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Minnesota Legislature

Office of the Revisor of Statutes

Key: (1) language to be deleted (2) new language

  

                         Laws of Minnesota 1987 

                        CHAPTER 385-H.F.No. 1542 
           An act relating to unemployment compensation; making 
          various technical and housekeeping changes; defining 
          "wages"; regulating benefits and contributions; 
          providing for the administration of the unemployment 
          compensation law; providing penalties; amending 
          Minnesota Statutes 1986, sections 268.04, subdivisions 
          9, 12, 24, 25, 26, 29, and by adding subdivisions; 
          268.06, subdivisions 2, 3a, 5, 6, 8, 19, 20, 22, and 
          24; 268.07, subdivision 3; 268.08, subdivisions 3, 3a, 
          and by adding a subdivision; 268.09, subdivisions 1 
          and 3; 268.12, subdivision 8; 268.121; 268.15, 
          subdivision 3; 268.16, subdivision 2, and by adding 
          subdivisions; 268.161, subdivisions 1, 8, 9, and by 
          adding a subdivision; 268.18, subdivisions 1, 2, 3, 4, 
          5, and by adding a subdivision; 268.65, subdivision 5; 
          270A.09, by adding a subdivision; and 508.25; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 268; and repealing Minnesota Statutes 1986, 
          section 268.24. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 268.04, 
subdivision 9, is amended to read:  
    Subd. 9.  "Employing unit" means any individual or type of 
organization, including any partnership, association, trust, 
estate, joint-stock company, insurance company, or corporation, 
whether domestic or foreign, or the receiver, trustee in 
bankruptcy, trustee or successor of any of the foregoing, or the 
legal representative of a deceased person, which has or 
subsequent to January 1, 1936, had in its employ one or more 
individuals performing services for it.  All individuals 
performing services within this state for any employing unit 
which maintains two or more separate establishments within this 
state shall be deemed to be employed by a single employing 
unit for all the purposes of sections 268.03 to 268.24.  Each 
individual employed to perform or assist in performing the work 
of any agent or individual employed by an employing unit shall 
be deemed to be employed by such employing unit for all the 
purposes of sections 268.03 to 268.24 whether such individual 
was hired or paid directly by such employing unit or by such 
agent or individual, provided the employing unit had actual or 
constructive knowledge of such work.  For the purposes of 
sections 268.03 to 268.24 Any private or nonprofit organization 
or government agency providing or authorizing the hiring of 
homeworkers, personal care attendants, or other individuals 
performing similar services in the private home of an individual 
is the employing unit of the homeworker, attendant or similar 
worker whether the agency pays the employee directly or provides 
funds to the recipient of the services to pay for the services.  
    Sec. 2.  Minnesota Statutes 1986, section 268.04, 
subdivision 12, is amended to read:  
    Subd. 12.  "Employment" means:  (1) Subject to the other 
provisions of this subdivision "employment" means service 
performed prior to January 1, 1945, which was employment as 
defined in this section prior to such date, and any service 
performed after December 31, 1944, including service in 
interstate commerce, by an individual who is a servant under the 
law of master and servant or who performs services for any 
employing unit, unless such services are performed by an 
independent contractor. 
    The term "employment" shall include:  Any service 
performed, including service in interstate commerce, by; 
    (a) any officer of any corporation; or 
    (b) any individual other than an individual who is an 
employee under clause (1) who performs services for remuneration 
for any person as an agent-driver or commission-driver engaged 
in distributing meat products, vegetable products, fruit 
products, bakery products, beverages (other than milk), or 
laundry or dry-cleaning services, for a principal, or as a 
traveling or city salesperson, other than as an agent-driver or 
commission-driver, engaged upon a full-time basis in the 
solicitation on behalf of, and the transmission to, a principal 
(except for sideline sales activities on behalf of some other 
person) of orders from wholesalers, retailers, contractors, or 
operators of hotels, restaurants, or other similar 
establishments for merchandise for resale or supplies for use in 
their business operations; or 
    (c) any individual who is a servant under the law of master 
and servant or who performs services for any employing unit, 
unless such services are performed by an independent contractor. 
    Provided, that for purposes of clause (1)(b), the term 
"employment" shall include services described above only if the 
contract of service contemplates that substantially all of the 
services are to be performed personally by such individual, the 
individual does not have a substantial investment in facilities 
used in connection with the performance of the services (other 
than in facilities for transportation), and the services are not 
in the nature of a single transaction that is not part of a 
continuing relationship with the person for whom the services 
are performed. 
    (2) The term "employment" shall include an individual's 
entire service, performed within or both within and without this 
state if (a) the service is localized in this state; or (b) the 
service is not localized in any state but some of the service is 
performed in this state and (1) the base of operations, or, if 
there is no base of operations, then the place from which such 
service is directed or controlled, is in this state; or (2) the 
base of operations or place from which such service is directed 
or controlled is not in any state in which some part of the 
service is performed, but the individual's residence is in this 
state. 
    (3) Service shall be deemed to be localized within a state 
if (a) the service is performed entirely within such state; or 
(b) the service is performed both within and without such state, 
but the service performed without such state is incidental to 
the individual's service within the state, for example, is 
temporary or transitory in nature or consists of isolated 
transactions. 
    (4) The term "employment" shall include an individual's 
service wherever performed within the United States or Canada, 
if 
    (a) such service is not covered under the unemployment 
compensation law of any other state or Canada, and 
    (b) the place from which the service is directed or 
controlled is in this state. 
    (5) (a) Service covered by an election pursuant to section 
268.11, subdivision 3; and 
    (b) service covered by an arrangement pursuant to section 
268.13 between the commissioner and the agency charged with the 
administration of any other state or federal employment security 
law, pursuant to which all service performed by an individual 
for an employing unit is deemed to be performed entirely within 
this state, shall be deemed to be employment if the commissioner 
has approved an election of the employing unit for which such 
service is performed, pursuant to which the entire service of 
such individual during the period covered by such election is 
deemed to be employment. 
    (6) Notwithstanding any inconsistent provisions of sections 
268.03 to 268.24, the term "employment" shall include any 
services which are performed by an individual with respect to 
which an employing unit is liable for any federal tax against 
which credit may be taken for contributions required to be paid 
into a state unemployment compensation fund or which as a 
condition for full tax credit against the tax imposed by the 
Federal Unemployment Tax Act is required to be covered under 
this law. 
    (7) Service performed by an individual in the employ of the 
state of Minnesota or any instrumentality which is wholly owned 
by the state of Minnesota or in the employ of this state and one 
or more other states or an instrumentality of this state and one 
or more of its political subdivisions or an instrumentality of 
this state and another state or an instrumentality of this state 
and one or more political subdivisions of another state if such 
service is excluded from "employment" as defined by section 
3306(c)(7) of the Federal Unemployment Tax Act and is not 
excluded from "employment" under clause (10). 
    (8) Service performed by an individual in the employ of any 
political subdivision of the state of Minnesota or 
instrumentality thereof or an instrumentality of two or more 
political subdivisions of this state or any instrumentality of a 
political subdivision of this state and another state or 
political subdivisions of another state if such service is 
excluded from "employment" as defined by section 3306(c)(7) of 
the Federal Unemployment Tax Act and is not excluded from 
"employment" under clause (10). 
    (a) The provisions of section 268.08, subdivision 6, shall 
apply to service covered by this section. 
    (b) The amounts required to be paid in lieu of 
contributions by any political subdivision shall be billed and 
payment made as provided in section 268.06, subdivision 28, 
clause (2), with respect to similar payments by nonprofit 
organizations. 
    (9) Service performed by an individual in the employ of a 
religious, charitable, educational or other organization but 
only if the following conditions are met: 
    (a) the service is excluded from "employment" as defined in 
the Federal Unemployment Tax Act solely by reason of section 
3306(c)(8) of that act; and 
    (b) the organization had one or more individuals in 
employment for some portion of a day in each of 20 different 
weeks, whether or not such weeks were consecutive, within either 
the current or preceding calendar year, regardless of whether 
they were employed at the same moment of time. 
    (10) For the purposes of clauses (7), (8), and (9), the 
term "employment" does not apply to service performed 
    (a) in the employ of a church or convention or association 
of churches, or an organization which is operated primarily for 
religious purposes and which is operated, supervised, 
controlled, or principally supported by a church or convention 
or association of churches; or 
    (b) by a duly ordained, commissioned, or licensed minister 
of a church in the exercise of a ministry or by a member of a 
religious order in the exercise of duties required by such 
order; or 
    (c) in a facility conducted for the purpose of carrying out 
a program of rehabilitation for individuals whose earning 
capacity is impaired by age or physical or mental deficiency or 
injury or a program providing remunerative work for individuals 
who because of their an impaired physical or mental capacity 
cannot be readily absorbed in the competitive labor market, by 
an individual receiving such the rehabilitation or remunerative 
work.  This exclusion applies only to services performed in a 
facility which is certified by the Minnesota department of jobs 
and training, division of rehabilitative services, and is 
limited to the effective period of the certificate; or 
    (d) as part of an unemployment work relief or work training 
program assisted or financed in whole or in part by any federal 
agency or an agency of a state or political subdivision thereof, 
by an individual receiving such work relief or work training.  
This exclusion shall not apply to programs that provide for and 
require unemployment insurance coverage for the participants; or 
    (e) by an inmate of a custodial or penal institution; or 
    (f) in the employ of governmental entities referred to in 
clauses (7) and (8) of this subdivision if such service is 
performed by an individual in the exercise of duties 
    (i) as an elected official, 
    (ii) as a member of a legislative body, or a member of the 
judiciary, 
    (iii) as a member of the Minnesota national guard or air 
national guard, 
    (iv) as an employee serving only on a temporary basis in 
case of fire, storm, snow, earthquake, flood or similar 
emergency, 
    (v) (a) in a position with the state of Minnesota which is 
a major nontenured policy making or advisory position in the 
unclassified service, or 
    (b) a policy making position with the state of Minnesota or 
a political subdivision the performance of the duties of which 
ordinarily does not require more than eight hours per week; or 
    (c) in a position with a political subdivision which is a 
major nontenured policy making or advisory position. 
