amounts were delinquent tax obligations of the 
 13.17  person who owned the property at the time the application 
 13.18  related to the improperly allowed homestead was filed.  The 
 13.19  treasurer may relieve a prior owner of personal liability for 
 13.20  the benefits, penalty, interest, and costs, and instead extend 
 13.21  those amounts on the tax lists against the property as provided 
 13.22  in this paragraph to the extent that the current owner agrees in 
 13.23  writing.  On all demands, billings, property tax statements, and 
 13.24  related correspondence, the county must list and state 
 13.25  separately the amounts of homestead benefits, penalty, interest 
 13.26  and costs being demanded, billed or assessed. 
 13.27     (i) Any amount of homestead benefits recovered by the 
 13.28  county from the property owner shall be distributed to the 
 13.29  county, city or town, and school district where the property is 
 13.30  located in the same proportion that each taxing district's levy 
 13.31  was to the total of the three taxing districts' levy for the 
 13.32  current year.  Any amount recovered attributable to taconite 
 13.33  homestead credit shall be transmitted to the St. Louis county 
 13.34  auditor to be deposited in the taconite property tax relief 
 13.35  account.  Any amount recovered that is attributable to 
 13.36  supplemental homestead credit is to be transmitted to the 
 14.1   commissioner of revenue for deposit in the general fund of the 
 14.2   state treasury.  The total amount of penalty collected must be 
 14.3   deposited in the county general fund. 
 14.4      (j) If a property owner has applied for more than one 
 14.5   homestead and the county assessors cannot determine which 
 14.6   property should be classified as homestead, the county assessors 
 14.7   will refer the information to the commissioner.  The 
 14.8   commissioner shall make the determination and notify the 
 14.9   counties within 60 days. 
 14.10     (k) In addition to lists of homestead properties, the 
 14.11  commissioner may ask the counties to furnish lists of all 
 14.12  properties and the record owners.  The social security numbers 
 14.13  and federal identification numbers that are maintained by a 
 14.14  county or city assessor for property tax administration 
 14.15  purposes, and that may appear on the lists retain their 
 14.16  classification as private or nonpublic data; but may be viewed, 
 14.17  accessed, and used by the county auditor or treasurer of the 
 14.18  same county for the limited purpose of assisting the 
 14.19  commissioner in the preparation of microdata samples under 
 14.20  section 270.0681. 
 14.21     Sec. 4.  [REPEALER.] 
 14.22     Minnesota Statutes 1998, section 273.11, subdivision 10, is 
 14.23  repealed. 
 14.24     Sec. 5.  [EFFECTIVE DATE.] 
 14.25     Sections 1 and 2 are effective for petitions filed on or 
 14.26  after the day following final enactment.  Sections 3 and 4 are 
 14.27  effective the day following final enactment. 
 14.28                             ARTICLE 3
 14.29                        MINNESOTACARE TAXES
 14.30     Section 1.  Minnesota Statutes 1998, section 295.55, 
 14.31  subdivision 2, is amended to read: 
 14.32     Subd. 2.  [ESTIMATED TAX; HOSPITALS; SURGICAL CENTERS.] (a) 
 14.33  Each hospital or surgical center must make estimated payments of 
 14.34  the taxes for the calendar year in monthly installments to the 
 14.35  commissioner within 15 days after the end of the month. 
 14.36     (b) Estimated tax payments are not required of hospitals or 
 15.1   surgical centers if:  (1) the tax for the current calendar year 
 15.2   is less than $500; or (2) the tax for the previous calendar year 
 15.3   is less than $500, if the taxpayer had a tax liability and was 
 15.4   doing business the entire year; or (3) if a hospital has been 
 15.5   allowed a grant under section 144.1484, subdivision 2, for the 
 15.6   year. 
 15.7      (c) Underpayment of estimated installments bear interest at 
 15.8   the rate specified in section 270.75, from the due date of the 
 15.9   payment until paid or until the due date of the annual return at 
 15.10  the rate specified in section 270.75 whichever comes first.  An 
 15.11  underpayment of an estimated installment is the difference 
 15.12  between the amount paid and the lesser of (1) 90 percent of 
 15.13  one-twelfth of the tax for the calendar year or (2) one-twelfth 
 15.14  of the total tax for the actual gross revenues received during 
 15.15  the month previous calendar year if the taxpayer had a tax 
 15.16  liability and was doing business the entire year. 
