3rd Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am
1.1 A bill for an act 1.2 relating to taxation; recodifying insurance tax laws; 1.3 providing for civil and criminal penalties; 1.4 appropriating money; amending Minnesota Statutes 1998, 1.5 sections 43A.316, subdivision 9; 43A.317, subdivision 1.6 8; 60A.19, subdivision 8; 60A.198, subdivision 3; 1.7 60A.208, subdivision 8; 60A.209, subdivision 3; 1.8 60C.17; 60E.04, subdivision 4; 60E.095; 61B.30, 1.9 subdivision 1; 62C.01, subdivision 3; 62E.10, 1.10 subdivision 1; 62E.13, subdivision 10; 62L.13, 1.11 subdivision 3; 62T.10; 64B.24; 71A.04, subdivision 1; 1.12 79.252, subdivision 4; 79.34, subdivision 1a; 176A.08; 1.13 290.35, subdivisions 2, 3, and 6; 295.58; and 424.165; 1.14 Minnesota Statutes 1999 Supplement, sections 43A.23, 1.15 subdivision 1; and 60A.19, subdivision 6; proposing 1.16 coding for new law as Minnesota Statutes, chapter 1.17 297I; repealing Minnesota Statutes 1998, sections 1.18 60A.15; 60A.152; 60A.198, subdivision 6; 60A.199, 1.19 subdivisions 2, 3, 4, 5, 6, 6a, 7, 8, 9, 10, and 11; 1.20 60A.209, subdivisions 4 and 5; 69.54; 69.55; 69.56; 1.21 69.57; 69.58; 69.59; 69.60; 69.61; 71A.04, subdivision 1.22 2; 299F.21; 299F.22; 299F.23; 299F.24; 299F.25; and 1.23 299F.26; Minnesota Rules, part 2765.1500, subpart 6. 1.24 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.25 ARTICLE 1 1.26 INSURANCE TAX RECODIFICATION 1.27 Section 1. [297I.01] [DEFINITIONS.] 1.28 Subdivision 1. [TERMS.] Unless the language or context 1.29 clearly indicates that a different meaning is intended, for the 1.30 purposes of this chapter, the following terms have the meanings 1.31 given them. 1.32 Subd. 2. [ASSOCIATION OR ASSOCIATIONS.] "Association" or 1.33 "associations" has the meaning given in section 60A.02, 1.34 subdivision 1a. 2.1 Subd. 3. [COMMISSIONER.] "Commissioner" means the 2.2 commissioner of revenue of the state of Minnesota. 2.3 Subd. 4. [COMMUNITY INTEGRATED SERVICE NETWORK.] 2.4 "Community integrated service network" has the meaning given in 2.5 section 62N.02, subdivision 4a. 2.6 Subd. 5. [COMPANY OR INSURANCE COMPANY.] "Company" or 2.7 "insurance company" has the meaning given in section 60A.02, 2.8 subdivision 4. 2.9 Subd. 6. [DEPARTMENT OF REVENUE.] "Department of revenue" 2.10 means the Minnesota department of revenue or commissioner of 2.11 revenue. 2.12 Subd. 7. [DOMESTIC.] "Domestic" has the meaning given in 2.13 section 60A.02, subdivision 5. 2.14 Subd. 8. [FOREIGN.] "Foreign" has the meaning given in 2.15 section 60A.02, subdivision 6. 2.16 Subd. 9. [GROSS PREMIUMS.] "Gross premiums" means total 2.17 premiums paid by policyholders and applicants of policies, 2.18 whether received in the form of money or other valuable 2.19 consideration, on property, persons, lives, interests and other 2.20 risks located, resident, or to be performed in this state, but 2.21 excluding consideration and premiums for reinsurance assumed 2.22 from other insurance companies. The term "gross premiums" 2.23 includes the total consideration paid to bail bond agents for 2.24 bail bonds. For title insurance companies, "gross premiums" 2.25 means the charge for title insurance made by a title insurance 2.26 company or its agents according to the company's rate filing 2.27 approved by the commissioner of commerce without a deduction for 2.28 commissions paid to or retained by the agent. Gross premiums of 2.29 a title insurance company does not include any other charge or 2.30 fee for abstracting, searching, or examining the title, or 2.31 escrow, closing, or other related services. 2.32 Subd. 10. [HEALTH MAINTENANCE ORGANIZATION.] "Health 2.33 maintenance organization" has the meaning given in section 2.34 62D.02, subdivision 4. 2.35 Subd. 11. [NONPROFIT HEALTH SERVICE PLAN CORPORATION.] 2.36 "Nonprofit health service plan corporation" has the meaning 3.1 given in section 62C.02, subdivision 6. 3.2 Subd. 12. [INSURANCE.] "Insurance" means the same as that 3.3 term is defined in section 60A.02, subdivision 3. 3.4 Subd. 13. [INSURANCE AGENT OR INSURANCE 3.5 AGENCY.] "Insurance agent or insurance agency" has the meaning 3.6 given in section 60A.02, subdivision 7. 3.7 Subd. 14. [RETURN PREMIUMS DEFINED.] "Return premiums" 3.8 means any dividend or any unused or unabsorbed portion of 3.9 premium deposit or assessment that is applied toward the payment 3.10 of any premium, premium deposit, or assessment due from the 3.11 policyholder or member upon a continuance or renewal of the 3.12 insurance on account of which the dividend was earned or premium 3.13 deposit or assessment paid. Return premiums also includes any 3.14 portion of premium returned by the company upon cancellation or 3.15 termination of a policy or membership, except surrender values 3.16 paid upon the cancellation and surrender of policies or 3.17 certificates of life insurance. 3.18 Subd. 15. [STATE.] "State" has the meaning given in 3.19 section 60A.02, subdivision 18. 3.20 Subd. 16. [TAXPAYER.] "Taxpayer" means any insurance 3.21 company, association, surplus lines licensee, automobile risk 3.22 self-insurer, or insured or any other person or entity required 3.23 to pay any amount due under this chapter. 3.24 Sec. 2. [297I.05] [TAX IMPOSED.] 3.25 Subdivision 1. [DOMESTIC AND FOREIGN COMPANIES.] Except as 3.26 otherwise provided in this section, a tax is imposed on every 3.27 domestic and foreign insurance company. The rate of tax is 3.28 equal to two percent of all gross premiums less return premiums 3.29 on all direct business received by the insurer or agents of the 3.30 insurer in Minnesota, in cash or otherwise, during the year. 3.31 Subd. 2. [TOWN AND FARMERS' MUTUAL INSURANCE.] A tax is 3.32 imposed on town and farmers' mutual insurance companies. The 3.33 rate of tax is equal to one percent of gross premiums less 3.34 return premiums on all direct business received by the insurer 3.35 or agents of the insurer in Minnesota, in cash or otherwise, 3.36 during the year. 4.1 Subd. 3. [MUTUAL PROPERTY AND CASUALTY COMPANIES WITH 4.2 ASSETS OF $5,000,000 OR LESS AT THE END OF THE CALENDAR YEAR.] A 4.3 tax is imposed on mutual property and casualty companies with 4.4 assets of $5,000,000 or less at the end of the calendar year. 4.5 The rate of tax is equal to one percent of gross premiums less 4.6 return premiums on all direct business received by the insurer 4.7 or agents of the insurer in Minnesota, in cash or otherwise, 4.8 during the year. 4.9 Subd. 4. [MUTUAL PROPERTY AND CASUALTY COMPANIES WITH 4.10 TOTAL ASSETS LESS THAN $1,600,000,000 ON DECEMBER 31, 1989.] A 4.11 tax is imposed on mutual property and casualty companies that 4.12 had total assets greater than $5,000,000 at the end of the 4.13 calendar year but that had total assets less than $1,600,000,000 4.14 on December 31, 1989. The rate of tax is equal to: 4.15 (1) two percent of gross premiums less return premiums on 4.16 all direct business received by the insurer or agents of the 4.17 insurer in Minnesota for life insurance, in cash or otherwise, 4.18 during the year; and 4.19 (2) 1.26 percent of gross premiums less return premiums on 4.20 all other direct business received by the insurer or agents of 4.21 the insurer in Minnesota, in cash or otherwise, during the year. 4.22 Subd. 5. [HEALTH MAINTENANCE ORGANIZATIONS, NONPROFIT 4.23 HEALTH SERVICE PLAN CORPORATIONS, AND COMMUNITY INTEGRATED 4.24 SERVICE NETWORKS.] (a) The commissioner of finance shall 4.25 determine the balance of the health care access fund on 4.26 September 1 of each year. 4.27 (b) If the commissioner of finance determines that there 4.28 will not be a structural deficit for the next state fiscal year, 4.29 no tax is imposed under this chapter on health maintenance 4.30 organizations, nonprofit health service plan corporations, and 4.31 community integrated service networks for the following calendar 4.32 year. 4.33 (c) If the commissioner of finance determines that there 4.34 will be a structural deficit in the fund for the next state 4.35 fiscal year, then the commissioner of finance, in consultation 4.36 with the commissioner of revenue, shall determine the amount 5.1 needed to eliminate the structural deficit, and a tax is imposed 5.2 for the next calendar year. The rate of tax is a percentage of 5.3 gross premiums less return premiums on all direct business 5.4 received by the insurer or agents of the insurer in Minnesota, 5.5 in cash or otherwise, during the year. The percentage rate is 5.6 one-quarter of one percent, one-half of one percent, 5.7 three-quarters of one percent, or one percent of the premiums, 5.8 whichever is the lowest rate that will produce sufficient 5.9 revenue to eliminate the projected structural deficit. 5.10 (d) The commissioner of finance shall publish in the State 5.11 Register by October 1 of each year the rate of tax to be imposed 5.12 for the following calendar year. 5.13 (e) In determining the structural balance of the health 5.14 care access fund for fiscal year 2001, the commissioner of 5.15 finance shall disregard the transfer amount from the health care 5.16 access fund to the general fund for expenditures associated with 5.17 the services provided to pregnant women and children under the 5.18 age of two enrolled in the MinnesotaCare program. 5.19 (f) In approving the premium rates as required in sections 5.20 62L.08, subdivision 8, and 62A.65, subdivision 3, the 5.21 commissioners of health and commerce shall ensure that to the 5.22 extent that the tax imposed under this subdivision is less than 5.23 one percent of gross premiums less return premiums, the premium 5.24 rate reflects the difference between the amount of tax imposed 5.25 and the amount that would have been collected if the rate was 5.26 one percent. 5.27 (g) The commissioner shall deposit all revenues, including 5.28 penalties and interest, collected under this chapter from health 5.29 maintenance organizations, community integrated service 5.30 networks, and nonprofit health service plan corporations in the 5.31 health care access fund. Refunds of overpayments of tax imposed 5.32 by this subdivision must be paid from the health care access 5.33 fund. There is annually appropriated from the health care 5.34 access fund to the commissioner the amount necessary to make any 5.35 refunds of the tax imposed under this subdivision. 5.36 Subd. 6. [FIRE MARSHAL TAX.] A tax is imposed on every 6.1 licensed company, including reciprocals or interinsurance 6.2 exchanges, doing business in this state, except farmers' mutual 6.3 fire insurance companies and township fire insurance companies. 6.4 The rate of tax is equal to one-half of one percent of the gross 6.5 fire premiums and assessments, less return premiums, on all 6.6 direct business received by the company in this state, or by its 6.7 agents for it, in cash or otherwise, during the year. "Gross 6.8 fire premiums and assessments" includes premiums on policies 6.9 covering fire risks only on automobiles, whether written under 6.10 floater form or otherwise. 6.11 Subd. 7. [SURPLUS LINES TAX.] (a) A tax is imposed on 6.12 surplus lines licensees. The rate of tax is equal to three 6.13 percent of the gross premiums less return premiums received by 6.14 the licensee minus any licensee association operating 6.15 assessments paid under section 60A.208. 6.16 (b) If surplus lines insurance placed by a surplus lines 6.17 licensee and taxed under this subdivision covers a subject of 6.18 insurance residing, located, or to be performed outside this 6.19 state, a proper pro rata portion of the entire premium payable 6.20 for all of that insurance must be allocated according to the 6.21 subjects of insurance residing, located, or to be performed in 6.22 this state. 6.23 Subd. 8. [INSURANCE PREMIUM TAX EQUIVALENT PAYMENT BY 6.24 AUTOMOBILE RISK SELF-INSURERS.] (a) The following terms, for the 6.25 purposes of this subdivision, have the meanings given them. 6.26 (1) "Automobile risks" means the risk of providing no-fault 6.27 insurance under sections 65B.41 to 65B.71. 6.28 (2) "Motor vehicle" has the meaning given in section 6.29 65B.43, subdivision 2. 6.30 (3) "Person" means an owner, as defined in section 65B.43, 6.31 subdivision 4, but does not include the state or a political 6.32 subdivision as defined in section 65B.43, subdivision 20. 6.33 (4) "Self-insurance" means the condition of qualifying as a 6.34 self-insurer by complying with section 65B.48, subdivisions 3 6.35 and 3a. 6.36 (5) "Self-insurer" means a person who has arranged 7.1 self-insurance for the automobile risks associated with the 7.2 person's motor vehicle. 7.3 (b) Every self-insurer who owns, leases, or operates a 7.4 motor vehicle required to be registered or licensed in this 7.5 state or principally garaged in this state for at least two 7.6 months in the calendar year shall pay an annual amount for each 7.7 vehicle of: 7.8 (1) $15 for a private passenger vehicle as defined in 7.9 section 65B.001, subdivision 3, or a utility vehicle as defined 7.10 in section 65B.001, subdivision 4, not including a taxi; or 7.11 (2) $25 for a taxi or any other self-insured vehicle not 7.12 covered by clause (1). 7.13 (c) A self-insurer who is more than six months delinquent 7.14 in paying the amount due under this subdivision must be referred 7.15 by the commissioner to the commissioner of commerce for action. 7.16 That action may include revocation of the self-insured's 7.17 self-insurer status. 7.18 (d) The amount paid under this subdivision must be 7.19 deposited into the general fund to the credit of the account 7.20 from which the police state aid provided for in sections 69.011 7.21 to 69.051 is payable. 