SF 513

1st Engrossment - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to taxation; making tax policy, collection, 
  1.3             and administrative changes; imposing penalties; 
  1.4             amending Minnesota Statutes 1994, sections 60A.15, 
  1.5             subdivision 12; 60A.199, subdivisions 8 and 10; 
  1.6             168.012, subdivision 9; 270.72, subdivisions 1, 2, and 
  1.7             3; 270.79, subdivision 4; 273.124, subdivisions 1, 3, 
  1.8             6, 11, and 13; 274.14; 275.07, subdivision 1; 275.08, 
  1.9             subdivision 1b; 289A.18, subdivision 2; 289A.20, 
  1.10            subdivision 2; 289A.25, by adding a subdivision; 
  1.11            289A.26, subdivision 2a; 289A.38, subdivision 7; 
  1.12            289A.40, subdivision 1; 289A.43; 289A.55, subdivision 
  1.13            7; 289A.60, subdivisions 2, 12, and by adding a 
  1.14            subdivision; 290.01, subdivision 7b; 290.015, 
  1.15            subdivision 1; 290.067, subdivision 1, as amended; 
  1.16            290.191, subdivisions 1, 5, and 6; 290.92, 
  1.17            subdivisions 1 and 23; 290.9201, subdivision 3; 
  1.18            290A.03, subdivisions 6 and 13; 290A.04, subdivision 
  1.19            3; 290A.07, subdivision 2a; 294.09, subdivisions 1 and 
  1.20            4; 296.12, subdivisions 3, 4, and 11; 296.141, 
  1.21            subdivisions 1, 2, and 6; 296.17, subdivisions 1, 3, 
  1.22            5, and 11; 296.18, subdivisions 1, 2, and 5; 297.08, 
  1.23            subdivisions 1 and 3; 297.35, subdivision 1; 297.43, 
  1.24            subdivision 2; 297C.02, subdivision 2; 297C.07; 
  1.25            297C.14, subdivision 2; 297E.11, subdivision 4; 
  1.26            297E.12, subdivision 2; 299F.26, subdivisions 1 and 4; 
  1.27            and 477A.015; proposing coding for new law in 
  1.28            Minnesota Statutes, chapters 270 and 296; repealing 
  1.29            Minnesota Statutes 1994, sections 270.70, subdivisions 
  1.30            8, 9, and 10; 297A.212; and 297A.38.  
  1.31  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.32                             ARTICLE 1
  1.33                   INCOME TAX AND BUSINESS TAXES
  1.34     Section 1.  Minnesota Statutes 1994, section 289A.18, 
  1.35  subdivision 2, is amended to read: 
  1.36     Subd. 2.  [WITHHOLDING RETURNS, ENTERTAINER WITHHOLDING 
  1.37  RETURNS, RETURNS FOR WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE 
  1.38  CONTRACTORS, AND WITHHOLDING RETURNS FROM PARTNERSHIPS AND S 
  2.1   CORPORATIONS.] Withholding returns are due on or before the last 
  2.2   day of the month following the close of the quarterly period.  
  2.3   However, if the return shows timely deposits in full payment of 
  2.4   the taxes due for that period, the return returns for the first, 
  2.5   second, and third quarters may be filed on or before the tenth 
  2.6   day of the second calendar month following the period and the 
  2.7   return for the fourth quarter may be filed on or before the 28th 
  2.8   day of the second calendar month following the period.  An 
  2.9   employer, in preparing a quarterly return, may take credit for 
  2.10  monthly deposits previously made for that quarter.  Entertainer 
  2.11  withholding tax returns are due within 30 days after each 
  2.12  performance.  Returns for withholding from payments to 
  2.13  out-of-state contractors are due within 30 days after the 
  2.14  payment to the contractor.  Returns for withholding by 
  2.15  partnerships are due on or before the due date specified for 
  2.16  filing partnership returns.  Returns for withholding by S 
  2.17  corporations are due on or before the due date specified for 
  2.18  filing corporate franchise tax returns. 
  2.19     Sec. 2.  Minnesota Statutes 1994, section 289A.20, 
  2.20  subdivision 2, is amended to read: 
  2.21     Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
  2.22  WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
  2.23  WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS CORPORATIONS.] 
  2.24  (a) A tax required to be deducted and withheld during the 
  2.25  quarterly period must be paid on or before the last day of the 
  2.26  month following the close of the quarterly period, unless an 
  2.27  earlier time for payment is provided.  A tax required to be 
  2.28  deducted and withheld from compensation of an entertainer and 
  2.29  from a payment to an out-of-state contractor must be paid on or 
  2.30  before the date the return for such tax must be filed under 
  2.31  section 289A.18, subdivision 2.  Taxes required to be deducted 
  2.32  and withheld by partnerships and S corporations must be paid on 
  2.33  or before the date the return must be filed under section 
  2.34  289A.18, subdivision 2. 
  2.35     (b) An employer who, during the previous quarter, withheld 
  2.36  more than $500 $1,500 of tax under section 290.92, subdivision 
  3.1   2a or 3, or 290.923, subdivision 2, must deposit tax withheld 
  3.2   under those sections with the commissioner within the time 
  3.3   allowed to deposit the employer's federal withheld employment 
  3.4   taxes under Treasury Regulation, section 31.6302-1, without 
  3.5   regard to the safe harbor or de minimus rules in subparagraph 
  3.6   (f) or the one-day rule in subsection (c), clause (3).  
  3.7   Taxpayers must submit a copy of their federal notice of deposit 
  3.8   status to the commissioner upon request by the commissioner. 
  3.9      (c) The commissioner may prescribe by rule other return 
  3.10  periods or deposit requirements.  In prescribing the reporting 
  3.11  period, the commissioner may classify payors according to the 
  3.12  amount of their tax liability and may adopt an appropriate 
  3.13  reporting period for the class that the commissioner judges to 
  3.14  be consistent with efficient tax collection.  In no event will 
  3.15  the duration of the reporting period be more than one year. 
  3.16     (d) If less than the correct amount of tax is paid to the 
  3.17  commissioner, proper adjustments with respect to both the tax 
  3.18  and the amount to be deducted must be made, without interest, in 
  3.19  the manner and at the times the commissioner prescribes.  If the 
  3.20  underpayment cannot be adjusted, the amount of the underpayment 
  3.21  will be assessed and collected in the manner and at the times 
  3.22  the commissioner prescribes. 
  3.23     (e) If the aggregate amount of the tax withheld during a 
  3.24  fiscal year ending June 30 under section 290.92, subdivision 2a 
  3.25  or 3, is equal to or exceeds $120,000 $50,000, the employer must 
  3.26  remit each required deposit in the subsequent calendar year by 
  3.27  means of a funds transfer as defined in section 336.4A-104, 
  3.28  paragraph (a).  The funds transfer payment date, as defined in 
  3.29  section 336.4A-401, must be on or before the date the deposit is 
  3.30  due.  If the date the deposit is due is not a funds transfer 
  3.31  business day, as defined in section 336.4A-105, paragraph (a), 
  3.32  clause (4), the payment date must be on or before the funds 
  3.33  transfer business day next following the date the deposit is due.
  3.34     (f) Providers of payroll services who remit withholding 
  3.35  deposits on behalf of 50 or more employers, or on behalf of any 
  3.36  employer with aggregate amounts over the threshold in paragraph 
  4.1   (e), must remit all deposits by means of a funds transfer as 
  4.2   provided in paragraph (e), regardless of the aggregate amount of 
  4.3   tax withheld during a fiscal year for all of the employers. 
  4.4      Sec. 3.  Minnesota Statutes 1994, section 289A.38, 
  4.5   subdivision 7, is amended to read: 
  4.6      Subd. 7.  [FEDERAL TAX CHANGES.] If the amount of income, 
  4.7   items of tax preference, deductions, or credits for any year of 
  4.8   a taxpayer as reported to the Internal Revenue Service is 
  4.9   changed or corrected by the commissioner of Internal Revenue or 
  4.10  other officer of the United States or other competent authority, 
  4.11  or where a renegotiation of a contract or subcontract with the 
  4.12  United States results in a change in income, items of tax 
  4.13  preference, deductions, or credits, or, in the case of estate 
  4.14  tax, where there are adjustments to the taxable estate resulting 
  4.15  in a change to the credit for state death taxes, the taxpayer 
  4.16  shall report the change or correction or renegotiation results 
  4.17  in writing to the commissioner, in the form required by the 
  4.18  commissioner.  The report must be submitted within 90 180 days 
  4.19  after the final determination and must concede the accuracy of 
  4.20  the determination or state how it is wrong be in the form of 
  4.21  either an amended Minnesota return conceding the accuracy of the 
  4.22  federal determination or a letter detailing how the federal 
  4.23  determination is incorrect or does not change the Minnesota 
  4.24  tax.  A taxpayer filing an amended federal tax return must also 
  4.25  file a copy of the amended return with the commissioner of 
  4.26  revenue within 90 180 days after filing the amended return. 
  4.27     Sec. 4.  Minnesota Statutes 1994, section 289A.55, 
  4.28  subdivision 7, is amended to read: 
  4.29     Subd. 7.  [INSTALLMENT PAYMENTS; ESTATE TAX.] Interest must 
  4.30  be paid on unpaid installment payments of the tax authorized 
  4.31  under section 289A.30, subdivision 2, beginning on the date the 
  4.32  tax was due without regard to extensions allowed or extensions 
  4.33  elected, at the rate of interest in effect under given in 
  4.34  section 270.75, nine months following the date of death. 
  4.35     Sec. 5.  Minnesota Statutes 1994, section 289A.60, is 
  4.36  amended by adding a subdivision to read: 
  5.1      Subd. 24.  [PENALTY FOR FAILURE TO NOTIFY OF FEDERAL 
  5.2   CHANGE.] If a person fails to report to the commissioner a 
  5.3   change or correction of the person's federal return in the 
  5.4   manner and time prescribed in section 289A.38, subdivision 7, 
  5.5   there must be added to the tax an amount equal to ten percent of 
  5.6   the amount of any underpayment of Minnesota tax attributable to 
  5.7   the federal change. 
  5.8      Sec. 6.  Minnesota Statutes 1994, section 290.01, 
  5.9   subdivision 7b, is amended to read: 
  5.10     Subd. 7b.  [RESIDENT TRUST.] Resident trust means a trust, 
  5.11  except a grantor type trust, which is administered in this state 
  5.12  either (1) was created by a will of a decedent who at his or her 
  5.13  death was domiciled in this state or (2) is an irrevocable 
  5.14  trust, the grantor of which was domiciled in this state at the 
  5.15  time the trust became irrevocable.  For the purpose of this 
  5.16  subdivision, a trust is considered irrevocable to the extent the 
  5.17  grantor is not treated as the owner thereof under sections 671 
  5.18  to 678 of the Internal Revenue Code.  The term "grantor type 
  5.19  trust" means a trust where the income or gains of the trust are 
  5.20  taxable to the grantor or others treated as substantial owners 
  5.21  under sections 671 to 678 of the Internal Revenue Code. 
  5.22     Sec. 7.  Minnesota Statutes 1994, section 290.015, 
  5.23  subdivision 1, is amended to read: 
  5.24     Subdivision 1.  [GENERAL RULE.] (a) Except as provided in 
  5.25  subdivision 3, a person that conducts a trade or business that 
  5.26  has a place of business in this state, regularly has employees 
  5.27  or independent contractors conducting business activities on its 
  5.28  behalf in this state, or owns or leases real property located in 
  5.29  this state or tangible personal property located in this state 
  5.30  as defined in section 290.191, subdivision 6, paragraph (e), is 
  5.31  subject to the taxes imposed by this chapter. 
  5.32     (b) Except as provided in subdivision 3, a person that 
  5.33  conducts a trade or business not described in paragraph (a) is 
  5.34  subject to the taxes imposed by this chapter if the trade or 
  5.35  business obtains or regularly solicits business from within this 
  5.36  state, without regard to physical presence in this state. 
  6.1      (c) For purposes of paragraph (b), business from within 
  6.2   this state includes, but is not limited to: 
  6.3      (1) sales of products or services of any kind or nature to 
  6.4   customers in this state who receive the product or service in 
  6.5   this state; 
  6.6      (2) sales of services which are performed from outside this 
  6.7   state but the benefits of which services are consumed received 
  6.8   in this state; 
  6.9      (3) transactions with customers in this state that involve 
  6.10  intangible property and result in income flowing to the person 
  6.11  from within this state as provided in section 290.191; 
  6.12     (4) leases of tangible personal property that is located in 
  6.13  this state as defined in section 290.191, subdivision 6, 
  6.14  paragraph (e); 
  6.15     (5) sales and leases of real property located in this 
  6.16  state; and 
  6.17     (6) if a financial institution, deposits received from 
  6.18  customers in this state.  
  6.19     (d) For purposes of paragraph (b), solicitation includes, 
  6.20  but is not limited to: 
  6.21     (1) the distribution, by mail or otherwise, without regard 
  6.22  to the state from which such distribution originated or in which 
  6.23  the materials were prepared, of catalogs, periodicals, 
  6.24  advertising flyers, or other written solicitations of business 
  6.25  to customers in this state; 
  6.26     (2) display of advertisements on billboards or other 
  6.27  outdoor advertising in this state; 
  6.28     (3) advertisements in newspapers published in this state; 
  6.29     (4) advertisements in trade journals or other periodicals, 
  6.30  the circulation of which is primarily within this state; 
  6.31     (5) advertisements in a Minnesota edition of a national or 
  6.32  regional publication or a limited regional edition of which this 
  6.33  state is included of a broader regional or national publication 
  6.34  which are not placed in other geographically defined editions of 
  6.35  the same issue of the same publication; 
  6.36     (6) advertisements in regional or national publications in 
  7.1   an edition which is not by its contents geographically targeted 
  7.2   to Minnesota, but which is sold over the counter in Minnesota or 
  7.3   by subscription to Minnesota residents; 
  7.4      (7) advertisements broadcast on a radio or television 
  7.5   station located in Minnesota; or 
  7.6      (8) any other solicitation by telegraph, telephone, 
  7.7   computer database, cable, optic, microwave, or other 
  7.8   communication system. 
  7.9      Sec. 8.  Minnesota Statutes, 1994, section 290.067, 
  7.10  subdivision 1, as amended by Laws 1995, chapter 1, section 4, is 
  7.11  amended to read: 
  7.12     Subdivision 1.  [AMOUNT OF CREDIT.] (a) A taxpayer may take 
  7.13  as a credit against the tax due from the taxpayer and a spouse, 
  7.14  if any, under this chapter an amount equal to the dependent care 
  7.15  credit for which the taxpayer is eligible pursuant to the 
  7.16  provisions of section 21 of the Internal Revenue Code subject to 
  7.17  the limitations provided in subdivision 2 except that in 
  7.18  determining whether the child qualified as a dependent, income 
  7.19  received as an aid to families with dependent children grant or 
  7.20  allowance to or on behalf of the child must not be taken into 
  7.21  account in determining whether the child received more than half 
  7.22  of the child's support from the taxpayer, and the provisions of 
  7.23  section 32(b)(1)(D) of the Internal Revenue Code do not apply. 
  7.24     (b) If a child who is six years of age or less has not 
  7.25  attained the age of six years at the close of the taxable year 
  7.26  is cared for at a licensed family day care home operated by the 
  7.27  child's parent, the taxpayer is deemed to have paid 
  7.28  employment-related expenses.  If the child is 16 months old or 
  7.29  younger at the close of the taxable year, the amount of expenses 
  7.30  deemed to have been paid equals the maximum limit for one 
  7.31  qualified individual under section 21(c) and (d) of the Internal 
  7.32  Revenue Code.  If the child is older than 16 months of age 
  7.33  but not older than six years of age has not attained the age of 
  7.34  six years at the close of the taxable year, the amount of 
  7.35  expenses deemed to have been paid equals the amount the licensee 
  7.36  would charge for the care of a child of the same age for the 
  8.1   same number of hours of care.  
  8.2      (c) If a married couple: 
  8.3      (1) has a child who has not attained the age of one year at 
  8.4   the close of the taxable year; 
  8.5      (2) files a joint tax return for the taxable year; and 
  8.6      (3) does not participate in a dependent care assistance 
  8.7   program as defined in section 129 of the Internal Revenue Code, 
  8.8   in lieu of the actual employment related expenses paid for that 
  8.9   child under paragraph (a) or the deemed amount under paragraph 
  8.10  (b), the lesser of (i) the combined earned income of the couple 
  8.11  or (ii) $2,400 will be deemed to be the employment related 
  8.12  expense paid for that child.  The earned income limitation of 
  8.13  section 21(d) of the Internal Revenue Code shall not apply to 
  8.14  this deemed amount.  These deemed amounts apply regardless of 
  8.15  whether any employment-related expenses have been paid.  
  8.16     (d) If the taxpayer is not required and does not file a 
  8.17  federal individual income tax return for the tax year, no credit 
  8.18  is allowed for any amount paid to any person unless: 
  8.19     (1) the name, address, and taxpayer identification number 
  8.20  of the person are included on the return claiming the credit; or 
  8.21     (2) if the person is an organization described in section 
  8.22  501(c)(3) of the Internal Revenue Code and exempt from tax under 
  8.23  section 501(a) of the Internal Revenue Code, the name and 
  8.24  address of the person are included on the return claiming the 
  8.25  credit.  
  8.26  In the case of a failure to provide the information required 
  8.27  under the preceding sentence, the preceding sentence does not 
  8.28  apply if it is shown that the taxpayer exercised due diligence 
  8.29  in attempting to provide the information required. 
  8.30     In the case of a nonresident, part-year resident, or a 
  8.31  person who has earned income not subject to tax under this 
  8.32  chapter, the credit determined under section 21 of the Internal 
  8.33  Revenue Code must be allocated based on the ratio by which the 
  8.34  earned income of the claimant and the claimant's spouse from 
  8.35  Minnesota sources bears to the total earned income of the 
  8.36  claimant and the claimant's spouse. 
  9.1      Sec. 9.  Minnesota Statutes 1994, section 290.191, 
  9.2   subdivision 1, is amended to read: 
  9.3      Subdivision 1.  [GENERAL RULE.] (a) Except as otherwise 
  9.4   provided in section 290.17, subdivision 5, the net income from a 
  9.5   trade or business carried on partly within and partly without 
  9.6   this state must be apportioned to this state as provided in this 
  9.7   section.  
  9.8      (b) For purposes of this section, "state" means a state of 
  9.9   the United States, the District of Columbia, the commonwealth of 
  9.10  Puerto Rico, or any territory or possession of the United States 
  9.11  or any foreign country. 
  9.12     Sec. 10.  Minnesota Statutes 1994, section 290.191, 
  9.13  subdivision 5, is amended to read: 
  9.14     Subd. 5.  [DETERMINATION OF SALES FACTOR.] For purposes of 
  9.15  this section, the following rules apply in determining the sales 
  9.16  factor.  
