SF 2424

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 policy and administrative 
  1.3             changes to certain taxes and fees; amending Minnesota 
  1.4             Statutes 1994, sections 103E.611, subdivision 7; 
  1.5             165.08, subdivision 5; 270.102, subdivisions 1, 2, and 
  1.6             3; 270.70, subdivision 2; 273.13, subdivision 23; 
  1.7             290.06, subdivision 2c; 290.091, subdivision 2; 
  1.8             290A.25; 295.51, subdivision 1, and by adding a 
  1.9             subdivision; 295.52, by adding a subdivision; 295.54, 
  1.10            subdivisions 1, 2, and by adding a subdivision; 
  1.11            296.02, subdivision 8; 296.141, subdivision 4; 297.04, 
  1.12            subdivision 9; 297A.09; 297A.25, subdivision 14; 
  1.13            297A.256, subdivision 1; and 458A.32, subdivision 4; 
  1.14            Minnesota Statutes 1995 Supplement, sections 115B.48, 
  1.15            by adding subdivisions; 115B.49, subdivisions 2 and 4; 
  1.16            273.124, subdivision 13; 295.50, subdivisions 3 and 4; 
  1.17            and 295.53, subdivisions 1 and 5; proposing coding for 
  1.18            new law in Minnesota Statutes, chapters 115B; 287; and 
  1.19            297A; repealing Minnesota Statutes 1994, section 
  1.20            295.50, subdivisions 8, 9, 9a, 11, 12, and 12a. 
  1.21  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.22                             ARTICLE 1
  1.23                             INCOME TAX
  1.24     Section 1.  Minnesota Statutes 1994, section 165.08, 
  1.25  subdivision 5, is amended to read: 
  1.26     Subd. 5.  [EXEMPTIONS.] Notwithstanding any other provision 
  1.27  of law to the contrary, the properties, moneys, and other assets 
  1.28  of any joint and independent international authority or 
  1.29  commission created under subdivision 1, all revenues or other 
  1.30  income of any such authority or commission, and all bonds, 
  1.31  certificates of indebtedness, or other obligations issued by any 
  1.32  such authority or commission, and the interest thereon, shall be 
  1.33  exempt from all taxation, licenses, fees, or charges of any kind 
  2.1   imposed by the state or by any county, municipality, political 
  2.2   subdivision, taxing district, or other public agency or body of 
  2.3   the state. 
  2.4      Sec. 2.  Minnesota Statutes 1994, section 290.06, 
  2.5   subdivision 2c, is amended to read: 
  2.6      Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
  2.7   AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
  2.8   married individuals filing joint returns and surviving spouses 
  2.9   as defined in section 2(a) of the Internal Revenue Code must be 
  2.10  computed by applying to their taxable net income the following 
  2.11  schedule of rates: 
  2.12     (1) On the first $19,910, 6 percent; 
  2.13     (2) On all over $19,910, but not over $79,120, 8 percent; 
  2.14     (3) On all over $79,120, 8.5 percent. 
  2.15     Married individuals filing separate returns, estates, and 
  2.16  trusts must compute their income tax by applying the above rates 
  2.17  to their taxable income, except that the income brackets will be 
  2.18  one-half of the above amounts.  
  2.19     (b) The income taxes imposed by this chapter upon unmarried 
  2.20  individuals must be computed by applying to taxable net income 
  2.21  the following schedule of rates: 
  2.22     (1) On the first $13,620, 6 percent; 
  2.23     (2) On all over $13,620, but not over $44,750, 8 percent; 
  2.24     (3) On all over $44,750, 8.5 percent. 
  2.25     (c) The income taxes imposed by this chapter upon unmarried 
  2.26  individuals qualifying as a head of household as defined in 
  2.27  section 2(b) of the Internal Revenue Code must be computed by 
  2.28  applying to taxable net income the following schedule of rates: 
  2.29     (1) On the first $16,770, 6 percent; 
  2.30     (2) On all over $16,770, but not over $67,390, 8 percent; 
  2.31     (3) On all over $67,390, 8.5 percent. 
  2.32     (d) In lieu of a tax computed according to the rates set 
  2.33  forth in this subdivision, the tax of any individual taxpayer 
  2.34  whose taxable net income for the taxable year is less than an 
  2.35  amount determined by the commissioner must be computed in 
  2.36  accordance with tables prepared and issued by the commissioner 
  3.1   of revenue based on income brackets of not more than $100.  The 
  3.2   amount of tax for each bracket shall be computed at the rates 
  3.3   set forth in this subdivision, provided that the commissioner 
  3.4   may disregard a fractional part of a dollar unless it amounts to 
  3.5   50 cents or more, in which case it may be increased to $1. 
  3.6      (e) An individual who is not a Minnesota resident for the 
  3.7   entire year must compute the individual's Minnesota income tax 
  3.8   as provided in this subdivision.  After the application of the 
  3.9   nonrefundable credits provided in this chapter, the tax 
  3.10  liability must then be multiplied by a fraction in which:  
  3.11     (1) The numerator is the individual's Minnesota source 
  3.12  federal adjusted gross income as defined in section 62 of the 
  3.13  Internal Revenue Code increased by the addition required for 
  3.14  interest income from non-Minnesota state and municipal bonds 
  3.15  under section 290.01, subdivision 19a, clause (1), after 
  3.16  applying the allocation and assignability provisions of section 
  3.17  290.081, clause (a), or 290.17; and 
  3.18     (2) the denominator is the individual's federal adjusted 
  3.19  gross income as defined in section 62 of the Internal Revenue 
  3.20  Code of 1986, as amended through April 15, 1995, increased by 
  3.21  the addition required for interest income from non-Minnesota 
  3.22  state and municipal bonds under section 290.01, subdivision 19a, 
  3.23  clause (1). 
  3.24     Sec. 3.  Minnesota Statutes 1994, section 290.091, 
  3.25  subdivision 2, is amended to read: 
  3.26     Subd. 2.  [DEFINITIONS.] For purposes of the tax imposed by 
  3.27  this section, the following terms have the meanings given: 
  3.28     (a) "Alternative minimum taxable income" means the sum of 
  3.29  the following for the taxable year: 
  3.30     (1) the taxpayer's federal alternative minimum taxable 
  3.31  income as defined in section 55(b)(2) of the Internal Revenue 
  3.32  Code; 
  3.33     (2) the taxpayer's itemized deductions allowed in computing 
  3.34  federal alternative minimum taxable income, but excluding the 
  3.35  Minnesota charitable contribution deduction and the medical 
  3.36  expense deduction; 
  4.1      (3) for depletion allowances computed under section 613A(c) 
  4.2   of the Internal Revenue Code, with respect to each property (as 
  4.3   defined in section 614 of the Internal Revenue Code), to the 
  4.4   extent not included in federal alternative minimum taxable 
  4.5   income, the excess of the deduction for depletion allowable 
  4.6   under section 611 of the Internal Revenue Code for the taxable 
  4.7   year over the adjusted basis of the property at the end of the 
  4.8   taxable year (determined without regard to the depletion 
  4.9   deduction for the taxable year); 
  4.10     (4) to the extent not included in federal alternative 
  4.11  minimum taxable income, the amount of the tax preference for 
  4.12  intangible drilling cost under section 57(a)(2) of the Internal 
  4.13  Revenue Code determined without regard to subparagraph (E); 
  4.14     (5) to the extent not included in federal alternative 
  4.15  minimum taxable income, the amount of interest income as 
  4.16  provided by section 290.01, subdivision 19a, clause (1); 
  4.17     less the sum of the amounts determined under the following 
  4.18  clauses (1) to (3): 
  4.19     (1) interest income as defined in section 290.01, 
  4.20  subdivision 19b, clause (1); 
  4.21     (2) an overpayment of state income tax as provided by 
  4.22  section 290.01, subdivision 19b, clause (2), to the extent 
  4.23  included in federal alternative minimum taxable income; and 
  4.24     (3) the amount of investment interest paid or accrued 
  4.25  within the taxable year on indebtedness to the extent that the 
  4.26  amount does not exceed net investment income, as defined in 
  4.27  section 163(d)(4) of the Internal Revenue Code.  Interest does 
  4.28  not include amounts deducted in computing federal adjusted gross 
  4.29  income. 
  4.30     In the case of an estate or trust, alternative minimum 
  4.31  taxable income must be computed as provided in section 59(c) of 
  4.32  the Internal Revenue Code. 
  4.33     (b) "Investment interest" means investment interest as 
  4.34  defined in section 163(d)(3) of the Internal Revenue Code. 
  4.35     (c) "Tentative minimum tax" equals seven percent of 
  4.36  alternative minimum taxable income after subtracting the 
  5.1   exemption amount determined under subdivision 3. 
  5.2      (d) "Regular tax" means the tax that would be imposed under 
  5.3   this chapter (without regard to this section and section 
  5.4   290.032), reduced by the sum of the nonrefundable credits 
  5.5   allowed under this chapter.  
  5.6      (e) "Net minimum tax" means the minimum tax imposed by this 
  5.7   section. 
  5.8      (f) "Minnesota charitable contribution deduction" means a 
  5.9   charitable contribution deduction under section 170 of the 
  5.10  Internal Revenue Code to or for the use of an entity described 
  5.11  in section 290.21, subdivision 3, clauses (a) to (e).  When the 
  5.12  federal deduction for charitable contributions is limited under 
  5.13  section 170(b) of the Internal Revenue Code, the allowable 
  5.14  contributions in the year of contribution are deemed to be first 
  5.15  contributions to entities described in section 290.21, 
  5.16  subdivision 3, clauses (a) to (e). 
  5.17     Sec. 4.  Minnesota Statutes 1994, section 458A.32, 
  5.18  subdivision 4, is amended to read: 
  5.19     Subd. 4.  Revenue bonds of the authority shall be deemed 
  5.20  and treated as instrumentalities of a public government agency; 
  5.21  and as such, together with interest thereon, exempt from 
  5.22  taxation. 