7.22 Subd. 9. [TAX ON PERSONS, FIRMS, OR CORPORATIONS LICENSED 7.23 TO PROCURE INSURANCE FROM UNLICENSED FOREIGN COMPANIES.] (a) A 7.24 tax is imposed on any person, firm, or corporation licensed 7.25 under section 60A.19, subdivision 8. The rate of tax is equal 7.26 to two percent of gross premiums paid in the year less return 7.27 premiums received in the year. 7.28 (b)(1) Money collected under this subdivision must be paid 7.29 to a municipality or a fire department relief association if: 7.30 (i) the money is attributable to fire, lightning, or 7.31 sprinkler insurance premiums paid by an owner to insure 7.32 property; and 7.33 (ii) the property is in a municipality that has an 7.34 organized fire department, a partly paid fire department, or a 7.35 volunteer fire department. 7.36 The money must be paid to the municipality where the insured 8.1 property is located, or to the municipality's fire department 8.2 relief association. The money to be paid includes penalties and 8.3 interest collected because a property owner failed to pay on 8.4 time the taxes due under this subdivision. 8.5 (2) This paragraph does not apply to taxes paid under this 8.6 subdivision that are attributable to premiums paid on property 8.7 if: 8.8 (i) the property is owned and occupied exclusively as a 8.9 homestead, and the owner carries insurance on the property; or 8.10 (ii) the property is exempt under section 550.37 and the 8.11 owner carries insurance on the property. 8.12 Subd. 10. [TAX ON PERSONS, FIRMS, OR CORPORATIONS 8.13 PROCURING INSURANCE FROM AN INELIGIBLE COMPANY.] (a) A tax is 8.14 imposed on each insured in this state who procures, causes to be 8.15 procured, or continues or renews insurance with an ineligible 8.16 surplus lines insurer or any self-insurer in this state who 8.17 procures or continues excess of loss, catastrophe, or other 8.18 insurance upon a subject of insurance resident, located, or to 8.19 be performed within this state, other than insurance procured 8.20 pursuant to section 60A.201 or 60A.209, subdivision 1, equal to 8.21 two percent of gross premiums less return premiums paid for such 8.22 insurance. 8.23 (b) If the insurance described in paragraph (a) also covers 8.24 a subject of insurance residing, located, or to be performed 8.25 outside this state, for the purposes of this subdivision, a 8.26 proper pro rata portion of the entire premium payable for all of 8.27 that insurance must be allocated according to the subjects of 8.28 insurance residing, located, or to be performed in this state. 8.29 (c) For the purposes of this subdivision, insurance placed 8.30 with an ineligible surplus lines insurer is considered to be 8.31 procured, continued, or renewed in this state if: 8.32 (1) it was procured through negotiations occurring in whole 8.33 or in part within or from outside this state; 8.34 (2) it was procured by an application made in whole or in 8.35 part within or from outside this state; or 8.36 (3) premiums for it are paid from within this state 9.1 directly or indirectly, in whole or in part. 9.2 Subd. 11. [RETALIATORY PROVISIONS.] (a) If any other state 9.3 or country imposes any taxes, fines, deposits, penalties, 9.4 licenses, or fees upon any insurance companies of this state and 9.5 their agents doing business in another state or country that are 9.6 in addition to or in excess of those imposed by the laws of this 9.7 state upon foreign insurance companies and their agents doing 9.8 business in this state, the same taxes, fines, deposits, 9.9 penalties, licenses, and fees are imposed upon every similar 9.10 insurance company of that state or country and their agents 9.11 doing or applying to do business in this state. 9.12 (b) If any conditions precedent to the right to do business 9.13 in any other state or country are imposed by the laws of that 9.14 state or country, beyond those imposed upon foreign companies by 9.15 the laws of this state, the same conditions precedent are 9.16 imposed upon every similar insurance company of that state or 9.17 country and their agents doing or applying to do business in 9.18 that state. 9.19 (c) For purposes of this subdivision, "taxes, fines, 9.20 deposits, penalties, licenses, or fees" means an amount of money 9.21 that is deposited in the general revenue fund of the state or 9.22 other similar fund in another state or country and is not 9.23 dedicated to a special purpose or use or money deposited in the 9.24 general revenue fund of the state or other similar fund in 9.25 another state or country and appropriated to the commissioner of 9.26 commerce or insurance for the operation of the department of 9.27 commerce or other similar agency with jurisdiction over 9.28 insurance. Taxes, fines, deposits, penalties, licenses, or fees 9.29 do not include: 9.30 (1) special purpose obligations or assessments imposed in 9.31 connection with particular kinds of insurance, including but not 9.32 limited to assessments imposed in connection with residual 9.33 market mechanisms; or 9.34 (2) assessments made by the insurance guaranty association, 9.35 life and health guarantee association, or similar association. 9.36 (d) This subdivision applies to taxes imposed under 10.1 subdivisions 1, 3, 4, 6, and 12, paragraph (a), clauses (1) and 10.2 (3). 10.3 (e) This subdivision does not apply to insurance companies 10.4 organized or domiciled in a state or country, the laws of which 10.5 do not impose retaliatory taxes, fines, deposits, penalties, 10.6 licenses, or fees or which grant, on a reciprocal basis, 10.7 exemptions from retaliatory taxes, fines, deposits, penalties, 10.8 licenses, or fees to insurance companies domiciled in this state. 10.9 Subd. 12. [OTHER ENTITIES.] (a) A tax is imposed equal to 10.10 two percent of: 10.11 (1) gross premiums less return premiums written for risks 10.12 resident or located in Minnesota by a risk retention group; 10.13 (2) gross premiums less return premiums received by an 10.14 attorney in fact acting in accordance with chapter 71A; 10.15 (3) gross premiums less return premiums received pursuant 10.16 to assigned risk policies and contracts of coverage under 10.17 chapter 79; 10.18 (4) the direct funded premium received by the reinsurance 10.19 association under section 79.34 from self-insurers approved 10.20 under section 176.181 and political subdivisions that 10.21 self-insure; 10.22 (5) gross premiums less return premiums received by a 10.23 nonprofit health service plan corporation authorized under 10.24 chapter 62C; and 10.25 (6) gross premiums less return premiums paid to an insurer 10.26 other than a licensed insurance company or a surplus lines 10.27 licensee for coverage of risks resident or located in Minnesota 10.28 by a purchasing group or any members of the purchasing group to 10.29 a broker or agent for the purchasing group. 10.30 (b) A tax is imposed on the state fund mutual insurance 10.31 company established under chapter 176A. The tax must be 10.32 computed in the same manner as mutual insurance companies under 10.33 subdivisions 1, 3, and 4. 10.34 (c) A tax is imposed on a joint self-insurance plan 10.35 operating under chapter 60F. The rate of tax is equal to two 10.36 percent of the total amount of claims paid during the fund year, 11.1 with no deduction for claims wholly or partially reimbursed 11.2 through stop-loss insurance. 11.3 (d) A tax is imposed on a joint self-insurance plan 11.4 operating under chapter 62H. The rate of tax is equal to two 11.5 percent of the total amount of claims paid during the fund's 11.6 fiscal year, with no deduction for claims wholly or partially 11.7 reimbursed through stop-loss insurance. 11.8 (e) A tax is imposed equal to the tax imposed under section 11.9 297I.05, subdivision 5, on the gross premiums less return 11.10 premiums on all coverages received by an accountable provider 11.11 network or agents of an accountable provider network in 11.12 Minnesota, in cash or otherwise, during the year. 11.13 Subd. 13. [FUNDS DEPOSITED INTO GENERAL FUND.] Unless 11.14 otherwise specified in this chapter, all amounts collected by 11.15 the commissioner under this chapter must be deposited in the 11.16 general fund. 11.17 Sec. 3. [297I.10] [SURCHARGE ON PREMIUMS TO RESTORE 11.18 DEFICIENCY IN SPECIAL FUND.] 11.19 Subdivision 1. [CITIES OF THE FIRST CLASS.] (a) The 11.20 commissioner shall order and direct a surcharge to be collected 11.21 of two percent of the fire, lightning, and sprinkler leakage 11.22 gross premiums, less return premiums, on all direct business 11.23 received by any licensed foreign or domestic fire insurance 11.24 company on property in a city of the first class, or by its 11.25 agents for it, in cash or otherwise. 11.26 (b) By July 31 and December 31 of each year the 11.27 commissioner of finance shall pay to the relief association in 11.28 each city a warrant for an amount equal to the total amount of 11.29 the surcharge on the premiums collected within the city since 11.30 the previous payment. 11.31 (c) The treasurer of the relief association shall place the 11.32 money received under this subdivision in the special fund of the 11.33 relief association. 11.34 Subd. 2. [CITY OF THE SECOND CLASS.] (a) Upon receiving 11.35 certification from a city of the second class pursuant to 11.36 section 424.165, the commissioner shall direct a surcharge to be 12.1 collected of two percent of the fire, lightning, and sprinkler 12.2 leakage gross premiums, less return premiums, on all direct 12.3 business received by any foreign or domestic fire insurance 12.4 company on property in such city of the second class, or by its 12.5 agents for it, in cash or otherwise. 12.6 (b) The board of trustees of a firefighter's relief 12.7 association of the city of the second class that has sent 12.8 certification to the commissioner under paragraph (a) must 12.9 notify the commissioner as soon as the balance in their special 12.10 fund equals $50,000. Upon receiving notice from the 12.11 association, the commissioner shall notify the insurers subject 12.12 to the surcharge that the surcharge is discontinued effective 15 12.13 days after the balance reached $50,000. 12.14 (c) By September 1 and March 1 of each year, the 12.15 commissioner of finance shall pay to the firefighter's relief 12.16 association of each city of the second class a warrant for an 12.17 amount equal to the total amount of the surcharge on the 12.18 premiums collected within the city since the previous payment. 12.19 (d) The treasurer of the firefighter's relief association 12.20 shall place the money received under this subdivision in the 12.21 special fund of the relief association. 12.22 Subd. 3. [APPROPRIATION.] The amount necessary to make the 12.23 payments required under this section is appropriated to the 12.24 commissioner of finance from the general fund. 12.25 Sec. 4. [297I.15] [EXEMPTIONS FROM TAX] 12.26 Subdivision 1. [GOVERNMENT PAYMENTS.] Premiums under 12.27 medical assistance, general assistance medical care, the 12.28 MinnesotaCare program, and the Minnesota comprehensive health 12.29 insurance plan and all payments, revenues, and reimbursements 12.30 received from the federal government for medicare-related 12.31 coverage as defined in section 62A.31, subdivision 3, are not 12.32 subject to tax under this chapter. 12.33 Subd. 2. [MINNESOTA EMPLOYEES INSURANCE PROGRAM.] To the 12.34 extent that the Minnesota employees insurance program under 12.35 section 43A.317 operates as a self-insured group, the premiums 12.36 paid to the program are exempt from the taxes imposed under this 13.1 chapter, but are subject to a Minnesota comprehensive health 13.2 association assessment under section 62E.11. 13.3 Subd. 3. [PUBLIC EMPLOYEES INSURANCE PROGRAM.] Premiums 13.4 paid to the public employees insurance program under section 13.5 43A.316 are exempt from the taxes imposed under this chapter. 13.6 Subd. 4. [PREMIUMS PAID TO HEALTH CARRIERS BY STATE.] A 13.7 health carrier as defined in section 62A.011 is exempt from the 13.8 taxes imposed under this chapter on premiums paid to it by the 13.9 state. 13.10 Subd. 5. [MINNESOTA INSURANCE GUARANTY ASSOCIATION.] The 13.11 Minnesota insurance guaranty association under chapter 60C is 13.12 exempt from the taxes imposed under this chapter. 13.13 Subd. 6. [MINNESOTA LIFE AND HEALTH GUARANTY ASSOCIATION.] 13.14 The Minnesota life and health guaranty association under chapter 13.15 61B is exempt from the taxes imposed under this chapter. 13.16 Subd. 7. [MINNESOTA COMPREHENSIVE HEALTH ASSOCIATION.] The 13.17 Minnesota comprehensive health association under chapter 62E is 13.18 exempt from the taxes imposed under this chapter. 13.19 Subd. 8. [WRITING CARRIER FOR THE COMPREHENSIVE HEALTH 13.20 INSURANCE PLAN.] Premiums received by the writing carrier for 13.21 the comprehensive health insurance plan established under 13.22 section 62E.10 in connection with that plan are exempt from the 13.23 taxes imposed under this chapter. 13.24 Subd. 9. [HEALTH COVERAGE REINSURANCE ASSOCIATION.] The 13.25 health coverage reinsurance association under chapter 62L is 13.26 exempt from the taxes imposed under this chapter. 13.27 Subd. 10. [PREMIUMS PAID TO FRATERNAL BENEFIT SOCIETIES.] 13.28 Premiums paid to fraternal benefit societies pursuant to chapter 13.29 64B are exempt from the taxes imposed under this chapter. 13.30 Sec. 5. [297I.20] [GUARANTY ASSOCIATION ASSESSMENT 13.31 OFFSET.] 