  9.17     (a) The sales factor includes all sales, gross earnings, or 
  9.18  receipts received in the ordinary course of the business, except 
  9.19  that the following types of income are not included in the sales 
  9.20  factor: 
  9.21     (1) interest; 
  9.22     (2) dividends; 
  9.23     (3) sales of capital assets as defined in section 1221 of 
  9.24  the Internal Revenue Code; 
  9.25     (4) sales of property used in the trade or business, except 
  9.26  sales of leased property of a type which is regularly sold as 
  9.27  well as leased; 
  9.28     (5) sales of debt instruments as defined in section 
  9.29  1275(a)(1) of the Internal Revenue Code or sales of stock; and 
  9.30     (6) royalties, fees, or other like income of a type which 
  9.31  qualify for a subtraction from federal taxable income under 
  9.32  section 290.01, subdivision 19(d)(11).  
  9.33     (b) Sales of tangible personal property are made within 
  9.34  this state if the property is received by a purchaser at a point 
  9.35  within this state, and the taxpayer is taxable in this state, 
  9.36  regardless of the f.o.b. point, other conditions of the sale, or 
 10.1   the ultimate destination of the property. 
 10.2      (c) Tangible personal property delivered to a common or 
 10.3   contract carrier or foreign vessel for delivery to a purchaser 
 10.4   in another state or nation is a sale in that state or nation, 
 10.5   regardless of f.o.b. point or other conditions of the sale.  
 10.6      (d) Notwithstanding paragraphs (b) and (c), when 
 10.7   intoxicating liquor, wine, fermented malt beverages, cigarettes, 
 10.8   or tobacco products are sold to a purchaser who is licensed by a 
 10.9   state or political subdivision to resell this property only 
 10.10  within the state of ultimate destination, the sale is made in 
 10.11  that state.  
 10.12     (e) Sales made by or through a corporation that is 
 10.13  qualified as a domestic international sales corporation under 
 10.14  section 992 of the Internal Revenue Code are not considered to 
 10.15  have been made within this state.  
 10.16     (f) Sales, rents, royalties, and other income in connection 
 10.17  with real property is attributed to the state in which the 
 10.18  property is located.  
 10.19     (g) Receipts from the lease or rental of tangible personal 
 10.20  property, including finance leases and true leases, must be 
 10.21  attributed to this state if the property is located in this 
 10.22  state and to other states if the property is not located in this 
 10.23  state.  Moving property including, but not limited to, motor 
 10.24  vehicles, rolling stock, aircraft, vessels, or mobile equipment 
 10.25  is located in this state if: 
 10.26     (1) the operation of the property is entirely within this 
 10.27  state; or 
 10.28     (2) the operation of the property is in two or more states 
 10.29  and the principal base of operations from which the property is 
 10.30  sent out is in this state. 
 10.31     (h) Royalties and other income not described in paragraph 
 10.32  (a), clause (6), received for the use of or for the privilege of 
 10.33  using intangible property, including patents, know-how, 
 10.34  formulas, designs, processes, patterns, copyrights, trade names, 
 10.35  service names, franchises, licenses, contracts, customer lists, 
 10.36  or similar items, must be attributed to the state in which the 
 11.1   property is used by the purchaser.  If the property is used in 
 11.2   more than one state, the royalties or other income must be 
 11.3   apportioned to this state pro rata according to the portion of 
 11.4   use in this state.  If the portion of use in this state cannot 
 11.5   be determined, the royalties or other income must be excluded 
 11.6   from both the numerator and the denominator.  Intangible 
 11.7   property is used in this state if the purchaser uses the 
 11.8   intangible property or the rights therein in the regular course 
 11.9   of its business operations in this state, regardless of the 
 11.10  location of the purchaser's customers. 
 11.11     (i) Sales of intangible property are made within the state 
 11.12  in which the property is used by the purchaser.  If the property 
 11.13  is used in more than one state, the sales must be apportioned to 
 11.14  this state pro rata according to the portion of use in this 
 11.15  state.  If the portion of use in this state cannot be 
 11.16  determined, the sale must be excluded from both the numerator 
 11.17  and the denominator of the sales factor.  Intangible property is 
 11.18  used in this state if the purchaser used the intangible property 
 11.19  in the regular course of its business operations in this state. 
 11.20     (j) Receipts from the performance of services must be 
 11.21  attributed to the state in which the benefits of where the 
 11.22  services are consumed received.  If the benefits are consumed in 
 11.23  more than one state, the receipts from those benefits must be 
 11.24  apportioned to this state pro rata according to the portion of 
 11.25  the benefits consumed in this state. If the extent to which the 
 11.26  benefits of services are consumed in this state is not readily 
 11.27  determinable, the benefits of the For the purposes of this 
 11.28  section, receipts from the performance of services provided to a 
 11.29  corporation, partnership, or trust may only be attributed to a 
 11.30  state where it has a fixed place of doing business.  If the 
 11.31  state where the services are received is not readily 
 11.32  determinable or is a state where the corporation, partnership, 
 11.33  or trust receiving the service does not have a fixed place of 
 11.34  doing business, the services shall be deemed to be consumed 
 11.35  received at the location of the office of the customer from 
 11.36  which the services were ordered in the regular course of the 
 12.1   customer's trade or business.  If the ordering office cannot be 
 12.2   determined, the benefits of the services shall be deemed to be 
 12.3   consumed received at the office of the customer to which the 
 12.4   services are billed.  
 12.5      Sec. 11.  Minnesota Statutes 1994, section 290.191, 
 12.6   subdivision 6, is amended to read: 
 12.7      Subd. 6.  [DETERMINATION OF RECEIPTS FACTOR FOR FINANCIAL 
 12.8   INSTITUTIONS.] (a) For purposes of this section, the rules in 
 12.9   this subdivision and subdivisions 7 and subdivision 8 apply in 
 12.10  determining the receipts factor for financial institutions.  
 12.11     (b) "Receipts" for this purpose means gross income, 
 12.12  including net taxable gain on disposition of assets, including 
 12.13  securities and money market instruments, when derived from 
 12.14  transactions and activities in the regular course of the 
 12.15  taxpayer's trade or business.  
 12.16     (c) "Money market instruments" means federal funds sold and 
 12.17  securities purchased under agreements to resell, commercial 
 12.18  paper, banker's acceptances, and purchased certificates of 
 12.19  deposit and similar instruments to the extent that the 
 12.20  instruments are reflected as assets under generally accepted 
 12.21  accounting principles.  
 12.22     (d) "Securities" means United States Treasury securities, 
 12.23  obligations of United States government agencies and 
 12.24  corporations, obligations of state and political subdivisions, 
 12.25  corporate stock, bonds, and other securities, participations in 
 12.26  securities backed by mortgages held by United States or state 
 12.27  government agencies, loan-backed securities and similar 
 12.28  investments to the extent the investments are reflected as 
 12.29  assets under generally accepted accounting principles.  
 12.30     (e) Receipts from the lease or rental of real or tangible 
 12.31  personal property, including both finance leases and true 
 12.32  leases, must be attributed to this state if the property is 
 12.33  located in this state.  Tangible personal property that is 
 12.34  characteristically moving property, such as motor vehicles, 
 12.35  rolling stock, aircraft, vessels, mobile equipment, and the 
 12.36  like, is considered to be located in a state if: 
 13.1      (1) the operation of the property is entirely within the 
 13.2   state; or 
 13.3      (2) the operation of the property is in two or more states, 
 13.4   but the principal base of operations from which the property is 
 13.5   sent out is in the state. 
 13.6      (f) Interest income and other receipts from assets in the 
 13.7   nature of loans that are secured primarily by real estate or 
 13.8   tangible personal property must be attributed to this state if 
 13.9   the security property is located in this state under the 
 13.10  principles stated in paragraph (e).  
 13.11     (g) Interest income and other receipts from consumer loans 
 13.12  not secured by real or tangible personal property that are made 
 13.13  to residents of this state, whether at a place of business, by 
 13.14  traveling loan officer, by mail, by telephone or other 
 13.15  electronic means, must be attributed to this state.  
 13.16     (h) Interest income and other receipts from commercial 
 13.17  loans and installment obligations that are unsecured by real or 
 13.18  tangible personal property or secured by intangible property 
 13.19  must be attributed to this state if the proceeds of the loan are 
 13.20  to be applied in this state.  If it cannot be determined where 
 13.21  the funds are to be applied, the income and receipts are 
 13.22  attributed to the state in which the office of the borrower from 
 13.23  which the application would be made in the regular course of 
 13.24  business is located.  If this cannot be determined, the 
 13.25  transaction is disregarded in the apportionment formula. 
 13.26     (i) Interest income and other receipts from a participating 
 13.27  financial institution's portion of participation and syndication 
 13.28  loans must be attributed under paragraphs (e) to (h).  A 
 13.29  participation loan is an arrangement in which a lender makes a 
 13.30  loan to a borrower and then sells, assigns, or otherwise 
 13.31  transfers all or a part of the loan to a purchasing financial 
 13.32  institution.  A syndication loan is a loan transaction involving 
 13.33  multiple financial institutions in which all the lenders are 
 13.34  named as parties to the loan documentation, are known to the 
 13.35  borrower, and have privity of contract with the borrower.  
 13.36     (j) Interest income and other receipts including service 
 14.1   charges from financial institution credit card and travel and 
 14.2   entertainment credit card receivables and credit card holders' 
 14.3   fees must be attributed to the state to which the card charges 
 14.4   and fees are regularly billed.  
 14.5      (k) Merchant discount income derived from financial 
 14.6   institution credit card holder transactions with a merchant must 
 14.7   be attributed to the state in which the merchant is located.  In 
 14.8   the case of merchants located within and outside the state, only 
 14.9   receipts from merchant discounts attributable to sales made from 
 14.10  locations within the state are attributed to this state.  It is 
 14.11  presumed, subject to rebuttal, that the location of a merchant 
 14.12  is the address shown on the invoice submitted by the merchant to 
 14.13  the taxpayer. 
 14.14     (l) Receipts from the performance of fiduciary and other 
 14.15  services must be attributed to the state in which the benefits 
 14.16  of the services are consumed received.  If the benefits are 
 14.17  consumed in more than one state, the receipts from those 
 14.18  benefits must be apportioned to this state pro rata according to 
 14.19  the portion of the benefits consumed in this state.  For the 
 14.20  purposes of this section, services provided to a corporation, 
 14.21  partnership, or trust must be attributed to a state where it has 
 14.22  a fixed place of doing business.  If the extent to which the 
 14.23  benefits of state where the services are consumed in this state 
 14.24  received is not readily determinable or is a state where the 
 14.25  corporation, partnership, or trust does not have a fixed place 
 14.26  of doing business, the benefits of the services shall be deemed 
 14.27  to be consumed received at the location of the office of the 
 14.28  customer from which the services were ordered in the regular 
 14.29  course of the customer's trade or business.  If the ordering 
 14.30  office cannot be determined, the benefits of the services shall 
 14.31  be deemed to be consumed received at the office of the customer 
 14.32  to which the services are billed.  
 14.33     (m) Receipts from the issuance of travelers checks and 
 14.34  money orders must be attributed to the state in which the checks 
 14.35  and money orders are purchased.  
 14.36     (n) Receipts from investments of a financial institution in 
 15.1   securities and from money market instruments must be apportioned 
 15.2   to this state based on the ratio that total deposits from this 
 15.3   state, its residents, including any business with an office or 
 15.4   other place of business in this state, its political 
 15.5   subdivisions, agencies, and instrumentalities bear to the total 
 15.6   deposits from all states, their residents, their political 
 15.7   subdivisions, agencies, and instrumentalities.  In the case of 
 15.8   an unregulated financial institution subject to this section, 
 15.9   these receipts are apportioned to this state based on the ratio 
 15.10  that its gross business income, excluding such receipts, earned 
 15.11  from sources within this state bears to gross business income, 
 15.12  excluding such receipts, earned from sources within all states.  
 15.13  For purposes of this subdivision, deposits made by this state, 
 15.14  its residents, its political subdivisions, agencies, and 
 15.15  instrumentalities must be attributed to this state, whether or 
 15.16  not the deposits are accepted or maintained by the taxpayer at 
 15.17  locations within this state. 
 15.18     (o) A financial institution's interest in property 
 15.19  described in section 290.015, subdivision 3, paragraph (b), is 
 15.20  included in the receipts factor in the same manner as assets in 
 15.21  the nature of securities or money market instruments are 
 15.22  included in paragraph (n).  
 15.23     Sec. 12.  Minnesota Statutes 1994, section 290.92, 
 15.24  subdivision 1, is amended to read: 
 15.25     Subdivision 1.  [DEFINITIONS.] (1)  [WAGES.] For purposes 
 15.26  of this section, the term "wages" means the same as that term is 
 15.27  defined in section 3401(a) and (f) of the Internal Revenue Code, 
 15.28  except wages shall not include agricultural labor as defined in 
 15.29  section 3121(g) of the Internal Revenue Code. 
 15.30     (2)  [PAYROLL PERIOD.] For purposes of this section the 
 15.31  term "payroll period" means a period for which a payment of 
 15.32  wages is ordinarily made to the employee by the employee's 
 15.33  employer, and the term "miscellaneous payroll period" means a 
 15.34  payroll period other than a daily, weekly, biweekly, 
 15.35  semimonthly, monthly, quarterly, semiannual, or annual payroll 
 15.36  period. 
 16.1      (3)  [EMPLOYEE.] For purposes of this section the term 
 16.2   "employee" means any resident individual performing services for 
 16.3   an employer, either within or without, or both within and 
 16.4   without the state of Minnesota, and every nonresident individual 
 16.5   performing services within the state of Minnesota, the 
 16.6   performance of which services constitute, establish, and 
 16.7   determine the relationship between the parties as that of 
 16.8   employer and employee.  As used in the preceding sentence, the 
 16.9   term "employee" includes an officer of a corporation, and an 
 16.10  officer, employee, or elected official of the United States, a 
 16.11  state, or any political subdivision thereof, or the District of 
 16.12  Columbia, or any agency or instrumentality of any one or more of 
 16.13  the foregoing. 
 16.14     (4)  [EMPLOYER.] For purposes of this section the term 
 16.15  "employer" means any person, including individuals, fiduciaries, 
 16.16  estates, trusts, partnerships, limited liability companies, and 
 16.17  corporations transacting business in or deriving any income from 
 16.18  sources within the state of Minnesota for whom an individual 
 16.19  performs or performed any service, of whatever nature, as the 
 16.20  employee of such person, except that if the person for whom the 
 16.21  individual performs or performed the services does not have 
 16.22  legal control of the payment of the wages for such services, the 
 16.23  term "employer," except for purposes of paragraph (1), means the 
 16.24  person having legal control of the payment of such wages.  As 
 16.25  used in the preceding sentence, the term "employer" includes any 
 16.26  corporation, individual, estate, trust, or organization which is 
 16.27  exempt from taxation under section 290.05 and further includes, 
 16.28  but is not limited to, officers of corporations who have legal 
 16.29  control, either individually or jointly with another or others, 
 16.30  of the payment of the wages. 
 16.31     (5)  [NUMBER OF WITHHOLDING EXEMPTIONS CLAIMED.] For 
 16.32  purposes of this section, the term "number of withholding 
 16.33  exemptions claimed" means the number of withholding exemptions 
 16.34  claimed in a withholding exemption certificate in effect under 
 16.35  subdivision 5, except that if no such certificate is in effect, 
 16.36  the number of withholding exemptions claimed shall be considered 
 17.1   to be zero. 
 17.2      Sec. 13.  Minnesota Statutes 1994, section 290.9201, 
 17.3   subdivision 3, is amended to read: 
 17.4      Subd. 3.  [CREDIT AGAINST TAX.] Each calendar year an 
 17.5   entertainment entity may take a nonrefundable credit 
 17.6   of $100 $120 against the tax imposed by this section. 
 17.7      Sec. 14.  [OMISSIONS FROM INHERITANCE OR ESTATE TAX 
 17.8   RETURN.] 
 17.9      Effective for decedents dying before August 1, 1990, the 
 17.10  provisions of Minnesota Statutes, section 289A.38, subdivision 
 17.11  6, apply to assets omitted from an inheritance tax return or 
 17.12  estate tax return rather than the provisions of Minnesota 
 17.13  Statutes 1988, section 291.11, subdivision 1, clause (2)(c). 
 17.14     Sec. 15.  [EFFECTIVE DATE.] 
 17.15     Section 1 is effective for returns due after December 31, 
 17.16  1995.  Section 2 as it relates to quarterly withholding deposits 
 17.17  is effective for withholding done after December 31, 1995, and 
 17.18  the remainder of section 2 is effective for payments due after 
 17.19  December 31, 1995.  Sections 3 and 5 are effective for federal 
 17.20  determinations after December 31, 1995.  Section 4 is effective 
 17.21  for estates of decedents dying after the date of final 
 17.22  enactment.  Section 6 is effective for deaths after December 31, 
 17.23  1995, and trusts that become irrevocable after December 31, 
 17.24  1995.  Sections 7 to 11 are effective for tax years beginning 
 17.25  after December 31, 1995.  Section 12 is effective for wages paid 
 17.26  after December 31, 1995.  Section 13 is effective for tax years 
 17.27  beginning after December 31, 1994. 
 17.28                             ARTICLE 2
 17.29               PROPERTY TAX AND PROPERTY TAX REFUNDS
 17.30     Section 1.  Minnesota Statutes 1994, section 168.012, 
 17.31  subdivision 9, is amended to read: 
 17.32     Subd. 9.  [MANUFACTURED HOMES.] Manufactured homes shall 
 17.33  not be taxed as motor vehicles using the public streets and 
 17.34  highways and shall be exempt from the motor vehicle tax 
 17.35  provisions of this chapter.  Except as provided in section 
 17.36  273.125, manufactured homes shall be taxed as personal property. 
 18.1   The provisions of Minnesota Statutes 1957, section 272.02 or any 
 18.2   other act providing for tax exemption shall be inapplicable to 
 18.3   manufactured homes, except such manufactured homes as are held 
 18.4   by a licensed dealer and exempted as inventory.  Travel trailers 
 18.5   not conspicuously displaying current registration plates on the 
 18.6   property tax assessment date shall be taxed as manufactured 
 18.7   homes if occupied as human dwelling places.  Park trailers not 
 18.8   used on the highway during any calendar year must be taxed as 
 18.9   manufactured homes if occupied as human dwelling places., and in 
 18.10  addition, park trailers used on the highway during any calendar 
 18.11  year must be taxed under section 168.013, subdivision 1j. 
 18.12     Sec. 2.  Minnesota Statutes 1994, section 273.124, 
 18.13  subdivision 1, is amended to read: 
 18.14     Subdivision 1.  [GENERAL RULE.] (a) Residential real estate 
 18.15  that is occupied and used for the purposes of a homestead by its 
 18.16  owner, who must be a Minnesota resident, is a residential 
 18.17  homestead.  
 18.18     Agricultural land, as defined in section 273.13, 
 18.19  subdivision 23, that is occupied and used as a homestead by its 
 18.20  owner, who must be a Minnesota resident, is an agricultural 
 18.21  homestead. 
 18.22     Dates for establishment of a homestead and homestead 
 18.23  treatment provided to particular types of property are as 
 18.24  provided in this section.  