  5.23     Sec. 5.  [EFFECTIVE DATE] 
  5.24     Sections 1 and 4 are effective for income earned after July 
  5.25  1, 1983, in taxable years beginning after December 31, 1982.  
  5.26  Sections 2 and 3 are effective for taxable years beginning after 
  5.27  December 31, 1995. 
  5.28                             ARTICLE 2
  5.29                      SALES AND SPECIAL TAXES
  5.30     Section 1.  Minnesota Statutes 1995 Supplement, section 
  5.31  115B.48, is amended by adding a subdivision to read: 
  5.32     Subd. 7.  [FACILITY.] "Facility" means one or more 
  5.33  buildings or parts of a building and the equipment, 
  5.34  installations, and structures contained in the building, located 
  5.35  on a single site or on contiguous or adjacent sites.  Facility 
  5.36  includes any site or area where a hazardous substance, or a 
  6.1   pollutant or contaminant, has been deposited, stored, disposed 
  6.2   of, or placed, or otherwise comes to be located. 
  6.3      Sec. 2.  Minnesota Statutes 1995 Supplement, section 
  6.4   115B.48, is amended by adding a subdivision to read: 
  6.5      Subd. 8.  [FULL-TIME EQUIVALENCE.] "Full-time equivalence" 
  6.6   means 2,000 hours worked by employees, owners, and others, at 
  6.7   duties related to the drycleaning operation in a drycleaning 
  6.8   facility during a 12-month period beginning July 1 of the 
  6.9   preceding year and running through June 30 of the year in which 
  6.10  the annual registration fee is due.  For those drycleaning 
  6.11  facilities that were in business less than the 12-month period, 
  6.12  full-time equivalence means the total of all of the hours worked 
  6.13  at duties related to the drycleaning operation in the 
  6.14  drycleaning facility, divided by 2,000 and multiplied by a 
  6.15  fraction, the numerator of which is 50 and the denominator of 
  6.16  which is the number of weeks in business during the reporting 
  6.17  period. 
  6.18     Sec. 3.  Minnesota Statutes 1995 Supplement, section 
  6.19  115B.49, subdivision 2, is amended to read: 
  6.20     Subd. 2.  [REVENUE SOURCES.] Revenue from the following 
  6.21  sources must be deposited in the state treasury and credited to 
  6.22  the account: 
  6.23     (1) the proceeds of the fees imposed by subdivision 4; 
  6.24     (2) interest attributable to investment of money in the 
  6.25  account; 
  6.26     (3) penalties and interest collected under subdivision 4, 
  6.27  paragraphs (e) and (f) paragraph (d); and 
  6.28     (4) money received by the commissioner for deposit in the 
  6.29  account in the form of gifts, grants, and appropriations. 
  6.30     Sec. 4.  Minnesota Statutes 1995 Supplement, section 
  6.31  115B.49, subdivision 4, is amended to read: 
  6.32     Subd. 4.  [REGISTRATION; FEES.] (a) The owner or operator 
  6.33  of a drycleaning facility shall register on or before July 1 of 
  6.34  each year with the commissioner of revenue in a manner 
  6.35  prescribed by the commissioner of revenue and pay a registration 
  6.36  fee for the facility.  The amount of the fee is: 
  7.1      (1) $500, for facilities with a full-time equivalence of up 
  7.2   to four full-time equivalent employees fewer than five; 
  7.3      (2) $1,000, for facilities with a full-time equivalence of 
  7.4   five to ten full-time equivalent employees; and 
  7.5      (3) $1,500, for facilities with a full-time equivalence of 
  7.6   more than ten full-time equivalent employees. 
  7.7      (b) A person who sells drycleaning solvents for use by 
  7.8   drycleaning facilities in the state shall collect and remit to 
  7.9   the commissioner of revenue in a manner prescribed by the 
  7.10  commissioner of revenue, on or before the 20th day of the month 
  7.11  following the month in which the sales of drycleaning solvents 
  7.12  are made, a fee of: 
  7.13     (1) $3.50 for each gallon of perchloroethylene sold for use 
  7.14  by drycleaning facilities in the state; and 
  7.15     (2) 70 cents for each gallon of hydrocarbon-based 
  7.16  drycleaning solvent sold for use by drycleaning facilities in 
  7.17  the state. 
  7.18     (c) The commissioner of revenue shall provide each person 
  7.19  who pays a registration fee under paragraph (a) with a receipt.  
  7.20  The receipt or a copy of the receipt must be produced for 
  7.21  inspection at the request of any authorized representative of 
  7.22  the commissioner of revenue. 
  7.23     (d) The commissioner shall, after a public hearing but 
  7.24  notwithstanding section 16A.1285, subdivision 4, annually adjust 
  7.25  the fees in this subdivision as necessary to maintain an 
  7.26  unencumbered balance in the account of at least $1,000,000.  Any 
  7.27  adjustment under this paragraph must be prorated among all the 
  7.28  fees in this subdivision.  Fees adjusted under this paragraph 
  7.29  may not exceed 200 percent of the fees in this subdivision.  The 
  7.30  commissioner shall notify the commissioner of revenue of an 
  7.31  adjustment under this paragraph no later than March 1 of the 
  7.32  year in which the adjustment is to become effective.  The 
  7.33  adjustment is effective for sales of drycleaning solvents made, 
  7.34  and annual registration fees due, beginning on July 1 of the 
  7.35  same year. 
  7.36     (e) An owner of a drycleaning facility who fails to pay a 
  8.1   fee under paragraph (a) when due is subject to a penalty of $50 
  8.2   per facility for each day the fee is not paid. 
  8.3      (f) (d) To enforce this subdivision, the commissioner of 
  8.4   revenue may examine documents, assess and collect fees, conduct 
  8.5   investigations, issue subpoenas, grant extensions to file 
  8.6   returns and pay fees, impose sales and use tax penalties and 
  8.7   interest on the annual registration fee under paragraph (a) and 
  8.8   the monthly fee under paragraph (b), abate penalties and 
  8.9   interest, and administer appeals, in the manner provided in 
  8.10  chapters 270 and 289A.  The penalties and interest imposed on 
  8.11  taxes under chapter 297A apply to the fees imposed under this 
  8.12  subdivision.  Disclosure of data collected by the commissioner 
  8.13  of revenue under this subdivision is governed by chapter 270B. 
  8.14     Sec. 5.  [115B.491] [DRYCLEANING FACILITY USE FEE; 
  8.15  FACILITIES TO FILE RETURN.] 
  8.16     Subdivision 1.  [USE FEE.] A drycleaning facility that 
  8.17  purchases drycleaning solvents for use in Minnesota without 
  8.18  paying the seller of drycleaning solvents the fee under section 
  8.19  115B.49, subdivision 4, paragraph (b), is subject to an 
  8.20  equivalent fee.  Liability for the fee is incurred when 
  8.21  drycleaning solvents are received in Minnesota by the 
  8.22  drycleaning facility. 
  8.23     Subd. 2.  [RETURN REQUIRED.] On or before the 20th of each 
  8.24  calendar month, every drycleaning facility that has purchased 
  8.25  drycleaning solvents for use in this state during the preceding 
  8.26  calendar month, upon which the fee imposed by section 115B.49, 
  8.27  subdivision 4, paragraph (b), has not been paid to the seller of 
  8.28  the drycleaning solvents, shall file a return with the 
  8.29  commissioner of revenue showing the quantity of solvents 
  8.30  purchased and a computation of the fee under section 115B.49, 
  8.31  subdivision 4, paragraph (d).  The fee must accompany the 
  8.32  return.  The return must be made upon a form furnished and 
  8.33  prescribed by the commissioner of revenue and must contain such 
  8.34  other information as the commissioner of revenue may require. 
  8.35     Subd. 3.  [APPLICABILITY.] All of the provisions of section 
  8.36  115B.49, subdivision 4, paragraph (d), apply to this section. 
  9.1      Sec. 6.  [115B.492] [ALLOCATION OF PAYMENT.] 
  9.2      In the discretion of the commissioner of revenue, payments 
  9.3   received for fees may be credited first to the oldest liability 
  9.4   not secured by a judgment or lien.  For liabilities to which 
  9.5   payments are applied, the commissioner of revenue may credit 
  9.6   payments first to penalties, next to interest, and then to the 
  9.7   fee due. 
  9.8      Sec. 7.  Minnesota Statutes 1994, section 297.04, 
  9.9   subdivision 9, is amended to read: 
  9.10     Subd. 9.  [APPLICATION DENIAL; LICENSE SUSPENSION AND 
  9.11  REVOCATION.] (a) The commissioner may revoke, cancel, or suspend 
  9.12  the license or licenses of any distributor or subjobber for 
  9.13  violation of sections 297.01 to 297.13, or any other act 
  9.14  applicable to the sale of cigarettes, or any rule promulgated by 
  9.15  the commissioner, and may also revoke any such license or 
  9.16  licenses of any distributor or subjobber for the violation of 
  9.17  sections 297.31 to 297.39, or any other act applicable to the 
  9.18  sale of tobacco products, or any rule promulgated by the 
  9.19  commissioner in furtherance of sections 297.31 to 297.39.  The 
  9.20  commissioner may revoke, cancel, or suspend the license or 
  9.21  licenses of any distributor or subjobber for violation of 
  9.22  sections 325D.31 to 325D.42.  
  9.23     (b) The department must not issue or renew a license under 
  9.24  this chapter, and may revoke a license under this chapter, if 
  9.25  the applicant or licensee: 
  9.26     (1) owes $500 or more in delinquent taxes as defined in 
  9.27  section 270.72; 
  9.28     (2) after demand, has not filed tax returns required by the 
  9.29  commissioner of revenue; 
  9.30     (3) had a cigarette or tobacco license revoked by the 
  9.31  commissioner of revenue within the past two years; 
  9.32     (4) had a sales and use tax permit revoked by the 
  9.33  commissioner of revenue within the past two years; or 
  9.34     (5) has been convicted of a crime involving cigarettes, 
  9.35  including but not limited to:  selling stolen cigarettes or 
  9.36  tobacco items, receiving stolen cigarettes or tobacco items, or 
 10.1   involvement in the smuggling of cigarettes or tobacco items. 