 15.17     Sec. 2.  Minnesota Statutes 1998, section 295.55, 
 15.18  subdivision 3, is amended to read: 
 15.19     Subd. 3.  [ESTIMATED TAX; OTHER TAXPAYERS.] (a) Each 
 15.20  taxpayer, other than a hospital or surgical center, must make 
 15.21  estimated payments of the taxes for the calendar year in 
 15.22  quarterly installments to the commissioner by April 15, July 15, 
 15.23  October 15, and January 15 of the following calendar year. 
 15.24     (b) Estimated tax payments are not required if:  (1) the 
 15.25  tax for the current calendar year is less than $500; or (2) the 
 15.26  tax for the previous calendar year is less than $500, if the 
 15.27  taxpayer had a tax liability and was doing business the entire 
 15.28  year. 
 15.29     (c) Underpayment of estimated installments bear interest at 
 15.30  the rate specified in section 270.75, from the due date of the 
 15.31  payment until paid or until the due date of the annual return at 
 15.32  the rate specified in section 270.75 whichever comes first.  An 
 15.33  underpayment of an estimated installment is the difference 
 15.34  between the amount paid and the lesser of (1) 90 percent of 
 15.35  one-quarter of the tax for the calendar year or (2) one-quarter 
 15.36  of the total tax for the actual gross revenues received during 
 16.1   the quarter previous calendar year if the taxpayer had a tax 
 16.2   liability and was doing business the entire year. 
 16.3      Sec. 3.  [EFFECTIVE DATE.] 
 16.4      Sections 1 and 2 are effective for payments received on or 
 16.5   after January 1, 2000. 
 16.6                              ARTICLE 4
 16.7                            SPECIAL TAXES
 16.8      Section 1.  Minnesota Statutes 1998, section 60A.15, is 
 16.9   amended by adding a subdivision to read: 
 16.10     Subd. 4a.  [GROSS PREMIUMS] "Gross premiums" means total 
 16.11  consideration paid for insurance, including but not limited to 
 16.12  assessments, policy fees, survey or inspection fees, membership, 
 16.13  application or registration fees or dues, service charges, and 
 16.14  all other charges or consideration received, applied, or derived 
 16.15  in cash, services, or otherwise for all new, renewal, 
 16.16  additional, or extended insurance contracts in any form on 
 16.17  property, persons, lives, interests, or risks located in this 
 16.18  state.  The term "gross premiums" includes the total 
 16.19  consideration paid to bail bond agents for bail bonds.  The term 
 16.20  "gross premiums" also includes the total consideration paid to 
 16.21  title insurance agents for title insurance. 
 16.22     Sec. 2.  Minnesota Statutes 1998, section 297F.01, 
 16.23  subdivision 23, is amended to read: 
 16.24     Subd. 23.  [WHOLESALE PRICE.] "Wholesale price" means the 
 16.25  established price for which a manufacturer or person sells a 
 16.26  tobacco product to a distributor, exclusive of any discount or 
 16.27  other reduction. 
 16.28     Sec. 3.  Minnesota Statutes 1998, section 297F.17, 
 16.29  subdivision 6, is amended to read: 
 16.30     Subd. 6.  [TIME LIMIT FOR BAD DEBT DEDUCTION REFUND.] 
 16.31  Claims for refund must be filed with the commissioner within one 
 16.32  year of during the one-year period beginning with the timely 
 16.33  filing date of the taxpayer's federal income tax return 
 16.34  containing the bad debt deduction that is being claimed.  
 16.35  Claimants under this subdivision are subject to the notice 
 16.36  requirements of section 289A.38, subdivision 7. 