13.32 (a) An insurance company may offset against its premium tax 13.33 liability to this state any amount paid for assessments made for 13.34 insolvencies which occur after July 31, 1994, under sections 13.35 60C.01 to 60C.22; and any amount paid for assessments made after 13.36 July 31, 1994, under Minnesota Statutes 1992, sections 61B.01 to 14.1 61B.16, or under sections 61B.18 to 61B.32 as follows: 14.2 (1) Each such assessment shall give rise to an amount of 14.3 offset equal to 20 percent of the amount of the assessment for 14.4 each of the five calendar years following the year in which the 14.5 assessment was paid. 14.6 (2) The amount of offset initially determined for each 14.7 taxable year is the sum of the amounts determined under clause 14.8 (1) for that taxable year. 14.9 (b)(1) Each year the commissioner shall compare total 14.10 guaranty association assessments levied over the preceding five 14.11 calendar years to the sum of all premium tax and corporate 14.12 franchise tax revenues collected from insurance companies, 14.13 without reduction for any guaranty association assessment offset 14.14 in the preceding calendar year, referred to in this subdivision 14.15 as "preceding year insurance tax revenues." 14.16 (2) If total guaranty association assessments levied over 14.17 the preceding five years exceed the preceding year insurance tax 14.18 revenues, insurance companies must be allowed only a 14.19 proportionate part of the premium tax offset calculated under 14.20 paragraph (a) for the current calendar year. 14.21 (3) The proportionate part of the premium tax offset 14.22 allowed in the current calendar year is determined by 14.23 multiplying the amount calculated under paragraph (a) by a 14.24 fraction. The numerator of the fraction equals the preceding 14.25 year insurance tax revenues, and its denominator equals total 14.26 guaranty association assessments levied over the preceding 14.27 five-year period. 14.28 (4) The proportionate part of the premium tax offset that 14.29 is not allowed must be carried forward to subsequent tax years 14.30 and added to the amount of premium tax offset calculated under 14.31 paragraph (a) prior to application of the limitation imposed by 14.32 this paragraph. 14.33 (5) Any amount carried forward from prior years must be 14.34 allowed before allowance of the offset for the current year 14.35 calculated under paragraph (a). 14.36 (6) The premium tax offset limitation must be calculated 15.1 separately for (i) insurance companies subject to assessment 15.2 under sections 60C.01 to 60C.22, and (ii) insurance companies 15.3 subject to assessment under Minnesota Statutes 1992, sections 15.4 61B.01 to 61B.16, or 61B.18 to 61B.32. 15.5 (7) When the premium tax offset is limited by this 15.6 provision, the commissioner shall notify affected insurance 15.7 companies on a timely basis for purposes of completing premium 15.8 and corporate franchise tax returns. 15.9 (8) The guaranty associations created under sections 60C.01 15.10 to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 15.11 and 61B.18 to 61B.32, shall provide the commissioner with the 15.12 necessary information on guaranty association assessments. 15.13 (c)(1) If the offset determined by the application of 15.14 paragraphs (a) and (b) exceeds the greater of the insurance 15.15 company's premium tax liability under this section or its 15.16 corporate franchise tax liability under chapter 290 prior to 15.17 allowance of the credit for premium taxes, then the insurance 15.18 company may carry forward the excess, referred to in this 15.19 subdivision as the "carryforward credit" to subsequent taxable 15.20 years. 15.21 (2) The carryforward credit is allowed as an offset against 15.22 premium tax liability for the first succeeding year to the 15.23 extent that the premium tax liability for that year exceeds the 15.24 amount of the allowable offset for the year determined under 15.25 paragraphs (a) and (b). 15.26 (3) The carryforward credit must be reduced, but not below 15.27 zero, by the greater of the amount of the carryforward credit 15.28 allowed as an offset against the premium tax under this 15.29 paragraph or the amount of the carryforward credit allowed as an 15.30 offset against the insurance company's corporate franchise tax 15.31 liability under section 290.35, subdivision 6, paragraph (d). 15.32 The remainder, if any, of the carryforward credit must be 15.33 carried forward to succeeding taxable years until the entire 15.34 carryforward credit has been credited against the insurance 15.35 company's liability for premium tax under this chapter and 15.36 corporate franchise tax under chapter 290 if applicable for that 16.1 taxable year. 16.2 (d) When an insurer has offset against taxes its payment of 16.3 an assessment of the Minnesota life and health guaranty 16.4 association, and the association pays the insurer a refund with 16.5 respect to the assessment under Minnesota Statutes 1992, section 16.6 61B.07, subdivision 6, or 61B.24, subdivision 6, then the refund 16.7 reduces the insurer's carryforward credit under paragraph (c). 16.8 If the refund exceeds the amount of the carryforward credit, the 16.9 excess amount must be repaid to the state by the insurers to the 16.10 extent of the offset in the manner the commissioner requires. 16.11 Sec. 6. [297I.25] [INFORMATION RETURNS.] 16.12 Subdivision 1. [LICENSED BROKERS OR AGENTS OF RISK 16.13 RETENTION GROUPS.] To the extent licensed agents or brokers are 16.14 utilized in accordance with section 60E.12, they shall report to 16.15 the commissioner the premiums received for direct business for 16.16 risks resident or located within this state which the licensees 16.17 have placed with or on behalf of a risk retention group not 16.18 chartered in this state. 16.19 Subd. 2. [FIRETOWN AND POLICE PREMIUM REPORTS.] To the 16.20 extent required by section 69.021, each insurer shall file with 16.21 the commissioner a Minnesota firetown premium report and 16.22 Minnesota aid to police premium report. 16.23 Sec. 7. [297I.30] [DUE DATES FOR FILING RETURNS.] 16.24 Subdivision 1. [GENERAL RULE.] On or before March 1, every 16.25 insurer subject to taxation under section 297I.05, subdivisions 16.26 1 to 6, and 12, paragraphs (a), clauses (1) to (5), (b), and 16.27 (e), shall file an annual return for the preceding calendar year 16.28 setting forth such information as the commissioner may 16.29 reasonably require on forms prescribed by the commissioner. 16.30 Subd. 2. [SURPLUS LINES LICENSEES AND PURCHASING 16.31 GROUPS.] On or before February 15 and August 15 of each year, 16.32 every surplus lines licensee subject to taxation under section 16.33 297I.05, subdivision 7, and every purchasing group or member of 16.34 a purchasing group subject to tax under section 297I.05, 16.35 subdivision 12, paragraph (a), clause (6), shall file a return 16.36 with the commissioner for the preceding six-month period ending 17.1 December 31, or June 30, setting forth any information the 17.2 commissioner reasonably prescribes on forms prescribed by the 17.3 commissioner. 17.4 Subd. 3. [AUTOMOBILE RISK SELF-INSURERS.] On or before 17.5 July 1 of each year, every self-insurer subject to taxation 17.6 under section 297I.05, subdivision 8, shall file a return with 17.7 the commissioner for the preceding calendar year setting forth 17.8 any information the commissioner reasonably requires on forms 17.9 prescribed by the commissioner. 17.10 Subd. 4. [PERSONS, FIRMS, OR CORPORATIONS LICENSED TO 17.11 PROCURE INSURANCE FROM UNLICENSED FOREIGN COMPANIES.] On or 17.12 before 30 days following the expiration date of a license issued 17.13 under section 297I.05, subdivision 9, a person, firm, or 17.14 corporation licensed to obtain insurance from a company not 17.15 authorized to do business in Minnesota shall file a return with 17.16 the commissioner for the preceding 12-month period setting forth 17.17 any information the commissioner reasonably requires on forms 17.18 prescribed by the commissioner. 17.19 Subd. 5. [JOINT SELF-INSURANCE PLANS.] On or before 60 17.20 days following the conclusion of their fiscal year, a plan 17.21 subject to tax under 297I.05, subdivision 12, paragraph (c) or 17.22 (d), shall file a return with the commissioner for the preceding 17.23 fiscal year setting forth any information the commissioner 17.24 reasonably requires on forms prescribed by the commissioner. 17.25 Subd. 6. [PERSONS, FIRMS, OR CORPORATIONS PROCURING 17.26 INSURANCE FROM AN UNLICENSED FOREIGN COMPANY.] Within 30 days 17.27 after the date the insurance was procured, continued, or 17.28 renewed, a taxpayer required to pay the tax under section 17.29 297I.05, subdivision 10, shall file a return setting forth any 17.30 information the commissioner reasonably requires on forms 17.31 prescribed by the commissioner. 17.32 Subd. 7. [SURCHARGE.] (a)(1) By April 30 of each year, 17.33 every company required to pay the surcharge under section 17.34 297I.10, subdivision 1, shall file a return for the five-month 17.35 period ending March 31 setting forth any information the 17.36 commissioner reasonably requires on forms prescribed by the 18.1 commissioner. 18.2 (2) By June 30 of each year, every company required to pay 18.3 the surcharge under section 297I.10, subdivision 1, shall file a 18.4 return for the two-month period ending May 31 setting forth any 18.5 information the commissioner reasonably requires on forms 18.6 prescribed by the commissioner. 18.7 (3) By November 30 of each year, every company required to 18.8 pay the surcharge under section 297I.10, subdivision 1, shall 18.9 file a return for the five-month period ending October 31 18.10 setting forth any information the commissioner reasonably 18.11 requires on forms prescribed by the commissioner. 18.12 (b) By February 15 and August 15 of each year, every 18.13 company required to pay a surcharge under section 297I.10, 18.14 subdivision 2, must file a return for the preceding six-month 18.15 period ending December 31 and June 30. 18.16 Sec. 8. [297I.35] [PAYMENT OF TAX.] 18.17 Subdivision 1. [GENERAL RULE.] All taxes and surcharges 18.18 imposed under this chapter must be paid to the commissioner by 18.19 the date that the return must be filed under section 297I.30. 18.20 Subd. 2. [ELECTRONIC FUNDS TRANSFER.] If the aggregate 18.21 amount of tax and surcharges due under this chapter during a 18.22 calendar year is equal to or exceeds $120,000, or if the 18.23 taxpayer is required to make payment of any other tax to the 18.24 commissioner by means of electronic funds transfer as defined in 18.25 section 336.4A-104, paragraph (a), then all tax and surcharge 18.26 payments in the subsequent calendar year must be paid by means 18.27 of a funds transfer as defined in section 336.4A-104, paragraph 18.28 (a). The funds transfer payment date, as defined in section 18.29 336.4A-104, must be on or before the date the payment is due. 18.30 If the date the payment is due is not a funds transfer business 18.31 day, as defined in section 336.4A-105, paragraph (a), clause 18.32 (4), the payment date must be on or before the funds transfer 18.33 business day next following the date the payment is due. 18.34 Sec. 9. [297I.40] [ESTIMATED TAX.] 18.35 Subdivision 1. [REQUIREMENT TO PAY.] On or before April 1, 18.36 June 1, and December 1 of each year, every taxpayer subject to 19.1 tax under section 297I.05, subdivisions 1 to 6, and 12, 19.2 paragraphs (a), clauses (1) to (5), (b), and (e), must pay to 19.3 the commissioner an installment equal to one-third of the 19.4 insurer's total estimated tax for the current year. 19.5 Subd. 2. [AMOUNT OF REQUIRED INSTALLMENT.] The amount of 19.6 any required installment is one-third of the lesser of 19.7 (1) 80 percent of the tax imposed for the current year, or 19.8 (2) 100 percent of the tax paid for the previous year. 19.9 Subd. 3. [NO ADDITION TO TAX WHERE THE TAX IS SMALL.] No 19.10 addition to tax is imposed if the total tax for the current tax 19.11 year is $500 or less. 19.12 Subd. 4. [ADDITION TO TAX.] (a) In case of any 19.13 underpayment of installments by an insurer, there is added to, 19.14 and collected as part of, the tax for the taxable year an amount 19.15 determined at the rate specified in section 270.75 upon the 19.16 amount of underpayment. 19.17 (b) The amount of the underpayment is the excess of: (1) 19.18 the amount of the installment; over (2) the amount, if any, of 19.19 the installment paid on or before the last date prescribed for 19.20 payment. 19.21 (c) The period of the underpayment runs from the date the 19.22 installment was required to be paid to the earlier of: 19.23 (1) March 1 of the year following the close of the taxable 19.24 year; or 19.25 (2) with respect to any portion of the underpayment, the 19.26 date on which that portion is paid. For purposes of this 19.27 clause, a payment of estimated tax on any installment date is 19.28 considered a payment of any previous underpayment only to the 19.29 extent the payment exceeds the amount of the installment 19.30 required to be made on that date. 19.31 Subd. 5. [DEFINITION OF TAX.] The term "tax" as used in 19.32 this section means the tax imposed by section 297I.05, 19.33 subdivisions 1 to 6, and 12, paragraphs (a), clauses (1) to (5), 19.34 (b), and (e), without regard to the retaliatory provisions of 19.35 section 297I.05, subdivision 11, and the offset in section 19.36 297I.20. 20.1 Subd. 6. [FAILURE TO PAY ESTIMATED TAX.] When an insurer 20.2 does not make any payments, the period of the underpayment runs 20.3 from the three installment dates set forth in subdivision 1 to 20.4 whichever of the periods in subdivision 4, paragraph (c), is the 20.5 earlier. 20.6 Subd. 7. [APRIL ESTIMATED PAYMENT.] A taxpayer who claims 20.7 a refund of an overpayment on an original return may elect to 20.8 have all or any portion of the overpayment applied as a credit 20.9 to the April 1 estimated tax payment for the year following the 20.10 year of the return. The credit is considered applied on April 20.11 1. Notwithstanding section 297I.80, the amount credited does 20.12 not bear interest. 20.13 Sec. 10. [297I.45] [ASSESSMENTS.] 