    (11) The term "employment" shall include the service of an 
individual who is a citizen of the United States, performed 
outside the United States, except in Canada, in the employ of an 
American employer (other than service which is deemed 
"employment" under the provisions of clause (2), (3), or (4) or 
the parallel provisions of another state's law) if: 
    (a) The employer's principal place of business in the 
United States is located in this state; or 
    (b) The employer has no place of business in the United 
States, but the employer is an individual who is a resident of 
this state, or the employer is a corporation which is organized 
under the laws of this state, or the employer is a partnership 
or a trust and the number of partners or trustees who are 
residents of this state is greater than the number who are 
residents of any one other state; or 
    (c) None of the criteria of (a) and (b) is met but the 
employer has elected coverage in this state, or the employer 
having failed to elect coverage in any state, the individual has 
filed a claim for benefits, based on such service, under the law 
of this state. 
    (d) An "American employer," for the purposes of this 
subdivision, means a person who is an individual who is a 
resident of the United States, or a partnership if two-thirds or 
more of the partners are residents of the United States, or a 
trust, if all of the trustees are residents of the United 
States, or a corporation organized under the laws of the United 
States or of any state; 
    (e) As used in this subdivision, the term "United States" 
includes the states, the District of Columbia, the Commonwealth 
of Puerto Rico, and the Virgin Islands. 
    (12) Notwithstanding clause (2), all service performed by 
an officer or member of the crew of an American vessel on or in 
connection with such vessel, if the operating office, from which 
the operations of such vessel operating on navigable waters 
within, or within and without, the United States are ordinarily 
and regularly supervised, managed, directed and controlled is 
within this state. 
    (13) Service performed by an individual in agricultural 
labor as defined in clause (15)(a) when: 
    (a) Such service is performed for a person who: 
    (i) during any calendar quarter in either the current or 
the preceding calendar year paid wages of $20,000 or more to 
individuals employed in agricultural labor, or 
    (ii) for some portion of a day in each of 20 different 
calendar weeks, whether or not such weeks were consecutive, in 
either the current or preceding calendar year employed in 
agricultural labor four or more individuals regardless of 
whether they were employed at the same time. 
    (b) For the purpose of this clause (13) any individual who 
is a member of a crew furnished by a crew leader to perform 
service in agricultural labor for any other person shall be 
treated as an employee of the crew leader: 
    (i) if the crew leader holds a valid certificate of 
registration under the Farm Labor Contractor Registration Act of 
1963, as amended; or substantially all of the members of the 
crew operate or maintain tractors, mechanized harvesting or crop 
dusting equipment, or any other mechanized equipment, which is 
provided by the crew leader; and 
    (ii) if the individual is not an employee of another person 
as determined by clause (1). 
    (c) For the purpose of this clause (13) in the case of any 
individual who is furnished by a crew leader to perform service 
in agricultural labor for any other person and who is not 
treated as an employee of the crew leader under subclause 
(13)(b): 
    (i) such other person and not the crew leader shall be 
treated as the employer of such individual; and 
    (ii) such other person shall be treated as having paid 
wages to such individual in an amount equal to the amount of 
wages paid to such individual by the crew leader (either on the 
crew leader's behalf or on behalf of such other person) for the 
service in agricultural labor performed for such other person. 
    (d) For the purposes of this clause (13) the term "crew 
leader" means an individual who: 
    (i) furnishes individuals to perform service in 
agricultural labor for any other person, 
    (ii) pays (either on the crew leader's own behalf or on 
behalf of such other person) the individuals so furnished by the 
crew leader for the service in agricultural labor performed by 
them, and 
    (iii) has not entered into a written agreement with such 
other person under which such furnished individual is designated 
as an employee of such other person. 
    (e) For the purposes of this clause (13) services performed 
by an officer or shareholder of a family farm corporation shall 
be excluded from agricultural labor and employment unless said 
corporation is an employer as defined in section 3306(a)(2) of 
the Federal Unemployment Tax Act. 
    (f) For the purposes of this clause (13), services 
performed by an individual 16 years of age or under shall be 
excluded from agricultural labor and employment unless the 
employer is an employer as defined in section 3306(a)(2) of the 
Federal Unemployment Tax Act. 
    (14) The term "employment" shall include Domestic service 
in a private home, local college club, or local chapter of a 
college fraternity or sorority performed for a person who paid 
wages of $1,000 or more in any calendar quarter in either the 
current calendar year or the preceding calendar year to 
individuals employed in domestic service in any calendar quarter.
    "Domestic service" includes all service for an individual 
in the operation and maintenance of a private household, for a 
local college club, or local chapter of a college fraternity or 
sorority as distinguished from service as an employee in the 
pursuit of an employer's trade, occupation, profession, 
enterprise or vocation. 
    (15) The term "employment" shall not include: 
    (a) Agricultural labor.  Service performed by an individual 
in agricultural labor, except as provided in clause (13) of this 
subdivision.  The term "agricultural labor" includes all 
services performed: 
    (1) On a farm, in the employ of any person or family farm 
corporation, in connection with cultivating the soil, or in 
connection with raising or harvesting any agricultural or 
horticultural commodity, including the raising, shearing, 
feeding, caring for, training, and management of livestock, 
bees, poultry, fur-bearing animals and wildlife; 
    (2) In the employ of the owner or tenant or other operator 
of a farm, in connection with the operation, management, 
conservation, improvement, or maintenance of such farm and its 
tools and equipment, or in salvaging timber or clearing land of 
brush and other debris left by a tornadic-like storm, if the 
major part of such service is performed on a farm; 
    (3) In connection with the production or harvesting of any 
commodity defined as an agricultural commodity in section 15(g) 
of the Agricultural Marketing Act, as amended (46 Statutes 1550, 
section 3; United States Code, title 12, section 1141j) or in 
connection with the ginning of cotton, or in connection with the 
operation or maintenance of ditches, canals, reservoirs, or 
waterways, not owned or operated for profit, used exclusively 
for supplying and storing water for farming purposes; 
    (4) In the employ of the operator of a farm in handling, 
planting, drying, packing, packaging, processing, freezing, 
grading, storing, or delivering to storage or to market or to a 
carrier for transportation to market, in its unmanufactured 
state, any agricultural or horticultural commodity; but only if 
such operator produced more than one-half of the commodity with 
respect to which such service is performed, or in the employ of 
a group of operators of farms (or a cooperative organization of 
which such operators are members) in the performance of service 
described herein, but only if such operators produced more than 
one-half of the commodity with respect to which such service is 
performed; however, the provisions of this paragraph shall not 
be deemed to be applicable with respect to service performed in 
connection with commercial canning or commercial freezing or in 
connection with any agricultural or horticultural commodity 
after its delivery to a terminal market for distribution for 
consumption; or 
    (5) On a farm operated for profit if such service is not in 
the course of the employer's trade or business. 
    As used herein, the term "farm" includes stock, dairy, 
poultry, fruit, fur-bearing animal, and truck farms, 
plantations, ranches, nurseries, ranges, greenhouses or other 
similar structures used primarily for the raising of 
agricultural or horticultural commodities, and orchards. 
    (b) Casual labor not in the course of the employing unit's 
trade or business; 
    (c) Service performed on the navigable waters of the United 
States as to which this state is prohibited by the constitution 
and laws of the United States of America from requiring 
contributions of employers with respect to wages as provided in 
sections 268.03 to 268.24; 
    (d) Service performed by an individual in the employ of a 
son, daughter, or spouse, and service performed by a child under 
the age of 18 in the employ of the child's father or mother; 
    (e) Service performed in the employ of the United States 
government, or any instrumentality of the United States exempt 
under the constitution of the United States from the 
contributions imposed by sections 268.03 to 268.24, except that 
with respect to such service and to the extent that the congress 
of the United States shall permit states to require any 
instrumentalities of the United States to make payments into an 
unemployment compensation fund under a state unemployment 
compensation act; then, to the extent permitted by congress, and 
from and after the date as of which such permission becomes 
effective, all of the provisions of these sections shall be 
applicable to such instrumentalities and to services performed 
for such instrumentalities in the same manner, to the same 
extent, and on the same terms as to all other employers, 
employing units, individuals, and services; provided, that if 
this state shall not be certified for any year by the United 
States department of labor under section 3304(c) of the federal 
Internal Revenue Code, the payments required of such 
instrumentalities with respect to such year shall be refunded by 
the commissioner from the fund in the same manner and within the 
same period as is provided in section 268.16, subdivision 6, 
with respect to contributions erroneously collected; 
    (f) Service with respect to which unemployment compensation 
is payable under an unemployment compensation system established 
by an act of Congress; 
    (g) (1) Service performed in any calendar quarter in the 
employ of any organization exempt from income tax under section 
501(a) (other than an organization described in section 401(a)) 
or section 521 of the federal Internal Revenue Code, if the 
remuneration for such service is less than $50; or 
    (2) Service performed in the employ of a school, college, 
or university, if such service is performed by a student who is 
enrolled and is regularly attending classes at such school, 
college, or university; or 
    (3) Service performed by an individual who is enrolled at a 
nonprofit or public educational institution which normally 
maintains a regular faculty and curriculum and normally has a 
regularly organized body of students in attendance at the place 
where its educational activities are carried on as a student in 
a full-time program, taken for credit at such institution, which 
combines academic instruction with work experience, if such 
service is an integral part of such program, and such 
institution has so certified to the employer, except that this 
paragraph shall not apply to service performed in a program 
established for or on behalf of an employer or group of 
employers; 
    (h) Service performed in the employ of a foreign government 
(including service as a consular or other officer or employee or 
a nondiplomatic representative); 
    (i) Service performed in the employ of an instrumentality 
wholly owned by a foreign government, if 
    (1) The service is of a character similar to that performed 
in foreign countries by employees of the United States 
government or of an instrumentality thereof; and 
    (2) The commissioner finds that the United States secretary 
of state has certified to the United States secretary of the 
treasury that the foreign government, with respect to whose 
instrumentality exemption is claimed, grants an equivalent 
exemption with respect to similar service performed in the 
foreign country by employees of the United States government and 
of instrumentalities thereof. 