 18.25     Property of a trustee, beneficiary, or grantor of a trust 
 18.26  is not disqualified from receiving homestead benefits if the 
 18.27  homestead requirements under this chapter are satisfied. 
 18.28     The assessor shall require proof, as provided in 
 18.29  subdivision 13, of the facts upon which classification as a 
 18.30  homestead may be determined.  Notwithstanding any other law, the 
 18.31  assessor may at any time require a homestead application to be 
 18.32  filed in order to verify that any property classified as a 
 18.33  homestead continues to be eligible for homestead status.  
 18.34  Notwithstanding any other law to the contrary, the department of 
 18.35  revenue may, upon request from an assessor, verify whether an 
 18.36  individual who is requesting or receiving homestead 
 19.1   classification has filed a Minnesota income tax return as a 
 19.2   resident for the most recent taxable year for which the 
 19.3   information is available. 
 19.4      When there is a name change or a transfer of homestead 
 19.5   property, the assessor may reclassify the property in the next 
 19.6   assessment unless a homestead application is filed to verify 
 19.7   that the property continues to qualify for homestead 
 19.8   classification. 
 19.9      (b) For purposes of this section, homestead property shall 
 19.10  include property which is used for purposes of the homestead but 
 19.11  is separated from the homestead by a road, street, lot, 
 19.12  waterway, or other similar intervening property.  The term "used 
 19.13  for purposes of the homestead" shall include but not be limited 
 19.14  to uses for gardens, garages, or other outbuildings commonly 
 19.15  associated with a homestead, but shall not include vacant land 
 19.16  held primarily for future development.  In order to receive 
 19.17  homestead treatment for the noncontiguous property, the owner 
 19.18  shall apply for it to the assessor by July 1 of the year when 
 19.19  the treatment is initially sought.  After initial qualification 
 19.20  for the homestead treatment, additional applications for 
 19.21  subsequent years are not required. 
 19.22     (c) Residential real estate that is occupied and used for 
 19.23  purposes of a homestead by a relative of the owner is a 
 19.24  homestead but only to the extent of the homestead treatment that 
 19.25  would be provided if the related owner occupied the property.  
 19.26  For purposes of this paragraph, "relative" means a parent, 
 19.27  stepparent, child, stepchild, grandparent, grandchild, brother, 
 19.28  sister, uncle, or aunt.  This relationship may be by blood or 
 19.29  marriage.  Property that was classified as seasonal recreational 
 19.30  residential property at the time when treatment under this 
 19.31  paragraph would first apply shall continue to be classified as 
 19.32  seasonal recreational residential property for the first four 
 19.33  assessment years beginning after the date when the relative of 
 19.34  the owner occupies the property as a homestead; this delay also 
 19.35  applies to property that, in the absence of this paragraph, 
 19.36  would have been classified as seasonal recreational residential 
 20.1   property at the time when the residence was constructed.  
 20.2   Neither the related occupant nor the owner of the property may 
 20.3   claim a property tax refund under chapter 290A for a homestead 
 20.4   occupied by a relative.  In the case of a residence located on 
 20.5   agricultural land, only the house, garage, and immediately 
 20.6   surrounding one acre of land shall be classified as a homestead 
 20.7   under this paragraph, except as provided in paragraph (d). 
 20.8      (d) Agricultural property that is occupied and used for 
 20.9   purposes of a homestead by a relative of the owner, is a 
 20.10  homestead, only to the extent of the homestead treatment that 
 20.11  would be provided if the related owner occupied the property, 
 20.12  and only if all of the following criteria are met: 
 20.13     (1) the relative who is occupying the agricultural property 
 20.14  is a son, daughter, father, or mother of the owner of the 
 20.15  agricultural property or a son or daughter of the spouse of the 
 20.16  owner of the agricultural property, 
 20.17     (2) the owner of the agricultural property must be a 
 20.18  Minnesota resident, 
 20.19     (3) the owner of the agricultural property must not receive 
 20.20  homestead treatment on any other agricultural property in 
 20.21  Minnesota, and 
 20.22     (4) the owner of the agricultural property is limited to 
 20.23  only one agricultural homestead per family under this paragraph. 
 20.24     Neither the related occupant nor the owner of the property 
 20.25  may claim a property tax refund under chapter 290A for a 
 20.26  homestead occupied by a relative qualifying under this 
 20.27  paragraph.  For purposes of this paragraph, "agricultural 
 20.28  property" means the house, garage, other farm buildings and 
 20.29  structures, and agricultural land. 
 20.30     Application must be made to the assessor by the owner of 
 20.31  the agricultural property to receive homestead benefits under 
 20.32  this paragraph.  The assessor may require the necessary proof 
 20.33  that the requirements under this paragraph have been met. 
 20.34     (e) In the case of property owned by a property owner who 
 20.35  is married, the assessor must not deny homestead treatment in 
 20.36  whole or in part if only one of the spouses occupies the 
 21.1   property and the other spouse is absent due to:  (1) marriage 
 21.2   dissolution proceedings, (2) legal separation, (3) employment or 
 21.3   self-employment in another location as provided under 
 21.4   subdivision 13, or (4) residence in a nursing home or boarding 
 21.5   care facility. 
 21.6      Sec. 3.  Minnesota Statutes 1994, section 273.124, 
 21.7   subdivision 3, is amended to read: 
 21.8      Subd. 3.  [COOPERATIVES AND CHARITABLE CORPORATIONS.] When 
 21.9   one or more dwellings, or one or more buildings which each 
 21.10  contain several dwelling units, are owned by a corporation or 
 21.11  association organized under chapter 308A, and each person who 
 21.12  owns a share or shares in the corporation or association is 
 21.13  entitled to occupy a dwelling, or dwelling unit in the building, 
 21.14  the corporation or association may claim homestead treatment for 
 21.15  each dwelling, or for each unit in case of a building containing 
 21.16  several dwelling units, for the dwelling or for the part of the 
 21.17  value of the building occupied by a shareholder.  Each dwelling 
 21.18  or unit must be designated by legal description or number, and 
 21.19  the net tax capacity of each dwelling that qualifies for 
 21.20  assessment under this subdivision must include not more than 
 21.21  one-half acre of land, if platted, nor more than 80 acres if 
 21.22  unplatted.  The net tax capacity of the building or buildings 
 21.23  containing several dwelling units is the sum of the net tax 
 21.24  capacities of each of the respective units comprising the 
 21.25  building.  To qualify for the treatment provided by this 
 21.26  subdivision, the corporation or association must be wholly owned 
 21.27  by persons having a right to occupy a dwelling or dwelling unit 
 21.28  owned by the corporation or association.  A charitable 
 21.29  corporation organized under the laws of Minnesota and not 
 21.30  otherwise exempt thereunder with no outstanding stock qualifies 
 21.31  for homestead treatment with respect to member residents of the 
 21.32  dwelling units who have purchased and hold residential 
 21.33  participation warrants entitling them to occupy the units. 
 21.34     When dwelling units no longer qualify under this 
 21.35  subdivision, the current owner must notify the assessor within 
 21.36  60 days.  Failure to notify the assessor within 60 days shall 
 22.1   result in the loss of benefits under this subdivision for taxes 
 22.2   payable in the year that the failure is discovered.  For these 
 22.3   purposes, "benefits under this subdivision" means the difference 
 22.4   in the net tax capacity of the units which no longer qualify as 
 22.5   computed under this subdivision and as computed under the 
 22.6   otherwise applicable law, times the local tax rate applicable to 
 22.7   the building for that taxes payable year.  Upon discovery of a 
 22.8   failure to notify, the assessor shall inform the auditor of the 
 22.9   difference in net tax capacity for the building or buildings in 
 22.10  which units no longer qualify, and the auditor shall calculate 
 22.11  the benefits under this subdivision.  Such amount, plus a 
 22.12  penalty equal to 100 percent of that amount, shall then be 
 22.13  demanded of the building's owner.  The property owner may appeal 
 22.14  the county's determination by filing a notice of appeal with the 
 22.15  Minnesota tax court within 60 days of the date of the notice 
 22.16  from the county.  Unless inconsistent with the provisions of 
 22.17  this subdivision, and except for the provisions of section 
 22.18  278.03 requiring partial payments, the tax court shall treat the 
 22.19  appeal as a chapter 278 property tax appeal.  If the amount of 
 22.20  the benefits under this subdivision and penalty are not paid 
 22.21  within 60 days, and if no appeal has been filed, the county 
 22.22  auditor shall certify the amount of the benefit and penalty to 
 22.23  the succeeding year's tax list to be collected as part of the 
 22.24  property taxes on the affected buildings. 
 22.25     Sec. 4.  Minnesota Statutes 1994, section 273.124, 
 22.26  subdivision 6, is amended to read: 
 22.27     Subd. 6.  [LEASEHOLD COOPERATIVES.] When one or more 
 22.28  dwellings or one or more buildings which each contain several 
 22.29  dwelling units is owned by a nonprofit corporation subject to 
 22.30  the provisions of chapter 317A and qualifying under section 
 22.31  501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as 
 22.32  amended through December 31, 1990, or a limited partnership 
 22.33  which corporation or partnership operates the property in 
 22.34  conjunction with a cooperative association, and has received 
 22.35  public financing, homestead treatment may be claimed by the 
 22.36  cooperative association on behalf of the members of the 
 23.1   cooperative for each dwelling unit occupied by a member of the 
 23.2   cooperative.  The cooperative association must provide the 
 23.3   assessor with the social security numbers of those members.  To 
 23.4   qualify for the treatment provided by this subdivision, the 
 23.5   following conditions must be met:  
 23.6      (a) the cooperative association must be organized under 
 23.7   chapter 308A and all voting members of the board of directors 
 23.8   must be resident tenants of the cooperative and must be elected 
 23.9   by the resident tenants of the cooperative; 
 23.10     (b) the cooperative association must have a lease for 
 23.11  occupancy of the property for a term of at least 20 years, which 
 23.12  permits the cooperative association, while not in default on the 
 23.13  lease, to participate materially in the management of the 
 23.14  property, including material participation in establishing 
 23.15  budgets, setting rent levels, and hiring and supervising a 
 23.16  management agent; 
 23.17     (c) to the extent permitted under state or federal law, the 
 23.18  cooperative association must have a right under a written 
 23.19  agreement with the owner to purchase the property if the owner 
 23.20  proposes to sell it; if the cooperative association does not 
 23.21  purchase the property it is offered for sale, the owner may not 
 23.22  subsequently sell the property to another purchaser at a price 
 23.23  lower than the price at which it was offered for sale to the 
 23.24  cooperative association unless the cooperative association 
 23.25  approves the sale; 
 23.26     (d) a minimum of 40 percent of the cooperative 
 23.27  association's members must have incomes at or less than 60 
 23.28  percent of area median gross income as determined by the United 
 23.29  States Secretary of Housing and Urban Development under section 
 23.30  142(d)(2)(B) of the Internal Revenue Code of 1986, as amended 
 23.31  through December 31, 1991.  For purposes of this clause, "member 
 23.32  income" means the income of a member existing at the time the 
 23.33  member acquires cooperative membership; 
 23.34     (e) if a limited partnership owns the property, it must 
 23.35  include as the managing general partner a nonprofit organization 
 23.36  operating under the provisions of chapter 317A and qualifying 
 24.1   under section 501(c)(3) or 501(c)(4) of the Internal Revenue 
 24.2   Code of 1986, as amended through December 31, 1990, and the 
 24.3   limited partnership agreement must provide that the managing 
 24.4   general partner have sufficient powers so that it materially 
 24.5   participates in the management and control of the limited 
 24.6   partnership; 
 24.7      (f) prior to becoming a member of a leasehold cooperative 
 24.8   described in this subdivision, a person must have received 
 24.9   notice that (1) describes leasehold cooperative property in 
 24.10  plain language, including but not limited to the effects of 
 24.11  classification under this subdivision on rents, property taxes 
 24.12  and tax credits or refunds, and operating expenses, and (2) 
 24.13  states that copies of the articles of incorporation and bylaws 
 24.14  of the cooperative association, the lease between the owner and 
 24.15  the cooperative association, a sample sublease between the 
 24.16  cooperative association and a tenant, and, if the owner is a 
 24.17  partnership, a copy of the limited partnership agreement, can be 
 24.18  obtained upon written request at no charge from the owner, and 
 24.19  the owner must send or deliver the materials within seven days 
 24.20  after receiving any request; 
 24.21     (g) if a dwelling unit of a building was occupied on the 
 24.22  60th day prior to the date on which the unit became leasehold 
 24.23  cooperative property described in this subdivision, the notice 
 24.24  described in paragraph (f) must have been sent by first class 
 24.25  mail to the occupant of the unit at least 60 days prior to the 
 24.26  date on which the unit became leasehold cooperative property.  
 24.27  For purposes of the notice under this paragraph, the copies of 
 24.28  the documents referred to in paragraph (f) may be in proposed 
 24.29  version, provided that any subsequent material alteration of 
 24.30  those documents made after the occupant has requested a copy 
 24.31  shall be disclosed to any occupant who has requested a copy of 
 24.32  the document.  Copies of the articles of incorporation and 
 24.33  certificate of limited partnership shall be filed with the 
 24.34  secretary of state after the expiration of the 60-day period 
 24.35  unless the change to leasehold cooperative status does not 
 24.36  proceed; 
 25.1      (h) the county attorney of the county in which the property 
 25.2   is located must certify to the assessor that the property meets 
 25.3   the requirements of this subdivision; 
 25.4      (i) the public financing received must be from at least one 
 25.5   of the following sources: 
 25.6      (1) tax increment financing proceeds used for the 
 25.7   acquisition or rehabilitation of the building or interest rate 
 25.8   write-downs relating to the acquisition of the building; 
 25.9      (2) government issued bonds exempt from taxes under section 
 25.10  103 of the Internal Revenue Code of 1986, as amended through 
 25.11  December 31, 1991, the proceeds of which are used for the 
 25.12  acquisition or rehabilitation of the building; 
 25.13     (3) programs under section 221(d)(3), 202, or 236, of Title 
 25.14  II of the National Housing Act; 
 25.15     (4) rental housing program funds under Section 8 of the 
 25.16  United States Housing Act of 1937 or the market rate family 
 25.17  graduated payment mortgage program funds administered by the 
 25.18  Minnesota housing finance agency that are used for the 
 25.19  acquisition or rehabilitation of the building; 
 25.20     (5) low-income housing credit under section 42 of the 
 25.21  Internal Revenue Code of 1986, as amended through December 31, 
 25.22  1991; 
 25.23     (6) public financing provided by a local government used 
 25.24  for the acquisition or rehabilitation of the building, including 
 25.25  grants or loans from (i) federal community development block 
 25.26  grants; (ii) HOME block grants; or (iii) residential rental 
 25.27  bonds issued under chapter 474A; or 
 25.28     (7) other rental housing program funds provided by the 
 25.29  Minnesota housing finance agency for the acquisition or 
 25.30  rehabilitation of the building; 
 25.31     (j) at the time of the initial request for homestead 
 25.32  classification or of any transfer of ownership of the property, 
 25.33  the governing body of the municipality in which the property is 
 25.34  located must hold a public hearing and make the following 
 25.35  findings: 
 25.36     (1) that the granting of the homestead treatment of the 
 26.1   apartment's units will facilitate safe, clean, affordable 
 26.2   housing for the cooperative members that would otherwise not be 
 26.3   available absent the homestead designation; 
 26.4      (2) that the owner has presented information satisfactory 
 26.5   to the governing body showing that the savings garnered from the 
 26.6   homestead designation of the units will be used to reduce 
 26.7   tenant's rents or provide a level of furnishing or maintenance 
 26.8   not possible absent the designation; and 
 26.9      (3) that the requirements of paragraphs (b), (d), and (i) 
 26.10  have been met. 
 26.11     Homestead treatment must be afforded to units occupied by 
 26.12  members of the cooperative association and the units must be 
 26.13  assessed as provided in subdivision 3, provided that any unit 
 26.14  not so occupied shall be classified and assessed pursuant to the 
 26.15  appropriate class.  No more than three acres of land may, for 
 26.16  assessment purposes, be included with each dwelling unit that 
 26.17  qualifies for homestead treatment under this subdivision. 
 26.18     When dwelling units no longer qualify under this 
 26.19  subdivision, the current owner must notify the assessor within 
 26.20  60 days.  Failure to notify the assessor within 60 days shall 
 26.21  result in the loss of benefits under this subdivision for taxes 
 26.22  payable in the year that the failure is discovered.  For these 
 26.23  purposes, "benefits under this subdivision" means the difference 
 26.24  in the net tax capacity of the units which no longer qualify as 
 26.25  computed under this subdivision and as computed under the 
 26.26  otherwise applicable law, times the local tax rate applicable to 
 26.27  the building for that taxes payable year.  Upon discovery of a 
 26.28  failure to notify, the assessor shall inform the auditor of the 
 26.29  difference in net tax capacity for the building or buildings in 
 26.30  which units no longer qualify, and the auditor shall calculate 
 26.31  the benefits under this subdivision.  Such amount, plus a 
 26.32  penalty equal to 100 percent of that amount, shall then be 
 26.33  demanded of the building's owner.  The property owner may appeal 
 26.34  the county's determination by filing a notice of appeal with the 
 26.35  Minnesota tax court within 60 days of the date of the notice 
 26.36  from the county.  Unless inconsistent with the provisions of 
 27.1   this subdivision, and except for the provisions of section 
 27.2   278.03 requiring partial payments, the tax court shall treat the 
 27.3   appeal as a chapter 278 property tax appeal.  If the amount of 
 27.4   the benefits under this subdivision and penalty are not paid 
 27.5   within 60 days, and if no appeal has been filed, the county 
 27.6   auditor shall certify the amount of the benefit and penalty to 
 27.7   the succeeding year's tax list to be collected as part of the 
 27.8   property taxes on the affected buildings. 
 27.9      Sec. 5.  Minnesota Statutes 1994, section 273.124, 
 27.10  subdivision 11, is amended to read: 
 27.11     Subd. 11.  [LIMITATION ON HOMESTEAD CLASSIFICATION.] If the 
 27.12  assessor has classified a property as both homestead and 
 27.13  nonhomestead, the greater of the value attributable to the 
 27.14  portion of the property classified as class 1 or class 2a or the 
 27.15  value of the first tier of net class rates provided under 
 27.16  section 273.13, subdivision 22, or 23, paragraph (a), is 
 27.17  entitled to assessment as a homestead under section 273.13, 
 27.18  subdivision 22 or 23.  The limitation in this subdivision does 
 27.19  not apply to buildings containing fewer than four residential 
 27.20  units or to a single rented or leased dwelling unit located 
 27.21  within or attached to a private garage or similar structure 
 27.22  owned by the owner of a homestead and located on the premises of 
 27.23  that homestead.  
 27.24     If the assessor has classified a property as both homestead 
 27.25  and nonhomestead, the homestead credit provided in section 
 27.26  273.13, subdivisions 22 and 23, and the reductions in tax 
 27.27  provided under sections 273.135 and 273.1391 apply to the value 
 27.28  of both the homestead and the nonhomestead portions of the 
 27.29  property. 