 10.2      (c) No license shall be revoked, canceled, or suspended 
 10.3   under this chapter, and no application for a license shall be 
 10.4   denied under this chapter, except after 20 days' notice and 
 10.5   specifying the commissioner's allegations against the licensee 
 10.6   or applicant, and the right to request, in writing within 20 
 10.7   days, a contested case hearing by the commissioner as provided 
 10.8   in section 297.09 chapter 14.  If a written request for a 
 10.9   hearing is received by the department of revenue within 20 days 
 10.10  of the date of the initial notice, the hearing must be held 
 10.11  within 45 days after referral to the office of administrative 
 10.12  hearings, and no earlier than 20 days after notice to the 
 10.13  licensee or applicant of the hearing time and place.  A license 
 10.14  is revoked or suspended, and an application is denied, when the 
 10.15  commissioner serves notice of revocation, suspension, or denial 
 10.16  after 20 days have passed following the initial notice under 
 10.17  this paragraph without a request for hearing being made, or if a 
 10.18  hearing is held, after the commissioner serves an order of 
 10.19  revocation, suspension, or denial under section 14.62, 
 10.20  subdivision 1.  All notices under this paragraph may be served 
 10.21  personally or by mail.  
 10.22     Sec. 8.  [297A.023] [REMITTANCE OF AMOUNTS COLLECTED AS 
 10.23  TAXES.] 
 10.24     Any amounts collected, even if erroneously or illegally 
 10.25  collected, from a purchaser under a representation that they are 
 10.26  taxes imposed under chapter 297A are state funds from the time 
 10.27  of collection and must be reported on a return filed with the 
 10.28  commissioner and are not subject to refund without proof that 
 10.29  such amounts have been refunded or credited to the purchaser by 
 10.30  the seller. 
 10.31     Sec. 9.  Minnesota Statutes 1994, section 297A.09, is 
 10.32  amended to read: 
 10.33     297A.09 [PRESUMPTION OF TAX; BURDEN OF PROOF.] 
 10.34     For the purpose of the proper administration of sections 
 10.35  297A.01 to 297A.44 and to prevent evasion of the tax, it shall 
 10.36  be presumed that all gross receipts are subject to the tax until 
 11.1   the contrary is established.  The burden of proving that a sale 
 11.2   is not a sale at retail is upon the person who makes the sale, 
 11.3   but that person may take from the purchaser, at the time the 
 11.4   exempt purchase occurs, an exemption certificate to the effect 
 11.5   that the property purchased is for resale or that the sale is 
 11.6   otherwise exempt from the application of the tax imposed by 
 11.7   sections 297A.01 to 297A.44.  Any person asserting a claim that 
 11.8   certain sales are exempt, who does not have the required 
 11.9   exemption certificates in their possession, shall acquire the 
 11.10  certificates within 60 days after receiving written notice from 
 11.11  the commissioner that the certificates are required.  If the 
 11.12  certificates are not obtained within the 60-day period, the 
 11.13  sales are deemed to be taxable sales under this chapter. 
 11.14     Sec. 10.  Minnesota Statutes 1994, section 297A.25, 
 11.15  subdivision 14, is amended to read: 
 11.16     Subd. 14.  [AIRFLIGHT EQUIPMENT.] The gross receipts from 
 11.17  sales of airflight equipment to, and the storage, use or other 
 11.18  consumption of such property by airline companies taxed under 
 11.19  the provisions of sections 270.071 to 270.079, as defined in 
 11.20  section 270.071, subdivision 4, are exempt.  For purposes of 
 11.21  this subdivision, "airflight equipment" includes airplanes and 
 11.22  parts necessary for the repair and maintenance of such airflight 
 11.23  equipment, and flight simulators, but does not include airplanes 
 11.24  with a gross weight of less than 30,000 pounds that are used on 
 11.25  intermittent or irregularly timed flights. 
 11.26     Sec. 11.  Minnesota Statutes 1994, section 297A.256, 
 11.27  subdivision 1, is amended to read: 
 11.28     Subdivision 1.  [FUNDRAISING SALES BY NONPROFIT GROUPS.] 
 11.29  Notwithstanding the provisions of this chapter, the following 
 11.30  sales made by a "nonprofit organization" are exempt from the 
 11.31  sales and use tax. 
 11.32     (a)(1) All sales made by an organization for fundraising 
 11.33  purposes if that organization exists solely for the purpose of 
 11.34  providing educational or social activities for young people 
 11.35  primarily age 18 and under.  This exemption shall apply only if 
 11.36  the gross annual sales receipts of the organization from 
 12.1   fundraising do not exceed $10,000. 
 12.2      (2) A club, association, or other organization of 
 12.3   elementary or secondary school students organized for the 
 12.4   purpose of carrying on sports, educational, or other 
 12.5   extracurricular activities is a separate organization from the 
 12.6   school district or school for purposes of applying the $10,000 
 12.7   limit.  This paragraph does not apply if the sales are derived 
 12.8   from admission charges or from activities for which the money 
 12.9   must be deposited with the school district treasurer under 
 12.10  section 123.38, subdivision 2, or be recorded in the same manner 
 12.11  as other revenues or expenditures of the school district under 
 12.12  section 123.38, subdivision 2b. 
 12.13     (b) All sales made by an organization for fundraising 
 12.14  purposes if that organization is a senior citizen group or 
 12.15  association of groups that in general limits membership to 
 12.16  persons age 55 or older and is organized and operated 
 12.17  exclusively for pleasure, recreation and other nonprofit 
 12.18  purposes and no part of the net earnings inure to the benefit of 
 12.19  any private shareholders.  This exemption shall apply only if 
 12.20  the gross annual sales receipts of the organization from 
 12.21  fundraising do not exceed $10,000. 
 12.22     (c) The gross receipts from the sales of tangible personal 
 12.23  property at, admission charges for, and sales of food, meals, or 
 12.24  drinks at fundraising events sponsored by a nonprofit 
 12.25  organization when the entire proceeds, except for the necessary 
 12.26  expenses therewith, will be used solely and exclusively for 
 12.27  charitable, religious, or educational purposes.  This exemption 
 12.28  does not apply to admission charges for events involving bingo 
 12.29  or other gambling activities or to charges for use of amusement 
 12.30  devices involving bingo or other gambling activities.  For 
 12.31  purposes of this clause paragraph, a "nonprofit organization" 
 12.32  means any unit of government, corporation, society, association, 
 12.33  foundation, or institution organized and operated for 
 12.34  charitable, religious, educational, civic, fraternal, senior 
 12.35  citizens' or veterans' purposes, no part of the net earnings of 
 12.36  which enures to the benefit of a private individual. 
 13.1      If the profits are not used solely and exclusively for 
 13.2   charitable, religious, or educational purposes, the entire gross 
 13.3   receipts are subject to tax. 
 13.4      Each nonprofit organization shall keep a separate 
 13.5   accounting record, including receipts and disbursements from 
 13.6   each fundraising event.  All deductions from gross receipts must 
 13.7   be documented with receipts and other records.  If records are 
 13.8   not maintained as required, the entire gross receipts are 
 13.9   subject to tax. 
 13.10     The exemption provided by this section paragraph does not 
 13.11  apply to any sale made by or in the name of a nonprofit 
 13.12  corporation as the active or passive agent of a person that is 
 13.13  not a nonprofit corporation. 
 13.14     The exemption for fundraising events under this section 
 13.15  paragraph is limited to no more than 24 days a year.  
 13.16  Fundraising events conducted on premises leased or occupied for 
 13.17  more than four days but less than 30 days do not qualify for 
 13.18  this exemption. 
 13.19     (d) The gross receipts from the sale or use of tickets or 
 13.20  admissions to a golf tournament held in Minnesota are exempt if 
 13.21  the beneficiary of the tournament's net proceeds qualifies as a 
 13.22  tax-exempt organization under section 501(c)(3) of the Internal 
 13.23  Revenue Code, including a tournament conducted on premises 
 13.24  leased or occupied for more than four days. 
 13.25     Sec. 12.  [EFFECTIVE DATE.] 
 13.26     Sections 1 to 11 are effective the day following final 
 13.27  enactment. 
 13.28                             ARTICLE 3
 13.29                            PROPERTY TAX
 13.30     Section 1.  Minnesota Statutes 1994, section 103E.611, 
 13.31  subdivision 7, is amended to read: 
 13.32     Subd. 7.  [COLLECTION AND ENFORCEMENT OF DRAINAGE LIENS.] 
 13.33  The provisions of law that exist relating to the enforcement, 
 13.34  collection of, penalty, and interest provisions relating to real 
 13.35  estate taxes are adopted apply to enforce the payment of 
 13.36  drainage liens.  If there is a default, a penalty may not be 
 14.1   added to an installment of principal and interest, but each 
 14.2   defaulted payment, principal, and interest draws interest from 
 14.3   the date of default until paid at the rate determined by the 
 14.4   state court administrator for judgments under section 549.09.  
 14.5      Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 14.6   273.124, subdivision 13, is amended to read: 
 14.7      Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
 14.8   the homestead requirements under subdivision 1 must file a 
 14.9   homestead application with the county assessor to initially 
 14.10  obtain homestead classification. 
 14.11     (b) On or before January 2, 1993, each county assessor 
 14.12  shall mail a homestead application to the owner of each parcel 
 14.13  of property within the county which was classified as homestead 
 14.14  for the 1992 assessment year.  The format and contents of a 
 14.15  uniform homestead application shall be prescribed by the 
 14.16  commissioner of revenue.  The commissioner shall consult with 
 14.17  the chairs of the house and senate tax committees on the 
 14.18  contents of the homestead application form.  The application 
 14.19  must clearly inform the taxpayer that this application must be 
 14.20  signed by all owners who occupy the property or by the 
 14.21  qualifying relative and returned to the county assessor in order 
 14.22  for the property to continue receiving homestead treatment.  The 
 14.23  envelope containing the homestead application shall clearly 
 14.24  identify its contents and alert the taxpayer of its necessary 
 14.25  immediate response. 