    (j) Service covered by an arrangement between the 
commissioner and the agency charged with the administration of 
any other state or federal employment security law pursuant to 
which all services performed by an individual for an employing 
unit during the period covered by such employing unit's duly 
approved election, are deemed to be performed entirely within 
such agency's state; 
    (k) Service performed in the employ of a hospital, if such 
service is performed by a patient of the hospital, as defined in 
clause (17); 
    (l) Service performed as a student nurse in the employ of a 
hospital or a nurses' training school by an individual who is 
enrolled and is regularly attending classes in a nurses' 
training school chartered and approved pursuant to state law; 
and service performed as an intern a medical or dental intern, 
or resident in training in the employ of a hospital, clinic, or 
medical or dental office by an individual who has completed a 
four years' course in a medical or dental school chartered and 
approved pursuant to state law; 
    (m) Service performed by an individual for a person as an 
insurance agent or as an insurance solicitor, if all such 
service performed by such individual for such person is 
performed for remuneration solely by way of commission (the word 
"insurance" as used in this subdivision shall include an annuity 
and an optional annuity); 
    (n) Service performed by an individual under the age of 18 
in the delivery or distribution of newspapers or shopping news, 
not including delivery or distribution to any point for 
subsequent delivery or distribution; 
    (o) Service performed by an individual for a person as a 
real estate salesperson, if all such service performed by such 
individual for such person is performed for remuneration solely 
by way of commission; 
    (p) If the service performed during one-half or more of any 
pay period by an individual for the person employing the 
individual constitutes employment, all the service of such 
individual for such period shall be deemed to be employment; but 
if the service performed during more than one-half of any such 
pay period by an individual for the person employing the 
individual does not constitute employment, then none of the 
service of such individual for such period shall be deemed to be 
employment.  As used in this subdivision, the term "pay period" 
means a period (of not more than 31 consecutive days) for which 
a payment or remuneration is ordinarily made to the individual 
by the person employing the individual. 
    (q) Services performed for a state, other than the state of 
Minnesota, or an instrumentality wholly owned by such other 
state or political subdivision of such other state; 
    (r) Services performed as a direct seller as defined in 
United States Code, title 26, section 3508.  
    (16) "Institution of higher education," for the purposes of 
this chapter, means an educational institution which: 
    (a) Admits as regular students only individuals having a 
certificate of graduation from a high school, or the recognized 
equivalent of such a certificate; 
    (b) Is legally authorized in this state to provide a 
program of education beyond high school; 
    (c) Provides an educational program for which it awards a 
bachelor's or higher degree, or provides a program which is 
acceptable for credit toward such a degree, a program of 
post-graduate or post-doctoral studies, or a program of training 
to prepare students for gainful employment in a recognized 
occupation; and 
    (d) Is a public or other nonprofit institution. 
    (e) Notwithstanding any of the foregoing provisions of this 
clause, all colleges and universities in this state are 
institutions of higher education for purposes of this section. 
    (17) "Hospital" means an institution which has been 
licensed, certified or approved by the department of health as a 
hospital. 
    Sec. 3.  Minnesota Statutes 1986, section 268.04, 
subdivision 24, is amended to read:  
    Subd. 24.  "Valid claim" with respect to any individual 
means a claim filed by an individual who has registered for work 
and who has earned wage credits and established credit 
weeks wages paid during the individual's base period sufficient 
to entitle the individual to benefits under section 268.07, 
subdivision 2. 
    Sec. 4.  Minnesota Statutes 1986, section 268.04, 
subdivision 25, is amended to read:  
    Subd. 25.  [WAGES.] "Wages" means all remuneration for 
services, including commissions and; bonuses,; back pay as of 
the date of payment, and; tips and gratuities paid to an 
employee by a customer of an employer and accounted for by the 
employee to the employer,; sickness and accident disability 
payments, except as otherwise provided in this subdivision; and 
the cash value of all remuneration in any medium other than 
cash, except that such term shall not include: 
    (a) For the purpose of determining contributions payable 
under section 268.06, subdivision 2, that part of the 
remuneration which exceeds, for each calendar year, the greater 
of $7,000 or that part of the remuneration which exceeds 60 
percent of the average annual wage rounded to the nearest $100 
computed in accordance with the provisions of clause (f) (j), 
paid to an individual by an employer or the employer's 
predecessor with respect to covered employment in this state, or 
with respect to employment under the unemployment compensation 
law of any other state during any calendar year paid to such 
individual by such covered employer or predecessor during such 
calendar year; provided, that.  Credit for remuneration reported 
under the unemployment compensation law of another state is 
limited to that state's taxable wage base.  If the term "wages" 
as contained in the Federal Unemployment Tax Act is amended to 
include remuneration in excess of the amount required to be paid 
hereunder to an individual by an employer under the federal act 
for any calendar year, wages for the purposes of sections 268.03 
to 268.24 shall include remuneration paid in a calendar year up 
to an amount equal to the dollar limitation specified in the 
Federal Unemployment Tax Act.  For the purposes of this clause, 
the term "employment" shall include service constituting 
employment under any employment security law of another state or 
of the federal government; 
    (b) The amount of any payment made to, or on behalf of, an 
employee under a plan or system established by an employer which 
makes provision for employees generally or for a class or 
classes of employees (including any amount paid by an employer 
for insurance or annuities, or into a fund, to provide for any 
such payment), on account of (1) retirement or (2) sickness or 
accident disability or (3) medical and hospitalization expenses 
in connection with sickness or accident disability, or (4) (3) 
death, provided the employee has not the option to receive, 
instead of provision for such death benefit, any part of such 
payment, or if such death benefit is insured, any part of the 
premium (or contributions to premiums) paid by the employer and 
has not the right, under the provisions of the plan or system or 
policy of insurance providing for such death benefit, to assign 
such benefit, or to receive a cash consideration in lieu of such 
benefit either upon withdrawal from the plan or system providing 
for such benefit or upon termination of such plan or system or 
policy of insurance or of employment with such employer; 
    (c) The payment by an employer (without deduction from the 
remuneration of the employee) (1) of the tax imposed upon an 
employee under section 3101 of the federal Internal Revenue 
Code, or (2) of any payment required from an employee under a 
state unemployment compensation law, with respect to 
remuneration paid to an employee for domestic service in a 
private home of the employer or for agricultural labor;  
    (d) Any payments made to a former employee during the 
period of active military service in the armed forces of the 
United States by such employer, whether legally required or not; 
    (e) Any payment made to, or on behalf of, an employee or 
beneficiary (1) from or to a trust described in section 401(a) 
of the federal Internal Revenue Code which is exempt from tax 
under section 501(a) of such code at the time of such payment 
unless such payment is made to an employee of the trust as 
remuneration for services rendered as an employee and not as a 
beneficiary of the trust, or (2) under or to an annuity plan 
which, at the time of such payment is a plan described in 
section 403(a) of the federal Internal Revenue Code, or (3) 
under or to a bond purchase plan which, at the time of such 
payment, is a qualified bond purchase plan described in section 
405(a) of the federal Internal Revenue Code; 
    (f) Sickness or accident disability payments made by the 
employer after the expiration of six calendar months following 
the last calendar month in which the individual worked for the 
employer; 
    (g) Disability payments made under the provisions of any 
workers' compensation law; 
    (h) Sickness or accident disability payments made by a 
third party payer such as an insurance company; 
    (i) Payments made into a fund, or for the purchase of 
insurance or an annuity, to provide for sickness or accident 
disability payments to employees pursuant to a plan or system 
established by the employer which provides for his employees 
generally or for a class or classes of his employees; 
    (j) On or before July 1 of each year the commissioner shall 
determine the average annual wage paid by employers subject to 
sections 268.03 to 268.24 in the following manner: 
    (1) The sum of the total monthly employment reported for 
the previous calendar year shall be divided by 12 to determine 
the average monthly employment; 
    (2) The sum of the total wages reported for the previous 
calendar year shall be divided by the average monthly employment 
to determine the average annual wage. 
    The average annual wage determined shall be effective for 
the calendar year next succeeding the determination; 
    (k) Nothing in this subdivision, other than clause (a), 
shall exclude from the term "wages" any payment made under any 
type of salary reduction agreement, including payments made 
under a cash or deferred arrangement and cafeteria plan, as 
defined in sections 401(k) and 125(d), respectively, of the 
federal Internal Revenue Code, to the extent that the employee 
has the option to receive the payment in cash. 
    Sec. 5.  Minnesota Statutes 1986, section 268.04, is 
amended by adding a subdivision to read: 
    Subd. 25a.  [WAGES PAID.] "Wages paid" means the amount of 
wages which have been actually paid or which have been credited 
to or set apart for the employee so that payment and disposition 
is under the control of the employee.  Wage payments delayed 
beyond their regularly scheduled pay date are considered 
"actually paid" on the missed pay date.  Any wages earned but 
not paid with no scheduled date of payment shall be considered 
"actually paid" on the last day services are performed in 
employment before separation. 
    Wages paid shall not include wages earned but not paid 
except as provided for in this subdivision. 
    Sec. 6.  Minnesota Statutes 1986, section 268.04, 
subdivision 26, is amended to read:  
    Subd. 26.  [WAGE CREDITS.] "Wage credits" mean the amount 
of wages actually or constructively paid, wages overdue and 
delayed beyond the usual time of payment and back pay paid by or 
from an employer to an employee for insured work and tips and 
gratuities paid to an employee by a customer of an employer and 
accounted for by the employee to the employer except that wages 
earned in part-time employment by a student as an integral part 
of an occupational course of study, under a plan for vocational 
education accepted by the Minnesota department of education, 
shall not result in wage credits available for benefit purposes 
paid within the base period for insured work. 
    Sec. 7.  Minnesota Statutes 1986, section 268.04, 
subdivision 29, is amended to read:  
    Subd. 29.  [CREDIT WEEK.] "Credit week" is any week for 
which wages or back pay, actually or constructively paid, wages 
overdue and delayed beyond the usual time of payment, and back 
pay by or from one or more employers to an employee for insured 
work wage credits equal or exceed 30 percent of the average 
weekly wage computed to the nearest whole dollar.  On or before 
June 30 of each year the commissioner shall determine the 
average weekly wage paid by employers subject to sections 268.03 
to 268.24 in the following manner:  
    (a) The sum of the total monthly employment reported for 
the previous calendar year shall be divided by 12 to determine 
the average monthly employment;  
    (b) The sum of the total wages reported for the previous 
calendar year shall be divided by the average monthly employment 
to determine the average annual wage; and 
    (c) The average annual wage shall be divided by 52 to 
determine the average weekly wage.  