 27.30     Sec. 6.  Minnesota Statutes 1994, section 273.124, 
 27.31  subdivision 13, is amended to read: 
 27.32     Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
 27.33  the homestead requirements under subdivision 1 must file a 
 27.34  homestead application with the county assessor to initially 
 27.35  obtain homestead classification. 
 27.36     (b) On or before January 2, 1993, each county assessor 
 28.1   shall mail a homestead application to the owner of each parcel 
 28.2   of property within the county which was classified as homestead 
 28.3   for the 1992 assessment year.  The format and contents of a 
 28.4   uniform homestead application shall be prescribed by the 
 28.5   commissioner of revenue.  The commissioner shall consult with 
 28.6   the chairs of the house and senate tax committees on the 
 28.7   contents of the homestead application form.  The application 
 28.8   must clearly inform the taxpayer that this application must be 
 28.9   signed by all owners who occupy the property or by the 
 28.10  qualifying relative and returned to the county assessor in order 
 28.11  for the property to continue receiving homestead treatment.  The 
 28.12  envelope containing the homestead application shall clearly 
 28.13  identify its contents and alert the taxpayer of its necessary 
 28.14  immediate response. 
 28.15     (c) Every property owner applying for homestead 
 28.16  classification must furnish to the county assessor the social 
 28.17  security number of each occupant who is listed as an owner of 
 28.18  the property on the deed of record, the name and address of each 
 28.19  owner who does not occupy the property, and the name and social 
 28.20  security number of each owner's spouse who occupies the 
 28.21  property.  The application must be signed by each owner who 
 28.22  occupies the property and by each owner's spouse who occupies 
 28.23  the property, or, in the case of property that qualifies as a 
 28.24  homestead under subdivision 1, paragraph (c), by the qualifying 
 28.25  relative. 
 28.26     If a property owner occupies a homestead, the property 
 28.27  owner's spouse may not claim another property as a homestead 
 28.28  unless the property owner and the property owner's spouse file 
 28.29  with the assessor an affidavit or other proof required by the 
 28.30  assessor stating that the property owner's spouse does not 
 28.31  occupy the homestead because marriage dissolution proceedings 
 28.32  are pending, the spouses are legally separated, or the spouse's 
 28.33  employment or self-employment location requires the spouse to 
 28.34  have a separate homestead.  The assessor may require proof of 
 28.35  employment or self-employment and employment or self-employment 
 28.36  location, or proof of dissolution proceedings or legal 
 29.1   separation. 
 29.2      If the social security number or affidavit or other proof 
 29.3   is not provided, the county assessor shall classify the property 
 29.4   as nonhomestead. 
 29.5      The social security numbers or affidavits or other proofs 
 29.6   of the property owners and spouses are private data on 
 29.7   individuals as defined by section 13.02, subdivision 12, but, 
 29.8   notwithstanding that section, the private data may be disclosed 
 29.9   to the commissioner of revenue, or, for purposes of proceeding 
 29.10  under the revenue recapture act to recover personal property 
 29.11  taxes owing, to the county treasurer. 
 29.12     (d) If residential real estate is occupied and used for 
 29.13  purposes of a homestead by a relative of the owner and qualifies 
 29.14  for a homestead under subdivision 1, paragraph (c), in order for 
 29.15  the property to receive homestead status, a homestead 
 29.16  application must be filed with the assessor.  The social 
 29.17  security number of each relative occupying the property and the 
 29.18  social security number of each owner who is related to an 
 29.19  occupant of the property shall be required on the homestead 
 29.20  application filed under this subdivision.  If a different 
 29.21  relative of the owner subsequently occupies the property, the 
 29.22  owner of the property must notify the assessor within 30 days of 
 29.23  the change in occupancy.  The social security number of a 
 29.24  relative occupying the property is private data on individuals 
 29.25  as defined by section 13.02, subdivision 12, but may be 
 29.26  disclosed to the commissioner of revenue.  
 29.27     (e) The homestead application shall also notify the 
 29.28  property owners that the application filed under this section 
 29.29  will not be mailed annually and that if the property is granted 
 29.30  homestead status for the 1993 assessment, or any assessment year 
 29.31  thereafter, that same property shall remain classified as 
 29.32  homestead until the property is sold or transferred to another 
 29.33  person, or the owners or the relatives no longer use the 
 29.34  property as their homestead.  Upon the sale or transfer of the 
 29.35  homestead property, a certificate of value must be timely filed 
 29.36  with the county auditor as provided under section 272.115.  
 30.1   Failure to notify the assessor within 30 days that the property 
 30.2   has been sold, or transferred if no certificate of real estate 
 30.3   value is filed under section 272.115, or that the owner or the 
 30.4   relative is no longer occupying the property as a homestead, 
 30.5   shall result in the penalty provided under this subdivision and 
 30.6   the property will lose its current homestead status. 
 30.7      (f) If the homestead application is not returned within 30 
 30.8   days, the county will send a second application to the present 
 30.9   owners of record.  The notice of proposed property taxes 
 30.10  prepared under section 275.065, subdivision 3, shall reflect the 
 30.11  property's classification.  Beginning with assessment year 1993 
 30.12  for all properties, If a homestead application has not been 
 30.13  filed with the county by December 15, the assessor shall 
 30.14  classify the property as nonhomestead for the current assessment 
 30.15  year for taxes payable in the following year, provided that the 
 30.16  owner may be entitled to receive the homestead classification by 
 30.17  proper application under section 375.192. 
 30.18     (g) At the request of the commissioner, each county must 
 30.19  give the commissioner a list that includes the name and social 
 30.20  security number of each property owner and the property owner's 
 30.21  spouse occupying the property, or relative of a property owner, 
 30.22  applying for homestead classification under this subdivision.  
 30.23  The commissioner shall use the information provided on the lists 
 30.24  as appropriate under the law, including for the detection of 
 30.25  improper claims by owners, or relatives of owners, under chapter 
 30.26  290A.  
 30.27     (h) If, in comparing the lists supplied by the counties, 
 30.28  the commissioner finds that a property owner is claiming more 
 30.29  than one homestead, the commissioner shall notify the 
 30.30  appropriate counties.  Within 90 days of the notification, the 
 30.31  county assessor shall investigate to determine if the homestead 
 30.32  classification was properly claimed.  If the property owner does 
 30.33  not qualify, the county assessor shall notify the county auditor 
 30.34  who will determine the amount of homestead benefits that had 
 30.35  been improperly allowed.  For the purpose of this section, 
 30.36  "homestead benefits" means the tax reduction resulting from the 
 31.1   classification as a homestead under section 273.13, the taconite 
 31.2   homestead credit under section 273.135, and the supplemental 
 31.3   homestead credit under section 273.1391. 
 31.4      The county auditor shall send a notice to the owners of 
 31.5   persons who owned the affected property at the time the 
 31.6   application related to the improperly allowed homestead was 
 31.7   submitted, demanding reimbursement of the homestead benefits 
 31.8   plus a penalty equal to 100 percent of the homestead benefits.  
 31.9   The property owners may appeal the county's determination by 
 31.10  filing a notice of appeal with the Minnesota tax court within 60 
 31.11  days of the date of the notice from the county.  Unless 
 31.12  inconsistent with the provisions of this subdivision, and except 
 31.13  for the provisions of section 278.03 requiring partial payments, 
 31.14  the tax court shall treat the appeal as a chapter 278 property 
 31.15  tax appeal.  If the amount of homestead benefits and penalty is 
 31.16  not paid within 60 days, and if no appeal has been filed, the 
 31.17  county auditor shall certify the amount of taxes and penalty to 
 31.18  the succeeding year's tax list to be collected as part of the 
 31.19  property taxes.  In the case of a manufactured home, the amount 
 31.20  shall be certified to the current year's tax list for collection 
 31.21  treasurer.  The treasurer shall assess interest to the total of 
 31.22  the homestead benefits and penalty according to the provisions 
 31.23  of section 277.17, and shall have the powers enumerated in 
 31.24  sections 277.20 and 277.21 to enforce payment of the benefits, 
 31.25  penalty, interest, and costs as a delinquent personal property 
 31.26  tax obligation of the owner of the affected property at the time 
 31.27  the application related to the improperly allowed homestead was 
 31.28  submitted. 
 31.29     (i) Any amount of homestead benefits recovered by the 
 31.30  county from the property owner shall be distributed to the 
 31.31  county, city or town, and school district where the property is 
 31.32  located in the same proportion that each taxing district's levy 
 31.33  was to the total of the three taxing districts' levy for the 
 31.34  current year.  Any amount recovered attributable to taconite 
 31.35  homestead credit shall be transmitted to the St. Louis county 
 31.36  auditor to be deposited in the taconite property tax relief 
 32.1   account.  The total amount of penalty collected must be 
 32.2   deposited in the county general fund. 
 32.3      (j) If a property owner has applied for more than one 
 32.4   homestead and the county assessors cannot determine which 
 32.5   property should be classified as homestead, the county assessors 
 32.6   will refer the information to the commissioner.  The 
 32.7   commissioner shall make the determination and notify the 
 32.8   counties within 60 days. 
 32.9      (k) In addition to lists of homestead properties, the 
 32.10  commissioner may ask the counties to furnish lists of all 
 32.11  properties and the record owners. 
 32.12     Sec. 7.  Minnesota Statutes 1994, section 274.14, is 
 32.13  amended to read: 
 32.14     274.14 [LENGTH OF SESSION; RECORD.] 
 32.15     The county board of equalization or the special board of 
 32.16  equalization appointed by it shall meet during the last two 
 32.17  weeks in June that contain the last ten meeting days, in June.  
 32.18  For this purpose, "meeting days" are defined as any day of the 
 32.19  week excluding Saturday and Sunday.  The board may meet on any 
 32.20  ten consecutive meeting days in June, after the second Friday in 
 32.21  June, if the actual meeting dates are contained on the valuation 
 32.22  notices mailed to each property owner in the county under 
 32.23  section 273.121.  No action taken by the county board of review 
 32.24  after June 30 is valid, except for corrections permitted in 
 32.25  sections 273.01 and 274.01.  The county auditor shall keep an 
 32.26  accurate record of the proceedings and orders of the board.  The 
 32.27  record must be published like other proceedings of county 
 32.28  commissioners.  A copy of the published record must be sent to 
 32.29  the commissioner of revenue, with the abstract of assessment 
 32.30  required by section 274.16.  
 32.31     Sec. 8.  Minnesota Statutes 1994, section 275.07, 
 32.32  subdivision 1, is amended to read: 
 32.33     Subdivision 1.  The taxes voted by cities, counties, school 
 32.34  districts, and special districts shall be certified by the 
 32.35  proper authorities to the county auditor on or before five 
 32.36  working days after December 20 in each year.  A town must 
 33.1   certify the levy adopted by the town board to the county auditor 
 33.2   by September 15 each year.  If the town board modifies the levy 
 33.3   at a special town meeting after September 15, the town board 
 33.4   must recertify its levy to the county auditor on or before five 
 33.5   working days after December 20.  The taxes certified shall not 
 33.6   be reduced by the aid received under sections section 273.1398, 
 33.7   subdivisions 2 and subdivision 3.  If a city, town, county, 
 33.8   school district, or special district fails to certify its levy 
 33.9   by that date, its levy shall be the amount levied by it for the 
 33.10  preceding year.  
 33.11     Sec. 9.  Minnesota Statutes 1994, section 275.08, 
 33.12  subdivision 1b, is amended to read: 
 33.13     Subd. 1b.  The amounts certified under section 275.07 after 
 33.14  adjustment under section 275.07, subdivision 3, by an individual 
 33.15  local government unit, except for any amounts certified under 
 33.16  sections 124A.03, subdivision 2a, and 275.61, shall be divided 
 33.17  by the total net tax capacity of all taxable properties within 
 33.18  the local government unit's taxing jurisdiction.  The resulting 
 33.19  ratio, the local government's local tax rate, multiplied by each 
 33.20  property's net tax capacity shall be each property's tax for 
 33.21  that local government unit before reduction by any credits.  
 33.22     Any amount certified to the county auditor under section 
 33.23  124A.03, subdivision 2a, or 275.61, after the dates given in 
 33.24  those sections, shall be divided by the total estimated market 
 33.25  value of all taxable properties within the taxing district.  The 
 33.26  resulting ratio, the taxing district's new referendum tax rate, 
 33.27  multiplied by each property's estimated market value shall be 
 33.28  each property's new referendum tax before reduction by any 
 33.29  credits. 
 33.30     Sec. 10.  Minnesota Statutes 1994, section 289A.60, 
 33.31  subdivision 12, is amended to read: 
 33.32     Subd. 12.  [PENALTIES RELATING TO PROPERTY TAX REFUNDS.] 
 33.33  (a) If the commissioner determines that a property tax refund 
 33.34  claim is or was excessive and was filed with fraudulent intent, 
 33.35  the claim must be disallowed in full.  If the claim has been 
 33.36  paid, the amount disallowed may be recovered by assessment and 
 34.1   collection. 
 34.2      (b) If it is determined that a property tax refund claim is 
 34.3   excessive and was negligently prepared, ten percent of the 
 34.4   corrected claim must be disallowed.  If the claim has been paid, 
 34.5   the amount disallowed must be recovered by assessment and 
 34.6   collection.  
 34.7      (c) An owner or managing agent who knowingly without 
 34.8   reasonable cause fails to give a certificate of rent 
 34.9   constituting property tax to a renter, as required by section 
 34.10  290A.19, paragraph (a), is liable to the commissioner for a 
 34.11  penalty of $100 for each failure. 
 34.12     (d) If the owner or managing agent knowingly gives rent 
 34.13  certificates that report total rent constituting property taxes 
 34.14  in excess of the amount of actual rent constituting property 
 34.15  taxes paid on the rented part of a property, the owner or 
 34.16  managing agent is liable for a penalty equal to the greater of 
 34.17  (1) $100 or (2) 50 percent of the excess that is reported.  An 
 34.18  overstatement of rent constituting property taxes is presumed to 
 34.19  be knowingly made if it exceeds by ten percent or more the 
 34.20  actual rent constituting property taxes. 
 34.21     (e) No claim is allowed if the initial claim is filed more 
 34.22  than one year after the original due date for filing the claim.  
 34.23     Sec. 11.  Minnesota Statutes 1994, section 290A.03, 
 34.24  subdivision 6, is amended to read: 
 34.25     Subd. 6.  [HOMESTEAD.] "Homestead" means the dwelling 
 34.26  occupied as the claimant's principal residence and so much of 
 34.27  the land surrounding it, not exceeding ten acres, as is 
 34.28  reasonably necessary for use of the dwelling as a home and any 
 34.29  other property used for purposes of a homestead as defined in 
 34.30  section 273.13, subdivision 22, except for agricultural land 
 34.31  assessed as part of a homestead pursuant to section 273.13, 
 34.32  subdivision 23, "homestead" is limited to 320 acres or, where 
 34.33  the farm homestead is rented, one acre.  The homestead may be 
 34.34  owned or rented and may be a part of a multidwelling or 
 34.35  multipurpose building and the land on which it is built.  A 
 34.36  manufactured home, as defined in section 273.125, subdivision 8, 
 35.1   or a park trailer taxed as a manufactured home under section 
 35.2   168.012, subdivision 9, assessed as personal property may be a 
 35.3   dwelling for purposes of this subdivision. 
 35.4      Sec. 12.  Minnesota Statutes 1994, section 290A.03, 
 35.5   subdivision 13, is amended to read: 
 35.6      Subd. 13.  [PROPERTY TAXES PAYABLE.] "Property taxes 
 35.7   payable" means the property tax exclusive of special 
 35.8   assessments, penalties, and interest payable on a claimant's 
 35.9   homestead before reductions made under section 273.13 but after 
 35.10  deductions made under sections 273.135, 273.1391, 273.42, 
 35.11  subdivision 2, and any other state paid property tax credits in 
 35.12  any calendar year.  In the case of a claimant who makes ground 
 35.13  lease payments, "property taxes payable" includes the amount of 
 35.14  the payments directly attributable to the property taxes 
 35.15  assessed against the parcel on which the house is located.  No 
 35.16  apportionment or reduction of the "property taxes payable" shall 
 35.17  be required for the use of a portion of the claimant's homestead 
 35.18  for a business purpose if the claimant does not deduct any 
 35.19  business depreciation expenses for the use of a portion of the 
 35.20  homestead in the determination of federal adjusted gross 
 35.21  income.  For homesteads which are manufactured homes as defined 
 35.22  in section 274.19, subdivision 8, and for homesteads which are 
 35.23  park trailers taxed as manufactured homes under section 168.012, 
 35.24  subdivision 9, "property taxes payable" shall also include the 
 35.25  amount of the gross rent paid in the preceding year for the site 
 35.26  on which the homestead is located, which is attributable to the 
 35.27  net tax paid on the site.  The amount attributable to property 
 35.28  taxes shall be determined by multiplying the net tax on the 
 35.29  parcel by a fraction, the numerator of which is the gross rent 
 35.30  paid for the calendar year for the site and the denominator of 
 35.31  which is the gross rent paid for the calendar year for the 
 35.32  parcel.  When a homestead is owned by two or more persons as 
 35.33  joint tenants or tenants in common, such tenants shall determine 
 35.34  between them which tenant may claim the property taxes payable 
 35.35  on the homestead.  If they are unable to agree, the matter shall 
 35.36  be referred to the commissioner of revenue whose decision shall 
 36.1   be final.  Property taxes are considered payable in the year 
 36.2   prescribed by law for payment of the taxes. 
 36.3      In the case of a claim relating to "property taxes 
 36.4   payable," the claimant must have owned and occupied the 
 36.5   homestead on January 2 of the year in which the tax is payable 
 36.6   and (i) the property must have been classified as homestead 
 36.7   property pursuant to section 273.13, subdivision 22 or 23, on or 
 36.8   before December 15 of the assessment year to which the "property 
 36.9   taxes payable" relate; or (ii) the claimant must provide 
 36.10  documentation from the local assessor that application for 
 36.11  homestead classification has been made on or before December 15 
 36.12  of the year in which the "property taxes payable" were payable 
 36.13  and that the assessor has approved the application. 
 36.14     Sec. 13.  Minnesota Statutes 1994, section 290A.04, 
 36.15  subdivision 3, is amended to read: 
 36.16     Subd. 3.  The commissioner of revenue shall construct and 
 36.17  make available to taxpayers a comprehensive table showing the 
 36.18  property taxes to be paid and refund allowed at various levels 
 36.19  of income and assessment.  The table shall follow the schedule 
 36.20  of income percentages, maximums and other provisions specified 
 36.21  in subdivision 2, except that the commissioner may graduate the 
 36.22  transition between income brackets.  All refunds shall be 
 36.23  computed in accordance with tables prepared and issued by the 
 36.24  commissioner of revenue.  
 36.25     The commissioner shall include on the form an appropriate 
 36.26  space or method for the claimant to identify if the property 
 36.27  taxes paid are for a manufactured home, as defined in section 
 36.28  273.125, subdivision 8, paragraph (c), or a park trailer taxed 
 36.29  as a manufactured home under section 168.012, subdivision 9. 