 14.26     (c) Every property owner applying for homestead 
 14.27  classification must furnish to the county assessor the social 
 14.28  security number of each occupant who is listed as an owner of 
 14.29  the property on the deed of record, the name and address of each 
 14.30  owner who does not occupy the property, and the name and social 
 14.31  security number of each owner's spouse who occupies the 
 14.32  property.  The application must be signed by each owner who 
 14.33  occupies the property and by each owner's spouse who occupies 
 14.34  the property, or, in the case of property that qualifies as a 
 14.35  homestead under subdivision 1, paragraph (c), by the qualifying 
 14.36  relative. 
 15.1      If a property owner occupies a homestead, the property 
 15.2   owner's spouse may not claim another property as a homestead 
 15.3   unless the property owner and the property owner's spouse file 
 15.4   with the assessor an affidavit or other proof required by the 
 15.5   assessor stating that the property qualifies as a homestead 
 15.6   under subdivision 1, paragraph (e). 
 15.7      Owners or spouses occupying residences owned by their 
 15.8   spouses and previously occupied with the other spouse, either of 
 15.9   whom fail to include the other spouse's name and social security 
 15.10  number on the homestead application or provide the affidavits or 
 15.11  other proof requested, will be deemed to have elected to receive 
 15.12  only partial homestead treatment of their residence.  The 
 15.13  remainder of the residence will be classified as nonhomestead 
 15.14  residential.  When an owner or spouse's name and social security 
 15.15  number appear on homestead applications for two separate 
 15.16  residences and only one application is signed, the owner or 
 15.17  spouse will be deemed to have elected to homestead the residence 
 15.18  for which the application was signed. 
 15.19     The social security numbers or affidavits or other proofs 
 15.20  of the property owners and spouses are private data on 
 15.21  individuals as defined by section 13.02, subdivision 12, but, 
 15.22  notwithstanding that section, the private data may be disclosed 
 15.23  to the commissioner of revenue, or, for purposes of proceeding 
 15.24  under the revenue recapture act to recover personal property 
 15.25  taxes owing, to the county treasurer. 
 15.26     (d) If residential real estate is occupied and used for 
 15.27  purposes of a homestead by a relative of the owner and qualifies 
 15.28  for a homestead under subdivision 1, paragraph (c), in order for 
 15.29  the property to receive homestead status, a homestead 
 15.30  application must be filed with the assessor.  The social 
 15.31  security number of each relative occupying the property and the 
 15.32  social security number of each owner who is related to an 
 15.33  occupant of the property shall be required on the homestead 
 15.34  application filed under this subdivision.  If a different 
 15.35  relative of the owner subsequently occupies the property, the 
 15.36  owner of the property must notify the assessor within 30 days of 
 16.1   the change in occupancy.  The social security number of a 
 16.2   relative occupying the property is private data on individuals 
 16.3   as defined by section 13.02, subdivision 12, but may be 
 16.4   disclosed to the commissioner of revenue.  
 16.5      (e) The homestead application shall also notify the 
 16.6   property owners that the application filed under this section 
 16.7   will not be mailed annually and that if the property is granted 
 16.8   homestead status for the 1993 assessment, or any assessment year 
 16.9   thereafter, that same property shall remain classified as 
 16.10  homestead until the property is sold or transferred to another 
 16.11  person, or the owners, the spouse of the owner, or the relatives 
 16.12  no longer use the property as their homestead.  Upon the sale or 
 16.13  transfer of the homestead property, a certificate of value must 
 16.14  be timely filed with the county auditor as provided under 
 16.15  section 272.115.  Failure to notify the assessor within 30 days 
 16.16  that the property has been sold, transferred, or that the owner, 
 16.17  the spouse of the owner, or the relative is no longer occupying 
 16.18  the property as a homestead, shall result in the penalty 
 16.19  provided under this subdivision and the property will lose its 
 16.20  current homestead status. 
 16.21     (f) If the homestead application is not returned within 30 
 16.22  days, the county will send a second application to the present 
 16.23  owners of record.  The notice of proposed property taxes 
 16.24  prepared under section 275.065, subdivision 3, shall reflect the 
 16.25  property's classification.  Beginning with assessment year 1993 
 16.26  for all properties, If a homestead application has not been 
 16.27  filed with the county by December 15, the assessor shall 
 16.28  classify the property as nonhomestead for the current assessment 
 16.29  year for taxes payable in the following year, provided that the 
 16.30  owner may be entitled to receive the homestead classification by 
 16.31  proper application under section 375.192. 
 16.32     (g) At the request of the commissioner, each county must 
 16.33  give the commissioner a list that includes the name and social 
 16.34  security number of each property owner and the property owner's 
 16.35  spouse occupying the property, or relative of a property owner, 
 16.36  applying for homestead classification under this subdivision.  
 17.1   The commissioner shall use the information provided on the lists 
 17.2   as appropriate under the law, including for the detection of 
 17.3   improper claims by owners, or relatives of owners, under chapter 
 17.4   290A.  
 17.5      (h) If, in comparing the lists supplied by the counties, 
 17.6   the commissioner finds that a property owner may be claiming a 
 17.7   fraudulent homestead, the commissioner shall notify the 
 17.8   appropriate counties.  Within 90 days of the notification, the 
 17.9   county assessor shall investigate to determine if the homestead 
 17.10  classification was properly claimed.  If the property owner does 
 17.11  not qualify, the county assessor shall notify the county auditor 
 17.12  who will determine the amount of homestead benefits that had 
 17.13  been improperly allowed.  For the purpose of this section, 
 17.14  "homestead benefits" means the tax reduction resulting from the 
 17.15  classification as a homestead under section 273.13, the taconite 
 17.16  homestead credit under section 273.135, and the supplemental 
 17.17  homestead credit under section 273.1391. 
 17.18     The county auditor shall send a notice to persons who 
 17.19  signed the owners of the affected property homestead application 
 17.20  related to the improper homestead, demanding reimbursement of 
 17.21  the homestead benefits plus a penalty equal to 100 percent of 
 17.22  the homestead benefits.  The property owners person notified may 
 17.23  appeal the county's determination by filing a notice of appeal 
 17.24  serving copies of a petition for review with county officials as 
 17.25  provided in section 278.01 and filing proof of service as 
 17.26  provided in section 278.01 with the Minnesota tax court within 
 17.27  60 days of the date of the notice from the 
 17.28  county.  Procedurally, the appeal is governed by the provisions 
 17.29  in chapter 271 which apply to the appeal of a property tax 
 17.30  assessment or levy, but without requiring any prepayment of the 
 17.31  amount in controversy.  If the amount of homestead benefits and 
 17.32  penalty is not paid within 60 days, and if no appeal has been 
 17.33  filed, the county auditor shall certify the amount of taxes and 
 17.34  penalty to the succeeding year's tax list to be collected as 
 17.35  part of the property taxes.  In the case of a manufactured home, 
 17.36  the amount shall be certified to the current year's tax list for 
 18.1   collection county treasurer.  The county treasurer will add 
 18.2   interest to the unpaid homestead benefits and penalty amounts at 
 18.3   the rate provided for delinquent personal property taxes for the 
 18.4   period beginning 60 days after demand for payment was made until 
 18.5   payment.  If the application related to the improperly allowed 
 18.6   homestead was signed by the current owner of the property, the 
 18.7   treasurer may add the total amount of benefits, penalty, 
 18.8   interest, and costs to the real estate taxes otherwise payable 
 18.9   on the property in the following year.  If the application 
 18.10  related to the improperly allowed homestead was not signed by 
 18.11  the current owner of the property, the treasurer may collect the 
 18.12  amounts due under the revenue recapture act in chapter 270A, or 
 18.13  use any of the powers granted in sections 277.20 and 277.21 
 18.14  without exclusion, to enforce payment of the benefits, penalty, 
 18.15  interest, and costs, as if those amounts were delinquent tax 
 18.16  obligations of the occupant who signed the application related 
 18.17  to the improperly allowed homestead.  The treasurer may relieve 
 18.18  a prior owner of personal liability for the benefits, penalty, 
 18.19  interest, and costs, and instead extend those amounts on the tax 
 18.20  lists against the property for taxes payable in the following 
 18.21  year to the extent that the current owner agrees in writing. 
 18.22     (i) Any amount of homestead benefits recovered by the 
 18.23  county from the property owner shall be distributed to the 
 18.24  county, city or town, and school district where the property is 
 18.25  located in the same proportion that each taxing district's levy 
 18.26  was to the total of the three taxing districts' levy for the 
 18.27  current year.  Any amount recovered attributable to taconite 
 18.28  homestead credit shall be transmitted to the St. Louis county 
 18.29  auditor to be deposited in the taconite property tax relief 
 18.30  account.  The total amount of penalty collected must be 
 18.31  deposited in the county general fund. 
 18.32     (j) If a property owner has applied for more than one 
 18.33  homestead and the county assessors cannot determine which 
 18.34  property should be classified as homestead, the county assessors 
 18.35  will refer the information to the commissioner.  The 
 18.36  commissioner shall make the determination and notify the 
 19.1   counties within 60 days. 
 19.2      (k) In addition to lists of homestead properties, the 
 19.3   commissioner may ask the counties to furnish lists of all 
 19.4   properties and the record owners. 