    The average weekly wage as so determined computed to the 
nearest whole dollar shall apply to claims for benefits which 
establish a benefit year which begins subsequent to December 31 
of the year of the computation.  
    Sec. 8.  Minnesota Statutes 1986, section 268.04, is 
amended by adding a subdivision to read: 
    Subd. 34.  [CONTRIBUTION REPORT.] "Contribution report" 
means the summary report of wages paid and employment used to 
determine the amount of contributions due by employers on a 
calendar quarter basis.  An auxiliary report of wages paid and 
employment broken down by business locations, when required, is 
part of the contribution report. 
    Sec. 9.  Minnesota Statutes 1986, section 268.04, is 
amended by adding a subdivision to read: 
    Subd. 35.  [WAGE DETAIL REPORT.] "Wage detail report" means 
the itemized report used to record the information required by 
section 268.121. 
    Sec. 10.  Minnesota Statutes 1986, section 268.06, 
subdivision 2, is amended to read:  
    Subd. 2.  [RATES.] Each employer shall pay contributions 
equal to two and seven-tenths percent for each calendar year 
prior to 1985 and 5-4/10 percent for 1985 and each subsequent 
calendar year of wages paid and wages overdue and delayed beyond 
the usual time of payment from the employer with respect to 
employment occurring during each calendar year, except as may be 
otherwise prescribed in subdivisions 3a and 4.  Each employer 
who has an experience ratio of less than one-tenth of one 
percent shall pay contributions on only the first $8,000 in 
wages paid and wages overdue and delayed beyond the usual time 
of payment to each employee with respect to employment occurring 
during each calendar year.  
    Sec. 11.  Minnesota Statutes 1986, section 268.06, 
subdivision 3a, is amended to read:  
    Subd. 3a.  [RATE FOR NEW EMPLOYERS.] Notwithstanding the 
provisions of subdivision 2, each employer, who becomes subject 
to this law, shall pay contributions at a rate: 
    (a) Not exceeding 2-7/10 percent, that is the higher of (1) 
one percent and (2) the state's three-year benefit cost rate for 
the 36 consecutive month period immediately preceding July 1 of 
each year for each employer who becomes subject to this law 
prior to January 1, 1984.  For purposes of this clause, the 
state's three-year benefit cost rate shall be computed annually 
and shall be derived by dividing the total dollar amount of 
benefits paid to claimants under this law during the 36 
consecutive calendar months immediately preceding July 1 of each 
year by the total dollar amount of wages subject to 
contributions under this law during the same period.  The rate 
so determined shall be applicable for the calendar year next 
succeeding each computation date.  
    (b) Not exceeding 2-7/10 percent, that is the higher of (1) 
one percent and (2) the state's four-year benefit cost rate for 
the 48 consecutive month period immediately preceding July 1 of 
each year for each employer, except employers in the 
construction industry, as determined by the commissioner, who 
becomes subject to this law subsequent to December 31, 1983 and 
prior to January 1, 1985.  For purposes of this clause, the 
state's four-year benefit cost rate shall be computed and 
derived by dividing the total dollar amount of benefits paid to 
claimants under this law during the 48 consecutive calendar 
months immediately preceding July 1, 1983 by the total dollar 
amount of wages subject to contributions under this law during 
the same period.  The rate so determined shall be applicable for 
the calendar year 1984.  
    Each construction employer described above who becomes 
subject to chapter 268 shall pay contributions at a rate, not 
exceeding 7-1/2 percent, that is the higher of (1) one percent, 
or (2) the state's four-year benefit cost rate for construction 
employers for the 48 consecutive month period immediately 
preceding July 1, 1983.  For purposes of this clause, the 
state's four-year benefit cost rate shall be computed and 
derived by dividing the total dollar amount of benefits paid to 
claimants of construction employers, as determined by the 
commissioner, during the 48 consecutive calendar months 
immediately preceding July 1, 1983 by the total dollar amount of 
wages of construction employers subject to contributions during 
the same period.  The rate so determined shall be applicable for 
the calendar year 1984.  
    (c) Not exceeding 5-4/10 percent, that is the higher of (1) 
one percent and (2) the state's five-year benefit cost rate for 
the 60 consecutive month period immediately preceding July 1, 
1984 and of each year thereafter for each employer, except 
employers in the construction industry, as determined by the 
commissioner who becomes subject to this law on January 1, 1985 
and thereafter.  For purposes of this clause, the state's 
five-year benefit cost rate shall be computed annually and shall 
be derived by dividing the total dollar amount of benefits paid 
to claimants under this law during the 60 consecutive calendar 
months immediately preceding July 1, 1984 and of each year 
thereafter by the total dollar amount of wages subject to 
contributions under this law during the same period.  The rate 
so determined shall be applicable for the calendar year next 
succeeding each computation date.  
   (b) Each construction employer described above in the 
construction industry who becomes subject to this chapter shall 
pay contributions at a rate, not exceeding 7-1/2 percent, that 
is the higher of (1) one percent, or (2) the state's five-year 
benefit cost rate for construction employers for the 60 
consecutive month period immediately preceding July 1, 1984 
and of each year thereafter.  For purposes of this clause, the 
state's five-year benefit cost rate shall be computed annually 
and shall be derived by dividing the total dollar amount of 
benefits paid to claimants of construction employers, as 
determined by the commissioner, during the 60 consecutive 
calendar months immediately preceding July 1, 1984 and of each 
year thereafter by the total dollar amount of wages of 
construction employers subject to contributions during the same 
period.  The rate so determined shall be applicable for the 
calendar year next succeeding each computation date.  
    For purposes of this subdivision an employer is in the 
construction industry if assigned an industrial classification 
within division C of the Standard Industrial Classification 
Manual issued by the United States Office of Management and 
Budget as determined by the tax branch of the department. 
    Sec. 12.  Minnesota Statutes 1986, section 268.06, 
subdivision 5, is amended to read:  
    Subd. 5.  [BENEFITS CHARGED AS AND WHEN PAID.] Benefits 
paid to an individual pursuant to a valid claim shall be charged 
against the account of the individual's employer as and when 
paid, except that benefits paid to an individual who earned base 
period wages for part-time employment shall not be charged to an 
employer that is liable for payments in lieu of contributions or 
to the experience rating account of an employer if the 
employer:  (1) provided weekly base period regularly scheduled 
part-time employment to the individual during the individual's 
base period; (2) during the individual's benefit year, continues 
to provide weekly the individual with regularly scheduled 
employment equal to at least approximating 90 percent of the 
part-time employment provided the claimant by that employer in 
the base period; and (3) is an interested party because of the 
individual's loss of other employment.  The relief of charges 
shall terminate effective the first week in the claimant's 
benefit year that the employer fails to meet the provisions of 
clause (2).  The amount of benefits so chargeable against each 
base period employer's account shall bear the same ratio to the 
total benefits paid to an individual as the base period wage 
credits of the individual earned from such employer bear to the 
total amount of base period wage credits of the individual 
earned from all the individual's base period employers. 
    In making computations under this provision, the amount of 
wage credits if not a multiple of $1, shall be computed to the 
nearest multiple of $1. 
    Benefits shall not be charged to an employer that is liable 
for payments in lieu of contributions or to the experience 
rating account of an employer for unemployment (1) that is 
directly caused by a major natural disaster declared by the 
president pursuant to section 102(2) of the Disaster Relief Act 
of 1974 (United States Code, title 42, section 5122(2)), if the 
unemployed individual would have been eligible for disaster 
unemployment assistance with respect to that unemployment but 
for the individual's receipt of unemployment insurance benefits, 
or (2) that is directly caused by a fire, flood, or act of God 
where 70 percent or more of the employees employed in the 
affected location become unemployed as a result and the employer 
substantially reopens its operations in that same area within 
360 days of the fire, flood, or act of God.  Benefits shall be 
charged to the employer's account where the unemployment is 
caused by the willful act of the employer or a person acting on 
behalf of the employer.  
    Sec. 13.  Minnesota Statutes 1986, section 268.06, 
subdivision 6, is amended to read:  
    Subd. 6.  [COMPUTATION OF EACH EMPLOYER'S EXPERIENCE 
RATIO.] The commissioner shall, for the calendar year 1966, and 
for each calendar year thereafter, compute an experience ratio 
for each employer whose account has been chargeable with 
benefits;  
    (a) During the 36 consecutive calendar months immediately 
preceding July 1 of the preceding calendar year for calendar 
years up to December 31, 1983; except that, for any employer who 
has not been subject to the Minnesota economic security law for 
a period of time sufficient to meet the 36 consecutive months 
requirement, the commissioner shall compute an experience ratio 
if the employer's account has been chargeable with benefits 
during at least the 12 consecutive calendar months immediately 
preceding July 1 of the preceding calendar year.  Such 
experience ratio shall be the quotient obtained by dividing 
1-1/4 times the total benefits charged to the employer's account 
during the period the account has been chargeable but not less 
than the 12 or more than the 36 consecutive calendar months 
ending on June 30 of the preceding calendar year, by the 
employer's total taxable payroll for the same period on which 
all contributions due have been paid to the department of jobs 
and training on or before July 31 of the preceding calendar 
year.  Such experience ratio shall be computed to the nearest 
one-tenth of a percent. 
    (b) During the 48 consecutive calendar months immediately 
preceding July 1, 1983 for the calendar year for 1984; except 
that, for any employer who has not been subject to the Minnesota 
economic security law for a period of time sufficient to meet 
the 48 consecutive months requirement, the commissioner shall 
compute an experience ratio if the employer's account has been 
chargeable with benefits during at least the 12 consecutive 
calendar months immediately preceding July 1, 1983.  Such 
experience ratio shall be the quotient obtained by dividing 
1-1/4 times the total benefits charged to the employer's account 
during the period the account has been chargeable but not less 
than the 12 or more than the 48 consecutive calendar months 
ending on June 30, 1983, by the employer's total taxable payroll 
for the same period on which all contributions due have been 
paid to the department of jobs and training on or before July 
31, 1983.  Such experience ratio shall be computed to the 
nearest one-tenth of a percent.  