 36.30     Sec. 14.  Minnesota Statutes 1994, section 290A.07, 
 36.31  subdivision 2a, is amended to read: 
 36.32     Subd. 2a.  A claimant who is a renter or a homeowner who 
 36.33  occupies a manufactured home, as defined in section 273.125, 
 36.34  subdivision 8, paragraph (c), or a park trailer taxed as a 
 36.35  manufactured home under section 168.012, subdivision 9, shall 
 36.36  receive full payment after August 1 and before August 15 or 60 
 37.1   days after receipt of the application, whichever is later.  
 37.2      Sec. 15.  Minnesota Statutes 1994, section 477A.015, is 
 37.3   amended to read: 
 37.4      477A.015 [PAYMENT DATES.] 
 37.5      The commissioner of revenue shall make the payments of 
 37.6   local government aid to affected taxing authorities in two 
 37.7   installments on July 20 and December 26 annually.  
 37.8      The commissioner may pay all or part of the payment due on 
 37.9   December 26 at any time after August 15 upon the request of a 
 37.10  city that requests such payment as being necessary for meeting 
 37.11  its cash flow needs.  
 37.12     Sec. 16.  [EFFECTIVE DATE.] 
 37.13     Sections 1 and 7 are effective for taxes payable in 1997 
 37.14  and thereafter.  Sections 3 to 6 are effective January 1, 1996, 
 37.15  and thereafter. Section 10 is effective for certificates of rent 
 37.16  paid required after the date of final enactment.  Sections 11 to 
 37.17  14 are effective for refunds based on property taxes paid in 
 37.18  1997 and thereafter, and for rent paid in 1996 and thereafter.  
 37.19  Section 15 is effective July 1, 1996, and thereafter. 
 37.20                             ARTICLE 3
 37.21                      SALES AND SPECIAL TAXES
 37.22     Section 1.  Minnesota Statutes 1994, section 297.08, 
 37.23  subdivision 1, is amended to read: 
 37.24     Subdivision 1.  [CONTRABAND DEFINED.] The following are 
 37.25  declared to be contraband: 
 37.26     (1) All packages which do not have stamps affixed to them 
 37.27  as provided in sections 297.01 to 297.13, including but not 
 37.28  limited to (i) packages with illegible stamps and packages with 
 37.29  stamps that are not complete or whole even if the stamps are 
 37.30  legible, and (ii) all devices for the vending of cigarettes in 
 37.31  which such unstamped packages as defined in item (i) are found, 
 37.32  including all contents contained within the devices. 
 37.33     (2) Any device for the vending of cigarettes and all 
 37.34  packages of cigarettes contained therein, where the device does 
 37.35  not afford at least partial visibility of contents.  Where any 
 37.36  package exposed to view does not carry the stamp required by 
 38.1   sections 297.01 to 297.13, it shall be presumed that all 
 38.2   packages contained in the device are unstamped and contraband. 
 38.3      (3) Any device for the vending of cigarettes to which the 
 38.4   commissioner or authorized agents have been denied access for 
 38.5   the inspection of contents.  In lieu of seizure, the 
 38.6   commissioner or an agent may seal the device to prevent its use 
 38.7   until inspection of contents is permitted. 
 38.8      (4) Any device for the vending of cigarettes which does not 
 38.9   carry the name and address of the owner, plainly marked and 
 38.10  visible from the front of the machine. 
 38.11     (5) Any device including, but not limited to, motor 
 38.12  vehicles, trailers, snowmobiles, airplanes, and boats used with 
 38.13  the knowledge of the owner or of a person operating with the 
 38.14  consent of the owner for the storage or transportation of more 
 38.15  than 5,000 cigarettes which are contraband under this 
 38.16  subdivision.  When cigarettes are being transported in the 
 38.17  course of interstate commerce, or are in movement from either a 
 38.18  public warehouse to a distributor upon orders from a 
 38.19  manufacturer or distributor, or from one distributor to another, 
 38.20  the cigarettes are not contraband, notwithstanding the 
 38.21  provisions of clause (1). 
 38.22     (6) All packages obtained in violation of section 297.11, 
 38.23  subdivision 6. 
 38.24     (7) All packages offered for sale or held as inventory in 
 38.25  violation of section 297.11, subdivision 7. 
 38.26     Sec. 2.  Minnesota Statutes 1994, section 297.08, 
 38.27  subdivision 3, is amended to read: 
 38.28     Subd. 3.  [INVENTORY; JUDICIAL DETERMINATION; APPEAL; 
 38.29  DISPOSITION OF SEIZED PROPERTY.] Within two days after the 
 38.30  seizure of any alleged contraband, the person making the seizure 
 38.31  shall deliver an inventory of the property seized to the person 
 38.32  from whom the seizure was made, if known, and file a copy with 
 38.33  the commissioner.  Within ten days after the date of service of 
 38.34  the inventory, the person from whom the property was seized or 
 38.35  any person claiming an ownership or security interest in the 
 38.36  property may file with the commissioner a demand for a judicial 
 39.1   determination of the question as to whether the property was 
 39.2   lawfully subject to seizure and forfeiture.  The commissioner, 
 39.3   within 30 days, shall institute an action in the district court 
 39.4   of the county where the seizure was made to determine the issue 
 39.5   of forfeiture.  The only issue to be decided by the court is 
 39.6   whether the alleged contraband is contraband, as defined in 
 39.7   subdivision 1.  The action shall be brought in the name of the 
 39.8   state and shall be prosecuted by the county attorney or by the 
 39.9   attorney general.  The court shall hear the action without a 
 39.10  jury and shall try and determine the issues of fact and law 
 39.11  involved.  Whenever a judgment of forfeiture is entered, the 
 39.12  commissioner may, unless the judgment is stayed pending an 
 39.13  appeal, either (1) deliver the forfeited property to the 
 39.14  commissioner of human services for use by patients in state 
 39.15  institutions; (2) cause it to be destroyed; or (3) cause it to 
 39.16  be sold at public auction as provided by law.  If a demand for 
 39.17  judicial determination is made and no action is commenced as 
 39.18  provided in this subdivision, the property shall be released by 
 39.19  the commissioner and redelivered to the person entitled to it.  
 39.20  If no demand is made, the property seized shall be deemed 
 39.21  forfeited to the state by operation of law and may be disposed 
 39.22  of by the commissioner as provided where there has been a 
 39.23  judgment of forfeiture.  Whenever the commissioner is satisfied 
 39.24  that any person from whom property is seized under sections 
 39.25  297.01 to 297.13 was acting in good faith and without intent to 
 39.26  evade the tax imposed by sections 297.01 to 297.13, the 
 39.27  commissioner shall release the property seized, without further 
 39.28  legal proceedings. 
 39.29     Sec. 3.  Minnesota Statutes 1994, section 297C.02, 
 39.30  subdivision 2, is amended to read: 
 39.31     Subd. 2.  [FERMENTED MALT BEVERAGES.] There is imposed 
 39.32  on the direct or indirect sale of fermented malt beverages all 
 39.33  fermented malt beverages that are imported, directly or 
 39.34  indirectly sold, or possessed in this state the following excise 
 39.35  tax:  
 39.36     (1) on fermented malt beverages containing not more than 
 40.1   3.2 percent alcohol by weight, $2.40 per barrel of 31 gallons; 
 40.2      (2) on fermented malt beverages containing more than 3.2 
 40.3   percent alcohol by weight, $4.60 per barrel of 31 gallons.  
 40.4      The tax is at a proportional rate for fractions of a barrel 
 40.5   of 31 gallons. 
 40.6      Sec. 4.  Minnesota Statutes 1994, section 297C.07, is 
 40.7   amended to read: 
 40.8      297C.07 [EXCEPTIONS.] 
 40.9      The following are not subject to the excise tax: 
 40.10     (1) Sales by a manufacturer, brewer, or wholesaler for 
 40.11  shipment outside the state in interstate commerce. 
 40.12     (2) Sales of wine for sacramental purposes under section 
 40.13  340A.316. 
 40.14     (3) Fruit juices naturally fermented or beer naturally 
 40.15  brewed in the home for family use. 
 40.16     (4) Malt beverages served by a brewery for on-premise 
 40.17  consumption at no charge, or distributed to brewery employees 
 40.18  for on-premise consumption under a labor contract. 
 40.19     (5) Alcoholic beverages sold to authorized manufacturers of 
 40.20  food products or pharmaceutical firms.  The alcoholic beverage 
 40.21  must be used exclusively in the manufacture of food products or 
 40.22  medicines.  For purposes of this part, "manufacturer" means a 
 40.23  manufacturer of food products intended for sale to wholesalers 
 40.24  or retailers for ultimate sale to the consumer. 
 40.25     (6) Sales to common carriers engaged in interstate 
 40.26  transportation of passengers and qualified approved military 
 40.27  clubs, except as provided in section 297C.17.  
 40.28     (7) Alcoholic beverages sold or transferred between 
 40.29  Minnesota wholesalers.  
 40.30     (8) Sales to a federal agency, that the state of Minnesota 
 40.31  is prohibited from taxing under the constitution or laws of the 
 40.32  United States or under the constitution of Minnesota. 
 40.33     (9) Shipments of wine to Minnesota residents under section 
 40.34  340A.417. 
 40.35     (10) One liter of intoxicating liquor or 288 ounces of malt 
 40.36  liquor per calendar month imported or possessed by a person 
 41.1   entering Minnesota from another state, provided the alcoholic 
 41.2   beverages accompany the person into this state and will not be 
 41.3   offered for sale or used for any commercial purpose. 
 41.4      (11) Four liters of intoxicating liquor or ten quarts (320 
 41.5   ounces) of malt liquor per calendar month imported or possessed 
 41.6   by a person entering Minnesota from a foreign country, provided 
 41.7   the alcoholic beverages accompany the person into this state and 
 41.8   will not be offered for sale or used for any commercial purpose. 
 41.9      (12) The alcoholic beverage contained in 12 or fewer 
 41.10  commemorative bottles per calendar month imported into this 
 41.11  state. 
 41.12     Sec. 5.  [REPEALER.] 
 41.13     Minnesota Statutes 1994, section 297A.212, is repealed.  
 41.14     Sec. 6.  [EFFECTIVE DATE.] 
 41.15     Sections 1 to 5, are effective the day following final 
 41.16  enactment.  
 41.17                             ARTICLE 4
 41.18                     COLLECTIONS AND COMPLIANCE
 41.19     Section 1.  Minnesota Statutes 1994, section 60A.15, 
 41.20  subdivision 12, is amended to read: 
 41.21     Subd. 12.  [OVERPAYMENTS, CLAIMS FOR REFUND.] (1) 
 41.22  [PROCEDURE, TIME LIMIT, APPROPRIATION.] A company who has paid, 
 41.23  voluntarily or otherwise, or from whom there has been collected 
 41.24  an amount of tax for any year in excess of the amount legally 
 41.25  due for that year, may file with the commissioner of revenue a 
 41.26  claim for a refund of the excess.  Except as provided in 
 41.27  subdivision 11, no claim or refund shall be allowed or made 
 41.28  after 3-1/2 years from the date prescribed for filing the return 
 41.29  (plus any extension of time granted for filing the return but 
 41.30  only if filed within the extended time) or after two years from 
 41.31  the date of overpayment, whichever period is longer, unless 
 41.32  before the expiration of the period a claim is filed by the 
 41.33  company the period prescribed in section 289A.40, subdivision 1. 
 41.34  For this purpose, a return or amended return claiming an 
 41.35  overpayment constitutes a claim for refund. 
 41.36     Upon the filing of a claim, the commissioner shall examine 
 42.1   it, shall make and file written findings denying or allowing the 
 42.2   claim in whole or in part, and shall mail a notice thereof to 
 42.3   the company at the address stated upon the return.  If the claim 
 42.4   is allowed in whole or in part, the commissioner shall issue a 
 42.5   certificate for the refundment of the excess paid by the 
 42.6   company, with interest at the rate specified in section 270.76 
 42.7   computed from the date of the payment of the tax until the date 
 42.8   the refund is paid or the credit is made to the company.  The 
 42.9   commissioner of finance shall pay the refund out of the proceeds 
 42.10  of the taxes imposed by this section, as other state moneys are 
 42.11  expended.  As much of the proceeds of the taxes as necessary are 
 42.12  appropriated for that purpose. 
 42.13     (2) [DENIAL OF CLAIM, COURT PROCEEDINGS.] If the claim is 
 42.14  denied in whole or in part, the commissioner shall mail an order 
 42.15  of denial to the company in the manner prescribed in subdivision 
 42.16  8.  An appeal from this order may be taken to the Minnesota tax 
 42.17  court in the manner prescribed in section 271.06, or the company 
 42.18  may commence an action against the commissioner to recover the 
 42.19  denied overpayment.  The action may be brought in the district 
 42.20  court of the district in the county of its principal place of 
 42.21  business, or in the district court for Ramsey county.  The 
 42.22  action in the district court must be commenced within 18 months 
 42.23  following the mailing of the order of denial to the company.  If 
 42.24  a claim for refund is filed by a company and no order of denial 
 42.25  is issued within six months of the filing, the company may 
 42.26  commence an action in the district court as in the case of a 
 42.27  denial, but the action must be commenced within two years of the 
 42.28  date that the claim for refund was filed. 
 42.29     (3) [CONSENT TO EXTEND TIME.] If the commissioner and the 
 42.30  company have, within the periods prescribed in clause (1), 
 42.31  consented in writing to any extension of time for the assessment 
 42.32  of the tax, the period within which a claim for refund may be 
 42.33  filed, or a refund may be made or allowed, if no claim is filed, 
 42.34  shall be the period within which the commissioner and the 
 42.35  company have consented to an extension for the assessment of the 
 42.36  tax and six months thereafter.  The period within which a claim 
 43.1   for refund may be filed shall not expire prior to two years 
 43.2   after the tax was paid. 
 43.3      (4) [OVERPAYMENTS; REFUNDS.] If the amount determined to be 
 43.4   an overpayment exceeds the taxes imposed by this section, the 
 43.5   amount of excess shall be considered an overpayment.  An amount 
 43.6   paid as tax constitutes an overpayment even if in fact there was 
 43.7   no tax liability with respect to which the amount was paid. 
 43.8      Notwithstanding any other provision of law to the contrary, 
 43.9   in the case of any overpayment, the commissioner, within the 
 43.10  applicable period of limitations, shall refund any balance of 
 43.11  more than one dollar to the company if the company requests the 
 43.12  refund. 
 43.13     Sec. 2.  Minnesota Statutes 1994, section 60A.199, 
 43.14  subdivision 8, is amended to read: 
 43.15     Subd. 8.  [REFUND PROCEDURE; TIME LIMIT; APPROPRIATION.] A 
 43.16  licensee which has paid, voluntarily or otherwise, or from which 
 43.17  there was collected an amount of tax for any year in excess of 
 43.18  the amount legally due for that year, may file with the 
 43.19  commissioner of revenue a claim for a refund of the excess. 
 43.20  Except as provided in subdivision 3, no claim or refund shall be 
 43.21  allowed or made after 3-1/2 years from the date prescribed for 
 43.22  filing the return (plus any extension of time granted for filing 
 43.23  the return but only if filed within the extended time) or after 
 43.24  two years from the date of overpayment, whichever period is 
 43.25  longer, unless before the expiration of the period a claim is 
 43.26  filed by the licensee the period prescribed in section 289A.40, 
 43.27  subdivision 1.  For this purpose, a return or amended return 
 43.28  claiming an overpayment constitutes a claim for refund.  
 43.29     Upon the filing of a claim the commissioner shall examine 
 43.30  it, shall make written findings thereon denying or allowing the 
 43.31  claim in whole or in part, and shall mail a notice thereof to 
 43.32  the licensee at the address stated upon the return.  If the 
 43.33  claim is allowed in whole or in part, the commissioner shall 
 43.34  issue a certificate for a refund of the excess paid by the 
 43.35  licensee, with interest at the rate specified in section 270.76 
 43.36  computed from the date of the payment of the tax until the date 
 44.1   the refund is paid or credit is made to the licensee.  The 
 44.2   commissioner of finance shall cause the refund to be paid as 
 44.3   other state moneys are expended.  So much of the proceeds of the 
 44.4   taxes as is necessary are appropriated for that purpose.  
 44.5      Sec. 3.  Minnesota Statutes 1994, section 60A.199, 
 44.6   subdivision 10, is amended to read: 
 44.7      Subd. 10.  [CONSENT TO EXTEND TIME.] If the commissioner 
 44.8   and the licensee have, within the periods prescribed by this 
 44.9   section, consented in writing to any extension of time for the 
 44.10  assessment of the tax, the period within which a claim for 
 44.11  refund may be filed, or a refund may be made or allowed, if no 
 44.12  claim is filed, is the period within which the commissioner and 
 44.13  the licensee have consented to an extension for the assessment 
 44.14  of the tax and six months thereafter, the period within which a 
 44.15  claim for refund may be filed shall not expire prior to two 
 44.16  years after the tax was paid. 
 44.17     Sec. 4.  [270.7002] [PERSONAL LIABILITY FOR FAILURE TO 
 44.18  HONOR A LEVY.] 
 44.19     Subdivision 1.  [SURRENDER OF PROPERTY SUBJECT TO LEVY.] A 
 44.20  person who fails or refuses to surrender property or rights to 
 44.21  property subject to a levy served on the person under section 
 44.22  270.70, 270.7001, or 290.92, subdivision 23, is liable in an 
 44.23  amount equal to the value of the property or rights not 
 44.24  surrendered, or the amount of taxes, penalties, and interest for 
 44.25  the collection of which the levy was made, whichever is less.  A 
 44.26  financial institution need not surrender funds on deposit until 
 44.27  ten days after service of the levy. 
 44.28     Subd. 2.  [PENALTY.] In addition to the personal liability 
 44.29  imposed by subdivision 1, if a person required to surrender 
 44.30  property or rights to property fails to do so without reasonable 
 44.31  cause, the person is liable for a penalty equal to 25 percent of 
 44.32  the amount under subdivision 1. 
 44.33     Subd. 3.  [PERSON DEFINED.] The term "person" as used in 
 44.34  this section includes an officer or employee of a corporation or 
 44.35  a member or employee of a partnership, who as such officer, 
 44.36  employee, or member is under a duty to surrender the property or 
 45.1   rights to property or to respond to the levy. 
 45.2      Subd. 4.  [ORDER ASSESSING LIABILITY.] The liability 
 45.3   imposed by this section may, after demand to honor a levy has 
 45.4   been made, be assessed by the commissioner within 60 days after 
 45.5   service of the demand.  The assessment may be based on 
 45.6   information available to the commissioner.  The assessment is 
 45.7   presumed to be valid, and the burden is on the person assessed 
 45.8   to show it is incorrect or invalid.  An order assessing 
 45.9   liability for failure to honor a levy is reviewable 
 45.10  administratively under section 289A.65, and is appealable to tax 
 45.11  court under chapter 271.  The amount assessed, plus interest at 
 45.12  the rate specified in section 270.75, may be collected by any 
 45.13  remedy available to the commissioner for the collection of 
 45.14  taxes.  The proceeds collected are applied first to the 
 45.15  liability of the original taxpayer to the extent of the 
 45.16  liability under subdivision 1 plus interest, and then to the 
 45.17  penalty under subdivision 2. 