 19.5      Sec. 3.  Minnesota Statutes 1994, section 273.13, 
 19.6   subdivision 23, is amended to read: 
 19.7      Subd. 23.  [CLASS 2.] (a) Class 2a property is agricultural 
 19.8   land including any improvements that is homesteaded.  The market 
 19.9   value of the house and garage and immediately surrounding one 
 19.10  acre of land has the same class rates as class 1a property under 
 19.11  subdivision 22.  The value of the remaining land including 
 19.12  improvements up to $115,000 has a net class rate of .45 percent 
 19.13  of market value and a gross class rate of 1.75 percent of market 
 19.14  value.  The remaining value of class 2a property over $115,000 
 19.15  of market value that does not exceed 320 acres has a net class 
 19.16  rate of one percent of market value, and a gross class rate of 
 19.17  2.25 percent of market value.  The remaining property over the 
 19.18  $115,000 market value in excess of 320 acres has a class rate of 
 19.19  1.5 percent of market value, and a gross class rate of 2.25 
 19.20  percent of market value.  
 19.21     (b) Class 2b property is (1) real estate, rural in 
 19.22  character and used exclusively for growing trees for timber, 
 19.23  lumber, and wood and wood products; (2) real estate that is not 
 19.24  improved with a structure and is used exclusively for growing 
 19.25  trees for timber, lumber, and wood and wood products, if the 
 19.26  owner has participated or is participating in a cost-sharing 
 19.27  program for afforestation, reforestation, or timber stand 
 19.28  improvement on that particular property, administered or 
 19.29  coordinated by the commissioner of natural resources; (3) real 
 19.30  estate that is nonhomestead agricultural land; or (4) a landing 
 19.31  area or public access area of a privately owned public use 
 19.32  airport.  Class 2b property has a net class rate of 1.5 percent 
 19.33  of market value, and a gross class rate of 2.25 percent of 
 19.34  market value.  
 19.35     (c) Agricultural land as used in this section means 
 19.36  contiguous acreage of ten acres or more, primarily used during 
 20.1   the preceding year for agricultural purposes.  Agricultural use 
 20.2   may include pasture, timber, waste, unusable wild land, and land 
 20.3   included in state or federal farm or conservation programs.  
 20.4   "Agricultural purposes" as used in this section means the 
 20.5   raising or cultivation of agricultural products.  Land enrolled 
 20.6   in the Reinvest in Minnesota program under sections 103F.505 to 
 20.7   103F.531 or the federal Conservation Reserve Program as 
 20.8   contained in Public Law Number 99-198, and consisting of a 
 20.9   minimum of ten contiguous acres, shall be classified as 
 20.10  agricultural. 
 20.11     (d) Real estate of less than ten acres used principally for 
 20.12  raising or cultivating agricultural products, shall be 
 20.13  considered as agricultural land, if it is not used primarily for 
 20.14  residential purposes.  
 20.15     (e) The term "agricultural products" as used in this 
 20.16  subdivision includes:  
 20.17     (1) livestock, dairy animals, dairy products, poultry and 
 20.18  poultry products, fur-bearing animals, horticultural and nursery 
 20.19  stock described in sections 18.44 to 18.61, fruit of all kinds, 
 20.20  vegetables, forage, grains, bees, and apiary products by the 
 20.21  owner; 
 20.22     (2) fish bred for sale and consumption if the fish breeding 
 20.23  occurs on land zoned for agricultural use; 
 20.24     (3) the commercial boarding of horses if the boarding is 
 20.25  done in conjunction with raising or cultivating agricultural 
 20.26  products as defined in clause (1); 
 20.27     (4) property which is owned and operated by nonprofit 
 20.28  organizations used for equestrian activities, excluding racing; 
 20.29  and 
 20.30     (5) game birds and waterfowl bred and raised for use on a 
 20.31  shooting preserve licensed under section 97A.115.  
 20.32     (f) If a parcel used for agricultural purposes is also used 
 20.33  for commercial or industrial purposes, including but not limited 
 20.34  to:  
 20.35     (1) wholesale and retail sales; 
 20.36     (2) processing of raw agricultural products or other goods; 
 21.1      (3) warehousing or storage of processed goods; and 
 21.2      (4) office facilities for the support of the activities 
 21.3   enumerated in clauses (1), (2), and (3), 
 21.4   the assessor shall classify the part of the parcel used for 
 21.5   agricultural purposes as class 1b, 2a, or 2b, whichever is 
 21.6   appropriate, and the remainder in the class appropriate to its 
 21.7   use.  The grading, sorting, and packaging of raw agricultural 
 21.8   products for first sale is considered an agricultural purpose.  
 21.9   A greenhouse or other building where horticultural or nursery 
 21.10  products are grown that is also used for the conduct of retail 
 21.11  sales must be classified as agricultural if it is primarily used 
 21.12  for the growing of horticultural or nursery products from seed, 
 21.13  cuttings, or roots and occasionally as a showroom for the retail 
 21.14  sale of those products.  Use of a greenhouse or building only 
 21.15  for the display of already grown horticultural or nursery 
 21.16  products does not qualify as an agricultural purpose.  
 21.17     The assessor shall determine and list separately on the 
 21.18  records the market value of the homestead dwelling and the one 
 21.19  acre of land on which that dwelling is located.  If any farm 
 21.20  buildings or structures are located on this homesteaded acre of 
 21.21  land, their market value shall not be included in this separate 
 21.22  determination.  
 21.23     (g) To qualify for classification under paragraph (b), 
 21.24  clause (4), a privately owned public use airport must be 
 21.25  licensed as a public airport under section 360.018.  For 
 21.26  purposes of paragraph (b), clause (4), "landing area" means that 
 21.27  part of a privately owned public use airport properly cleared, 
 21.28  regularly maintained, and made available to the public for use 
 21.29  by aircraft and includes runways, taxiways, aprons, and sites 
 21.30  upon which are situated landing or navigational aids.  A landing 
 21.31  area also includes land underlying both the primary surface and 
 21.32  the approach surfaces that comply with all of the following:  
 21.33     (i) the land is properly cleared and regularly maintained 
 21.34  for the primary purposes of the landing, taking off, and taxiing 
 21.35  of aircraft; but that portion of the land that contains 
 21.36  facilities for servicing, repair, or maintenance of aircraft is 
 22.1   not included as a landing area; 
 22.2      (ii) the land is part of the airport property; and 
 22.3      (iii) the land is not used for commercial or residential 
 22.4   purposes. 
 22.5   The land contained in a landing area under paragraph (b), clause 
 22.6   (4), must be described and certified by the commissioner of 
 22.7   transportation.  The certification is effective until it is 
 22.8   modified, or until the airport or landing area no longer meets 
 22.9   the requirements of paragraph (b), clause (4).  For purposes of 
 22.10  paragraph (b), clause (4), "public access area" means property 
 22.11  used as an aircraft parking ramp, apron, or storage hangar, or 
 22.12  an arrival and departure building in connection with the airport.
 22.13     Sec. 4.  [287.37] [INVESTIGATIONS AND ASSESSMENTS.] 
 22.14     The commissioner of revenue may investigate and examine 
 22.15  persons and transactions that are subject to this chapter using 
 22.16  the powers and authorities granted in chapters 270 and 289A.  
 22.17  The commissioner may issue orders of assessment under chapter 
 22.18  289A, and enforce collection of unpaid tax or penalty amounts, 
 22.19  including interest, under the authority of chapter 270.  All tax 
 22.20  amounts collected by the commissioner must be apportioned under 
 22.21  section 287.12.  The commissioner's expenses under this section 
 22.22  are not expenses of administration under section 287.33.  All 
 22.23  data and information made available to the commissioner under 
 22.24  this section is public except for investigative data covered by 
 22.25  section 270B.03, subdivision 6. 
 22.26     Sec. 5.  Minnesota Statutes 1994, section 290A.25, is 
 22.27  amended to read: 
 22.28     290A.25 [VERIFICATION OF SOCIAL SECURITY NUMBERS.] 
 22.29     Annually, the commissioner of revenue shall furnish a list 
 22.30  to the county assessor containing the names and social security 
 22.31  numbers of persons who have applied for both homestead 
 22.32  classification under section 273.13 and a property tax refund as 
 22.33  a renter under this chapter.  
 22.34     Within 90 days of the notification, the county assessor 
 22.35  shall investigate to determine if the homestead classification 
 22.36  was improperly claimed.  If the property owner does not qualify, 
 23.1   the county assessor shall notify the county auditor who will 
 23.2   determine the amount of homestead benefits that has been 
 23.3   improperly allowed.  For the purpose of this section, "homestead 
 23.4   benefits" means the tax reduction resulting from the 
 23.5   classification as a homestead under section 273.13, and the 
 23.6   taconite homestead credit under section 273.1391 has the meaning 
 23.7   given in section 273.124, subdivision 13, paragraph (h).  The 
 23.8   county auditor shall send a notice to persons who signed the 
 23.9   owners of homestead application related to the property improper 
 23.10  homestead, demanding reimbursement of the homestead benefits 
 23.11  plus a penalty equal to 100 percent of the homestead benefits.  
 23.12  The property owners persons notified may appeal the county's 
 23.13  determination by filing a notice of appeal with the Minnesota 
 23.14  tax court within 60 days of the date of the notice from the 
 23.15  county as provided in section 273.124, subdivision 13, paragraph 
 23.16  (h). 
 23.17     If the amount of homestead benefits and penalty is not paid 
 23.18  within 60 days, and if no appeal has been filed, the county 
 23.19  auditor shall certify the amount of taxes and penalty to the 
 23.20  succeeding year's tax list to be collected as part of the 
 23.21  property taxes county treasurer.  The county treasurer will add 
 23.22  interest to the unpaid homestead benefits and penalty amounts at 
 23.23  the rate provided for delinquent personal property taxes for the 
 23.24  period beginning 60 days after demand for payment was made until 
 23.25  payment.  If the application related to the improperly allowed 
 23.26  homestead was signed by the current owner of the property, the 
 23.27  treasurer may add the total amount of benefits, penalty, 
 23.28  interest, and costs to the real estate taxes otherwise payable 
 23.29  on the property in the following year.  If the application 
 23.30  related to the improperly allowed homestead was not signed by 
 23.31  the current owner of the property, the treasurer may collect the 
 23.32  amounts due under the revenue recapture act in chapter 270A, or 
 23.33  use any of the powers granted in sections 277.20 and 277.21 
 23.34  without exclusion, to enforce payment of the benefits, penalty, 
 23.35  interest, and costs, as if those amounts were delinquent tax 
 23.36  obligations of the occupant who signed the application related 
 24.1   to the improperly allowed homestead.  The treasurer may relieve 
 24.2   a prior owner of personal liability for the benefits, penalty, 
 24.3   interest, and costs, and instead extend those amounts on the tax 
 24.4   lists against the property for taxes payable in the following 
 24.5   year to the extent that the current owner agrees in writing. 