    (c) during the 60 consecutive calendar months immediately 
preceding July 1 of the preceding calendar year for 1985 and 
each year thereafter; except that, for any employer who has not 
been subject to the Minnesota economic security law for a period 
of time sufficient to meet the 60 consecutive months 
requirement, the commissioner shall compute an experience ratio 
if the employer's account has been chargeable with benefits 
during at least the 12 consecutive calendar months immediately 
preceding July 1 of the preceding calendar year.  Such 
experience ratio shall be the quotient obtained by dividing 
1-1/4 times the total benefits charged to the employer's account 
during the period the account has been chargeable but not less 
than the 12 or more than the 60 consecutive calendar months 
ending on June 30 of the preceding calendar year for 1985 and 
each year thereafter, by the employer's total taxable payroll 
for the same period on which all contributions due have been 
paid to the department of jobs and training on or before July 
October 31 of the preceding calendar year.  Such experience 
ratio shall be computed to the nearest one-tenth of a percent.  
    Sec. 14.  Minnesota Statutes 1986, section 268.06, 
subdivision 8, is amended to read:  
    Subd. 8.  [DETERMINATION OF CONTRIBUTION RATES.] (a) For 
each calendar year the commissioner shall determine the 
contribution rate of each employer by adding the minimum rate to 
the experience ratio, except that if the ratio for the current 
calendar year increases or decreases the experience ratio for 
the preceding calendar year by more than one and one-half 
percentage points for 1982; and 2-1/2 percentage points for 1983 
and each year thereafter, the increase or decrease for the 
current year shall be limited to one and one-half percentage 
points for 1982; and 2-1/2 percentage points for 1983 and each 
year thereafter, provided that a small business employer shall 
be eligible, upon application, for a reduction in the limitation 
to 1-1/2 percentage points for 1983 and each year thereafter. 
"Small business employer" for the purpose of this subdivision 
means an employer with an annual covered payroll of $250,000 or 
less, or fewer than 20 employees in three of the four quarters 
ending June 30, of the previous calendar year. 
    (b) The minimum rate for all employers shall be one percent 
if the amount in the unemployment compensation fund is less than 
$80,000,000 on June 30 of the preceding calendar year; or 
nine-tenths of one percent if the fund is more than $80,000,000 
but less than $90,000,000; or eight-tenths of one percent if the 
fund is more than $90,000,000 but less than $110,000,000; or 
seven-tenths of one percent if the fund is more than 
$110,000,000 but less than $130,000,000; or six-tenths of one 
percent if the fund is more than $130,000,000 but less than 
$150,000,000; or five-tenths of one percent if the fund is more 
than $150,000,000 but less than $170,000,000; or three-tenths of 
one percent if the fund is more than $170,000,000 but less than 
$200,000,000; or one-tenth of one percent if the fund is 
$200,000,000 or more; provided that no employer shall have a 
contribution rate of more than 7.5 percent. 
    (c) For the purposes of this section the unemployment 
compensation fund shall not include any moneys advanced from the 
Federal Unemployment Account in the unemployment trust fund in 
accordance with Title XII of the Social Security Act, as 
amended.  No employer first assigned an experience ratio in 
accordance with subdivision 6, shall have a contribution rate 
increased or decreased by more than one and one-half percentage 
points for 1982; and 2-1/2 percentage points for 1983 and each 
year thereafter over the contribution rate assigned for the 
preceding calendar year in accordance with subdivision 3a, 
provided that a small business employer shall be eligible, upon 
application, for a reduction in the limitation to 1-1/2 
percentage points for 1983 and each year thereafter.  
    Sec. 15.  Minnesota Statutes 1986, section 268.06, 
subdivision 19, is amended to read:  
    Subd. 19.  [NOTICE OF RATE.] The commissioner shall mail to 
each employer notice of the employer's rate of contributions as 
determined for any calendar year pursuant to this section.  Such 
notice shall contain the contribution rate, factors used in 
determining the individual employer's experience rating, and 
such other information as the commissioner may prescribe.  
Unless reviewed in the manner hereinafter changed by the 
procedure provided in this subdivision, the assigned rate as 
initially determined or as modified changed by a redetermination 
by the tax branch of this department, a decision of a referee, 
or the commissioner shall be final except for fraud and shall be 
the rate upon which contributions shall be computed for the 
calendar year for which such rate was determined assigned, and 
shall not be subject to collateral attack for any errors, 
clerical or otherwise, whether by way of claim for adjustment or 
refund, or otherwise.  If the legislature changes any of the 
factors used to determine the contribution rate of any employer 
for any year subsequent to the original mailing of such notice 
for the year, the earlier notice shall be void.  The notice 
based on the new factors shall be deemed to be the only notice 
of rate of contributions for that year and shall be subject to 
the same finality, redetermination and review procedures as 
provided above.  
    Sec. 16.  Minnesota Statutes 1986, section 268.06, 
subdivision 20, is amended to read:  
    Subd. 20.  [PROTEST, REVIEW, REDETERMINATION, APPEAL.] A 
review of the charges made to an employer's account as set forth 
in the notice of charges referred to in subdivision 18 and a 
review of an employer's contribution rate as set forth in the 
notice of the employer's rate for any calendar year as provided 
in subdivision 19, may be had by the employer by filing with the 
commissioner a written protest setting forth reasons therefor 
within 30 days from the date of the mailing of the notice of 
charges or contribution rate to the employer.  The date shall 
appear on the notice.  Upon receipt of the protest, the 
commissioner shall refer the matter to an official designated by 
the commissioner to review the charges appearing on the notice 
appealed from or the computations of the protesting employer's 
rate, as the case may be, to determine whether or not there has 
been any clerical error or error in computation in either case.  
The official shall either affirm or make a redetermination 
rectifying the charges or rate as the case may be, and a notice 
of the affirmation or redetermination shall immediately be 
mailed to the employer.  If the employer is not satisfied with 
the affirmation or redetermination, the employer may appeal by 
filing a notice with the department within ten days after the 
date of mailing appearing upon the redetermination.  Upon the 
receipt of the appeal, the commissioner shall refer the matter 
to a referee for a hearing and after opportunity for a fair 
hearing, the referee shall affirm, modify or set aside the 
original determination with its affirmation or the 
redetermination, as appears just and proper.  The commissioner 
may at any time upon the commissioner's own motion correct any 
clerical error of the department resulting in charges against an 
employer's account or any error in the computation or the 
assignment of an employer's contribution rate.  The referee may 
order the consolidation of two or more appeals whenever, in the 
referee's judgment, consolidation will not be prejudicial to any 
interested party.  At any hearing a written report of any 
employee of the department which has been authenticated shall be 
admissible in evidence.  Appeals from the decision of the 
referee shall be provided by section 268.10, subdivision 5.  
    Sec. 17.  Minnesota Statutes 1986, section 268.06, 
subdivision 22, is amended to read:  
    Subd. 22.  [EMPLOYMENT EXPERIENCE RECORD TRANSFER.] (a) 
When an employing unit succeeds to or acquires the organization, 
trade or business or substantially all the assets of another 
employing unit which at the time of the acquisition was an 
employer subject to this law, and continues such organization, 
trade or business, the experience rating record of the 
predecessor employer shall be transferred as of the date of 
acquisition to the successor employer for the purpose of rate 
determination. 
    (b) When an employing unit succeeds to or acquires a 
distinct severable portion of the organization, trade, business 
or assets which is less than substantially all of the employing 
enterprises of another employing unit, the successor employing 
unit shall acquire the experience rating record attributable to 
the portion to which it has succeeded, and the predecessor 
employing unit shall retain the experience rating record 
attributable to the portion which it has retained, if (1) the 
successor continues the organization, trade or business of the 
portion acquired, (2) the successor within 90 days of 
acquisition makes a written request to file an application as 
prescribed by the commissioner for the transfer of the 
experience rating record for the severable portion acquired from 
the predecessor (3) and within 90 days from the date the 
application is mailed to the successor the successor and 
predecessor employing units jointly sign the and file a properly 
completed, written application as prescribed by the commissioner 
that furnishes the commissioner with sufficient information to 
substantiate the severable portion and to assign the appropriate 
total and taxable wages and benefit charges to the successor for 
experience rating purposes.  Previously assigned contribution 
rates that have become final in accordance with subdivision 19 
prior to the filing of the written request to file an 
application shall not be affected by the transfer. 
    (c) An employing unit which succeeds to or acquires the 
organization, trade or business or substantially all of the 
assets of an employer shall notify the department in writing of 
the acquisition not later than 30 days after the acquisition.  
Failure to give notice shall render the predecessor and 
successor employing unit jointly and severally liable for 
contributions due and unpaid by the predecessor. 
    (d) Employment with a predecessor employer shall not be 
deemed to have been terminated if similar employment is offered 
by the successor employer and accepted by the employee. 
    (e) (d) An official, designated by the commissioner, upon 
the official's own motion or upon application of an employing 
unit shall determine if an employing unit is a successor within 
the meaning of this subdivision and shall notify the employing 
unit of the determination.  The determination shall be final 
unless the employing unit shall within 30 days after mailing of 
notice of determination to the employing unit's last known 
address file a written appeal.  Proceedings on the appeal shall 
be in accordance with section 268.12, subdivision 13.  
    (f) (e) Notwithstanding subdivision 19, the commissioner 
may, after as the result of any determination of or decision 
regarding succession or nonsuccession, recompute the rate of the 
employer all employers affected by the determination or decision 
for any prior year, including the year of the acquisition or 
succession and subsequent years, that is affected by the 
transfer or nontransfer of part or all of the experience rating 
record under this subdivision.  This paragraph does not apply to 
rates that have become final in accordance with subdivision 19 
prior to the filing of a written request to file an application 
for the transfer of a severable portion of the experience rating 
record as provided in paragraph (b). 
    Sec. 18.  Minnesota Statutes 1986, section 268.06, 
subdivision 24, is amended to read:  
    Subd. 24.  [REASSIGNMENT VOLUNTARY CONTRIBUTIONS.] 