20.14 The commissioner shall make determinations, corrections, 20.15 and assessments with respect to taxes and surcharges, including 20.16 interest, additions to tax, and penalties. To determine the 20.17 accuracy of a return, or in fixing liability for a tax or 20.18 surcharge, the commissioner may make reasonable examinations or 20.19 investigations of the taxpayer's records and accounts. If a 20.20 taxpayer fails to file a required return, the commissioner, from 20.21 information in the commissioner's possession or obtainable by 20.22 the commissioner, may make a return for the taxpayer. 20.23 Sec. 11. [297I.50] [ORDER OF ASSESSMENT.] 20.24 Subdivision 1. [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 20.25 TAXPAYER.] (a) When a return has been filed and the commissioner 20.26 determines that the tax or surcharge disclosed by the return is 20.27 different than the tax or surcharge determined by the 20.28 examination, the commissioner shall send an order of assessment 20.29 to the taxpayer. When no return has been filed, the 20.30 commissioner may make a return for the taxpayer under section 20.31 297I.45 or may send an order of assessment under this 20.32 subdivision. The order must explain the basis for the 20.33 assessment and must explain the taxpayer's appeal rights. An 20.34 order of assessment is final when made but may be reconsidered 20.35 by the commissioner under section 297I.95. 20.36 (b) If a tax payment meets the requirements of this 21.1 paragraph, the penalty under section 297I.85, subdivision 2, is 21.2 not imposed, and the commissioner may not take any collection 21.3 action, including the filing of liens under section 270.69. 21.4 To meet the requirements, the taxpayer must first file a 21.5 return for the tax or surcharge type on which the order is based 21.6 and then pay the amount shown on the order within the following 21.7 time limits: 21.8 (1) If the taxpayer files an administrative appeal under 21.9 section 297I.95 or a tax court appeal under chapter 271, and if 21.10 the appeal is based on a constitutional challenge to the tax, 21.11 the payment must be made within 60 days after final 21.12 determination of the appeal. 21.13 (2) If the appeal is not based on a constitutional 21.14 challenge, the payment must be made when the decision of the tax 21.15 court is made. 21.16 (3) If the taxpayer does not file an appeal, the payment 21.17 must be made within 60 days after the date the order is mailed 21.18 to the taxpayer by the commissioner. 21.19 Subd. 2. [ERRONEOUS REFUNDS.] An erroneous refund is 21.20 considered an underpayment of tax or surcharge on the date 21.21 made. An assessment of a deficiency arising out of an erroneous 21.22 refund may be made at any time within two years from the making 21.23 of the refund. If part of the refund was induced by fraud or 21.24 misrepresentation of a material fact, the assessment may be made 21.25 at any time. 21.26 Subd. 3. [ASSESSMENT PRESUMED VALID.] A return or 21.27 assessment of tax or surcharge made by the commissioner is prima 21.28 facie correct and valid. The taxpayer has the burden of 21.29 establishing its incorrectness or invalidity in any related 21.30 action or proceeding. 21.31 Subd. 4. [AGGREGATE REFUND OR ASSESSMENT.] The 21.32 commissioner, on examining returns of a taxpayer for more than 21.33 one year or period, may issue one order covering the period 21.34 under examination that reflects the aggregate refund or 21.35 additional tax or surcharge due. 21.36 Subd. 5. [SUFFICIENCY OF NOTICE.] An order of assessment, 22.1 sent postage prepaid by United States mail to the taxpayer at 22.2 the taxpayer's last known address, is sufficient even if a 22.3 corporation has terminated its existence, unless the department 22.4 has been provided with a new address by a party authorized to 22.5 received notices of assessment. 22.6 Sec. 12. [297I.55] [EXAMINATIONS; AUDITS AND COLLECTIONS.] 22.7 Subdivision 1. [EXAMINATION OF TAXPAYER.] To determine the 22.8 accuracy of a return or report, or in fixing liability under 22.9 this chapter, or for the purpose of collection, the commissioner 22.10 may make reasonable examinations or investigations of a 22.11 taxpayer's place of business; tangible personal property; 22.12 equipment, computer systems and facilities; and pertinent books, 22.13 records, papers, vouchers, computer printouts, accounts, and 22.14 documents. 22.15 Subd. 2. [ACCESS TO RECORDS OF OTHER PERSONS IN CONNECTION 22.16 WITH EXAMINATION OF TAXPAYER.] When conducting an investigation 22.17 or an audit of a taxpayer, or for the purpose of collection, the 22.18 commissioner may, except where privileged by law, examine the 22.19 relevant records and files of any state agency as well as any 22.20 person, business, institution, financial institution, agency of 22.21 the United States government, or agency of any other state where 22.22 permitted by statute, agreement, or reciprocity. The 22.23 commissioner may compel production of these records by subpoena. 22.24 A subpoena may be served directly by the commissioner. 22.25 Subd. 3. [POWER TO COMPEL TESTIMONY.] In the 22.26 administration of this chapter, the commissioner may: 22.27 (1) administer oaths or affirmations and compel by subpoena 22.28 the attendance of witnesses, testimony, and the production of a 22.29 person's pertinent books, records, papers, or other data for 22.30 inspection and copying; and 22.31 (2) examine under oath or affirmation any person regarding 22.32 the business of any taxpayer concerning any relevant matter 22.33 incident to the administration of this chapter. The fees of 22.34 witnesses required by the commissioner to attend a hearing are 22.35 equal to those allowed to witnesses appearing before courts of 22.36 this state. The fees must be paid in the manner provided for 23.1 the payment of other expenses incident to the administration of 23.2 state tax law. 23.3 Subd. 4. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 23.4 IS KNOWN.] An investigation may extend to a person that the 23.5 commissioner determines has access to information that may be 23.6 relevant to the examination or investigation. When a subpoena 23.7 requiring the production of records as described in subdivision 23.8 2 is served on a third-party recordkeeper, written notice of the 23.9 subpoena must be mailed to the taxpayer and to any other person 23.10 who is identified in the subpoena. The notices must be given 23.11 within three days of the day on which the subpoena is served. 23.12 Notice to the taxpayer required by this section is sufficient if 23.13 it is mailed to the last address on record with the commissioner. 23.14 The provisions of this subdivision relating to notice to 23.15 the taxpayer or other parties identified in the subpoena do not 23.16 apply if there is reasonable cause to believe that the giving of 23.17 notice may lead to attempts to conceal, destroy, or alter 23.18 records or assets relevant to the examination, to prevent the 23.19 communication of information from other persons through 23.20 intimidation, bribery, or collusion, or to flee to avoid 23.21 prosecution, testifying, or production of records. 23.22 Subd. 5. [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 23.23 IS NOT KNOWN.] A subpoena that does not identify the person or 23.24 persons whose tax or surcharge liability is being investigated 23.25 may be served only if: 23.26 (1) the subpoena relates to the investigation of a 23.27 particular person or ascertainable group or class of persons; 23.28 (2) there is a reasonable basis for believing that the 23.29 person or group or class of persons may fail or may have failed 23.30 to comply with laws administered by the commissioner; 23.31 (3) the information sought to be obtained from the 23.32 examination of the records, and the identity of the person or 23.33 persons with respect to whose liability the subpoena is issued, 23.34 is not readily available from other sources; 23.35 (4) the subpoena is clear and specific concerning the 23.36 information sought to be obtained; and 24.1 (5) the information sought to be obtained is limited solely 24.2 to the scope of the investigation. 24.3 When a subpoena does not identify the person or persons 24.4 with respect to whose tax or surcharge liability the subpoena is 24.5 issued, the party served with the subpoena may petition for a 24.6 determination concerning whether the commissioner has complied 24.7 with clauses (1) to (5) and thus whether the subpoena is 24.8 enforceable. The petitions must be to the district court in 24.9 which the party is located. The petition must be filed within 24.10 20 days after service of the subpoena. If the party served does 24.11 not petition within the time prescribed, the subpoena has the 24.12 effect of a court order. 24.13 Subd. 6. [REQUEST BY TAXPAYER FOR SUBPOENA.] When the 24.14 commissioner has the power to issue a subpoena for investigative 24.15 or auditing purposes, the commissioner shall honor a reasonable 24.16 request by the taxpayer to issue a subpoena on the taxpayer's 24.17 behalf, if in connection with the investigation or audit. 24.18 Subd. 7. [APPLICATION TO COURT FOR ENFORCEMENT OF 24.19 SUBPOENA.] Disobedience of subpoenas issued under this section 24.20 is punishable by the district court of the district in which the 24.21 party served with the subpoena is located, in the same manner as 24.22 contempt of the district court. 24.23 Subd. 8. [COST OF PRODUCTION OF RECORDS.] The cost of 24.24 producing records of a third party required by a subpoena must 24.25 be paid by the taxpayer, if the taxpayer requests the subpoena 24.26 to be issued, or if the taxpayer has the records available but 24.27 has refused to provide them to the commissioner. In other cases 24.28 where the taxpayer cannot produce records and the commissioner 24.29 then initiates a subpoena for third-party records, the 24.30 commissioner shall pay the reasonable cost of producing the 24.31 records. The commissioner may later assess the reasonable costs 24.32 against the taxpayer if the records contribute to the 24.33 determination of an assessment of tax or surcharge against the 24.34 taxpayer. 24.35 Sec. 13. [297I.60] [CLAIMS FOR REFUND.] 24.36 Subdivision 1. [GENERAL RIGHT TO REFUND.] (a) Subject to 25.1 the requirements of this section and section 297I.70, if a 25.2 taxpayer has paid a tax or surcharge in excess of the amount due 25.3 and files a written claim for refund, the commissioner shall 25.4 refund or credit the overpayment determined by the commissioner 25.5 to be erroneously paid. 25.6 (b) The claim must specify the name of the taxpayer, the 25.7 date when and the period for which the tax or surcharge was 25.8 paid, the kind of tax or surcharge paid, the amount that the 25.9 taxpayer claims was erroneously paid, the grounds on which a 25.10 refund is claimed, and other information relative to the payment. 25.11 The claim must be in the form required by the commissioner. A 25.12 return or amended return claiming an overpayment constitutes a 25.13 claim for refund. 25.14 (c) The commissioner shall determine the amount of refund, 25.15 if any, that is due, and notify the taxpayer of the 25.16 determination as soon as practicable after a claim has been 25.17 filed. Notice must be mailed to the taxpayer at the address 25.18 stated upon the return or claim for refund. 25.19 (d) If the amount of tax or surcharge paid by the taxpayer 25.20 exceeds the amount of tax or surcharge imposed on the taxpayer, 25.21 the amount of excess is considered an overpayment even if in 25.22 fact there was no liability with respect to which the amount was 25.23 paid. 25.24 (e) When in the course of an examination and within the 25.25 time for requesting a refund, the commissioner determines that 25.26 there has been an overpayment of tax or surcharge, the 25.27 commissioner shall refund or credit the amount of the 25.28 overpayment to the taxpayer and no return is necessary. 25.29 (f) Notwithstanding any law to the contrary, the 25.30 commissioner is not required to refund or credit any overpayment 25.31 of less than one dollar. 25.32 (g) There is appropriated to the commissioner the amounts 25.33 necessary to make refunds required by this section. The funds 25.34 are appropriated from the same fund to which the tax or 25.35 surcharge being refunded was originally deposited. 25.36 Subd. 2. [REMEDIES.] (a) If the taxpayer is notified that 26.1 the refund claim is denied in whole or in part, the taxpayer may 26.2 contest the denial by: 26.3 (1) filing an administrative appeal with the commissioner 26.4 under section 297I.95; 26.5 (2) filing an appeal in tax court within 60 days of the 26.6 date of the notice of denial; or 26.7 (3) filing an action in the district court to recover the 26.8 refund. 26.9 (b) An action in the district court must be brought with 18 26.10 months following the date of the notice of denial. An action 26.11 for refund of tax or surcharge must be brought in the district 26.12 court of the district in which lies the taxpayer's principal 26.13 place of business or in the district court for Ramsey county. 26.14 If a taxpayer files a claim for refund and the commissioner has 26.15 not issued a denial of the claim, the taxpayer may bring an 26.16 action in the district court or the tax court at any time after 26.17 the expiration of six months of the time the claim was filed. 26.18 Sec. 14. [297I.65] [LIMITATIONS OF TIME FOR ASSESSMENT OF 26.19 TAX.] 26.20 Subdivision 1. [GENERAL RULE.] Except as otherwise 26.21 provided, the amount of taxes or surcharges assessable must be 26.22 assessed within three and one-half years after the date the 26.23 return is filed. 26.24 Subd. 2. [FILING DATE.] For purposes of this section, a 26.25 return filed before the last day prescribed by law for filing 26.26 the return is considered to be filed on the last day. 26.27 Subd. 3. [FALSE OR FRAUDULENT RETURN.] Notwithstanding the 26.28 limitation under subdivision 1, the tax or surcharge may be 26.29 assessed at any time if a false or fraudulent return is filed or 26.30 when a taxpayer fails to file a return. 