 24.6      Any amount of homestead benefits recovered by the county 
 24.7   from the property owner shall be distributed to the county, city 
 24.8   or town, and school district where the property is located in 
 24.9   the same proportion that each taxing district's levy was to the 
 24.10  total of the three taxing districts' levy for the current year.  
 24.11  Any amount recovered attributable to taconite homestead credit 
 24.12  shall be transmitted to the St. Louis county auditor to be 
 24.13  deposited in the taconite property tax relief account.  The 
 24.14  total amount of penalty collected must be deposited in the 
 24.15  county general fund. 
 24.16     Sec. 6.  [EFFECTIVE DATE.] 
 24.17     Section 1 is effective for lien amounts first becoming 
 24.18  payable in 1996 and thereafter.  Sections 2 to 5 are effective 
 24.19  the day following final enactment. 
 24.20                             ARTICLE 4
 24.21                           MINNESOTACARE
 24.22     Section 1.  Minnesota Statutes 1995 Supplement, section 
 24.23  295.50, subdivision 3, is amended to read: 
 24.24     Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
 24.25  amounts received in money or otherwise by: 
 24.26     (1) a resident hospital for patient services; 
 24.27     (2) a resident surgical center for patient services; 
 24.28     (3) a nonresident hospital for patient services provided to 
 24.29  patients domiciled in Minnesota; 
 24.30     (4) a nonresident surgical center for patient services 
 24.31  provided to patients domiciled in Minnesota; 
 24.32     (5) a resident health care provider, other than a staff 
 24.33  model health carrier, for patient services; 
 24.34     (6) a nonresident health care provider for patient services 
 24.35  provided to an individual domiciled in Minnesota or patient 
 24.36  services provided in Minnesota; 
 25.1      (7) (4) a wholesale drug distributor for sale or 
 25.2   distribution of legend drugs that are delivered:  (i) to a 
 25.3   Minnesota resident by a wholesale drug distributor who is a 
 25.4   nonresident pharmacy directly, by common carrier, or by mail; or 
 25.5   (ii) in Minnesota by the wholesale drug distributor, by common 
 25.6   carrier, or by mail, unless the legend drugs are delivered to 
 25.7   another wholesale drug distributor who sells legend drugs 
 25.8   exclusively at wholesale.  Legend drugs do not include 
 25.9   nutritional products as defined in Minnesota Rules, part 
 25.10  9505.0325; 
 25.11     (8) (5) a staff model health plan company as gross premiums 
 25.12  for enrollees, copayments, deductibles, coinsurance, and fees 
 25.13  for patient services covered under its contracts with groups and 
 25.14  enrollees; and 
 25.15     (9) (6) a resident pharmacy for medical supplies, 
 25.16  appliances, and equipment; and 
 25.17     (10) a nonresident pharmacy for medical supplies, 
 25.18  appliances, and equipment provided to consumers domiciled in 
 25.19  Minnesota or delivered into Minnesota. 
 25.20     Sec. 2.  Minnesota Statutes 1995 Supplement, section 
 25.21  295.50, subdivision 4, is amended to read: 
 25.22     Subd. 4.  [HEALTH CARE PROVIDER.] (a) "Health care 
 25.23  provider" means: 
 25.24     (1) a person furnishing any or all of the following goods 
 25.25  or services directly to a patient or consumer:  medical, 
 25.26  surgical, optical, visual, dental, hearing, nursing services, 
 25.27  drugs, medical supplies, medical appliances, laboratory, 
 25.28  diagnostic or therapeutic services, or any goods and services 
 25.29  not listed above that qualify for reimbursement under the 
 25.30  medical assistance program provided under chapter 256B.  For 
 25.31  purposes of this clause, "directly to a patient or consumer" 
 25.32  includes goods and services provided in connection with 
 25.33  independent medical examinations under section 65B.56 or other 
 25.34  examinations for purposes of litigation or insurance claims; 
 25.35     (2) a staff model health plan company; or 
 25.36     (3) an ambulance service required to be licensed. 
 26.1      (b) Health care provider does not include hospitals, 
 26.2   nursing homes licensed under chapter 144A or licensed in any 
 26.3   other jurisdiction, pharmacies, surgical centers, bus and 
 26.4   taxicab transportation, or any other providers of transportation 
 26.5   services other than ambulance services required to be licensed, 
 26.6   supervised living facilities for persons with mental retardation 
 26.7   or related conditions, licensed under Minnesota Rules, parts 
 26.8   4665.0100 to 4665.9900, residential care homes licensed under 
 26.9   chapter 144B, board and lodging establishments providing only 
 26.10  custodial services that are licensed under chapter 157 and 
 26.11  registered under section 157.031 to provide supportive services 
 26.12  or health supervision services, adult foster homes as defined in 
 26.13  Minnesota Rules, part 9555.5050 9555.5105, day training and 
 26.14  habilitation services for adults with mental retardation and 
 26.15  related conditions as defined in section 252.41, subdivision 3, 
 26.16  and boarding care homes, as defined in Minnesota Rules, part 
 26.17  4655.0100. 
 26.18     Sec. 3.  Minnesota Statutes 1994, section 295.51, 
 26.19  subdivision 1, is amended to read: 
 26.20     Subdivision 1.  [BUSINESS TRANSACTIONS IN MINNESOTA.] A 
 26.21  hospital, surgical center, pharmacy, or health care provider is 
 26.22  subject to tax under sections 295.50 to 295.58 295.59 if it is 
 26.23  "transacting business in Minnesota."  A hospital, surgical 
 26.24  center, pharmacy, or health care provider is transacting 
 26.25  business in Minnesota only if it: 
 26.26     (1) maintains an office in Minnesota used in the trade or 
 26.27  business of providing patient services or medical supplies, 
 26.28  appliances, or equipment; 
 26.29     (2) has employees, representatives, or independent 
 26.30  contractors conducting business in Minnesota related to the 
 26.31  trade or business of providing patient services or medical 
 26.32  supplies, appliances, or equipment; 
 26.33     (3) regularly provides patient services or medical 
 26.34  supplies, appliances, or equipment to customers that receive the 
 26.35  services in Minnesota; 
 26.36     (4) regularly solicits business from potential customers in 
 27.1   Minnesota.  A hospital, surgical center, pharmacy, or health 
 27.2   care provider is presumed to regularly solicit business within 
 27.3   Minnesota if it receives gross receipts for patient services or 
 27.4   medical supplies, appliances, or equipment from 20 or more 
 27.5   patients domiciled in Minnesota in a calendar year; 
 27.6      (5) regularly performs services outside Minnesota the 
 27.7   benefits of which are consumed in Minnesota; 
 27.8      (6) owns or leases tangible personal or real property 
 27.9   physically located in Minnesota and used in the trade or 
 27.10  business of providing patient services or medical supplies, 
 27.11  appliances, or equipment; or 
 27.12     (7) receives medical assistance payments from the state of 
 27.13  Minnesota. maintains contacts with or presence in the state of 
 27.14  Minnesota sufficient to permit taxation of gross revenues 
 27.15  received for patient services under the United States 
 27.16  Constitution. 
 27.17     Sec. 4.  Minnesota Statutes 1994, section 295.51, is 
 27.18  amended by adding a subdivision to read: 
 27.19     Subd. 1a.  [NEXUS IN MINNESOTA.] A wholesale drug 
 27.20  distributor has nexus in Minnesota if its contacts with or 
 27.21  presence in Minnesota is sufficient to satisfy the requirements 
 27.22  of the United States Constitution. 
 27.23     Sec. 5.  Minnesota Statutes 1994, section 295.52, is 
 27.24  amended by adding a subdivision to read: 
 27.25     Subd. 4a.  [TAX COLLECTION.] A wholesale drug distributor 
 27.26  with nexus in Minnesota, who is not subject to tax under 
 27.27  subdivision 3, on all or a particular transaction, is required 
 27.28  to collect the tax imposed under subdivision 4, from the 
 27.29  purchaser of the drugs and give the purchaser a receipt for the 
 27.30  tax paid.  The tax collected shall be remitted to the 
 27.31  commissioner in the manner prescribed by section 295.55, 
 27.32  subdivision 3. 