Notwithstanding any inconsistent provisions of law any employer 
who has been assigned a contribution rate pursuant to 
subdivisions 4, 6, and 8 of this section may, for the calendar 
year 1967, or any calendar year thereafter, upon the voluntary 
payment of an amount equivalent to any portion or all of the 
benefits charged to the employer's account during the period 
ending June 30 of the preceding year used for the purpose of 
computing an employer's experience ratio as authorized by said 
subdivisions 4, 6, and 8, obtain a cancellation of benefits 
charged to the account during such period equal to such payment 
so voluntarily made.  Upon the payment of such voluntary 
contribution, plus a surcharge of 25 percent of such benefit 
charged, within the applicable period prescribed by the 
provisions of this subdivision, the commissioner shall cancel 
the benefits equal to such payment, excluding the 25 percent 
surcharge, so voluntarily made and compute a new experience 
ratio for such employer. The employer then shall be assigned the 
contribution rate applicable to the category within which the 
recomputed experience ratio is included.  Such voluntary 
payments may be made only during the 30-day period immediately 
following the date of mailing to the employer of the notice of 
contribution rate as prescribed in this section; provided that 
the commissioner may extend this period if the commissioner 
finds that the employer's failure to make such payment within 
such 30-day period was for good cause; and provided further that 
notwithstanding any of the foregoing provisions of this 
subdivision, in no event shall any new experience ratio be 
computed for any employer or a contribution rate be reduced as a 
result of any such voluntary payment which is made after the 
expiration of the 120-day period commencing with the first day 
of the calendar year for which such rate is effective.  Any 
adjustments under this subdivision shall be used only in the 
form of credits against accrued or future 
contributions Voluntary contributions made within the required 
time limits will not be refunded unless a request is made in 
writing at the time of payment that the department refund the 
voluntary contribution if it does not result in a lower rate. 
    When all or a part of the benefits charged to an employer's 
account are for the unemployment of 75 percent or more of the 
employees in an employing unit and the unemployment is caused by 
damages to the unit by fire, flood, wind or other act of God, 
the employer may obtain a cancellation of benefits incurred 
because of that unemployment in the manner provided by this 
subdivision without being subject to the surcharge of 25 percent 
otherwise required. 
    Sec. 19.  Minnesota Statutes 1986, section 268.07, 
subdivision 3, is amended to read:  
    Subd. 3.  [WHEN WAGE CREDITS ARE NOT AVAILABLE.] (1) No 
individual may receive benefits in a benefit year unless, 
subsequent to the beginning of the next preceding benefit year 
during which benefits were received, the individual performed 
service in insured work as defined in section 268.04, 
subdivision 17, and earned remuneration for the service in an 
amount equal to not less than the minimum wage credits required 
to qualify for benefits. 
    (2) No employer who provided 90 percent or more of the wage 
credits in a claimant's base period shall be charged for 
benefits based upon earnings of the claimant during a subsequent 
base period unless the employer has employed the claimant in any 
part of the subsequent base period. 
    (3) Wages paid by an employing unit may not be used for 
benefit purposes by any individual claimant who (a) individually 
or, jointly, or in combination with a the claimant's spouse, 
parent, or child owns or controls directly or indirectly 25 
percent or more interest in the employing unit; or (b) is the 
spouse, parent, or minor child of any individual who owns or 
controls directly or indirectly 25 percent or more interest in 
the employing unit; and (c) is not permanently separated from 
employment. 
    This clause is effective when the individual has been paid 
four times the individual's weekly benefit amount in the current 
benefit year. 
    (4) Wages paid in seasonal employment, as defined in 
subdivision 2a, are not available for benefit purposes during 
weeks in which there is no seasonal employment available with 
the employer. 
    Sec. 20.  Minnesota Statutes 1986, section 268.08, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [BENEFITS DUE DECEASED PERSONS.] Upon the death 
of any claimant for benefits, and in the event it is found by 
the commissioner that benefits have accrued and are due and 
payable to that claimant and remain wholly or partially unpaid 
at the time of the claimant's death, or in the event there have 
been issued and unpaid one or more benefit checks, those checks 
may, upon application therefor, be paid to the duly qualified 
administrator or executor of the estate of the deceased 
claimant.  In the event that no administrator or executor is 
appointed to administer the estate of the deceased, if any, the 
benefits may, upon the order and direction of the commissioner 
be paid to any person designated by the commissioner in the 
following order:  (1) the surviving spouse, (2) the surviving 
child or children, or (3) the surviving parent or parents. 
    A person seeking payment under this subdivision shall 
complete an affidavit on a form prescribed by the department and 
the payment of benefits to a person pursuant to an affidavit 
under this subdivision shall discharge the obligations of the 
department to the claimant to the extent of the payment, and no 
other person shall claim or assert any right with respect 
thereto. 
    Sec. 21.  Minnesota Statutes 1986, section 268.08, 
subdivision 3, is amended to read:  
    Subd. 3.  [NOT ELIGIBLE.] An individual shall not be 
eligible to receive benefits for any week with respect to which 
the individual is receiving, has received, or has filed a claim 
for remuneration in an amount equal to or in excess of the 
individual's weekly benefit amount in the form of 
    (1) termination, severance, or dismissal payment or wages 
in lieu of notice whether legally required or not; provided that 
if a termination, severance, or dismissal payment is made in a 
lump sum, the employer may allocate such lump sum payment over a 
period equal to the lump sum divided by the employee's regular 
pay while employed by such employer; provided any such payment 
shall be applied for a period immediately following the last day 
of work but not to exceed 28 calendar days; or 
    (2) vacation allowance paid directly by the employer for a 
period of requested vacation, including vacation periods 
assigned by the employer under the provisions of a collective 
bargaining agreement, or uniform vacation shutdown; or 
    (3) compensation for loss of wages under the workers' 
compensation law of this state or any other state or under a 
similar law of the United States, or under other insurance or 
fund established and paid for by the employer except that this 
does not apply to an individual who is receiving temporary 
partial compensation pursuant to section 176.101, subdivision 
3k; or 
    (4) 50 percent of the pension payments from any fund, 
annuity or insurance maintained or contributed to by a base 
period employer including the armed forces of the United States 
if the employee contributed to the fund, annuity or insurance 
and all of the pension payments if the employee did not 
contribute to the fund, annuity or insurance; or 
    (5) 50 percent of a primary insurance benefit under title 
II of the Social Security Act as amended, or similar old age 
benefits under any act of congress or this state or any other 
state; or 
    (6) holiday pay, in excess of $25. 
    Provided, that if such remuneration is less than the 
benefits which would otherwise be due under sections 268.03 to 
268.24, the individual shall be entitled to receive for such 
week, if otherwise eligible, benefits reduced by the amount of 
such remuneration; provided, further, that if the appropriate 
agency of such other state or the federal government finally 
determines that the individual is not entitled to such benefits, 
this provision shall not apply.  If the computation of reduced 
benefits, required by this subdivision, is not a whole dollar 
amount, it shall be rounded down to the next lower dollar amount.
    Sec. 22.  Minnesota Statutes 1986, section 268.08, 
subdivision 3a, is amended to read:  
    Subd. 3a.  [RECEIPT OF BACK PAY.] Back pay received by an 
individual with respect to any weeks of unemployment occurring 
in the 104 weeks immediately preceding the payment of the back 
pay shall be deducted from benefits paid for those weeks.  
    The amount deducted shall not reduce the benefits for which 
the individual is otherwise eligible for that week below zero. 
If the amount of benefits after the deduction of back pay is not 
a whole dollar amount, it shall be rounded to the next lower 
dollar.  
    If a deduction from back pay is paid to the fund for 
benefits deductible under this subdivision, the payment the back 
pay awarded the individual is reduced by benefits paid, the 
amounts withheld shall be: (a) shall be paid by the employer 
into the fund within 30 days of the award and are subject to the 
same collection procedures that apply to past due contributions 
under this chapter; (b) applied to benefit overpayments 
resulting from the payment of the back pay; (b) (c) credited to 
the individual's maximum amount of benefits payable in a benefit 
year which includes the weeks of unemployment for which back pay 
was deducted; and (c).  Benefit charges for those weeks shall be 
removed from the employer's account as of the calendar quarter 
in which the fund receives payment.  
    Payments to the fund under this subdivision are made by the 
employer on behalf of the individual and are not voluntary 
contributions under section 268.06, subdivision 24.  
    Sec. 23.  Minnesota Statutes 1986, section 268.09, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DISQUALIFYING CONDITIONS.] An individual 
separated from any employment under clause (1), (2), or 
(3) paragraph (a), (b), or (d) shall be disqualified for waiting 
week credit and benefits.  For separations under clauses 
(1) paragraphs (a) and (2) (b), the disqualification shall 
continue until four calendar weeks have elapsed following the 
individual's separation and the individual has earned four times 
the individual's weekly benefit amount in insured work. 
    (1) (a) [VOLUNTARY LEAVE.] The individual voluntarily and 
without good cause attributable to the employer discontinued 
employment with such employer.  For the purpose of this clause 
paragraph, a separation from employment by reason of its 
temporary nature or for inability to pass a test or for 
inability to meet performance standards necessary for 
continuation of employment or based solely on a provision in a 
collective bargaining agreement by which an individual has 
vested discretionary authority in another to act in behalf of 
the individual shall not be deemed voluntary.  
    A separation shall be for good cause attributable to the 
employer if it occurs as a consequence of sexual harassment.  
Sexual harassment means unwelcome sexual advances, requests for 
sexual favors, sexually motivated physical contact or other 
conduct or communication of a sexual nature when:  (1) the 
employee's submission to such conduct or communication is made a 
term or condition of the employment, (2) the employee's 
submission to or rejection of such conduct or communication is 
the basis for decisions affecting employment, or (3) such 
conduct or communication has the purpose or effect of 
substantially interfering with an individual's work performance 
or creating an intimidating, hostile, or offensive working 
environment and the employer knows or should know of the 
existence of the harassment and fails to take timely and 
appropriate action.  
    (2) (b) [DISCHARGE FOR MISCONDUCT.] The individual was 
discharged for misconduct, not amounting to gross misconduct 
connected with work or for misconduct which interferes with and 
adversely affects employment. 