26.31 Sec. 15. [297I.70] [LIMITATION ON CLAIMS FOR REFUND.] 26.32 Except as provided in section 297I.75, a claim for refund 26.33 of an overpayment must be filed within 3-1/2 years from the date 26.34 prescribed for filing the return, or one year from the date of 26.35 an order assessing tax or surcharge, or one year from the date 26.36 of a return filed by the commissioner, upon payment in full of 27.1 the tax, surcharge, penalties, and interest shown on the order 27.2 or return made by the commissioner, whichever period expires 27.3 later. Claims for refund filed after the 3-1/2-year period but 27.4 within the one-year period are limited to the amount of tax, 27.5 surcharge, penalties, and interest on the order or return made 27.6 by the commissioner and to issues determined by the order or 27.7 return made by the commissioner. 27.8 Sec. 16. [297I.75] [CONSENT TO EXTEND TIME.] 27.9 If before the expiration of the time prescribed in sections 27.10 297I.65 and 297I.70 for the assessment of tax or surcharge or 27.11 the filing of a claim for refund, the commissioner and the 27.12 taxpayer have consented in writing to the assessment or filing 27.13 of a claim for refund after that time, the tax or surcharge may 27.14 be assessed at any time before the expiration of the agreed-upon 27.15 period and a claim for refund may be paid at any time before the 27.16 expiration of the agreed-upon period plus six months. The 27.17 period may be extended by later agreements in writing before the 27.18 expiration of the period previously agreed upon. 27.19 Sec. 17. [297I.80] [INTEREST.] 27.20 Subdivision 1. [PAYABLE TO THE COMMISSIONER.] (a) When 27.21 interest is required under this section, interest is computed at 27.22 the rate specified in section 270.75. 27.23 (b) If a tax or surcharge is not paid within the time named 27.24 by law for payment, the unpaid tax or surcharge bears interest 27.25 from the date the tax or surcharge should have been paid until 27.26 the date the tax or surcharge is paid. 27.27 (c) Whenever a taxpayer is liable for additional tax or 27.28 surcharge because of a redetermination by the commissioner or 27.29 other reason, the additional tax or surcharge bears interest 27.30 from the time the tax or surcharge should have been paid until 27.31 the date the tax or surcharge is paid. 27.32 (d) A penalty bears interest from the date the return or 27.33 payment was required to be filed or paid to the date of payment 27.34 of the penalty. 27.35 Subd. 2. [ON OVERPAYMENTS.] (a) When interest is required 27.36 under this section, interest is computed at the rate specified 28.1 in section 270.76. 28.2 (b) Interest on an overpayment is computed from the date of 28.3 the payment of the tax or surcharge until the date the refund is 28.4 made. For purposes of this subdivision, any payment made before 28.5 the last day prescribed by law to make the payment, including 28.6 any estimated tax payments, is considered paid on the last day 28.7 prescribed by law for the payment. A return filed before the 28.8 due date is considered as filed on the due date. 28.9 Sec. 18. [297I.85] [CIVIL PENALTIES.] 28.10 Subdivision 1. [LATE FILING PENALTY.] If a taxpayer fails 28.11 to file a return within the time prescribed, a penalty of five 28.12 percent of the amount of tax or surcharge not timely paid is 28.13 added to the tax or surcharge. 28.14 Subd. 2. [LATE PAYMENT PENALTY.] If a taxpayer fails to 28.15 pay a tax or surcharge within the time specified for payment a 28.16 penalty must be added to the amount required to be shown as tax 28.17 or surcharge. The penalty is five percent of the tax or 28.18 surcharge not paid on or before the date specified for payment 28.19 of the tax or surcharge if the failure is for not more than 30 28.20 days, with an additional penalty of five percent of the amount 28.21 of tax or surcharge remaining unpaid during each additional 30 28.22 days or fraction of 30 days during which the failure continues, 28.23 not exceeding 15 percent in the aggregate. 28.24 Subd. 3. [INTENT TO EVADE.] If a taxpayer, with intent to 28.25 evade the tax or surcharge imposed by this chapter fails to file 28.26 any return required by this chapter, or with such intent files a 28.27 false or fraudulent return, a penalty is imposed on the 28.28 taxpayer. The penalty is equal to 50 percent of the tax or 28.29 surcharge, less amounts paid by the taxpayer on the basis of the 28.30 false or fraudulent return and is due for the period to which 28.31 the return related. 28.32 Subd. 4. [NEGLIGENCE OR INTENTIONAL DISREGARD; 28.33 PENALTY.] If any part of an additional assessment is due to 28.34 negligence or intentional disregard of the statute or a rule but 28.35 without intent to defraud, there is added to the tax or 28.36 surcharge a penalty equal to ten percent of the additional 29.1 assessment. 29.2 Subd. 5. [PAYMENT OF PENALTIES.] The penalties imposed by 29.3 this section must be collected and paid in the same manner as 29.4 taxes. 29.5 Subd. 6. [PENALTIES ARE ADDITIONAL.] The civil penalties 29.6 imposed by this section are in addition to the criminal 29.7 penalties imposed by this chapter. 29.8 Subd. 7. [PENALTY FOR FAILURE TO MAKE PAYMENT BY 29.9 ELECTRONIC FUNDS TRANSFER.] In addition to other applicable 29.10 penalties imposed by this section, if the commissioner notifies 29.11 the taxpayer that payments are required to be made by means of 29.12 electronic funds transfer, and the payments are made by some 29.13 other means, a penalty is imposed. The amount of the penalty is 29.14 equal to five percent of each payment that should have been paid 29.15 electronically. The penalty may be abated under the abatement 29.16 procedures prescribed in section 270.07, subdivision 6, if the 29.17 failure to pay electronically is due to reasonable cause. 29.18 Sec. 19. [297I.90] [CRIMINAL PENALTIES.] 29.19 Subdivision 1. [PENALTIES FOR KNOWING FAILURE TO FILE OR 29.20 PAY; WILLFUL EVASION.] (a) If a person is required to file with 29.21 the commissioner a return, report, or other document, and that 29.22 person fails to file it when required and does so knowingly, 29.23 rather than accidentally, inadvertently, or negligently, that 29.24 person is guilty of a gross misdemeanor. 29.25 (b) If a person is required to file with the commissioner a 29.26 return, report, or other document, and that person willfully 29.27 attempts in any manner to evade or defeat a tax or surcharge by 29.28 failing to file it when required, that person is guilty of a 29.29 felony. 29.30 (c) If a person is required to pay or to collect and remit 29.31 a tax or surcharge, and that person knowingly, rather than 29.32 accidentally, inadvertently, or negligently fails to do so when 29.33 required, that person is guilty of a gross misdemeanor. 29.34 (d) If a person is required to pay or to collect and remit 29.35 a tax or surcharge, and that person willfully attempts to evade 29.36 or defeat a tax or surcharge by failing to do so when required, 30.1 that person is guilty of a felony. 30.2 Subd. 2. [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 30.3 person who files with the commissioner a return, report, or 30.4 other document known by the person to be fraudulent or false 30.5 concerning a material matter is guilty of a felony. 30.6 (b) A person who knowingly aids or assists in, or advises 30.7 in the preparation or presentation of a return, report, or other 30.8 document that is fraudulent or false concerning a material 30.9 matter, whether or not the falsity or fraud committed is with 30.10 the knowledge or consent of the person authorized or required to 30.11 present the return, report, or other document, is guilty of a 30.12 felony. 30.13 Sec. 20. [297I.95] [ADMINISTRATIVE APPEALS.] 30.14 Subdivision 1. [TAXPAYER RIGHT TO RECONSIDERATION.] A 30.15 taxpayer may obtain the commissioner's reconsideration of an 30.16 order assessing tax or surcharge, a denial of a request for 30.17 abatement of penalty or interest, or a denial of a claim for 30.18 refund by filing an administrative appeal under subdivision 4. 30.19 No reconsideration is allowed under this section if the action 30.20 taken by the commissioner is the outcome of an administrative 30.21 appeal. 30.22 Subd. 2. [APPEAL BY TAXPAYER.] A taxpayer who wishes to 30.23 seek administrative review must follow the procedures in 30.24 subdivision 4. 30.25 Subd. 3. [NOTICE DATE.] For purposes of this section, the 30.26 term "notice date" means the date of the order adjusting the tax 30.27 or surcharge or order denying a request for abatement, or, in 30.28 the case of a denied refund, the date of the notice of denial. 30.29 Subd. 4. [TIME AND CONTENT FOR ADMINISTRATIVE 30.30 APPEAL.] Within 60 days after the notice date, the taxpayer must 30.31 file a written appeal with the commissioner. The appeal need 30.32 not be in any particular form but must contain the following 30.33 information: 30.34 (1) name and address of the taxpayer; 30.35 (2) if a corporation, the state of incorporation of the 30.36 taxpayer, and the principal place of business of the 31.1 corporation; 31.2 (3) the Minnesota identification number or social security 31.3 number of the taxpayer; 31.4 (4) the type of tax or surcharge involved; 31.5 (5) the date; 31.6 (6) the tax years or periods involved and the amount of tax 31.7 or surcharge involved for each year or period; 31.8 (7) the findings in the notice that the taxpayer disputes; 31.9 (8) a summary statement that the taxpayer relies on for 31.10 each exception; and 31.11 (9) the taxpayer's signature or signature of the taxpayer's 31.12 duly authorized agent. 31.13 Subd. 5. [EXTENSIONS.] When requested in writing and 31.14 within the time allowed for filing an administrative appeal, the 31.15 commissioner may extend the time for filing an appeal for a 31.16 period not more than 30 days after the expiration of the 60 days 31.17 after the notice date. 31.18 Subd. 6. [DETERMINATION OF APPEAL.] Based on applicable 31.19 law and available information, the commissioner shall determine 31.20 whether the appeal is valid. The commissioner shall find the 31.21 appeal valid in whole, valid in part, or invalid, and shall 31.22 notify the taxpayer of the decision. This notice must be in 31.23 writing and must state the reasons for the determination. 31.24 Subd. 7. [AGREEMENT DETERMINING TAX LIABILITY.] When it 31.25 appears to be in the best interests of the state, the 31.26 commissioner may settle any taxes, surcharges, penalties, or 31.27 interest that the commissioner has under consideration by virtue 31.28 of an appeal filed under this section. An agreement must be in 31.29 writing and signed by the commissioner and the taxpayer, or by 31.30 the taxpayer's representative authorized by the taxpayer to 31.31 enter into an agreement. The agreement is final and, except 31.32 upon a showing of fraud, malfeasance, or misrepresentation of a 31.33 material fact, the case must not be reopened as to the matters 31.34 agreed upon. 31.35 Subd. 8. [APPEAL OF AN ADMINISTRATIVE DETERMINATION.] 31.36 After deciding an appeal, the commissioner shall issue an order 32.1 reflecting that decision. The order must be issued 32.2 notwithstanding any statute of limitations for making 32.3 assessments or other determinations. If the statute of 32.4 limitations for making assessments or other determinations would 32.5 have expired before the issuance of this order, except for this 32.6 section, the order is limited to issues or matters contained in 32.7 the appealed determination. The order is appealable to the 32.8 Minnesota tax court under section 271.06. 32.9 Subd. 9. [APPEAL WHERE NO DETERMINATION.] If the 32.10 commissioner does not make a determination within six months 32.11 after the filing of an administrative appeal, the taxpayer may 32.12 appeal to tax court. 32.13 Subd. 10. [EXEMPTION FROM ADMINISTRATIVE PROCEDURE 32.14 ACT.] This section is not subject to the contested case 32.15 procedures of chapter 14. 32.16 Sec. 21. [PURPOSE.] 32.17 It is the intent of the legislature to simplify Minnesota's 32.18 insurance tax laws by consolidating and recodifying tax 32.19 administration and compliance provisions now contained 32.20 throughout Minnesota Statutes, chapter 60A, and elsewhere. Due 32.21 to the complexity of the recodification, prior provisions are 32.22 repealed on the effective date of the new provisions. The 32.23 repealed provisions, however, remain in effect until superseded 32.24 by the analogous provision in the new law. 32.25 Sec. 22. [EFFECTIVE DATES.] 32.26 Sections 1 and 16 are effective January 1, 2001. 32.27 Sections 2 to 9 and 18 are effective for returns, taxes, 32.28 surcharges, and estimated payments required to be filed or paid 32.29 for tax years beginning on or after January 1, 2001. 32.30 Sections 10 to 12 are effective for assessments made and 32.31 examinations and audits commenced on or after January 1, 2001. 32.32 Section 13 is effective for claims for refunds filed on or 32.33 after January 1, 2001. 32.34 Section 14 is effective for assessments that have not been 32.35 made as of the day following final enactment. The time period 32.36 for making such assessments is the time period prescribed in the 33.1 enacted section or one year after the day following final 33.2 enactment, whichever is greater. 33.3 Section 15 is effective for claims for refund which have 33.4 not been filed as of the day following final enactment and in 33.5 which the time period for filing the claim has not expired under 33.6 the provisions in effect prior to the day following final 33.7 enactment. The time period for filing such claims is the time 33.8 period prescribed in the enacted sections, or one year after the 33.9 day following final enactment, whichever is greater. 