 27.33     Sec. 6.  Minnesota Statutes 1995 Supplement, section 
 27.34  295.53, subdivision 1, is amended to read: 
 27.35     Subdivision 1.  [EXEMPTIONS.] (a) The following payments 
 27.36  are excluded from the gross revenues subject to the hospital, 
 28.1   surgical center, or health care provider taxes under sections 
 28.2   295.50 to 295.57: 
 28.3      (1) payments received for services provided under the 
 28.4   Medicare program, including payments received from the 
 28.5   government, and organizations governed by sections 1833 and 1876 
 28.6   of title XVIII of the federal Social Security Act, United States 
 28.7   Code, title 42, section 1395, and enrollee deductibles, 
 28.8   coinsurance, and copayments, whether paid by the Medicare 
 28.9   enrollee or by a Medicare supplemental coverage as defined in 
 28.10  section 62A.011, subdivision 3, clause (10).  Payments for 
 28.11  services not covered by Medicare are taxable; 
 28.12     (2) medical assistance payments including payments received 
 28.13  directly from the government or from a prepaid plan; 
 28.14     (3) payments received for home health care services; 
 28.15     (4) payments received from hospitals or surgical centers 
 28.16  for goods and services on which liability for tax is imposed 
 28.17  under section 295.52 or the source of funds for the payment is 
 28.18  exempt under clause (1), (2), (7), (8), or (10) (9); 
 28.19     (5) payments received from health care providers for goods 
 28.20  and services on which liability for tax is imposed under this 
 28.21  chapter or the source of funds for the payment is exempt under 
 28.22  clause (1), (2), (7), (8), or (10) (9); 
 28.23     (6) amounts paid for legend drugs, other than nutritional 
 28.24  products, to a wholesale drug distributor reduced by 
 28.25  reimbursements received for legend drugs under clauses (1), (2), 
 28.26  (7), and (8); 
 28.27     (7) payments received under the general assistance medical 
 28.28  care program including payments received directly from the 
 28.29  government or from a prepaid plan; 
 28.30     (8) payments received for providing services under the 
 28.31  MinnesotaCare program including payments received directly from 
 28.32  the government or from a prepaid plan and enrollee deductibles, 
 28.33  coinsurance, and copayments.  For purposes of this clause, 
 28.34  coinsurance means the portion of payment that the enrollee is 
 28.35  required to pay for the covered service; 
 28.36     (9) payments received by a resident health care provider or 
 29.1   the wholly owned subsidiary of a resident health care provider 
 29.2   for care provided outside Minnesota to a patient who is not 
 29.3   domiciled in Minnesota; 
 29.4      (10) payments received from the chemical dependency fund 
 29.5   under chapter 254B; 
 29.6      (11) (10) payments received in the nature of charitable 
 29.7   donations that are not designated for providing patient services 
 29.8   to a specific individual or group; 
 29.9      (12) (11) payments received for providing patient services 
 29.10  incurred through a formal program of health care research 
 29.11  conducted in conformity with federal regulations governing 
 29.12  research on human subjects.  Payments received from patients or 
 29.13  from other persons paying on behalf of the patients are subject 
 29.14  to tax; 
 29.15     (13) (12) payments received from any governmental agency 
 29.16  for services benefiting the public, not including payments made 
 29.17  by the government in its capacity as an employer or insurer; 
 29.18     (14) (13) payments received for services provided by 
 29.19  community residential mental health facilities licensed under 
 29.20  Minnesota Rules, parts 9520.0500 to 9520.0690, community support 
 29.21  programs and family community support programs approved under 
 29.22  Minnesota Rules, parts 9535.1700 to 9535.1760, and community 
 29.23  mental health centers as defined in section 245.62, subdivision 
 29.24  2; 
 29.25     (15) (14) government payments received by a regional 
 29.26  treatment center; 
 29.27     (16) (15) payments received for hospice care services; 
 29.28     (17) (16) payments received by a resident health care 
 29.29  provider or the wholly owned subsidiary of a resident health 
 29.30  care provider for medical supplies, appliances and equipment 
 29.31  delivered outside of Minnesota; 
 29.32     (18) (17) payments received by a post-secondary educational 
 29.33  institution from student tuition, student activity fees, health 
 29.34  care service fees, government appropriations, donations, or 
 29.35  grants.  Fee for service payments and payments for extended 
 29.36  coverage are taxable; and 
 30.1      (19) (18) payments received for services provided by:  
 30.2   assisted living programs and congregate housing programs. 
 30.3      (b) Payments received by wholesale drug distributors for 
 30.4   prescription drugs sold directly to veterinarians or veterinary 
 30.5   bulk purchasing organizations are excluded from the gross 
 30.6   revenues subject to the wholesale drug distributor tax under 
 30.7   sections 295.50 to 295.59. 
 30.8      Sec. 7.  Minnesota Statutes 1995 Supplement, section 
 30.9   295.53, subdivision 5, is amended to read: 
 30.10     Subd. 5.  [EXEMPTIONS FOR PHARMACIES.] (a) Pharmacies may 
 30.11  exclude from their gross revenues subject to tax payments for 
 30.12  medical supplies, appliances, and devices that are exempt under 
 30.13  subdivision 1, clauses (1), (2), (4), (5), (7), (8), and 
 30.14  (13) (12). 
 30.15     (b) Resident Pharmacies may exclude from their gross 
 30.16  revenues subject to tax payments received for medical supplies, 
 30.17  appliances, and equipment delivered outside of Minnesota. 
 30.18     Sec. 8.  Minnesota Statutes 1994, section 295.54, 
 30.19  subdivision 1, is amended to read: 
 30.20     Subdivision 1.  [TAXES PAID TO ANOTHER STATE.] A resident 
 30.21  hospital, resident surgical center, pharmacy, or resident health 
 30.22  care provider who is liable for that has paid taxes payable to 
 30.23  another state or province or territory of Canada measured by 
 30.24  gross receipts revenues and is subject to tax under section 
 30.25  sections 295.52 to 295.59 on the same gross revenues is entitled 
 30.26  to a credit for the tax legally due and paid to another state or 
 30.27  province or territory of Canada to the extent of the lesser of 
 30.28  (1) the tax actually paid to the other state or province or 
 30.29  territory of Canada, or (2) the amount of tax imposed by 
 30.30  Minnesota on the gross receipts revenues subject to tax in the 
 30.31  other taxing jurisdictions. 
 30.32     Sec. 9.  Minnesota Statutes 1994, section 295.54, 
 30.33  subdivision 2, is amended to read: 
 30.34     Subd. 2.  [PHARMACY CREDIT.] A resident pharmacy may claim 
 30.35  a quarterly credit against the total amount of tax the pharmacy 
 30.36  owes during that quarter under section 295.52, subdivision 1b, 
 31.1   as provided in this subdivision.  The credit shall equal two 
 31.2   percent of the amount paid by the pharmacy to a wholesale drug 
 31.3   distributor subject to tax under section 295.52, subdivision 3, 
 31.4   for legend drugs delivered by the pharmacy outside of Minnesota. 
 31.5   If the amount of the credit exceeds the tax liability of the 
 31.6   pharmacy under section 295.52, subdivision 1b, the commissioner 
 31.7   shall provide the pharmacy with a refund equal to the excess 
 31.8   amount. 
 31.9      Sec. 10.  Minnesota Statutes 1994, section 295.54, is 
 31.10  amended by adding a subdivision to read: 
 31.11     Subd. 3.  [WHOLESALE DRUG DISTRIBUTOR CREDIT.] A wholesale 
 31.12  drug distributor who has paid taxes to another state or province 
 31.13  or territory of Canada measured by gross revenues or sales and 
 31.14  is subject to tax under sections 295.52 to 295.59 on the same 
 31.15  gross revenues or sales is entitled to a credit for the tax 
 31.16  legally due and paid to another state or province or territory 
 31.17  of Canada to the extent of the lesser of (1) the tax actually 
 31.18  paid to the other state or province or territory of Canada or 
 31.19  (2) the amount of tax imposed by Minnesota on the gross revenues 
 31.20  or sales subject to tax in the other taxing jurisdictions. 
 31.21     Sec. 11.  [REPEALER.] 
 31.22     Minnesota Statutes 1994, section 295.50, subdivisions 8, 9, 
 31.23  9a, 11, 12, and 12a, are repealed.  
 31.24     Sec. 12.  [EFFECTIVE DATES.] 
 31.25     Sections 1, 3, 6 to 9, and 11 are effective the day 
 31.26  following final enactment. 
 31.27     Sections 4, 5, and 10 are effective for tax periods 
 31.28  beginning on or after January 1, 1997. 
 31.29                             ARTICLE 5 
 31.30                           MISCELLANEOUS
 31.31     Section 1.  Minnesota Statutes 1994, section 270.102, 
 31.32  subdivision 1, is amended to read: 
 31.33     Subdivision 1.  [DEFINITIONS.] (a) The following terms used 
 31.34  in this section have the following meanings. 
 31.35     (b) "Successor" means a person who directly or indirectly 
 31.36  purchases, acquires, is gifted, or succeeds to the business or 
 32.1   stock of goods of any person quitting, selling, or otherwise 
 32.2   disposing of a business or stock of goods.  Successor does not 
 32.3   include a personal representative or beneficiary of an estate, a 
 32.4   trustee in bankruptcy, a debtor in possession, a receiver, a 
 32.5   secured party, a mortgagee, an assignee of rents, or any other 
 32.6   lienholder.  
 32.7      (c) "Person" means an individual, partnership, corporation, 
 32.8   sole proprietorship, joint venture, limited liability company, 
 32.9   or any other type of business entity or association.  
 32.10     (d) "Withhold" means setting aside money or dealing with 
 32.11  the payment of consideration in a manner that denies a 
 32.12  transferring business the benefit of the transfer in an amount 
 32.13  equal to the sales and withholding tax liability of the 
 32.14  transferring business.  
 32.15     (e) "Purchase price" means the consideration paid or to be 
 32.16  paid for the transfer by the successor to the transferring 
 32.17  business, and includes amounts paid for tangible property or 
 32.18  intangibles such as leases, licenses, or goodwill.  Purchase 
 32.19  price also includes debts assumed or forgiven by the successor, 
 32.20  or real or personal property conveyed or to be conveyed by the 
 32.21  successor to the transferring business.  
 32.22     (f) "Arm's length transaction" means a transfer for 
 32.23  adequate consideration between independent parties both acting 
 32.24  in their own best interests.  If the parties are related to each 
 32.25  other, a rebuttable presumption arises that the transaction is 
 32.26  not at arm's length.  
 32.27     (g) "Transfer" means every mode, direct or indirect, 
 32.28  absolute or conditional, voluntary or involuntary, of disposing 
 32.29  of or parting with a business or an interest in a business, or a 
 32.30  stock of goods, whether by gift or for consideration.  Transfer 
 32.31  includes a change in the type of business entity or the name of 
 32.32  the business, where one business is discontinued and a new one 
 32.33  started.  Transfer also includes the acquisition by a new 
 32.34  corporation of the assets of a prior business in exchange for 
 32.35  the stock of the new corporation.  Transfer does not include an 
 32.36  assignment for the benefit of creditors, foreclosure or 
 33.1   enforcement of a mortgage, assignment of rents, security 
 33.2   interest or lien, sale or disposition in a bankruptcy 
 33.3   proceeding, or sale or disposition by a receiver. 