 17.1      Sec. 4.  Minnesota Statutes 1998, section 297H.06, 
 17.2   subdivision 2, is amended to read: 
 17.3      Subd. 2.  [MATERIALS.] The tax is not imposed upon charges 
 17.4   to generators of mixed municipal solid waste or upon the volume 
 17.5   of non-mixed-municipal solid waste for waste management services 
 17.6   to manage the following materials: 
 17.7      (1) mixed municipal solid waste and non-mixed-municipal 
 17.8   solid waste generated outside of Minnesota; 
 17.9      (2) recyclable materials that are separated for recycling 
 17.10  by the generator, collected separately from other waste, and 
 17.11  recycled, to the extent the price of the service for handling 
 17.12  recyclable material is separately itemized; 
 17.13     (3) recyclable non-mixed-municipal solid waste that is 
 17.14  separated for recycling by the generator, collected separately 
 17.15  from other waste, delivered to a waste facility for the purpose 
 17.16  of recycling, and recycled; 
 17.17     (4) industrial waste, when it is transported to a facility 
 17.18  owned and operated by the same person that generated it; 
 17.19     (5) mixed municipal solid waste from a recycling facility 
 17.20  that separates or processes recyclable materials and reduces the 
 17.21  volume of the waste by at least 85 percent, provided that the 
 17.22  exempted waste is managed separately from other waste; 
 17.23     (6) recyclable materials that are separated from mixed 
 17.24  municipal solid waste by the generator, collected and delivered 
 17.25  to a waste facility that recycles at least 85 percent of its 
 17.26  waste, and are collected with mixed municipal solid waste that 
 17.27  is segregated in leakproof bags, provided that the mixed 
 17.28  municipal solid waste does not exceed five percent of the total 
 17.29  weight of the materials delivered to the facility and is 
 17.30  ultimately delivered to a waste facility identified as a 
 17.31  preferred waste management facility in county solid waste plans 
 17.32  under section 115A.46; 
 17.33     (7) through December 31, 2002, source-separated compostable 
 17.34  waste, if the waste is delivered to a facility exempted as 
 17.35  described in this clause.  To initially qualify for an 
 17.36  exemption, a facility must apply for an exemption in its 
 18.1   application for a new or amended solid waste permit to the 
 18.2   pollution control agency.  The first time a facility applies to 
 18.3   the agency it must certify in its application that it will 
 18.4   comply with the criteria in items (i) to (v) and the 
 18.5   commissioner of the agency shall so certify to the commissioner 
 18.6   of revenue who must grant the exemption.  For each subsequent 
 18.7   calendar year, by October 1 of the preceding year, the facility 
 18.8   must apply to the agency for certification to renew its 
 18.9   exemption for the following year.  The application must be filed 
 18.10  according to the procedures of, and contain the information 
 18.11  required by, the agency.  The commissioner of revenue shall 
 18.12  grant the exemption if the commissioner of the pollution control 
 18.13  agency finds and certifies to the commissioner of revenue that 
 18.14  based on an evaluation of the composition of incoming waste and 
 18.15  residuals and the quality and use of the product: 
 18.16     (i) generators separate materials at the source; 
 18.17     (ii) the separation is performed in a manner appropriate to 
 18.18  the technology specific to the facility that: 
 18.19     (A) maximizes the quality of the product; 
 18.20     (B) minimizes the toxicity and quantity of residuals; and 
 18.21     (C) provides an opportunity for significant improvement in 
 18.22  the environmental efficiency of the operation; 
 18.23     (iii) the operator of the facility educates generators, in 
 18.24  coordination with each county using the facility, about 
 18.25  separating the waste to maximize the quality of the waste stream 
 18.26  for technology specific to the facility; 
 18.27     (iv) process residuals do not exceed 15 percent of the 
 18.28  weight of the total material delivered to the facility; and 
 18.29     (v) the final product is accepted for use; and 
 18.30     (8) waste and waste by-products for which the tax has been 
 18.31  paid; and 
 18.32     (9) daily cover for landfills that has been approved in 
 18.33  writing by the Minnesota pollution control agency.  
 18.34     Sec. 5.  [EFFECTIVE DATES.] 
 18.35     Sections 1, 2, and 4 are effective the day following final 
 18.36  enactment.  Section 3 is effective for refund claims filed on or 
 19.1   after July 1, 1999. 
 19.2                              ARTICLE 5
 19.3                            MISCELLANEOUS
 19.4      Section 1.  Minnesota Statutes 1998, section 289A.40, 
 19.5   subdivision 1, is amended to read: 
 19.6      Subdivision 1.  [TIME LIMIT; GENERALLY.] Unless otherwise 
 19.7   provided in this chapter, a claim for a refund of an overpayment 
 19.8   of state tax must be filed within 3-1/2 years from the date 
 19.9   prescribed for filing the return, plus any extension of time 
 19.10  granted for filing the return, but only if filed within the 
 19.11  extended time, or one year from the date of an order assessing 
 19.12  tax under section 289A.37, subdivision 1, or an order 
 19.13  determining an appeal under section 289A.65, subdivision 8, or 
 19.14  one year from the date of a return made by the commissioner 
 19.15  under section 289A.35, upon payment in full of the tax, 
 19.16  penalties, and interest shown on the order or return made by the 
 19.17  commissioner, whichever period expires later.  Claims for 
 19.18  refund, except for taxes under chapter 297A, filed after the 
 19.19  3-1/2 year period but within the one-year period are limited to 
 19.20  the amount of the tax, penalties, and interest on the order or 
 19.21  return made by the commissioner and to issues determined by the 
 19.22  order or return made by the commissioner. 