    (c)  [EXCEPTIONS TO DISQUALIFICATION.] An individual shall 
not be disqualified under clauses (1) and (2) paragraphs (a) and 
(b) of this subdivision under any of the following conditions: 
    (a) (1) the individual voluntarily discontinued employment 
to accept work offering substantially better conditions of work 
or substantially higher wages or both; 
    (b) (2) the individual is separated from employment due to 
personal, serious illness provided that such individual has made 
reasonable efforts to retain employment;. 
    An individual who is separated from employment due to the 
individual's illness of chemical dependency which has been 
professionally diagnosed or for which the individual has 
voluntarily submitted to treatment and who fails to make 
consistent efforts to maintain the treatment the individual 
knows or has been professionally advised is necessary to control 
that illness has not made reasonable efforts to retain 
employment. 
    (c) (3) the individual accepts work from a base period 
employer which involves a change in location of work so that 
said work would not have been deemed to be suitable work under 
the provisions of subdivision 2 and within a period of 13 weeks 
from the commencement of said work voluntarily discontinues 
employment due to reasons which would have caused the work to be 
unsuitable under the provision of said subdivision 2; 
    (d) (4) the individual left employment because of reaching 
mandatory retirement age and was 65 years of age or older; 
    (e) (5) the individual is terminated by the employer 
because the individual gave notice of intention to terminate 
employment within 30 days.  This exception shall be effective 
only through the calendar week which includes the date of 
intended termination, provided that this exception shall not 
result in the payment of benefits for any week for which the 
individual receives the individual's normal wage or salary which 
is equal to or greater than the weekly benefit amount; 
    (f) (6) the individual is separated from employment due to 
the completion of an apprenticeship program, or segment thereof, 
approved pursuant to chapter 178;  
    (g) (7) the individual voluntarily leaves part-time 
employment with a base period employer while continuing 
full-time employment if the individual attempted to return to 
part-time employment after being separated from the full-time 
employment, and if substantially the same part-time employment 
with the base period employer was not available for the 
individual; 
    (8) the individual is separated from employment based 
solely on a provision in a collective bargaining agreement by 
which an individual has vested discretionary authority in 
another to act on behalf of the individual.  Except as provided 
in paragraph (d), separations from part-time employment will not 
be disqualifying when the claim is based on sufficient full-time 
employment to establish a valid claim from which the claimant 
has been separated for nondisqualifying reasons. 
    (3) (d) [DISCHARGE FOR GROSS MISCONDUCT.] The individual 
was discharged for gross misconduct connected with work or gross 
misconduct which interferes with and adversely affects the 
individual's employment.  For a separation under this clause, 
the commissioner shall impose a total disqualification for the 
benefit year and cancel all of the wage credits from the last 
employer from whom the individual was discharged for gross 
misconduct connected with work. 
    For the purpose of this clause paragraph "gross misconduct" 
is defined as misconduct involving assault and battery or the 
malicious destruction of property or arson or sabotage or 
embezzlement or any other act, including theft, the commission 
of which amounts to a felony or gross misdemeanor.  For an 
employee of a health care facility, gross misconduct also 
includes misconduct involving an act of patient or resident 
abuse as defined in section 626.557, subdivision 2, clause (d).  
    If an individual is convicted of a felony or gross 
misdemeanor for the same act or acts of misconduct for which the 
individual was discharged, the misconduct is conclusively 
presumed to be gross misconduct if it was connected with the 
individual's work. 
    (4) (e) [LIMITED OR NO CHARGE OF BENEFITS.] Benefits paid 
subsequent to an individual's separation under any of the 
foregoing clauses paragraphs, excepting clauses (2)(c) and 
(2)(e) paragraphs (c)(3), (c)(5), and (c)(8), shall not be used 
as a factor in determining the future contribution rate of the 
employer from whose employment such individual separated. 
    Benefits paid subsequent to an individual's failure, 
without good cause, to accept an offer of suitable re-employment 
shall not be used as a factor in determining the future 
contribution rate of the employer whose offer of re-employment 
was not accepted or whose offer of re-employment was refused 
solely due to the distance of the available work from the 
individual's residence, the individual's own serious illness or, 
the individual's other employment at the time of the offer, or 
if the individual is in training with the approval of the 
commissioner. 
    (5) (f) [ACTS OF OMISSIONS.] An individual who was employed 
by an employer shall not be disqualified for benefits under this 
subdivision for any acts or omissions occurring after separation 
from employment with the employer.  
    (6) (g) [DISCIPLINARY SUSPENSIONS.] An individual shall be 
disqualified for waiting week credit and benefits for the 
duration of any disciplinary suspension of 30 days or less 
resulting from the individual's own misconduct.  Disciplinary 
suspensions of more than 30 days shall constitute a discharge 
from employment. 
    Sec. 24.  Minnesota Statutes 1986, section 268.09, 
subdivision 3, is amended to read:  
    Subd. 3.  [LABOR DISPUTE.] (a) An individual who has left 
or partially or totally lost employment with an employer because 
of a strike or other labor dispute at the establishment in which 
the individual is or was employed shall be disqualified for 
benefits:  
    (a) (1) For each week during which the strike or labor 
dispute is in progress; or 
    (b) (2) For one week following the commencement of the 
strike or labor dispute if the individual is not participating 
in or directly interested in the strike or labor dispute.  
    Participation includes the failure or refusal of an 
individual to accept and perform available and customary work at 
the establishment.  
    (b) An individual who has left or partially or totally lost 
employment with an employer because of a jurisdictional 
controversy between two or more labor organizations at the 
establishment in which the individual is or was employed shall 
be disqualified for benefits for each week during which the 
jurisdictional controversy is in progress. 
    (c) For the purpose of this subdivision the term "labor 
dispute" shall have the same definition as provided in the 
Minnesota labor relations act.  Nothing in this subdivision 
shall be deemed to deny benefits to any employee: 
    (a) (1) who becomes unemployed because of a strike or 
lockout caused by an employer's willful failure to observe the 
terms of the safety and health section of a union contract or 
failure to comply with an official citation for a violation of 
federal and state laws involving occupational safety and health; 
provided, however, that benefits paid in accordance with this 
provision shall not be charged to the employer's experience 
rating account if, following official appeal proceedings, it is 
held that there was no willful failure on the part of the 
employer,; or 
    (b) (2) who becomes unemployed because of a lockout,; or 
    (c) (3) who is dismissed during the period of negotiation 
in any labor dispute and prior to the commencement of a strike.  
    Provided, however, that (d) A voluntary separation during 
the time that the strike or other labor dispute is in progress 
at the establishment shall not be deemed to terminate the 
individual's participation in or direct interest in such strike 
or other labor dispute for purposes of this subdivision. 
    (e) Benefits paid to an employee who has left or partially 
or totally lost employment because of a strike or other labor 
dispute at the employee's primary place of employment shall not 
be charged to the employer's account unless the employer was a 
party to the particular strike or labor dispute.  
    (f) Notwithstanding any other provision of this section, an 
individual whose last separation from employment with an 
employer occurred prior to the commencement of the strike or 
other labor dispute and was permanent or for an indefinite 
period, shall not be denied benefits or waiting week credit 
solely by reason of failure to apply for or to accept recall to 
work or re-employment with the employer during any week in which 
the strike or other labor dispute is in progress at the 
establishment in which the individual was employed. 
    Sec. 25.  Minnesota Statutes 1986, section 268.12, 
subdivision 8, is amended to read:  
    Subd. 8.  [RECORDS; REPORTS.] (1) Each employing unit shall 
keep true and accurate work records for such periods of time and 
containing such information as the commissioner may 
prescribe.  Such records shall be open to inspection, audit, and 
verification, and be subject to being copied by any authorized 
representative of the commissioner at any reasonable time and as 
often as may be necessary.  The commissioner, appeal referee, or 
any other duly authorized representative of the commissioner, 
may require from any employing unit any sworn or unsworn 
reports, with respect to persons employed by it, which the 
commissioner, appeal referee, or any other duly authorized 
representative of the commissioner deems necessary for the 
effective administration of sections 268.03 to 268.24, provided 
that quarterly contribution and wage report forms shall include 
the employee's name, social security number, and total wages 
paid to the employee For the purpose of determining compliance 
with this chapter, or for the purpose of collection of any 
amounts due under this chapter, the commissioner or any 
authorized representative of the commissioner has the power to 
examine, or cause to be examined or copied, any books, 
correspondence, papers, records, or memoranda which are relevant 
to making these determinations, whether the books, 
correspondence, papers, records, or memoranda are the property 
of or in the possession of the employing unit or any other 
person or corporation at any reasonable time and as often as may 
be necessary. 
    (2) The commissioner or any other duly authorized 
representative of the commissioner may cause to be made such 
summaries, compilations, photographs, duplications, or 
reproductions of any records, reports, or transcripts thereof as 
the commissioner may deem advisable for the effective and 
economical preservation of the information contained therein, 
and such summaries, compilations, photographs, duplications or 
reproductions, duly authenticated, shall be admissible in any 
proceeding under sections 268.03 to 268.24 this chapter, if the 
original record or records would have been admissible therein.  
Notwithstanding any restrictions contained in section 16B.50, 
except restrictions as to quantity, the commissioner is hereby 
authorized to duplicate, on equipment furnished by the federal 
government or purchased with funds furnished for that purpose by 
the federal government, records, reports, summaries, 
compilations, instructions, determinations, or any other written 
matter pertaining to the administration of the Minnesota 
economic security law. 
    (3) Notwithstanding any inconsistent provisions elsewhere, 
the commissioner may provide for the destruction or disposition 
of any records, reports, transcripts, or reproductions thereof, 
or other papers in the commissioner's custody, which are more 
than two years old, the preservation of which is no longer 
necessary for the establishment of contribution liability or 
benefit rights or for any purpose necessary to the proper 
administration of sections 268.03 to 268.24 this chapter, 
including any required audit thereof, provided, that the 
commissioner may provide for the destruction or disposition of 
any record, report, or transcript, or other paper in the 
commissioner's custody which has been photographed, duplicated, 
or reproduced in the manner provided in clause (2). 