 33.4      (h) "Transfer in bulk" means a transfer, other than in the 
 33.5   ordinary course of the transferor's trade or business, of more 
 33.6   than one-half of all the property of a business at all locations 
 33.7   combined, as measured by the value of the property at the time 
 33.8   of the transfer. 
 33.9      Sec. 2.  Minnesota Statutes 1994, section 270.102, 
 33.10  subdivision 2, is amended to read: 
 33.11     Subd. 2.  [BULK TRANSFERS; LIABILITY OF SUCCESSOR; LIEN.] 
 33.12  (a) Whenever a business transfers in bulk to a successor all or 
 33.13  any part of the business assets, other than in the ordinary 
 33.14  course of business, and a an enforceable lien for unpaid sales 
 33.15  and withholding taxes has been filed against the business by the 
 33.16  commissioner under section 270.69 in the office of the secretary 
 33.17  of state or in the office of the county recorder for the county 
 33.18  in which the business is located, at least 20 days before taking 
 33.19  possession of the assets or paying the purchase price, the 
 33.20  successor shall notify the commissioner of the transfer and the 
 33.21  terms and conditions related to it.  The notice must include the 
 33.22  tax identification number of the transferring business.  If an 
 33.23  agreement to transfer has been entered into, this notice 
 33.24  requirement only applies:  (1) if a lien described under this 
 33.25  paragraph has been filed prior to the date of the agreement; or 
 33.26  (2) if the date of the transfer is more than 30 days after the 
 33.27  date of the agreement, and a lien described under this paragraph 
 33.28  is filed at least 30 days prior to the date of transfer. 
 33.29     (b) If the successor fails to give the notice required in 
 33.30  paragraph (a), the successor is liable for any unpaid sales and 
 33.31  withholding taxes, interest, and penalties due from the 
 33.32  transferring business to the extent of the purchase price.  If 
 33.33  the successor provides the notice required in paragraph (a) and, 
 33.34  within 20 days after receipt of the notice, the commissioner 
 33.35  notifies the successor that tax liabilities exist in addition to 
 33.36  those included on the lien or there are sales and withholding 
 34.1   tax returns due but not filed, the successor is, in addition to 
 34.2   being liable for the amounts included on the lien, liable for 
 34.3   all other uncontested sales and withholding taxes, interest, and 
 34.4   penalties as stated in the commissioner's notice from the 
 34.5   transferring business to the extent of the purchase price if the 
 34.6   successor pays the purchase price or takes possession of the 
 34.7   assets without withholding and remitting the liability to the 
 34.8   commissioner.  The successor is liable whether the purchase 
 34.9   price is paid or the assets are transferred prior to or after 
 34.10  notification from the commissioner.  The commissioner may also 
 34.11  notify the successor that there are no sales or withholding tax 
 34.12  liabilities or returns due from the transferring business other 
 34.13  than the liabilities included on the lien, and of the current 
 34.14  balance due to satisfy the lien. 
 34.15     (c) The commissioner shall have a first priority lien for 
 34.16  all consideration paid or to be paid toward the purchase price 
 34.17  when the requirements of this section have not been met.  
 34.18     (d) If, based upon the information available, the 
 34.19  commissioner determines that a transfer was not at arm's length 
 34.20  or was a gift, the successor's liability under this section 
 34.21  equals the value of the assets transferred.  For purposes of 
 34.22  imposing the liability, the value of the property transferred is 
 34.23  presumed, subject to rebuttal, to equal the unpaid sales and 
 34.24  withholding taxes, interest, and penalties of the transferring 
 34.25  business. 
 34.26     (e) (d) In the case of a gift resulting in successor 
 34.27  liability under this section, return of the gifted property by 
 34.28  the donee to the donor releases the donee's successor liability. 
 34.29     (f) The liability imposed by this section does not include 
 34.30  assignments for the benefit of creditors under chapter 577, 
 34.31  foreclosures of mortgages under chapters 580 to 582 or of 
 34.32  security interests arising under article 9 of the Uniform 
 34.33  Commercial Code, or sales by trustees in bankruptcy.  
 34.34     (g) (e) A successor who complies with the requirements of 
 34.35  paragraphs (a) and (b) is not liable for any assessments of 
 34.36  sales and withholding taxes of the transferring business made 
 35.1   after the commissioner provides notice to the successor under 
 35.2   paragraph (b), except for taxes assessed on returns filed to 
 35.3   comply with the notice.  If the commissioner fails to provide 
 35.4   the notice and the 20-day period expires, the successor is not 
 35.5   liable for any sales and withholding taxes of the transferring 
 35.6   business other than those included on the lien.  
 35.7      Sec. 3.  Minnesota Statutes 1994, section 270.102, 
 35.8   subdivision 3, is amended to read: 
 35.9      Subd. 3.  [ASSESSMENT PROCEDURE; NO STAY ON COLLECTION 
 35.10  REMEDIES.] The commissioner may assess liability under this 
 35.11  section within the time prescribed for collecting the underlying 
 35.12  sales and withholding taxes, interest, and penalties.  The 
 35.13  assessment is presumed to be valid, and the burden is upon the 
 35.14  successor to show it is incorrect or invalid.  An order 
 35.15  assessing successor liability is reviewable administratively 
 35.16  under section 289A.65 and is appealable to tax court under 
 35.17  chapter 271.  The commissioner may abate an assessment if the 
 35.18  successor's failure to give the notice required under this 
 35.19  section is due to reasonable cause.  The procedural and appeal 
 35.20  provisions under section 270.07, subdivision 6, apply to 
 35.21  abatement requests under this subdivision.  Collection remedies 
 35.22  available against the transferring business are available 
 35.23  against the successor from the date of assessment of successor 
 35.24  liability.  
 35.25     Sec. 4.  Minnesota Statutes 1994, section 270.70, 
 35.26  subdivision 2, is amended to read: 
 35.27     Subd. 2.  [NOTICE AND DEMAND; COLLECTION BY LEVY; JEOPARDY 
 35.28  COLLECTION.] (a) Before a levy is made, notice and demand for 
 35.29  payment of the amount due must be given to the person liable for 
 35.30  the payment or collection of the tax at least 30 days prior to 
 35.31  the levy.  The notice required under this paragraph must be sent 
 35.32  to the taxpayer's last known address and must include a brief 
 35.33  statement that sets forth in simple and nontechnical terms: 
 35.34     (1) the administrative appeals available to the taxpayer 
 35.35  with respect to the levy and sale; and 
 35.36     (2) the alternatives available to the taxpayer that can 
 36.1   prevent a levy, including installment payment agreements under 
 36.2   section 270.67, subdivision 2. 
 36.3      (b) Notwithstanding the stay of collection provisions in 
 36.4   sections 270.10, subdivision 5, and 289A.37, subdivision 1, 
 36.5   paragraph (b), and the notice provisions in paragraph (a), if 
 36.6   the commissioner has reason to believe that collection of the 
 36.7   tax is in jeopardy, notice and demand for immediate payment of 
 36.8   the tax may be made.  If the tax is not paid, the commissioner 
 36.9   may proceed to collect by levy or by filing a lien under section 
 36.10  270.69.  
 36.11     Sec. 5.  Minnesota Statutes 1994, section 296.02, 
 36.12  subdivision 8, is amended to read: 
 36.13     Subd. 8.  [CREDITS FOR SALES TO GOVERNMENTS AND SCHOOLS.] 
 36.14  Until October 1, 1999, a distributor shall be allowed a credit 
 36.15  of 80 cents for every on each gallon of fuel grade alcohol 
 36.16  blended with gasoline to produce agricultural alcohol gasoline 
 36.17  which is sold to the state, local units of government, or for 
 36.18  use in the transportation of pupils to and from school-related 
 36.19  events in vehicles owned by or under contract to a school 
 36.20  district.  This reduction is in lieu of the reductions provided 
 36.21  in subdivision 7. 
 36.22     The amount of the credit for every gallon is: 
 36.23     (1) until October 1, 1996, 80 cents; 
 36.24     (2) until October 1, 1997, 60 cents; 
 36.25     (3) until October 1, 1998, 40 cents; and 
 36.26     (4) until October 1, 1999, 20 cents. 
 36.27     Sec. 6.  Minnesota Statutes 1994, section 296.141, 
 36.28  subdivision 4, is amended to read: 
 36.29     Subd. 4.  [CREDIT OR REFUND OF TAX PAID.] The commissioner 
 36.30  shall allow the distributor credit or refund of the tax paid on 
 36.31  gasoline and special fuel: 
 36.32     (1) exported or sold for export from the state, other than 
 36.33  in the supply tank of a motor vehicle or of an aircraft; 
 36.34     (2) sold to the United States government to be used 
 36.35  exclusively in performing its governmental functions and 
 36.36  activities or to any "cost plus a fixed fee" contractor employed 
 37.1   by the United States government on any national defense project; 
 37.2      (3) if the fuel is placed in a tank used exclusively for 
 37.3   residential heating; 
 37.4      (4) destroyed by accident while in the possession of the 
 37.5   distributor; 
 37.6      (5) in error; 
 37.7      (6) sold for storage in an on-farm bulk storage tank, if 
 37.8   the tax was not collected on the sale; and 
 37.9      (7) (6) in such other cases as the commissioner may permit, 
 37.10  not inconsistent with the provisions of this chapter and other 
 37.11  laws relating to the gasoline and special fuel excise taxes. 
 37.12     Sec. 7.  [EFFECTIVE DATE.] 
 37.13     Sections 1 to 3 are effective for business transfers, 
 37.14  acquisitions, successions, or dissolutions on or after January 
 37.15  1, 1995. 
 37.16     Section 4 is effective the day following final enactment. 
 37.17     Section 6 is effective for gasoline or special fuel 
 37.18  purchased after July 1, 1996.