 45.18     Sec. 5.  Minnesota Statutes 1994, section 270.72, 
 45.19  subdivision 1, is amended to read: 
 45.20     Subdivision 1.  [TAX CLEARANCE REQUIRED.] The state or a 
 45.21  political subdivision of the state may not issue, transfer, or 
 45.22  renew, and must revoke, a license for the conduct of a 
 45.23  profession, occupation, trade, or business, if the commissioner 
 45.24  notifies the licensing authority that the applicant owes the 
 45.25  state delinquent taxes, penalties, or interest.  The 
 45.26  commissioner may not notify the licensing authority unless the 
 45.27  applicant taxpayer owes $500 or more in delinquent taxes or has 
 45.28  not filed returns.  If the applicant taxpayer does not owe 
 45.29  delinquent taxes but has not filed returns, the commissioner may 
 45.30  not notify the licensing authority unless the taxpayer has been 
 45.31  given 90 days' written notice to file the returns or show that 
 45.32  the returns are not required to be filed.  A licensing authority 
 45.33  that has received a notice from the commissioner may issue, 
 45.34  transfer, or renew, or not revoke the applicant's license only 
 45.35  if (a) the commissioner issues a tax clearance certificate and 
 45.36  (b) the commissioner or the applicant forwards a copy of the 
 46.1   clearance to the authority.  The commissioner may issue a 
 46.2   clearance certificate only if the applicant does not owe the 
 46.3   state any uncontested delinquent taxes, penalties, or interest 
 46.4   and has filed all required returns. 
 46.5      Sec. 6.  Minnesota Statutes 1994, section 270.72, 
 46.6   subdivision 2, is amended to read: 
 46.7      Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
 46.8   following terms have the meanings given.  
 46.9      (a) "Taxes" are all taxes payable to the commissioner 
 46.10  including penalties and interest due on the taxes. 
 46.11     (b) "Delinquent taxes" do not include a tax liability if 
 46.12  (i) an administrative or court action which contests the amount 
 46.13  or validity of the liability has been filed or served, (ii) the 
 46.14  appeal period to contest the tax liability has not expired, or 
 46.15  (iii) the applicant has entered into a payment agreement and is 
 46.16  current with the payments.  
 46.17     (c) "Applicant" means an individual if the license is 
 46.18  issued to or in the name of an individual or the corporation or 
 46.19  partnership if the license is issued to or in the name of a 
 46.20  corporation or partnership.  "Applicant" also means an officer 
 46.21  of a corporation, a member of a partnership, or an individual 
 46.22  who is liable for delinquent taxes, either for the entity for 
 46.23  which the license is at issue or for another entity for which 
 46.24  the liability was incurred, or personally as a licensee.  In the 
 46.25  case of a license transfer, "applicant" also means both the 
 46.26  transferor and the transferee of the license.  "Applicant" also 
 46.27  means any holder of a license. 
 46.28     (d) "License" includes a contract for space rental at the 
 46.29  Minnesota state fair. 
 46.30     (e) "Licensing authority" includes the Minnesota state fair 
 46.31  board. 
 46.32     Sec. 7.  Minnesota Statutes 1994, section 270.72, 
 46.33  subdivision 3, is amended to read: 
 46.34     Subd. 3.  [NOTICE AND HEARING.] (a) The commissioner, on 
 46.35  notifying a licensing authority pursuant to subdivision 1 not to 
 46.36  issue, transfer, or renew a license, must send a copy of the 
 47.1   notice to the applicant.  If the applicant requests, in writing, 
 47.2   within 30 days of the date of the notice a hearing, a contested 
 47.3   case hearing must be held.  The hearing must be held within 45 
 47.4   days of the date the commissioner refers the case to the office 
 47.5   of administrative hearings.  Notwithstanding any law to the 
 47.6   contrary, the applicant must be served with 20 days' notice in 
 47.7   writing specifying the time and place of the hearing and the 
 47.8   allegations against the applicant.  The notice may be served 
 47.9   personally or by mail.  
 47.10     (b) Prior to notifying a licensing authority pursuant to 
 47.11  subdivision 1 to revoke a license, the commissioner must send a 
 47.12  notice to the applicant of the commissioner's intent to require 
 47.13  revocation of the license and of the applicant's right to a 
 47.14  hearing under paragraph (a).  A license is subject to revocation 
 47.15  when 30 days have passed following the date of the notice in 
 47.16  this paragraph without the applicant requesting a hearing, or, 
 47.17  if a hearing is timely requested, upon final determination of 
 47.18  the hearing under section 14.62, subdivision 1.  A license shall 
 47.19  be revoked by the licensing authority within 30 days after 
 47.20  receiving notice from the commissioner to revoke. 
 47.21     (c) A hearing under this subdivision is in lieu of any 
 47.22  other hearing or proceeding provided by law arising from any 
 47.23  action taken under subdivision 1. 
 47.24     Sec. 8.  [270.721] [REVOCATION OF CORPORATE CERTIFICATES OF 
 47.25  AUTHORITY TO DO BUSINESS IN THIS STATE.] 
 47.26     When a foreign corporation authorized to do business in 
 47.27  this state under chapter 303 fails to comply with any tax laws 
 47.28  administered by the commissioner of revenue, the commissioner 
 47.29  may serve the secretary of state with a certified copy of an 
 47.30  order finding such failure to comply.  The secretary of state, 
 47.31  upon receipt of the order, shall revoke the certificate of 
 47.32  authority of the corporation to do business in this state, and 
 47.33  shall reinstate the certificate under section 303.19 only when 
 47.34  the corporation has obtained from the commissioner an order 
 47.35  finding that the corporation is in compliance with state tax 
 47.36  law.  An order requiring revocation of a certificate shall not 
 48.1   be issued unless the commissioner gives the corporation 30 days' 
 48.2   written notice of the proposed order, specifying the violations 
 48.3   of state tax law, and affording the corporation an opportunity 
 48.4   to request a contested case hearing under chapter 14. 
 48.5      Sec. 9.  Minnesota Statutes 1994, section 270.79, 
 48.6   subdivision 4, is amended to read: 
 48.7      Subd. 4.  [REFUND PROCEDURES.] (a) If the commissioner 
 48.8   determines that the cumulative refunds due all affected 
 48.9   taxpayers will exceed $50,000,000, the refund procedures in this 
 48.10  subdivision apply.  
 48.11     (b) The refunds due shall be paid in five installments 
 48.12  beginning after July 1 of.  The first installment will be paid 
 48.13  during the calendar year following the later of the filing of 
 48.14  the refund claim or the final judicial determination and ending 
 48.15  in the fifth calendar year or at the time that the return for 
 48.16  that calendar year is filed subsequent installments will be paid 
 48.17  at any time during each of the four succeeding calendar years. 
 48.18     (c) The refunds shall be paid in the form of refundable 
 48.19  credits claimed on the tax return for the tax type giving rise 
 48.20  to the refund. 
 48.21     (d) In the case of annual returns the credit allowable must 
 48.22  be claimed on the annual return.  When returns are filed on 
 48.23  other than an annual basis, the allowable credit must be claimed 
 48.24  on the first return due after July 1 of a calendar year The 
 48.25  commissioner shall compute the annual refund installment due 
 48.26  under this subdivision, and notify the taxpayer of the total 
 48.27  amount of the claim for refund which has been allowed. 
 48.28     (e) (d) The credit allowed for installment paid each year 
 48.29  equals 20 percent of the claimed refund allowed unless the 
 48.30  commissioner determines that the cumulative refunds due for a 
 48.31  particular year under this section will exceed $150,000,000.  If 
 48.32  the refunds payable will exceed that amount, the claimed refunds 
 48.33  they will be reduced pro rata with any balance remaining due 
 48.34  payable with the final refund installment. 
 48.35     (f) (e) Unless contrary to the provisions in this section, 
 48.36  the provisions for refunds in the various tax types, including 
 49.1   provisions related to the payment of interest, apply to the 
 49.2   refunds subject to these provisions.  
 49.3      (g) (f) The commissioner may establish a de minimis 
 49.4   individual refund amount below which the installment provisions 
 49.5   do not apply.  The amount established under this paragraph is 
 49.6   not subject to the provisions of chapter 14. 
 49.7      (g) If the commissioner of finance determines that it is in 
 49.8   the best interest of the state, refunds payable under this 
 49.9   section may be paid in fewer than five installments. 
 49.10     Sec. 10.  Minnesota Statutes 1994, section 289A.25, is 
 49.11  amended by adding a subdivision to read: 
 49.12     Subd. 3a.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] (a) If the 
 49.13  aggregate amount of estimated tax payments made during a 
 49.14  calendar year is equal to or exceeds $10,000, all estimated tax 
 49.15  payments in the subsequent calendar year must be paid by means 
 49.16  of a funds transfer as defined in section 336.4A-104, paragraph 
 49.17  (a).  The funds transfer payment date, as defined in section 
 49.18  336.4A-401, must be on or before the date the estimated tax 
 49.19  payment is due.  If the date the estimated tax payment is due is 
 49.20  not a funds transfer business day, as defined in section 
 49.21  336.4A-105, paragraph (a), clause (4), the payment date must be 
 49.22  on or before the funds transfer business day next following the 
 49.23  date the estimated tax payment is due. 
 49.24     (b) All trust companies required to pay tax under section 
 49.25  295.37 who remit estimated tax payments on behalf of trusts must 
 49.26  remit those payments by means of a funds transfer as provided in 
 49.27  paragraph (a), regardless of the aggregate amount of estimated 
 49.28  tax payments made during a calendar year for a trust. 
 49.29     Sec. 11.  Minnesota Statutes 1994, section 289A.26, 
 49.30  subdivision 2a, is amended to read: 
 49.31     Subd. 2a.  [ELECTRONIC FUNDS TRANSFER PAYMENTS.] If the 
 49.32  aggregate amount of estimated tax payments made during a 
 49.33  calendar year is equal to or exceeds $80,000 $20,000, all 
 49.34  estimated tax payments in the subsequent calendar year must be 
 49.35  paid by means of a funds transfer as defined in section 
 49.36  336.4A-104, paragraph (a).  The funds transfer payment date, as 
 50.1   defined in section 336.4A-401, must be on or before the date the 
 50.2   estimated tax payment is due.  If the date the estimated tax 
 50.3   payment is due is not a funds transfer business day, as defined 
 50.4   in section 336.4A-105, paragraph (a), clause (4), the payment 
 50.5   date must be on or before the funds transfer business day next 
 50.6   following the date the estimated tax payment is due. 
 50.7      Sec. 12.  Minnesota Statutes 1994, section 289A.40, 
 50.8   subdivision 1, is amended to read: 
 50.9      Subdivision 1.  [TIME LIMIT; GENERALLY.] Unless otherwise 
 50.10  provided in this chapter, a claim for a refund of an overpayment 
 50.11  of state tax must be filed within 3-1/2 years from the date 
 50.12  prescribed for filing the return, plus any extension of time 
 50.13  granted for filing the return, but only if filed within the 
 50.14  extended time, or two years one year from the time date of an 
 50.15  order assessing tax under section 289A.37, subdivision 1, upon 
 50.16  payment in full of the tax is paid in full, penalties, and 
 50.17  interest shown on the order, whichever period expires 
 50.18  later.  Claims for refund filed after the 3-1/2 year period but 
 50.19  within the one-year period are limited to the amount of the tax, 
 50.20  penalties, and interest on the order and to issues determined by 
 50.21  the order. 
 50.22     Sec. 13.  Minnesota Statutes 1994, section 289A.60, 
 50.23  subdivision 2, is amended to read: 
 50.24     Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
 50.25  a taxpayer fails to make and file a return other than an income 
 50.26  tax return of an individual, a withholding return, or sales or 
 50.27  use tax return, within the time prescribed or an extension, a 
 50.28  penalty is added to the tax.  The penalty is three percent of 
 50.29  the amount of tax not paid on or before the date prescribed for 
 50.30  payment of the tax including any extensions if the failure is 
 50.31  for not more than 30 days, with an additional five percent of 
 50.32  the amount of tax remaining unpaid during each additional 30 
 50.33  days or fraction of 30 days, during which the failure continues, 
 50.34  not exceeding 23 percent in the aggregate. 
 50.35     If a taxpayer fails to file a return, other than an income 
 50.36  tax return of an individual, within 60 days of the date 
 51.1   prescribed for filing of the return (determined with regard to 
 51.2   any extension of time for filing), the addition to tax under 
 51.3   this subdivision must not be less than the lesser of:  (1) $200; 
 51.4   or (2) the greater of (a) 25 percent of the amount required to 
 51.5   be shown as tax on the return without reduction for any payments 
 51.6   made or refundable credits allowable against the tax, or (b) $50.
 51.7      If a taxpayer fails to file an individual income tax return 
 51.8   within six months after the date prescribed for filing of the 
 51.9   return, a penalty of ten percent of the amount of tax not paid 
 51.10  by the end of that six-month period is added to the tax.  
 51.11     If a taxpayer fails to file a withholding or sales or use 
 51.12  tax return within the time prescribed, including an extension, a 
 51.13  penalty of five percent of the amount of tax not timely paid is 
 51.14  added to the tax.  
 51.15     Sec. 14.  Minnesota Statutes 1994, section 290.92, 
 51.16  subdivision 23, is amended to read: 
 51.17     Subd. 23.  [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 
 51.18  (1) The commissioner may, within five years after the date of 
 51.19  assessment of the tax, or if a lien has been filed under section 
 51.20  270.69, within the statutory period for enforcement of the lien, 
 51.21  give notice to any employer deriving income which has a taxable 
 51.22  situs in this state regardless of whether the income is exempt 
 51.23  from taxation, that an employee of that employer is delinquent 
 51.24  in a certain amount with respect to any state taxes, including 
 51.25  penalties, interest, and costs.  The commissioner can proceed 
 51.26  under this subdivision only if the tax is uncontested or if the 
 51.27  time for appeal of the tax has expired.  The commissioner shall 
 51.28  not proceed under this subdivision until the expiration of 30 
 51.29  days after mailing to the taxpayer, at the taxpayer's last known 
 51.30  address, a written notice of (a) the amount of taxes, interest, 
 51.31  and penalties due from the taxpayer and demand for their 
 51.32  payment, and (b) the commissioner's intention to require 
 51.33  additional withholding by the taxpayer's employer pursuant to 
 51.34  this subdivision.  The effect of the notice shall expire 180 
 51.35  days after it has been mailed to the taxpayer provided that the 
 51.36  notice may be renewed by mailing a new notice which is in 
 52.1   accordance with this subdivision.  The renewed notice shall have 
 52.2   the effect of reinstating the priority of the original claim.  
 52.3   The notice to the taxpayer shall be in substantially the same 
 52.4   form as that provided in section 571.72.  The notice shall 
 52.5   further inform the taxpayer of the wage exemptions contained in 
 52.6   section 550.37, subdivision 14.  If no statement of exemption is 
 52.7   received by the commissioner within 30 days from the mailing of 
 52.8   the notice, the commissioner may proceed under this 
 52.9   subdivision.  The notice to the taxpayer's employer may be 
 52.10  served by mail or by delivery by an employee of the department 
 52.11  of revenue and shall be in substantially the same form as 
 52.12  provided in section 571.75.  Upon receipt of notice, the 
 52.13  employer shall withhold from compensation due or to become due 
 52.14  to the employee, the total amount shown by the notice, subject 
 52.15  to the provisions of section 571.922.  The employer shall 
 52.16  continue to withhold each pay period until the notice is 
 52.17  released by the commissioner under section 270.709.  Upon 
 52.18  receipt of notice by the employer, the claim of the state of 
 52.19  Minnesota shall have priority over any subsequent garnishments 
 52.20  or wage assignments.  The commissioner may arrange between the 
 52.21  employer and the employee for withholding a portion of the total 
 52.22  amount due the employee each pay period, until the total amount 
 52.23  shown by the notice plus accrued interest has been withheld.  
 52.24     The "compensation due" any employee is defined in 
 52.25  accordance with the provisions of section 571.921.  The maximum 
 52.26  withholding allowed under this subdivision for any one pay 
 52.27  period shall be decreased by any amounts payable pursuant to a 
 52.28  garnishment action with respect to which the employer was served 
 52.29  prior to being served with the notice of delinquency and any 
 52.30  amounts covered by any irrevocable and previously effective 
 52.31  assignment of wages; the employer shall give notice to the 
 52.32  department of the amounts and the facts relating to such 
 52.33  assignments within ten days after the service of the notice of 
 52.34  delinquency on the form provided by the department of revenue as 
 52.35  noted in this subdivision.  
 52.36     (2) If the employee ceases to be employed by the employer 
 53.1   before the full amount set forth in a notice of delinquency plus 
 53.2   accrued interest has been withheld, the employer shall 
 53.3   immediately notify the commissioner in writing of the 
 53.4   termination date of the employee and the total amount withheld.  
 53.5   No employer may discharge any employee by reason of the fact 
 53.6   that the commissioner has proceeded under this subdivision.  If 
 53.7   an employer discharges an employee in violation of this 
 53.8   provision, the employee shall have the same remedy as provided 
 53.9   in section 571.927, subdivision 2.  
 53.10     (3) Within ten days after the expiration of such pay 
 53.11  period, the employer shall remit to the commissioner, on a form 
 53.12  and in the manner prescribed by the commissioner, the amount 
 53.13  withheld during each pay period under this subdivision.  Should 
 53.14  any employer, after notice, willfully fail to withhold in 
 53.15  accordance with the notice and this subdivision, or willfully 
 53.16  fail to remit any amount withheld as required by this 
 53.17  subdivision, the employer shall be liable for the total amount 
 53.18  set forth in the notice together with accrued interest which may 
 53.19  be collected by any means provided by law relating to taxation.  
 53.20  Any amount collected from the employer for failure to withhold 
 53.21  or for failure to remit under this subdivision shall be credited 
 53.22  to the employee's account in the following manner:  penalties, 
 53.23  interest, tax, and costs.  
 53.24     (4) Clauses (1), (2), and (3), except provisions imposing a 
 53.25  liability on the employer for failure to withhold or remit, 
 53.26  shall apply to cases in which the employer is the United States 
 53.27  or any instrumentality thereof or this state or any municipality 
 53.28  or other subordinate unit thereof.  
 53.29     (5) The commissioner shall refund to the employee excess 
 53.30  amounts withheld from the employee under this subdivision.  If 
 53.31  any excess results from payments by the employer because of 
 53.32  willful failure to withhold or remit as prescribed in clause 
 53.33  (3), the excess attributable to the employer's payment shall be 
 53.34  refunded to the employer.  
 53.35     (6) Employers required to withhold delinquent taxes, 
 53.36  penalties, interest, and costs under this subdivision shall not 
 54.1   be required to compute any additional interest, costs or other 
 54.2   charges to be withheld.  