33.10 Section 17 is effective for all amounts due on or after 33.11 January 1, 2001. 33.12 Section 19 is effective for crimes committed on or after 33.13 January 1, 2001. 33.14 Section 20 is effective for assessments made or refund 33.15 claims or abatements denied on or after January 1, 2001. 33.16 ARTICLE 2 33.17 TECHNICAL CHANGES 33.18 Section 1. Minnesota Statutes 1999 Supplement, section 33.19 43A.23, subdivision 1, is amended to read: 33.20 Subdivision 1. [GENERAL.] The commissioner is authorized 33.21 to request bids from carriers or to negotiate with carriers and 33.22 to enter into contracts with carriers which in the judgment of 33.23 the commissioner are best qualified to underwrite and service 33.24 the benefit plans. Contracts entered into with carriers are not 33.25 subject to the requirements of sections 16C.16 to 16C.19. The 33.26 commissioner may negotiate premium rates and coverage provisions 33.27 with all carriers licensed under chapters 62A, 62C, and 62D. 33.28 The commissioner may also negotiate reasonable restrictions to 33.29 be applied to all carriers under chapters 62A, 62C, and 62D. 33.30 Contracts to underwrite the benefit plans must be bid or 33.31 negotiated separately from contracts to service the benefit 33.32 plans, which may be awarded only on the basis of competitive 33.33 bids. The commissioner shall consider the cost of the plans, 33.34 conversion options relating to the contracts, service 33.35 capabilities, character, financial position, and reputation of 33.36 the carriers, and any other factors which the commissioner deems 34.1 appropriate. Each benefit contract must be for a uniform term 34.2 of at least one year, but may be made automatically renewable 34.3 from term to term in the absence of notice of termination by 34.4 either party. The commissioner shall, to the extent feasible, 34.5 make hospital and medical benefits available from at least one 34.6 carrier licensed to do business pursuant to each of chapters 34.7 62A, 62C, and 62D. The commissioner need not provide health 34.8 maintenance organization services to an employee who resides in 34.9 an area which is not served by a licensed health maintenance 34.10 organization. The commissioner may refuse to allow a health 34.11 maintenance organization to continue as a carrier. The 34.12 commissioner may elect not to offer all three types of carriers 34.13 if there are no bids or no acceptable bids by that type of 34.14 carrier or if the offering of additional carriers would result 34.15 in substantial additional administrative costs. A carrier 34.16 licensed under chapter 62A is exempt from the
taxtaxes imposed 34.17 by section 60A.15chapter 297I on premiums paid to it by the 34.18 state. 34.19 All self-insured hospital and medical service products must 34.20 comply with coverage mandates, data reporting, and consumer 34.21 protection requirements applicable to the licensed carrier 34.22 administering the product, had the product been insured, 34.23 including chapters 62J, 62M, and 62Q. Any self-insured products 34.24 that limit coverage to a network of providers or provide 34.25 different levels of coverage between network and nonnetwork 34.26 providers shall comply with section 62D.123 and geographic 34.27 access standards for health maintenance organizations adopted by 34.28 the commissioner of health in rule under chapter 62D. 34.29 Sec. 2. Minnesota Statutes 1998, section 43A.316, 34.30 subdivision 9, is amended to read: 34.31 Subd. 9. [INSURANCE TRUST FUND.] The insurance trust fund 34.32 in the state treasury consists of deposits of the premiums 34.33 received from employers participating in the program and 34.34 transfers before July 1, 1994, from the excess contributions 34.35 holding account established by section 353.65, subdivision 7. 34.36 All money in the fund is appropriated to the commissioner to pay 35.1 insurance premiums, approved claims, refunds, administrative 35.2 costs, and other related service costs. Premiums paid by 35.3 employers to the fund are exempt from the taxtaxes imposed by 35.4 sections 60A.15 and 60A.198chapter 297I. The commissioner 35.5 shall reserve an amount of money to cover the estimated costs of 35.6 claims incurred but unpaid. The state board of investment shall 35.7 invest the money according to section 11A.24. Investment income 35.8 and losses attributable to the fund must be credited to the fund. 35.9 Sec. 3. Minnesota Statutes 1998, section 43A.317, 35.10 subdivision 8, is amended to read: 35.11 Subd. 8. [PREMIUMS.] (a) [PAYMENTS.] Employers enrolled in 35.12 the program shall pay premiums according to terms established by 35.13 the commissioner. If an employer fails to make the required 35.14 payments, the commissioner may cancel coverage and pursue other 35.15 civil remedies. 35.16 (b) [RATING METHOD.] The commissioner shall determine the 35.17 premium rates and rating method for the program. The rating 35.18 method for eligible small employers must meet or exceed the 35.19 requirements of chapter 62L. The rating methods must recover in 35.20 premiums all of the ongoing costs for state administration and 35.21 for maintenance of a premium stability and claim fluctuation 35.22 reserve. On June 30, 1999, after paying all necessary and 35.23 reasonable expenses, the commissioner must apply up to 35.24 $2,075,000 of any remaining balance in the Minnesota employees' 35.25 insurance trust fund to repayment of any amounts drawn or 35.26 expended for this program from the health care access fund. 35.27 (c) [TAXES AND ASSESSMENTS.] To the extent that the program 35.28 operates as a self-insured group, the premiums paid to the 35.29 program are not subject to the premiumtaxes imposed by sections35.30 60A.15 and 60A.198chapter 297I, but the program is subject to a 35.31 Minnesota comprehensive health association assessment under 35.32 section 62E.11. 35.33 Sec. 4. Minnesota Statutes 1999 Supplement, section 35.34 60A.19, subdivision 6, is amended to read: 35.35 Subd. 6. [RETALIATORY PROVISIONS.] (1) When by the laws of35.36 any other state or country any taxes, fines, deposits,36.1 penalties, licenses, or fees, in addition to or in excess of36.2 those imposed by the laws of this state upon foreign insurance36.3 companies and their agents doing business in this state, are36.4 imposed on insurance companies of this state and their agents36.5 doing business in that state or country, or when any conditions36.6 precedent to the right to do business in that state are imposed36.7 by the laws thereof, beyond those imposed upon these foreign36.8 companies by the laws of this state, the same taxes, fines,36.9 deposits, penalties, licenses, fees, and conditions precedent36.10 shall be imposed upon every similar insurance company of that36.11 state or country and their agents doing or applying to do36.12 business in this state so long as these foreign laws remain in36.13 force. Special purpose obligations or assessments, including36.14 assessments by an insurance guaranty association, joint36.15 underwriting association or similar organization, or assessments36.16 imposed in connection with particular kinds of insurance, are36.17 not taxes, licenses, or fees as these terms are used in this36.18 section.36.19 (2)In the event that a domestic insurance company, after 36.20 complying with all reasonable laws and rulings of any other 36.21 state or country, is refused permission by that state or country 36.22 to transact business therein after the commissioner of commerce 36.23 of Minnesota has determined that that company is solvent and 36.24 properly managed and after the commissioner has so certified to 36.25 the proper authority of that other state or country, then, and 36.26 in every such case, the commissioner may forthwith suspend or 36.27 cancel the certificate of authority of every insurance company 36.28 organized under the laws of that other state or country to the 36.29 extent that it insures, or seeks to insure, in this state 36.30 against any of the risks or hazards which that domestic company 36.31 seeks to insure against in that other state or country. Without 36.32 limiting the application of the foregoing provision, it is 36.33 hereby determined that any law or ruling of any other state or 36.34 country which prescribes to a Minnesota domestic insurance 36.35 company the premium rate or rates for life insurance issued or 36.36 to be issued outside that other state or country shall not be 37.1 reasonable. 37.2 (3)(2) This section does not apply to insurance companies 37.3 organized or domiciled in a state or country, the laws of which 37.4 do not impose retaliatory taxes, fines, deposits, penalties, 37.5 licenses, or fees or which grant, on a reciprocal basis, 37.6 exemptions from retaliatory taxes, fines, deposits, penalties, 37.7 licenses, or fees to insurance companies domiciled in this state. 37.8 Sec. 5. Minnesota Statutes 1998, section 60A.19, 37.9 subdivision 8, is amended to read: 37.10 Subd. 8. [INSURANCE FROM UNLICENSED FOREIGN COMPANIES.] 37.11 Any person, firm, or corporation desiring to obtain insurance 37.12 upon any property, interests, or risks of any nature other than 37.13 life insurance in this state in companies not authorized to do 37.14 business therein shall give bond to the commissioner of commerce37.15 in such sum as the commissioner shall deem reasonable, with37.16 satisfactory resident sureties, conditioned that the obligors,37.17 on the expiration of a license to obtain such insurance, shall37.18 pay to the commissioner of revenue, for the use of the state, a37.19 tax of two percent upon the gross premiums paid by the37.20 licenseein the state must agree to file with the commissioner 37.21 of revenue all returns required under chapter 297I and pay to 37.22 the commissioner of revenue any amounts required to be paid 37.23 under chapter 297I. ThereuponUpon that agreement, the 37.24 commissioner of commerce shall issue sucha license, good for 37.25 one year , and all. Insurance procured thereunder shall be37.26 lawful andunder the license is valid and the provisions of all37.27 the policies thereof shall be deemedare considered to be in 37.28 accordance, and construed as if identical in effect, with the 37.29 standard policy prescribed by the laws of this state and. The 37.30 insurers may enter the state to perform any act necessary or 37.31 proper in the conduct of the business. This bond may be37.32 enforced by the commissioner of commerce in the commissioner's37.33 name in any district court. The licensee shall file with the37.34 commissioner of commerce on June 30 and December 31 annually a37.35 verified statement of the aggregate premiums paid and returned37.36 premiums received on account of such insurance.38.1 The commissioner of revenue, or duly authorized agents, may38.2 conduct investigations, inquiries, and hearings to enforce the38.3 tax imposed by this subdivision and, in connection with those38.4 investigations, inquiries, and hearings, the commissioner and38.5 duly authorized agents have all the powers conferred by section38.6 270.06.38.7 Sec. 6. Minnesota Statutes 1998, section 60A.198, 38.8 subdivision 3, is amended to read: 38.9 Subd. 3. [PROCEDURE FOR OBTAINING LICENSE.] A person 38.10 licensed as an agent in this state pursuant to other law may 38.11 obtain a surplus lines license by doing the following: 38.12 (a) filing an application in the form and with the 38.13 information the commissioner may reasonably require to determine 38.14 the ability of the applicant to act in accordance with sections 38.15 60A.195 to 60A.209; 38.16 (b) maintaining an agent's license in this state; 38.17 (c) delivering to the commissioner a financial guarantee38.18 bond from a surety acceptable to the commissioner for the38.19 greater of the following:38.20 (1) $5,000; or38.21 (2) the largest semiannual surplus lines premium tax38.22 liability incurred by the applicant in the immediately preceding38.23 five years;38.24 (d)agreeing to file with the commissioner of revenue no38.25 later than February 15 and August 15 annually, a sworn statement38.26 of the charges for insurance procured or placed and the amounts38.27 returned on the insurance canceled under the license for the38.28 preceding six-month period ending December 31 and June 3038.29 respectively, and at the time of the filing of this statement,38.30 paying the commissioner a tax on premiums equal to three percent38.31 of the total written premiums less cancellations;all returns 38.32 required by chapter 297I and paying to the commissioner of 38.33 revenue all amounts required under chapter 297I; and 38.34 (e)(d) paying a fee as prescribed by section 60K.06, 38.35 subdivision 2, paragraph (a), clause (4) ; and. 38.36 (f) paying penalties imposed under section 289A.60,39.1 subdivision 1, as it relates to withholding and sales or use39.2 taxes, if the tax due under clause (d) is not timely paid.39.3 Sec. 7. Minnesota Statutes 1998, section 60A.208, 39.4 subdivision 8, is amended to read: 39.5 Subd. 8. [OPERATING ASSESSMENT.] (a) Upon request from the 39.6 association, the commissioner may approve the levy of an 39.7 assessment of not more than one-half of one percent of premiums 39.8 charged pursuant to sections 60A.195 to 60A.209 for operation of 39.9 the association to the extent that the operation relieves the 39.10 commissioner of duties otherwise required of the commissioner 39.11 pursuant to sections 60A.195 to 60A.209. Any assessment so 39.12 approved may be subtracted from the premium tax owed by the 39.13 licensee under chapter 297I. 39.14 (b) The association may revoke the membership and the 39.15 commissioner may revoke the license in this state, of any 39.16 licensee who fails to pay an assessment when due, if the 39.17 assessment has been approved by the commissioner. 