 19.23     In the case of assessments under section 289A.38, 
 19.24  subdivision 5 or 6, claims for refund under chapter 297A filed 
 19.25  after the 3-1/2 year period but within the one-year period are 
 19.26  limited to the amount of the tax, penalties, and interest on the 
 19.27  order or return made by the commissioner that are due for the 
 19.28  period before the 3-1/2 year period. 
 19.29     Sec. 2.  Minnesota Statutes 1998, section 289A.60, 
 19.30  subdivision 3, is amended to read: 
 19.31     Subd. 3.  [COMBINED PENALTIES.] When penalties are imposed 
 19.32  under subdivisions 1 and 2, except for the minimum penalty under 
 19.33  subdivision 2, the penalties imposed under both subdivisions 
 19.34  combined must not exceed 38 percent. 
 19.35     Sec. 3.  Minnesota Statutes 1998, section 289A.60, 
 19.36  subdivision 21, is amended to read: 
 20.1      Subd. 21.  [PENALTY FOR FAILURE TO MAKE PAYMENT BY 
 20.2   ELECTRONIC FUNDS TRANSFER.] (a) In addition to other applicable 
 20.3   penalties imposed by this section, after notification from the 
 20.4   commissioner to the taxpayer that payments are required to be 
 20.5   made by means of electronic funds transfer under section 
 20.6   289A.20, subdivision 2, paragraph (e), or 4, paragraph (d), or 
 20.7   289A.26, subdivision 2a, and the payments are remitted by some 
 20.8   other means, there is a penalty in the amount of five percent of 
 20.9   each payment that should have been remitted electronically.  The 
 20.10  penalty can be abated under the abatement procedures prescribed 
 20.11  in section 270.07, subdivision 6, if the failure to remit the 
 20.12  payment electronically is due to reasonable cause. 
 20.13     (b) The penalty under paragraph (a) does not apply if the 
 20.14  taxpayer pays by other means the amount due at least three 
 20.15  business days before the date the payment is due.  This 
 20.16  paragraph does not apply after December 31, 1997.  
 20.17     Sec. 4.  Minnesota Statutes 1998, section 297A.15, 
 20.18  subdivision 5, is amended to read: 
 20.19     Subd. 5.  [REFUND; APPROPRIATION.] Notwithstanding the 
 20.20  provisions of sections 297A.02, subdivision 5, and 297A.25, 
 20.21  subdivision 42, the tax on sales of capital equipment, and 
 20.22  replacement capital equipment, shall be imposed and collected as 
 20.23  if the rate under section 297A.02, subdivision 1, applied.  Upon 
 20.24  application by the purchaser, on forms prescribed by the 
 20.25  commissioner, a refund equal to the reduction in the tax due as 
 20.26  a result of the application of the exemption under section 
 20.27  297A.25, subdivision 42, and the rate under section 297A.02, 
 20.28  subdivision 5, shall be paid to the purchaser.  The application 
 20.29  must include sufficient information to permit the commissioner 
 20.30  to verify the sales tax paid for the project.  The application 
 20.31  shall include information necessary for the commissioner 
 20.32  initially to verify that the purchases qualified as capital 
 20.33  equipment under section 297A.25, subdivision 42, or replacement 
 20.34  capital equipment under section 297A.01, subdivision 20.  No 
 20.35  more than two applications for refunds may be filed under this 
 20.36  subdivision in a calendar year.  Unless otherwise specifically 
 21.1   provided by this subdivision, the provisions of section sections 
 21.2   289A.40 and 289A.50 apply to the refunds payable under this 
 21.3   subdivision.  There is annually appropriated to the commissioner 
 21.4   of revenue the amount required to make the refunds. 
 21.5      The amount to be refunded shall bear interest at the rate 
 21.6   in section 270.76 from the date the refund claim is filed with 
 21.7   the commissioner. 
 21.8      Sec. 5.  [REPEALER.] 
 21.9      Minnesota Statutes 1998, sections 297E.12, subdivision 3; 
 21.10  297F.19, subdivision 4; and 297G.18, subdivision 4, are repealed.
 21.11     Sec. 6.  [EFFECTIVE DATE.] 
 21.12     Section 1 is effective for orders issued on or after the 
 21.13  day following final enactment.  Section 2 is effective for tax 
 21.14  years ending on or after the day following final enactment.  
 21.15  Sections 3 to 5 are effective the day following final enactment.