 54.3      (7) The collection remedy provided to the commissioner by 
 54.4   this subdivision shall have the same legal effect as if it were 
 54.5   a levy made pursuant to section 270.70.  
 54.6      Sec. 15.  Minnesota Statutes 1994, section 294.09, 
 54.7   subdivision 1, is amended to read: 
 54.8      Subdivision 1.  [PROCEDURES; TIME LIMIT.] A company, joint 
 54.9   stock association, copartnership, corporation, or individual who 
 54.10  has paid, voluntarily or otherwise, or from whom there has been 
 54.11  collected (other than by proceedings instituted by the attorney 
 54.12  general under sections 294.06 and 294.08, subdivision 3) an 
 54.13  amount of gross earnings tax for any year in excess of the 
 54.14  amount legally due for that year, may file with the commissioner 
 54.15  of revenue a claim for a refund of such excess.  Except as 
 54.16  provided in subdivision 4, no such claim shall be entertained 
 54.17  unless filed within two years after such tax was paid or 
 54.18  collected, or within 3-1/2 years from the filing of the return, 
 54.19  whichever period is the longer the period prescribed in section 
 54.20  289A.40, subdivision 1.  Upon the filing of a claim the 
 54.21  commissioner shall examine the same and shall make and file 
 54.22  written findings thereon denying or allowing the claim in whole 
 54.23  or in part and shall mail a notice thereof to such company, 
 54.24  joint stock association, copartnership, corporation, or 
 54.25  individual at the address stated upon the return.  If such claim 
 54.26  is allowed in whole or in part, the commissioner shall credit 
 54.27  the amount of the allowance against any tax due the state from 
 54.28  the claimant and for the balance of said allowance, if any, the 
 54.29  commissioner shall issue a certificate for the refundment of the 
 54.30  excess paid.  The commissioner of finance shall cause such 
 54.31  refund to be paid out of the proceeds of the gross earnings 
 54.32  taxes imposed by Minnesota Statutes 1967, chapters 294 and 295 
 54.33  as other state moneys are expended.  So much of the proceeds as 
 54.34  may be necessary are hereby appropriated for that purpose.  Any 
 54.35  allowance so made by the commissioner shall include interest at 
 54.36  the rate specified in section 270.76 computed from the date of 
 55.1   payment or collection of the tax until the date the refund is 
 55.2   paid to the claimant.  
 55.3      Sec. 16.  Minnesota Statutes 1994, section 294.09, 
 55.4   subdivision 4, is amended to read: 
 55.5      Subd. 4.  [CONSENT TO EXTEND TIME.] If the commissioner and 
 55.6   the taxpayer have within the periods prescribed in subdivision 1 
 55.7   consented in writing to any extension of time for the assessment 
 55.8   of the tax under the provisions of section 294.08, subdivision 
 55.9   4, the period within which a claim for refund may be filed, or a 
 55.10  refund may be made or allowed, if no claim is filed, shall be 
 55.11  the period within which the commissioner and the taxpayer have 
 55.12  consented to an extension for the assessment of the tax and six 
 55.13  months thereafter, provided, however, that the period within 
 55.14  which a claim for refund may be filed shall not expire prior to 
 55.15  two years after the tax was paid. 
 55.16     Sec. 17.  Minnesota Statutes 1994, section 297.35, 
 55.17  subdivision 1, is amended to read: 
 55.18     Subdivision 1.  On or before the 18th day of each calendar 
 55.19  month every distributor with a place of business in this state 
 55.20  shall file a return with the commissioner showing the quantity 
 55.21  and wholesale sales price of each tobacco product (1) brought, 
 55.22  or caused to be brought, into this state for sale; and (2) made, 
 55.23  manufactured, or fabricated in this state for sale in this 
 55.24  state, during the preceding calendar month.  Every licensed 
 55.25  distributor outside this state shall in like manner file a 
 55.26  return showing the quantity and wholesale sales price of each 
 55.27  tobacco product shipped or transported to retailers in this 
 55.28  state to be sold by those retailers, during the preceding 
 55.29  calendar month.  Returns shall be made upon forms furnished and 
 55.30  prescribed by the commissioner and shall contain such other 
 55.31  information as the commissioner may require.  Each return shall 
 55.32  be accompanied by a remittance for the full tax liability shown 
 55.33  therein, less 1.5 percent of such liability as compensation to 
 55.34  reimburse the distributor for expenses incurred in the 
 55.35  administration of sections 297.31 to 297.39.  The return for the 
 55.36  May liability and 75 percent of the estimated June liability is 
 56.1   due on the date payment of the tax is due. 
 56.2      A distributor having a liability of $120,000 or more during 
 56.3   a calendar fiscal year ending June 30 must remit all liabilities 
 56.4   in the subsequent fiscal calendar year ending June 30 by means 
 56.5   of a funds transfer as defined in section 336.4A-104, paragraph 
 56.6   (a).  The funds transfer payment date, as defined in section 
 56.7   336.4A-401, must be on or before the date the tax is due.  If 
 56.8   the date the tax is due is not a funds transfer business day, as 
 56.9   defined in section 336.4A-105, paragraph (a), clause (4), the 
 56.10  payment date must be on or before the funds transfer business 
 56.11  day next following the date the tax is due. 
 56.12     Sec. 18.  Minnesota Statutes 1994, section 297.43, 
 56.13  subdivision 2, is amended to read: 
 56.14     Subd. 2.  [PENALTY FOR FAILURE TO FILE.] If a person fails 
 56.15  to make and file a return within the time required under 
 56.16  sections 297.07, 297.23, and 297.35, there shall be added to the 
 56.17  tax five percent of the amount of tax not paid on or before the 
 56.18  date prescribed for payment of the tax.  The amount so added to 
 56.19  any tax under this subdivision and subdivision 1 shall be 
 56.20  collected at the same time and in the same manner and as a part 
 56.21  of the tax and shall bear interest at the rate specified in 
 56.22  section 270.75 from the time the tax should have been paid, 
 56.23  unless the tax has been paid before the discovery of the 
 56.24  negligence, in which case the amount so added shall be collected 
 56.25  in the same manner as the tax. 
 56.26     In the case of a failure to file a return within 60 days of 
 56.27  the date prescribed for filing of the return (determined with 
 56.28  regard to any extension of time for filing), the addition to tax 
 56.29  under this subdivision shall not be less than the lesser of (i) 
 56.30  $200; or (ii) the greater of (a) 25 percent of the amount 
 56.31  required to be shown as tax on the return without reduction for 
 56.32  any payments made or refundable credits allowable against the 
 56.33  tax; or (b) $50.  
 56.34     Sec. 19.  Minnesota Statutes 1994, section 297C.14, 
 56.35  subdivision 2, is amended to read: 
 56.36     Subd. 2.  [PENALTY FOR FAILURE TO FILE.] If a person fails 
 57.1   to make and file a return within the time required by this 
 57.2   chapter or an extension of time, there shall be added to the tax 
 57.3   five percent of the amount of tax not paid on or before the date 
 57.4   prescribed for payment of the tax.  The amount so added to any 
 57.5   tax under subdivisions 1 and 2 shall be collected at the same 
 57.6   time and in the same manner and as a part of the tax and shall 
 57.7   bear interest at the rate specified in section 270.75 from the 
 57.8   time the tax should have been paid, unless the tax has been paid 
 57.9   before the discovery of the negligence, in which case the amount 
 57.10  so added shall be collected in the same manner as the tax. 
 57.11     In the case of a failure to file a return within 60 days of 
 57.12  the date prescribed for filing of the return (determined with 
 57.13  regard to any extension of time for filing), the addition to tax 
 57.14  under this subdivision shall not be less than the lesser of (i) 
 57.15  $200; or (ii) the greater of (a) 25 percent of the amount 
 57.16  required to be shown as tax on the return without reduction for 
 57.17  any payments made or refundable credits allowable against the 
 57.18  tax; or (b) $50.  
 57.19     Sec. 20.  Minnesota Statutes 1994, section 297E.11, 
 57.20  subdivision 4, is amended to read: 
 57.21     Subd. 4.  [TIME LIMIT FOR REFUNDS.] Unless otherwise 
 57.22  provided in this chapter, a claim for a refund of an overpayment 
 57.23  of tax must be filed within 3-1/2 years from the date prescribed 
 57.24  for filing the return, plus any extension of time granted for 
 57.25  filing the return, but only if filed within the extended time, 
 57.26  or two years from the time the tax is paid, whichever period 
 57.27  expires later the period prescribed in section 289A.40, 
 57.28  subdivision 1.  Interest on refunds must be computed at the rate 
 57.29  specified in section 270.76 from the date of payment to the date 
 57.30  the refund is paid or credited.  For purposes of this 
 57.31  subdivision, the date of payment is the later of the date the 
 57.32  tax was finally due or was paid.  
 57.33     Sec. 21.  Minnesota Statutes 1994, section 297E.12, 
 57.34  subdivision 2, is amended to read: 
 57.35     Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
 57.36  a taxpayer fails to make and file a return within the time 
 58.1   prescribed or an extension, a penalty is added to the tax.  The 
 58.2   penalty is five percent of the amount of tax not paid on or 
 58.3   before the date prescribed for payment of the tax. 
 58.4      If a taxpayer fails to file a return within 60 days of the 
 58.5   date prescribed for filing of the return (determined with regard 
 58.6   to any extension of time for filing), the addition to tax under 
 58.7   this subdivision must be at least the lesser of:  (1) $200; or 
 58.8   (2) the greater of (i) 25 percent of the amount required to be 
 58.9   shown as tax on the return without reduction for any payments 
 58.10  made or refundable credits allowable against the tax, or (ii) 
 58.11  $50. 
 58.12     Sec. 22.  Minnesota Statutes 1994, section 299F.26, 
 58.13  subdivision 1, is amended to read: 
 58.14     Subdivision 1.  [PROCEDURE, TIME LIMIT, APPROPRIATION.] A 
 58.15  company which has paid, voluntarily or otherwise, or from which 
 58.16  there was collected an amount of tax for any year in excess of 
 58.17  the amount legally due for that year, may file with the 
 58.18  commissioner of revenue a claim for a refund of the excess.  
 58.19  Except as provided in subdivision 4, no claim or refund shall be 
 58.20  allowed or made after 3-1/2 years from the date prescribed for 
 58.21  filing the return (plus any extension of time granted for filing 
 58.22  the return but only if filed within the extended time) or after 
 58.23  two years from the date of overpayment, whichever period is 
 58.24  longer, unless before the expiration of the period a claim is 
 58.25  filed by the company the period prescribed in section 289A.40, 
 58.26  subdivision 1.  For this purpose a return or amended return 
 58.27  claiming an overpayment constitutes a claim for refund. 
 58.28     Upon the filing of a claim the commissioner shall examine 
 58.29  the same and shall make and file written findings thereon 
 58.30  denying or allowing the claim in whole or in part and shall mail 
 58.31  a notice thereof to the company at the address stated upon the 
 58.32  return.  If such claim is allowed in whole or in part, the 
 58.33  commissioner shall issue a certificate for the refundment of the 
 58.34  excess paid by the company, with interest at the rate specified 
 58.35  in section 270.76 computed from the date of the payment of the 
 58.36  tax until the date the refund is paid or the credit is made to 
 59.1   the company, and the commissioner of finance shall cause the 
 59.2   refund to be paid as other state moneys are expended.  So much 
 59.3   of the proceeds of the taxes as is necessary are appropriated 
 59.4   for that purpose. 
 59.5      Sec. 23.  Minnesota Statutes 1994, section 299F.26, 
 59.6   subdivision 4, is amended to read: 
 59.7      Subd. 4.  [CONSENT TO EXTEND TIME.] If the commissioner and 
 59.8   the company have within the periods prescribed in subdivision 1, 
 59.9   consented in writing to any extension of time for the assessment 
 59.10  of the tax, the period within a claim for refund may be filed, 
 59.11  or a refund may be made or allowed, if no claim is filed, shall 
 59.12  be the period within which the commissioner and the company have 
 59.13  consented to an extension for the assessment of the tax and six 
 59.14  months thereafter, provided, however, that the period within 
 59.15  which a claim for refund may be filed shall not expire prior to 
 59.16  two years after the tax was paid. 
 59.17     Sec. 24.  [REPEALER.] 
 59.18     Minnesota Statutes 1994, sections 270.70, subdivisions 8, 
 59.19  9, and 10; and 297A.38, are repealed. 
 59.20     Sec. 25.  [EFFECTIVE DATE.] 
 59.21     Sections 1, 2, 12, 15, 20, and 22 are effective for claims 
 59.22  for refund which have not been filed as of the day following 
 59.23  final enactment and in which the time period for filing the 
 59.24  claim has not expired under the provisions in effect prior to 
 59.25  the day following final enactment.  The time period for filing 
 59.26  such claims is the time period prescribed in the enacted 
 59.27  sections, or one year after the day following final enactment, 
 59.28  whichever is greater. 
 59.29     Sections 3, 16, and 23, and the provisions in section 1 
 59.30  pertaining to consents to extend time, are effective for 
 59.31  consents to extend time for filing claims for refund entered 
 59.32  into on or after the day following final enactment. 
 59.33     Sections 4, 8, 13, 14, 17 to 19, 21, and 24 are effective 
 59.34  the day following final enactment. 
 59.35     Sections 5 to 7 are effective July 1, 1995. 
 59.36     Section 9 is effective for payments of refunds resulting 
 60.1   from final determinations made on or after April 26, 1994, 
 60.2   including refunds resulting from appeals filed before that date 
 60.3   but finally determined after that date. 
 60.4      Sections 10 and 11 are effective for payments due for tax 
 60.5   years beginning after December 31, 1995. 
 60.6                              ARTICLE 5
 60.7                            MISCELLANEOUS
 60.8      Section 1.  Minnesota Statutes 1994, section 289A.43, is 
 60.9   amended to read: 
 60.10     289A.43 [PROHIBITION OF SUITS TO RESTRAIN ASSESSMENT OR 
 60.11  COLLECTION.] 
 60.12     Except for the express procedures in this chapter, chapters 
 60.13  270 and 271, and any other tax statutes for contesting the 
 60.14  assessment or collection of taxes, penalties, or interest 
 60.15  administered by the commissioner of revenue, and except for an 
 60.16  action challenging the constitutionality of a tax statute on its 
 60.17  face, if it is demonstrated to the court by clear and convincing 
 60.18  evidence that under no circumstances would the commissioner 
 60.19  ultimately prevail and that the taxpayer will suffer irreparable 
 60.20  harm if the relief sought is not granted, no suit to restrain 
 60.21  assessment or collection, including a declaratory judgment 
 60.22  action, can be maintained in any court by any person.  
 60.23     Sec. 2.  [296.041] [ELECTRONICALLY FILED RETURNS OR 
 60.24  REPORTS; SIGNATURES.] 
 60.25     For purposes of this chapter, the name of the taxpayer, the 
 60.26  name of the taxpayer's authorized agent, or the taxpayer's 
 60.27  identification number constitutes a signature when transmitted 
 60.28  as part of the information on returns or reports filed by 
 60.29  electronic means by the taxpayer or at the taxpayer's 
 60.30  direction.  "Electronic means" includes, but is not limited to, 
 60.31  the use of a touch-tone telephone to transmit return or report 
 60.32  information in a manner prescribed by the commissioner. 
 60.33     Sec. 3.  Minnesota Statutes 1994, section 296.12, 
 60.34  subdivision 3, is amended to read: 
 60.35     Subd. 3.  [TAX COLLECTION, REPORTING AND PAYMENT.] (a) For 
 60.36  clear diesel fuel, the tax is imposed on the distributor who 
 61.1   receives the fuel. 
 61.2      (b) For all other special fuels, the tax is imposed on the 
 61.3   distributor, bulk purchaser, or special fuel dealer.  The tax 
 61.4   may be paid upon receipt or sale as follows:  
 61.5      (1) Distributors and special fuel dealers may, subject to 
 61.6   the approval of the commissioner, elect to pay to the 
 61.7   commissioner the special fuel excise tax on all special fuel 
 61.8   delivered or sold into the supply tank of an aircraft or a 
 61.9   licensed motor vehicle.  Under this option an invoice must be 
 61.10  issued at the time of each delivery showing the name and address 
 61.11  of the purchaser, date of sale, number of gallons, price per 
 61.12  gallon and total amount of sale.  A separate sales ticket book 
 61.13  shall be maintained for special fuel sales; and 
 61.14     (2) Bulk purchasers shall report and pay the excise tax on 
 61.15  all special fuel purchased by them for storage, to the 
 61.16  commissioner in the form and manner prescribed by the 
 61.17  commissioner. 
 61.18     (c) Any person delivering special fuel on which the excise 
 61.19  tax has not previously been paid, into the supply tank of an 
 61.20  aircraft or a licensed motor vehicle shall report such delivery 
 61.21  and pay the excise tax on the special fuel so delivered, to the 
 61.22  commissioner. 
 61.23     Sec. 4.  Minnesota Statutes 1994, section 296.12, 
 61.24  subdivision 4, is amended to read: 
 61.25     Subd. 4.  [MONTHLY REPORTS; SHRINKAGE ALLOWANCE.] On or 
 61.26  before the 23rd day of each month, the persons subject to the 
 61.27  provisions of this section shall file in the office of the 
 61.28  commissioner at St. Paul, Minnesota, a report in the following 
 61.29  manner form and manner prescribed by the commissioner.  Reports 
 61.30  shall contain information as follows: 
 61.31     (1) Distributors of clear diesel fuel must file a monthly 
 61.32  tax return with the department listing all purchases or receipts 
 61.33  of clear diesel fuel.  Distributors may be allowed to take a 
 61.34  credit or credits under section 296.14, subdivision 2.  
 61.35     (2) Distributors and dealers of special fuel other than 
 61.36  clear diesel fuel shall report the total number of gallons 
 62.1   delivered to them during the preceding calendar month and shall 
 62.2   pay the special fuel excise tax due thereon to the commissioner. 
 62.3   The invoice must show the true and correct name and address of 
 62.4   the purchaser, and the purchaser's signature.  The report shall 
 62.5   contain such other information as the commissioner may require.  
 62.6      (3) Distributors and dealers of special fuel other than 
 62.7   clear diesel fuel who have elected to pay the special fuel 
 62.8   excise tax on all special fuel delivered into the supply tank of 
 62.9   an aircraft or licensed motor vehicle as provided in subdivision 
 62.10  3, shall report the total number of gallons delivered into the 
 62.11  supply tank of an aircraft or licensed motor vehicle during the 
 62.12  preceding calendar month and shall pay the special fuel excise 
 62.13  tax due thereon to the commissioner.  
 62.14     (4) Bulk purchasers shall report and pay the special fuel 
 62.15  excise tax on all special fuel except clear diesel fuel 
 62.16  purchased by them for storage, during the preceding calendar 
 62.17  month.  In such cases as the commissioner may permit, credit for 
 62.18  the excise tax due or previously paid on special fuel not used 
 62.19  in aircraft or licensed motor vehicles, may be allowed in 
 62.20  computing tax liability.  The report shall contain such other 
 62.21  information as the commissioner may require. 