39.18 Sec. 8. Minnesota Statutes 1998, section 60A.209, 39.19 subdivision 3, is amended to read: 39.20 Subd. 3. [DUTY TO REPORT.] Each insured in this state who 39.21 procures, causes to be procured, or continues or renews 39.22 insurance with an ineligible surplus lines insurer or any 39.23 self-insurer in this state who procures or continues excess of 39.24 loss, catastrophe, or other insurance upon a subject of 39.25 insurance resident, located, or to be performed within this 39.26 state, other than insurance procured pursuant to section 60A.201 39.27 or subdivision 1 shall file a written report regarding the39.28 insurance with the commissioner of revenue on forms prescribed39.29 by the commissioner of revenue and furnished to the insured upon39.30 request. The report shall be filed within 30 days after the39.31 date the insurance was procured, continued, or renewed and shall39.32 be accompanied by the tax on the premiums of two percent. The39.33 report shall show all of the following:39.34 (a) The name and address of the insured;39.35 (b) The name and address of the insurer;39.36 (c) The subject of the insurance;40.1 (d) A general description of the coverage;40.2 (e) The amount of premium currently charged for the40.3 insurance; and40.4 (f) Any additional pertinent information reasonably40.5 requested by the commissioner of revenuemust file with the 40.6 commissioner of revenue all returns and pay to the commissioner 40.7 of revenue all amounts required under chapter 297I. 40.8 Sec. 9. Minnesota Statutes 1998, section 60C.17, is 40.9 amended to read: 40.10 60C.17 [TAX EXEMPTION.] 40.11 The association is exempt from payment of all taxes imposed 40.12 under chapter 297I and all fees and all other taxes levied by 40.13 this state or any of its subdivisions except taxes levied on 40.14 real or personal property. 40.15 Sec. 10. Minnesota Statutes 1998, section 60E.04, 40.16 subdivision 4, is amended to read: 40.17 Subd. 4. [TAXATION.] (a) Each risk retention group is40.18 liable for the payment of premium taxes and taxes on premiums of40.19 direct business for risks resident or located within this state,40.20 and shall report to the commissioner of revenue the net premiums40.21 written for risks resident or located within this state. The40.22 risk retention group shall be subject to taxation, and any40.23 applicable taxation-related fines and penalties, on the same40.24 basis as a foreign admitted insurermust file with the 40.25 commissioner of revenue all returns and pay to the commissioner 40.26 of revenue all amounts required under chapter 297I. 40.27 (b) To the extent licensed agents or brokers are utilized 40.28 pursuant toin accordance with section 60E.12, they shall report 40.29 to the commissioner of revenue the premiums for direct business 40.30 for risks resident or located within this state which the 40.31 licensees have placed with or on behalf of a risk retention 40.32 group not chartered in this state. 40.33 (c) To the extent that insurance agents or brokers are 40.34 utilized pursuant toin accordance with section 60E.12, each 40.35 agent or broker shall keep a complete and separate record of all 40.36 policies procured from each risk retention group, which shall41.1 must be open to examination by the commissioner, as provided in 41.2 section 60A.031 and by the commissioner of revenue. These 41.3 records shallmust, for each policy and each kind of insurance 41.4 provided, include the following: 41.5 (1) the limit of liability; 41.6 (2) the time period covered; 41.7 (3) the effective date; 41.8 (4) the name of the risk retention group which issued the 41.9 policy; 41.10 (5) the gross premium charged; and 41.11 (6) the amount of return premiums, if any. 41.12 Sec. 11. Minnesota Statutes 1998, section 60E.095, is 41.13 amended to read: 41.14 60E.095 [PURCHASING GROUP TAXATION.] 41.15 Premium taxes and taxes on premiumspaid for coverage of 41.16 risks resident or located in this state by a purchasing group or 41.17 any members of the purchasing groups shall be:41.18 (1) imposed at the same rate and subject to the same41.19 interest, fines, and penalties as that applicable to premium41.20 taxes and taxes on premiums paid for similar coverage from a41.21 similar insurance source by other insureds; and41.22 (2) paid first by the insurance source, and if not by the41.23 source by the agent or broker for the purchasing group, and if41.24 not by the agent or broker then by the purchasing group, and if41.25 not by the purchasing group then by each of its membersgroup 41.26 must be paid to the commissioner of revenue as provided in 41.27 chapter 297I. 41.28 Sec. 12. Minnesota Statutes 1998, section 61B.30, 41.29 subdivision 1, is amended to read: 41.30 Subdivision 1. [STATE FEES AND TAXES.] The association is 41.31 exempt from payment of all taxes imposed under chapter 297I and 41.32 all fees and all other taxes levied by this state or its 41.33 subdivisions, except taxes levied on real property. 41.34 Sec. 13. Minnesota Statutes 1998, section 62C.01, 41.35 subdivision 3, is amended to read: 41.36 Subd. 3. [SCOPE.] Every foreign or domestic nonprofit 42.1 corporation organized for the purpose of establishing or 42.2 operating a health service plan in Minnesota whereby health 42.3 services are provided to subscribers to the plan under a 42.4 contract with the corporation shall be subject to and governed 42.5 by Laws 1971, chapter 568, and shall not be subject to the laws 42.6 of this state relating to insurance, except section 60A.15the 42.7 gross premiums tax provisions contained in chapter 297I and as 42.8 otherwise specifically provided. Laws 1971, chapter 568 shall 42.9 apply to all health service plan corporations incorporated after 42.10 August 1, 1971, and to all existing health service plan 42.11 corporations, except as otherwise provided. Nothing in sections 42.12 62C.01 to 62C.23 shall apply to prepaid group practice plans. A 42.13 prepaid group practice plan is any plan or arrangement other 42.14 than a service plan, whereby health services are rendered to 42.15 certain patients by providers who devote their professional 42.16 effort primarily to members or patients of the plan, and whereby 42.17 the recipients of health services pay for the services on a 42.18 regular, periodic basis, not on a fee for service basis. 42.19 Sec. 14. Minnesota Statutes 1998, section 62E.10, 42.20 subdivision 1, is amended to read: 42.21 Subdivision 1. [CREATION; TAX EXEMPTION.] There is 42.22 established a comprehensive health association to promote the 42.23 public health and welfare of the state of Minnesota with 42.24 membership consisting of all insurers; self-insurers; 42.25 fraternals; joint self-insurance plans regulated under chapter 42.26 62H; the Minnesota employees insurance program established in 42.27 section 43A.317, effective July 1, 1993; health maintenance 42.28 organizations; and community integrated service networks 42.29 licensed or authorized to do business in this state. The 42.30 comprehensive health association shall beis exempt from 42.31 taxationthe taxes imposed under thechapter 297I and any other 42.32 laws of this state and all property owned by the 42.33 association shall beis exempt from taxation. 42.34 Sec. 15. Minnesota Statutes 1998, section 62E.13, 42.35 subdivision 10, is amended to read: 42.36 Subd. 10. [PREMIUMS NOT SUBJECT TO TAX.] Premiums received 43.1 by the writing carrier for the comprehensive health insurance 43.2 plan are exempt from the provisions of section 60A.15taxes 43.3 imposed under chapter 297I. 43.4 Sec. 16. Minnesota Statutes 1998, section 62L.13, 43.5 subdivision 3, is amended to read: 43.6 Subd. 3. [EXEMPTIONS.] The association, its transactions, 43.7 and all property owned by it are exempt from taxation under the 43.8 laws of this state or any of its subdivisions, including, but 43.9 not limited to, premiums taxes imposed under chapter 297I, 43.10 income tax, sales tax, use tax, and property tax. The 43.11 association may seek exemption from payment of all fees and 43.12 taxes levied by the federal government. Except as otherwise 43.13 provided in this chapter, the association is not subject to the 43.14 provisions of chapters 13, 60A, 62A to 62H, and section 43.15 471.705. The association is not a public employer and is not 43.16 subject to the provisions of chapters 179A and 353. The board 43.17 of directors and health carriers who are members of the 43.18 association are exempt from sections 325D.49 to 325D.66 in the 43.19 performance of their duties as directors and members of the 43.20 association. 43.21 Sec. 17. Minnesota Statutes 1998, section 62T.10, is 43.22 amended to read: 43.23 62T.10 [MINNESOTACARE TAX.] 43.24 An accountable provider network is subject to the premium43.25 tax established in section 60A.15 and must pay installments as43.26 described in section 60A.15, subdivision 1, paragraph (d)shall 43.27 file with the commissioner of revenue all returns and pay to the 43.28 commissioner of revenue all amounts required under chapter 297I. 43.29 Sec. 18. Minnesota Statutes 1998, section 64B.24, is 43.30 amended to read: 43.31 64B.24 [TAXATION.] 43.32 Fraternal benefit societies are declared to be charitable 43.33 institutions, and the property held and used for lodge purposes, 43.34 and the funds of these societies shall be exempt from taxation 43.35 under the general tax or revenue laws of this state, except that 43.36 the real estate of the society shall be taxable. Insurance 44.1 premiums paid to a fraternal benefit society are exempt from the 44.2 taxes imposed under chapter 297I. 44.3 Sec. 19. Minnesota Statutes 1998, section 71A.04, 44.4 subdivision 1, is amended to read: 44.5 Subdivision 1. [PREMIUM TAX.] The attorney-in-fact, in 44.6 lieu of all taxes, state, county, and municipal, shall pay to44.7 the state with the filing of each annual report on or before44.8 March 1 as an annual license fee two percent of the gross44.9 premiums or deposits for the preceding calendar year, deducting44.10 all amounts returned to subscribers or credited to their44.11 accounts; and the attorney shall pay a filing fee of $2shall 44.12 file with the commissioner of revenue all returns and pay to the 44.13 commissioner of revenue all amounts required under chapter 297I. 44.14 Sec. 20. Minnesota Statutes 1998, section 79.252, 44.15 subdivision 4, is amended to read: 44.16 Subd. 4. [RESPONSIBILITIES.] Assigned risk policies and 44.17 contracts of coverage shall beare subject to premium tax44.18 pursuant to section 60A.15taxation under chapter 297I, and 44.19 special compensation fund assessments pursuant tounder 44.20 Minnesota Statutes 1990, section 176.131, subdivision 10. The 44.21 assigned risk plan shall be a member of the reinsurance 44.22 association for the purposes of sections 79.34 to 79.40 and may 44.23 select either retention limit provided in section 79.34, 44.24 subdivision 2. 44.25 Sec. 21. Minnesota Statutes 1998, section 79.34, 44.26 subdivision 1a, is amended to read: 44.27 Subd. 1a. [GROSS PREMIUMS TAX.] The direct funded premium44.28 premiums received by the reinsurance association isfrom 44.29 self-insurers approved under section 176.181 and political 44.30 subdivisions that self-insure are subject to the gross premium44.31 tax imposed by section 60A.15taxation under chapter 297I. Only44.32 direct funded premium payments made to the reinsurance44.33 association by self-insurers approved pursuant to section44.34 176.181 and each political subdivision that self-insures shall44.35 be subject to the gross premiums tax.44.36 Sec. 22. Minnesota Statutes 1998, section 176A.08, is 45.1 amended to read: 45.2 176A.08 [EXEMPTION FROM AND APPLICABILITY OF CERTAIN LAWS.] 45.3 The fund shall not be considered a state agency for any 45.4 purpose including, but not limited to, chapters 13, 15, 15A, and 45.5 43A. However, the fund shall be subject to sections 179A.01 to 45.6 179A.25. The insurance operations of the fund are subject to 45.7 all of the provisions of chapters 60A and 60B. The commissioner 45.8 of commerce has the same powers with respect to the board as the 45.9 commissioner has with respect to a private workers' compensation 45.10 insurer under chapters 60A and 60B. The fund is considered an 45.11 insurer for the purposes of chapters 60C, 72A, 79, and 176. The 45.12 fund is subject to the same tax liability as a mutual insurance 45.13 company in this state pursuant to section 60A.15under chapter 45.14 297I. As a condition of its authority to transact business in 45.15 this state the fund shall be a member of the workers' 45.16 compensation reinsurance association and is bound by its plan of 45.17 operation. 45.18 Sec. 23. Minnesota Statutes 1998, section 290.35, 45.19 subdivision 2, is amended to read: 45.20 Subd. 2. [APPORTIONMENT OF TAXABLE NET INCOME.] The 45.21 commissioner shall compute therefrom the taxable net income of 45.22 such companies by assigning to this state that proportion 45.23 thereof which the gross premiums collected by them during the 45.24 taxable year from old and new business within this state bears 45.25 to the total gross premiums collected by them during that year 45.26 from their entire old and new business, including reinsurance 45.27 premiums; provided, the commissioner shall add to the taxable 45.28 net income so apportioned to this state the amount of any taxes 45.29 on premiums paid by the company by virtue of any law of this 45.30 state (other than the surcharge on premiums imposed by sections45.31 69.54 to 69.56section 297I.10 and the surcharge imposed by 45.32 section 168A.40, subdivision 3) which shall have been deducted 45.33 from gross income by the company in arriving at its total net 45.34 income under the provisions of such act of Congress. 