 62.22     (5) In computing the special fuel excise tax due, a 
 62.23  deduction of one percent of the quantity of special fuel on 
 62.24  which tax is due shall be made for evaporation and loss.  
 62.25     (6) Each report shall contain a confession of judgment for 
 62.26  the amount of the tax shown due thereon to the extent not timely 
 62.27  paid.  
 62.28     Sec. 5.  Minnesota Statutes 1994, section 296.12, 
 62.29  subdivision 11, is amended to read: 
 62.30     Subd. 11.  [QUALIFIED BULK PURCHASERS.] Notwithstanding any 
 62.31  other provision of law to the contrary, the commissioner of 
 62.32  revenue may allow any bulk purchaser who receives special fuel 
 62.33  other than clear diesel fuel in bulk storage for subsequent 
 62.34  delivery into the supply tank of licensed motor vehicles or 
 62.35  aircraft operated by the bulk purchaser to purchase bulk special 
 62.36  fuel on a tax paid basis from any consenting supplier licensed 
 63.1   as a distributor or special fuel dealer under this section or 
 63.2   section 296.06.  Bulk purchasers qualifying under this provision 
 63.3   must become registered in a manner approved by the commissioner 
 63.4   but shall be exempt from the bulk purchaser license 
 63.5   requirements.  Every licensed distributor or special fuel dealer 
 63.6   who sells or delivers special fuel other than clear diesel fuel 
 63.7   on a tax paid basis to persons registered under this provision 
 63.8   must report on or before the 23rd day of each month sales made 
 63.9   during the preceding calendar month and shall pay the special 
 63.10  fuel excise tax due thereon to the commissioner.  The report 
 63.11  shall be in the form and manner prescribed by the commissioner, 
 63.12  and shall contain information as the commissioner may require.  
 63.13     Sec. 6.  Minnesota Statutes 1994, section 296.141, 
 63.14  subdivision 1, is amended to read: 
 63.15     Subdivision 1.  [PAYMENT OF GASOLINE TAX AND PETROLEUM TANK 
 63.16  RELEASE CLEANUP FEE; SHRINKAGE ALLOWANCE.] On or before the 23rd 
 63.17  day of each month, every person who is required to pay a 
 63.18  gasoline tax shall file in the office of with the commissioner 
 63.19  at St. Paul, Minnesota, a report, in a the form and manner 
 63.20  approved by the commissioner, showing the number of gallons of 
 63.21  petroleum products received by the reporter during the preceding 
 63.22  calendar month, and other information the commissioner may 
 63.23  require.  The number of gallons of gasoline must be reported in 
 63.24  United States standard liquid gallons (231 cubic inches), except 
 63.25  that the commissioner may upon written application and for cause 
 63.26  shown permit the distributor to report the number of gallons of 
 63.27  gasoline as corrected to a 60 degree Fahrenheit temperature.  If 
 63.28  the application is granted, all gasoline covered in the 
 63.29  application and allowed by the commissioner must continue to be 
 63.30  reported by the distributor on the adjusted basis for a period 
 63.31  of one year from the date of the granting of the application.  
 63.32  The number of gallons of petroleum products other than gasoline 
 63.33  must be reported as originally invoiced. 
 63.34     Each report must show separately the number of gallons of 
 63.35  aviation gasoline received by the reporter during such calendar 
 63.36  month. 
 64.1      Each report must include the amount of gasoline tax on 
 64.2   gasoline received by the reporter during the preceding month; 
 64.3   provided that in computing the tax a deduction of three percent 
 64.4   of the quantity of gasoline received by a distributor shall be 
 64.5   made for evaporation and loss; provided further that at the time 
 64.6   of reporting, the distributor shall submit satisfactory evidence 
 64.7   that one-third of the three percent deduction has been credited 
 64.8   or paid to dealers on quantities sold to them.  The A written 
 64.9   report is deemed to have been filed as required in this 
 64.10  subdivision if postmarked on or before the 23rd day of the month 
 64.11  in which payable. 
 64.12     Sec. 7.  Minnesota Statutes 1994, section 296.141, 
 64.13  subdivision 2, is amended to read: 
 64.14     Subd. 2.  [INSPECTION FEES.] Persons required to pay an 
 64.15  inspection fee under section 239.101 must file a report.  Each 
 64.16  report must include the amount of inspection fees due on 
 64.17  petroleum products.  The Reports must be filed with the 
 64.18  commissioner in the form and manner the commissioner 
 64.19  prescribes.  A written report is considered filed as required if 
 64.20  postmarked on or before the 23rd day of the month in which 
 64.21  payable. 
 64.22     Sec. 8.  Minnesota Statutes 1994, section 296.141, 
 64.23  subdivision 6, is amended to read: 
 64.24     Subd. 6.  [ON-FARM BULK STORAGE OF GASOLINE OR SPECIAL 
 64.25  FUEL; ETHYL ALCOHOL FOR PERSONAL USE.] Notwithstanding the 
 64.26  provisions of this section, the producer of ethyl alcohol which 
 64.27  is produced for personal use and not for sale in the usual 
 64.28  course of business and a farmer who uses gasoline or any special 
 64.29  fuel on which a tax has not been paid shall report and pay the 
 64.30  tax on all ethyl alcohol, gasoline, or special fuel delivered 
 64.31  into the supply tank of a licensed motor vehicle during the 
 64.32  preceding calendar year.  The tax must be reported in the form 
 64.33  and manner prescribed by the commissioner and paid together with 
 64.34  any refund claim filed by the taxpayer under section 296.18.  If 
 64.35  no refund claim is filed, the tax must be reported and paid 
 64.36  annually by March 15 or more frequently, as the commissioner may 
 65.1   prescribe.  Any producer qualifying under this subdivision is 
 65.2   exempt from the licensing requirements contained in section 
 65.3   296.06, subdivision 1. 
 65.4      Sec. 9.  Minnesota Statutes 1994, section 296.17, 
 65.5   subdivision 1, is amended to read: 
 65.6      Subdivision 1.  [UNREPORTED FUEL.] It shall be the duty of 
 65.7   every distributor, dealer, and person who sells or uses gasoline 
 65.8   manufactured, produced, received, or stored by the distributor, 
 65.9   dealer, or person, and of every person using gasoline in motor 
 65.10  vehicles or special fuel in licensed motor vehicles, if the same 
 65.11  has not been reported or if the tax on account thereof has not 
 65.12  been paid to the commissioner, to report to the commissioner in 
 65.13  the form and manner prescribed by the commissioner, the quantity 
 65.14  of such gasoline so sold or used or such special fuel used, and 
 65.15  such person shall become liable for the payment of the tax.  All 
 65.16  provisions of sections 296.01 to 296.421 relating to the 
 65.17  calculation, collection and payment of the tax shall be 
 65.18  applicable to any such person, dealer or distributor. 
 65.19     Sec. 10.  Minnesota Statutes 1994, section 296.17, 
 65.20  subdivision 3, is amended to read: 
 65.21     Subd. 3.  [REFUNDS ON FUEL USED IN OTHER STATES.] Every 
 65.22  person regularly or habitually operating motor vehicles upon the 
 65.23  public highways of any other state or states and using in said 
 65.24  motor vehicles gasoline or special fuel purchased or obtained in 
 65.25  this state, shall be allowed a credit or refund equal to the tax 
 65.26  on said gasoline or special fuel paid to this state on the 
 65.27  gasoline or special fuel actually used in the other state or 
 65.28  states.  No credit or refund shall be allowed under this 
 65.29  subdivision for taxes paid to any state which imposes a tax upon 
 65.30  gasoline or special fuel purchased or obtained in this state and 
 65.31  used on the highways of such other state, and which does not 
 65.32  allow a similar credit or refund for the tax paid to this state 
 65.33  on gasoline or special fuel purchased or acquired in such other 
 65.34  state and used on the highways of this state.  Every person 
 65.35  claiming a credit or refund under this subdivision shall file a, 
 65.36  claim on a in the form and manner prescribed by the commissioner 
 66.1   or take the credit on a subsequent tax return within one year of 
 66.2   the last day of the month following the end of the quarter when 
 66.3   the overpayment occurred.  
 66.4      Sec. 11.  Minnesota Statutes 1994, section 296.17, 
 66.5   subdivision 5, is amended to read: 
 66.6      Subd. 5.  [UNREPORTED AVIATION GASOLINE.] The provisions of 
 66.7   subdivision 1 do not apply to aviation gasoline.  It shall be 
 66.8   the duty of every distributor, dealer, and person who receives, 
 66.9   sells, stores, or withdraws from storage in this state aviation 
 66.10  gasoline manufactured, produced, received, or stored by the 
 66.11  distributor, dealer, or person, if the same has not been 
 66.12  reported or if a tax provided for in section 296.02 on account 
 66.13  thereof, has not been paid to the commissioner, to report to the 
 66.14  commissioner, in the form and manner prescribed by the 
 66.15  commissioner, the quantity of such gasoline so received, sold, 
 66.16  stored, or withdrawn from storage, and such person shall become 
 66.17  liable for the payment of the tax. 
 66.18     All provisions of sections 296.01 to 296.421 relating to 
 66.19  the calculation, collections, and payment of the tax shall be 
 66.20  applicable to any such person, dealer, or distributor. 
 66.21     Sec. 12.  Minnesota Statutes 1994, section 296.17, 
 66.22  subdivision 11, is amended to read: 
 66.23     Subd. 11.  [MOTOR CARRIER REPORTS.] Every motor carrier 
 66.24  subject to the road tax shall, on or before the last day of 
 66.25  April, July, October, and January, file with the commissioner 
 66.26  such in the form and manner prescribed by the commissioner, 
 66.27  reports of operations during the previous three months as the 
 66.28  commissioner may require, and such other reports from time to 
 66.29  time as the commissioner may deem necessary.  The commissioner 
 66.30  by rule may exempt from the quarterly reporting requirements of 
 66.31  this section those motor carriers whose mileage is all or 
 66.32  substantially all and those motor carriers whose mileage is 
 66.33  minimal within this state, or states with which Minnesota has 
 66.34  reciprocity and require in such instances an annual report 
 66.35  reflecting the operations of the carrier during the previous 
 66.36  year along with payment of any taxes due. 
 67.1      Each report shall contain a confession of judgment for the 
 67.2   amount of the tax shown due thereon to the extent not timely 
 67.3   paid. 
 67.4      Sec. 13.  Minnesota Statutes 1994, section 296.18, 
 67.5   subdivision 1, is amended to read: 
 67.6      Subdivision 1.  [CLAIM; FUEL USED IN OTHER VEHICLES.] Any 
 67.7   person who shall buy and use gasoline for a qualifying purpose 
 67.8   other than use in motor vehicles, snowmobiles except as provided 
 67.9   in clause (2), or motorboats, or special fuel for a qualifying 
 67.10  purpose other than use in licensed motor vehicles, and who shall 
 67.11  have paid the Minnesota excise tax directly or indirectly 
 67.12  through the amount of the tax being included in the price of the 
 67.13  gasoline or special fuel, or otherwise, shall be reimbursed and 
 67.14  repaid the amount of the tax paid upon filing with the 
 67.15  commissioner a signed claim in writing in the form and manner 
 67.16  prescribed by the commissioner, and containing the information 
 67.17  the commissioner shall require and accompanied by the original 
 67.18  invoice thereof.  By signing any such claim which is false or 
 67.19  fraudulent, the applicant shall be subject to the penalties 
 67.20  provided in this section for knowingly making a false claim.  
 67.21  The claim shall set forth the total amount of the gasoline so 
 67.22  purchased and used by the applicant other than in motor 
 67.23  vehicles, or special fuel so purchased and used by the applicant 
 67.24  other than in licensed motor vehicles, and shall state when and 
 67.25  for what purpose it was used.  When a claim contains an error in 
 67.26  computation or preparation, the commissioner is authorized to 
 67.27  adjust the claim in accordance with the evidence shown on the 
 67.28  claim or other information available to the commissioner.  The 
 67.29  commissioner, on being satisfied that the claimant is entitled 
 67.30  to the payments, shall approve the claim and transmit it to the 
 67.31  commissioner of finance.  No repayment shall be made unless the 
 67.32  claim and invoice shall be filed with the commissioner within 
 67.33  one year from the date of the purchase.  The postmark on the 
 67.34  envelope in which the a written claim is mailed shall determine 
 67.35  the its date of filing.  The words "gasoline" or "special fuel" 
 67.36  as used in this subdivision do not include aviation gasoline or 
 68.1   special fuel for aircraft.  Gasoline or special fuel bought and 
 68.2   used for a "qualifying purpose" means: 
 68.3      (1) Gasoline or special fuel used in carrying on a trade or 
 68.4   business, used on a farm situated in Minnesota, and used for a 
 68.5   farming purpose.  "Farm" and "farming purpose" have the meanings 
 68.6   given them in section 6420(c)(2), (3), and (4) of the Internal 
 68.7   Revenue Code of 1986, as amended through December 31, 1988.  
 68.8      (2) Gasoline or special fuel used for off-highway business 
 68.9   use.  "Off-highway business use" means any use by a person in 
 68.10  that person's trade, business, or activity for the production of 
 68.11  income.  "Off-highway business use" includes use of a passenger 
 68.12  snowmobile off the public highways as part of the operations of 
 68.13  a resort as defined in section 157.01, subdivision 1.  
 68.14  "Off-highway business use" does not include use as a fuel in a 
 68.15  motor vehicle which, at the time of use, is registered or is 
 68.16  required to be registered for highway use under the laws of any 
 68.17  state or foreign country.  
 68.18     (3) Gasoline or special fuel placed in the fuel tanks of 
 68.19  new motor vehicles, manufactured in Minnesota, and shipped by 
 68.20  interstate carrier to destinations in other states or foreign 
 68.21  countries. 
 68.22     Sec. 14.  Minnesota Statutes 1994, section 296.18, 
 68.23  subdivision 2, is amended to read: 
 68.24     Subd. 2.  [FAILURE TO USE OR SELL FOR INTENDED PURPOSE; 
 68.25  REPORTS REQUIRED.] (1) Any person who shall buy aviation 
 68.26  gasoline or special fuel for aircraft use and who shall have 
 68.27  paid the excise taxes due thereon directly or indirectly through 
 68.28  the amount of the tax being included in the price thereof, or 
 68.29  otherwise, and shall use said gasoline or special fuel in motor 
 68.30  vehicles or shall knowingly sell it to any person for use in 
 68.31  motor vehicles shall, on or before the twenty-third day of the 
 68.32  month following that in which such gasoline or special fuel was 
 68.33  so used or sold, report the fact of such use or sale to the 
 68.34  commissioner in such form and manner as the commissioner may 
 68.35  prescribe. 
 68.36     (2) Any person who shall buy gasoline other than aviation 
 69.1   gasoline and who shall have paid the motor vehicle gasoline 
 69.2   excise tax directly or indirectly through the amount of the tax 
 69.3   being included in the price of the gasoline, or otherwise, who 
 69.4   shall knowingly sell such gasoline to any person to be used for 
 69.5   the purpose of producing or generating power for propelling 
 69.6   aircraft, or who shall receive, store, or withdraw from storage 
 69.7   such gasoline to be used for that purpose, shall, on or before 
 69.8   the 23rd day of the month following that in which such gasoline 
 69.9   was so sold, stored, or withdrawn from storage, report the fact 
 69.10  of such sale, storage, or withdrawal from storage to the 
 69.11  commissioner in such form and manner as the commissioner may 
 69.12  prescribe. 
 69.13     (3) Any person who shall buy aviation gasoline or special 
 69.14  fuel for aircraft use and who shall have paid the excise taxes 
 69.15  directly or indirectly through the amount of the tax being 
 69.16  included in the price thereof, or otherwise, who shall not use 
 69.17  it in motor vehicles or receive, sell, store, or withdraw it 
 69.18  from storage for the purpose of producing or generating power 
 69.19  for propelling aircraft, shall be reimbursed and repaid the 
 69.20  amount of the tax paid upon filing with the commissioner a 
 69.21  signed claim in writing in such form and containing such 
 69.22  information as the commissioner shall require and accompanied by 
 69.23  the original invoice thereof manner as the commissioner may 
 69.24  prescribe.  By signing any such filing a claim which is false or 
 69.25  fraudulent, the applicant shall be subject to the penalties 
 69.26  provided in section 296.25 for knowingly or willfully making a 
 69.27  false claim.  The claim shall set forth the total amount of the 
 69.28  aviation gasoline or special fuel for aircraft use so purchased 
 69.29  and used by the applicant, and shall state when and for what 
 69.30  purpose it was used.  When a claim contains an error in 
 69.31  computation or preparation, the commissioner is authorized to 
 69.32  adjust the claim in accordance with the evidence shown on the 
 69.33  claim or other information available to the commissioner.  The 
 69.34  commissioner, on being satisfied that the claimant is entitled 
 69.35  to payment, shall approve the claim and transmit it to the 
 69.36  commissioner of finance.  No repayment shall be made unless the 
 70.1   claim and invoice shall be filed with the commissioner within 
 70.2   one year from the date of the purchase.  The postmark on the 
 70.3   envelope in which the a written claim is mailed shall determine 
 70.4   the its date of filing. 
 70.5      Sec. 15.  Minnesota Statutes 1994, section 296.18, 
 70.6   subdivision 5, is amended to read: 
 70.7      Subd. 5.  [GRADUATED REDUCTION-BASIS REFUND CLAIM, 
 70.8   REQUIREMENTS.] Any distributor or other person claiming to be 
 70.9   entitled to any refund provided for in subdivision 4 shall 
 70.10  receive such refund upon filing with the commissioner a verified 
 70.11  claim in such form and manner, and, containing such information, 
 70.12  and accompanied by such invoices or other proof as the 
 70.13  commissioner shall require.  The claim shall set forth, among 
 70.14  other things, the total number of gallons of aviation gasoline 
 70.15  or special fuel for aircraft use upon which the claimant has 
 70.16  directly or indirectly paid the excise tax provided for in 
 70.17  sections 296.02, subdivision 2, or 296.025, subdivision 2, 
 70.18  during the calendar year, which has been received, stored, or 
 70.19  withdrawn from storage by the claimant in this state and not 
 70.20  sold or otherwise disposed of to others.  The commissioner, on 
 70.21  being satisfied that the claimant is entitled to the refund, 
 70.22  shall approve the claim and transmit it to the commissioner of 
 70.23  finance, and it shall be paid as provided for in section 
 70.24  296.421, subdivision 2.  All claims for refunds under this 
 70.25  subdivision shall be made on or before April 15 following the 
 70.26  end of the calendar year for which the refund is claimed.  
 70.27  Claims for aviation gasoline and special fuel tax refund filed 
 70.28  within 15 days beyond the due date prescribed by this 
 70.29  subdivision shall be honored by the commissioner less a penalty 
 70.30  of 25 percent of the amount of the approved claim. 
 70.31     Sec. 16.  [EFFECTIVE DATE.] 
 70.32     Sections 2 to 15 are effective the day following final 
 70.33  enactment. 
 70.34     Section 1 is effective for lawsuits initiated on or after 
 70.35  the day following final enactment.