45.35 (a) For purposes of determining the Minnesota apportionment 45.36 percentage, premiums from reinsurance contracts in connection 46.1 with property in or liability arising out of activity in, or in 46.2 connection with the lives or health of Minnesota residents shall 46.3 be assigned to Minnesota and premiums from reinsurance contracts 46.4 in connection with property in or liability arising out of 46.5 activity in, or in connection with the lives or health of 46.6 non-Minnesota residents shall be assigned outside of Minnesota. 46.7 Reinsurance premiums are presumed to be received for a Minnesota 46.8 risk and are assigned to Minnesota, if: 46.9 (1) the reinsurance contract is assumed for a company 46.10 domiciled in Minnesota; and 46.11 (2) the taxpayer, upon request of the commissioner, fails 46.12 to provide reliable records indicating the reinsured contract 46.13 covered non-Minnesota risks. 46.14 For purposes of this paragraph, "Minnesota risk" means coverage 46.15 in connection with property in or liability arising out of 46.16 activity in Minnesota, or in connection with the lives or health 46.17 of Minnesota residents. 46.18 (b) The apportionment method prescribed by paragraph (a) 46.19 shall be presumed to fairly and correctly determine the 46.20 taxpayer's taxable net income. If the method prescribed in 46.21 paragraph (a) does not fairly reflect all or any part of taxable 46.22 net income, the taxpayer may petition for or the commissioner 46.23 may require the determination of taxable net income by use of 46.24 another method if that method fairly reflects taxable net 46.25 income. A petition within the meaning of this section must be 46.26 filed by the taxpayer on such form as the commissioner shall 46.27 require. 46.28 Sec. 24. Minnesota Statutes 1998, section 290.35, 46.29 subdivision 3, is amended to read: 46.30 Subd. 3. [CREDIT.] An insurance company shall receive a 46.31 credit against the tax computed under sections 290.06, 46.32 subdivision 1, and 290.0921, equal to any taxes based on 46.33 premiums paid by it that are attributable to the period for 46.34 which the tax under this chapter is imposed by virtue of any law 46.35 of this state, other than the surcharge on premiums imposed by 46.36 sections 69.54 to 69.56section 297I.10. 47.1 Sec. 25. Minnesota Statutes 1998, section 290.35, 47.2 subdivision 6, is amended to read: 47.3 Subd. 6. [GUARANTY ASSOCIATION ASSESSMENT OFFSET.] (a) An 47.4 insurance company may offset against its corporate franchise tax 47.5 liability under this chapter any amount paid pursuant to 47.6 assessments made for insolvencies which occur after July 31, 47.7 1994, under sections 60C.01 to 60C.22, and any amount paid 47.8 pursuant to assessments made after July 31, 1994, under 47.9 Minnesota Statutes 1992, sections 61B.01 to 61B.16, or sections 47.10 61B.18 to 61B.32, as follows: 47.11 (a)(1) Each such assessment shall give rise to an amount 47.12 of offset equal to 20 percent of the amount of the assessment 47.13 for each of the five calendar years following the year in which 47.14 the assessment was paid. 47.15 (b)(2) The amount of offset initially determined for each 47.16 taxable year is the sum of the amounts determined under 47.17 paragraph (a)clause (1) for that taxable year. 47.18 (c)(b)(1) Each year the commissioner of revenueshall 47.19 compare total guaranty association assessments levied over the 47.20 preceding five calendar years to the sum of all premium tax and 47.21 corporate franchise tax revenues collected from insurance 47.22 companies without reduction for any guaranty association 47.23 assessment offset, in the preceding calendar year, referred to 47.24 in this subdivision as "preceding year insurance tax revenues." 47.25 (2) If total guaranty association assessments levied over 47.26 the preceding five years exceed the preceding year insurance tax 47.27 revenues, insurance companies shall beare allowed only a 47.28 proportionate part of the corporate franchise tax offset 47.29 calculated under paragraph (b)(a) for the current calendar year. 47.30 (3) The proportionate part of the corporate franchise tax 47.31 offset allowed in the current calendar year is determined by 47.32 multiplying the amount calculated under paragraph (b)(a) by a 47.33 fraction, the numerator of which equals the preceding year 47.34 insurance tax revenues and the denominator of which equals total 47.35 guaranty association assessments levied over the preceding 47.36 five-year period. 48.1 (4) The proportionate part of the premium tax offset that 48.2 is not allowed shallmust be carried forward to subsequent tax 48.3 years and added to the amount of corporate franchise tax offset 48.4 calculated under paragraph (b)(a) before application of the 48.5 limitation imposed by this paragraph. 48.6 (5) Any amount carried forward from prior years must be 48.7 allowed before allowance of the offset for the current year 48.8 calculated under paragraph (b)(a). 48.9 (6) The corporate franchise tax offset limitation must be 48.10 calculated separately for (1) insurance companies subject to 48.11 assessment under sections 60C.01 to 60C.22, and (2) insurance 48.12 companies subject to assessment under Minnesota Statutes 1992, 48.13 sections 61B.01 to 61B.16, or sections 61B.18 to 61B.32. 48.14 (7) When the corporate franchise tax offset is limited by 48.15 this provision, the commissioner of revenue will notify affected 48.16 insurance companies on a timely basis for purposes of completing 48.17 premium and corporate franchise tax returns. 48.18 (8) The guaranty associations created under sections 60C.01 48.19 to 60C.22, Minnesota Statutes 1992, sections 61B.01 to 61B.16, 48.20 and sections 61B.18 to 61B.32, shall provide the commissioner of 48.21 revenue with the necessary information on guaranty association 48.22 assessments. The limitation in this paragraph is effective for48.23 offsets allowable in 1999 and thereafter.48.24 (d)(c)(1) If the offset determined by the application of 48.25 paragraphs (a) to (c)and (b) exceeds the greater of the 48.26 insurance company's corporate franchise tax liability under this 48.27 chapter prior to allowance of the credit provided by subdivision 48.28 3 or its premium tax liability under chapter 60A297I, then the 48.29 insurance company may carry forward the excess, referred to in 48.30 this subdivision as the "carryforward credit," to subsequent 48.31 taxable years. 48.32 (2) The carryforward credit must be allowed as an offset 48.33 against corporate franchise tax liability for the first 48.34 succeeding year to the extent that the corporate franchise tax 48.35 liability for that year exceeds the amount of the allowable 48.36 offset for the year determined under paragraphs (a) to (c)and 49.1 (b). 49.2 (3) The carryforward credit shallmust be reduced, but not 49.3 below zero, by the greater of the amount of the carryforward 49.4 credit allowed as an offset against the corporate franchise tax 49.5 pursuant to this paragraph or the amount of the carryforward 49.6 credit allowed as an offset against the insurance company's 49.7 premium tax liability under chapter 60A297I pursuant to section 49.8 60A.15, subdivision 15, paragraph (d)297I.20, paragraph (c). 49.9 The remainder, if any, of the carryforward credit must be 49.10 carried forward to succeeding taxable years until the entire 49.11 carryforward credit has been credited against the insurance 49.12 company's liability for corporate franchise tax under this 49.13 chapter and premium tax under chapter 60A297I. 49.14 (e)(d) A refund paid by the Minnesota Life and Health49.15 Insurance Guaranty Association to member insurers under49.16 Minnesota Statutes 1992, section 61B.07, subdivision 6, or49.17 section 61B.24, subdivision 6, with respect to an assessment49.18 payment which has been offset against taxes shall reduce the49.19 carryforward credit determined under paragraph (d) and, if the49.20 refund exceeds the amount of the carryforward credit, shall be49.21 repaid by the insurers to the extent of the offset to the state49.22 in the manner the commissioner of revenue requires.When an 49.23 insurer has offset against taxes its payment of an assessment of 49.24 the Minnesota life and health guaranty association, and the 49.25 association pays the insurer a refund with respect to the 49.26 assessment under Minnesota Statutes 1992, section 61B.07, 49.27 subdivision 6, or 61B.24, subdivision 6, then the refund reduces 49.28 the insurer's carryforward credit under paragraph (c). If the 49.29 refund exceeds the amount of the carryforward credit, the excess 49.30 amount must be repaid to the state by the insurers to the extent 49.31 of the offset in the manner the commissioner requires. 49.32 Sec. 26. Minnesota Statutes 1998, section 295.58, is 49.33 amended to read: 49.34 295.58 [DEPOSIT OF REVENUES AND PAYMENT OF REFUNDS.] 49.35 The commissioner shall deposit all revenues, including 49.36 penalties and interest, derived from the taxes imposed by 50.1 sections 295.50 to 295.57 and from the insurance premiums 50.2 tax imposed by section 297I.05, subdivision 5, on health 50.3 maintenance organizations, community integrated service 50.4 networks, and nonprofit health service plan corporations in the 50.5 health care access fund in the state treasury. Refunds of 50.6 overpayments must be paid from the health care access fund in50.7 the state treasury. There is annually appropriated from the 50.8 health care access fund to the commissioner of revenue the 50.9 amount necessary to make anyrefunds requiredunder section 50.10 295.54. 50.11 Sec. 27. Minnesota Statutes 1998, section 424.165, is 50.12 amended to read: 50.13 424.165 [SPECIAL FUND, MAINTENANCE.] 50.14 Subdivision 1. [SURCHARGE.] When the balance in the50.15 special fund of any firefighter's relief association in any city50.16 of the second class is less than $50,000 as determined by any50.17 such association's board of trustees, which fact shall be duly50.18 certified to by the state auditor, such board of trustees may50.19 thereupon file its duly verified petition for relief,50.20 accompanied by such certificate, with the commissioner of50.21 revenue. The commissioner of revenue shall thereupon order and50.22 direct a surcharge to be collected of two percent of the fire,50.23 lightning and sprinkler leakage gross premiums, less return50.24 premiums, on all direct business received by any foreign or50.25 domestic fire insurance company on property in such city of the50.26 second class, or by its agents for it, in cash or otherwise,50.27 until the balance in the special funds of such relief50.28 association amounts to $50,000 and for a period of 15 days50.29 thereafter. As soon as the balance in said special fund amounts50.30 to $50,000 the board of trustees of such relief association50.31 shall certify that fact to the commissioner of revenue and the50.32 commissioner of revenue shall forthwith issue an order ordering50.33 and directing that the collection of such surcharge shall be50.34 discontinued after the expiration of said 15-day period and50.35 shall forthwith mail a copy of the order last mentioned to each50.36 insurance company affected thereby. Said surcharge shall be due51.1 and payable from such companies to the state treasurer in51.2 semiannual installments on June 30 and December 31 of each51.3 calendar year to be kept by the state treasurer in a separate51.4 fund and if not paid within 30 days after such dates a penalty51.5 of three percent shall accrue thereon and thereafter such sum51.6 and penalty shall draw interest at the rate of one percent per51.7 month until paid.51.8 Subd. 2. [ISSUANCE OF WARRANT.] The commissioner of51.9 finance on July 31, 1938, and semiannually thereafter, shall51.10 issue and deliver to the treasurer of such relief association in51.11 such city a warrant upon the state treasurer for an amount equal51.12 to the total amount of said surcharge on said premiums within51.13 such city theretofore so collected and transmitted to the state51.14 treasurer by such insurance companies. Said warrants shall be51.15 paid out of said separate fund hereinbefore provided for, and51.16 the payment in each case shall be made to the treasurer of the51.17 relief association presenting the warrant.51.18 There is hereby appropriated to such firefighter's relief51.19 association, from such fund or account in the state treasury to51.20 which the money was credited, such sums as may, from time to51.21 time, be necessary to pay these warrants.51.22 Subd. 3. [FUNDS TO BE KEPT IN SPECIAL FUND.] The treasurer51.23 of such relief association shall place the money received in51.24 payment of any such warrant in the special fund of such relief51.25 association.51.26 Subd. 4. [EMERGENCY DECLARED TO EXIST.] An emergency51.27 exists and this section shall be construed as a relief measure51.28 for firefighter's relief associations in any city of the second51.29 class.51.30 When the balance in the special fund of any firefighter's 51.31 relief association in any city of the second class is less than 51.32 $50,000 as determined by the board of trustees of the 51.33 association, and as certified by the state auditor, the board of 51.34 trustees may file with the commissioner a request to impose the 51.35 surcharge on fire, lightning, and sprinkler leakage insurance 51.36 premiums authorized under section 297I.10, subdivision 2. 52.1 Sec. 28. [REPEALER.] 52.2 Minnesota Statutes 1998, sections 60A.15; 60A.152; 60A.198, 52.3 subdivision 6; 60A.199, subdivisions 2, 3, 4, 5, 6, 6a, 7, 8, 9, 52.4 10, and 11; 60A.209, subdivisions 4 and 5; 69.54; 69.55; 69.56; 52.5 69.57; 69.58; 69.59; 69.60; 69.61; 71A.04, subdivision 2; 52.6 299F.21; 299F.22; 299F.23; 299F.24; 299F.25; and 299F.26; and 52.7 Minnesota Rules, part 2765.1500, subpart 6, are repealed. 52.8 Sec. 29. [EFFECTIVE DATE.] 52.9 This article is effective January 1, 2001.