    (4) Notwithstanding the provisions of the Minnesota State 
Archives Act the commissioner shall with the approval of the 
legislative auditor destroy all benefit checks and benefit check 
authorization cards that are more than two years old and no 
person shall make any demand, bring any suit or other proceeding 
to recover from the state of Minnesota any sum alleged to be due 
on any claim for benefits after the expiration of two years from 
the date of filing such claim. 
    Sec. 26.  Minnesota Statutes 1986, section 268.121, is 
amended to read:  
    268.121 [WAGE REPORTING.] 
    Beginning on April 1, 1984, each employer subject to this 
chapter shall provide the commissioner with a quarterly report 
of the wages, as defined in section 268.04, subdivision 25, paid 
to each employee of that employer covered by this chapter.  The 
commissioner shall provide the legislature with recommendations 
for statutory changes to fully implement this section no later 
than January 1, 1983 The report must include the employee's 
name, social security number, and total wages paid to the 
employee.  The report shall be due and filed at the same time as 
the contribution report in accordance with rules established by 
the commissioner for filing of quarterly contribution reports.  
    Sec. 27.  Minnesota Statutes 1986, section 268.15, 
subdivision 3, is amended to read:  
    Subd. 3.  [CONTINGENT ACCOUNT.] There is hereby created in 
the state treasury a special account, to be known as the 
economic security contingent account, which shall not lapse nor 
revert to any other fund.  Such account shall consist of all 
moneys appropriated therefor by the legislature, all moneys in 
the form of interest and penalties collected pursuant to section 
268.16 and all moneys received in the form of voluntary 
contributions to this account and interest thereon.  All moneys 
in such account shall be supplemental to all federal moneys that 
would be available to the commissioner but for the existence of 
this account.  Moneys in this account are hereby appropriated to 
the commissioner and shall be expended in accordance with the 
provisions of section 3.30, in connection with the 
administration of sections 268.03 to 268.24 available to the 
commissioner for such expenditures as the commissioner may deem 
necessary in connection with the administration of sections 
268.04 to 268.24.  Whenever the commissioner expends moneys from 
said contingent account for the proper and efficient 
administration of the Minnesota economic security law for which 
funds have not yet been made available by the federal 
government, such moneys so withdrawn from the contingent account 
shall be replaced as hereinafter provided.  Upon the deposit in 
the economic security administration fund of moneys which are 
received in reimbursement of payments made as above provided for 
said contingent account, the commissioner shall certify to the 
state treasurer the amount of such reimbursement and thereupon 
the state treasurer shall transfer such amount from the economic 
security administration fund to said contingent account.  All 
moneys in this account shall be deposited, administered, and 
disbursed in the same manner and under the same conditions and 
requirements as is provided by law for the other special 
accounts in the state treasury.  The state treasurer shall be 
liable on the treasurer's official bond for the faithful 
performance of duties in connection with the economic security 
contingent account provided for herein.  Notwithstanding 
anything to the contrary contained herein, on June 30 of each 
year, except 1982, all amounts in excess of $300,000 in this 
account shall be paid over to the unemployment compensation fund 
established under section 268.05 and administered in accordance 
with the provisions set forth therein. 
    Sec. 28.  Minnesota Statutes 1986, section 268.16, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [INTEREST ON JUDGMENTS.] Notwithstanding section 
549.09, if judgment is or has been entered upon any past due 
contribution or reimbursement which has not been paid within the 
time specified by law for payment, the unpaid judgment shall 
bear interest at the rate specified in subdivision 1 until the 
date of payment.  The rate will be effective after July 1, 1987, 
on any unpaid judgment balances and all new judgments docketed 
after that date. 
    Sec. 29.  Minnesota Statutes 1986, section 268.16, 
subdivision 2, is amended to read:  
    Subd. 2.  [REPORTS; DELINQUENCIES; PENALTIES.] (1) (a) Any 
employer who knowingly fails to make and submit to the 
department of jobs and training any contribution report of wages 
paid by or due from the employer for insured work in the manner 
and at the time such the report is required by rules prescribed 
by the commissioner shall pay to the department of jobs and 
training for the contingent account a penalty in the amount of 
1-1/2 percent of contributions accrued during the period for 
which such the report is required, for each month from and after 
such the due date until such the report is properly made and 
submitted to the department of jobs and training.  In no case 
shall the amount of the penalty imposed hereby be less than $5 
per month.  The maximum penalty imposed hereby shall be $25 or 
the amount determined at the rate of 1-1/2 percent per month, 
whichever is greater.  Any employing unit which fails to make 
and submit to the commissioner any report, other than one of 
wages paid or payable for insured work, as and when required by 
the rules of the commissioner, shall be subject to a penalty in 
the sum of $10 payable to the department of jobs and training 
for the contingent account.  All such penalties shall be in 
addition to interest and any other penalties provided for by 
sections 268.03 to 268.24 and shall be collected as provided by 
section 268.161. 
    (2) (b) If any employing unit required by sections 268.03 
to 268.24 to make and submit contribution reports shall fail to 
do so within the time prescribed by these sections or by rules 
under the authority thereof, or shall make, willfully or 
otherwise, an incorrect, false or fraudulent contribution 
report, it shall, on the written demand of the commissioner, 
make such contribution report, or corrected report, within ten 
days after the mailing of such written demand and at the same 
time pay the whole contribution, or additional contribution, due 
on the basis thereof.  If such employer shall fail within that 
time to make such report, or corrected report, the commissioner 
shall make a report, or corrected report, from the 
commissioner's own knowledge and from such information as the 
commissioner can obtain through testimony, or otherwise, and 
assess a contribution on the basis thereof, which contribution, 
plus penalties and interest which thereafter accrued (less any 
payments theretofore made) shall be paid within ten days after 
the commissioner has mailed to such employer a written notice of 
the amount thereof and demand for its payment.  Any such 
contribution report or assessment made by the commissioner on 
account of the failure of the employer to make a report or 
corrected report shall be prima facie correct and valid, and the 
employer shall have the burden of establishing its incorrectness 
or invalidity in any action or proceeding in respect thereto.  
Whenever such delinquent employer shall file a report or 
corrected report, the commissioner may, on finding it 
substantially correct, substitute it for the commissioner's 
report.  
    (c) Any employer who fails to file the wage detail report 
required by section 268.121 shall pay to the department for each 
month the report is delinquent a penalty of one-half of one 
percent of total wages paid.  The penalty shall not be assessed 
if the wage detail report is properly made and filed within 30 
days after a demand for the report is mailed to the employer's 
address of record.  In no case shall the amount of the penalty, 
if assessed, be less than $25.  Penalties due under this 
subdivision may be waived where good cause for late filing is 
found by the commissioner. 
    (d) Any employer who files the wage detail report required 
by section 268.121 but knowingly fails to include any of the 
required information or knowingly enters erroneous information 
shall be subject to a penalty of $25 for each individual for 
whom the information is missing or erroneous. 
    (e) Any employing unit which fails to make and submit to 
the commissioner any report, other than a contribution report or 
wage detail report, as and when required by rule, shall be 
subject to a penalty of $50 payable to the department. 
    (f) Penalties provided for in paragraphs (a), (c), (d), and 
(e) are in addition to interest and any other penalties imposed 
by sections 268.03 to 268.24 and shall be collected as provided 
by section 268.161 and shall be credited to the contingent 
account. 
    Sec. 30.  Minnesota Statutes 1986, section 268.16, is 
amended by adding a subdivision to read: 
    Subd. 3a.  [COSTS.] Any employing unit which fails to make 
and submit reports or pay any contributions or reimbursement 
when due is liable to the department for any recording fees, 
sheriff fees, or litigation costs incurred in the collection of 
the amounts due or obtaining the reports.  
    If any check or money order, in payment of any amount due 
under this chapter, is not honored when presented for payment, 
the employing unit will be assessed a fee of $20 which is in 
addition to any other fees provided by this chapter.  The fee 
shall be assessed regardless of the amount of the check or money 
order or the reason for nonpayment with the exception of 
processing errors made by a financial institution. 
    Costs due under this subdivision shall be paid to the 
department and credited to the administration fund. 
    Sec. 31.  Minnesota Statutes 1986, section 268.161, 
subdivision 1, is amended to read:  
    Subdivision 1.  [LIEN.] (a) Any contributions, benefit 
overpayments, or reimbursements due under sections 268.03 to 
268.24 this chapter and interest and penalties imposed with 
respect thereto, shall become a lien upon all the property, 
within this state, both real and personal, of the person liable 
therefor, except the person's homestead, from and after the 
filing by the commissioner of a notice of lien in the office of 
the county recorder of the county in which the property is 
situated, or in the case of personal property belonging to an 
individual who is not a resident of this state, or which is a 
corporation, partnership, or other organization, in the office 
of the secretary of state.  When the filing of the notice of 
lien is made in the office of the county recorder, the fee for 
filing and indexing shall be as prescribed in sections 272.483 
and 272.484 the date of assessment of the contribution, benefit 
overpayment, or reimbursement.  The term "date of assessment" 
means the date a report was due or the payment due date of the 
notice of benefits charged to a reimbursable account. 
    The lien created under this section shall become effective 
with respect to personal property from and after the date of 
filing by the commissioner of a notice of the lien describing 
the property to which the lien attaches in the office of the 
county recorder of the county in which the commissioner believes 
the property is located at the time the lien is filed, and with 
the secretary of state (b) The lien imposed by this section is 
not enforceable against any purchaser, mortgagee, pledgee, 
holder of a uniform commercial code security interest, 
mechanic's lien, or judgment lien creditor, until a notice of 
lien has been filed by the commissioner in the office of the 
county recorder of the county in which the property is situated, 
or in the case of personal property belonging to an individual 
who is not a resident of the state, or which is a corporation, 
partnership, or other organization, in the office of the 
secretary of state.  When the filing of the notice of lien is 
made in the office of the county recorder, the fee for filing 
and indexing shall be as prescribed in sections 272.483 and 
272.484.  
    (c) The lien imposed on personal property by this section, 
even though properly filed, shall not be valid as is not 
enforceable against a purchaser with respect to tangible 
personal property purchased at retail or as against the personal 
property listed as exempt in sections 550.37, 550.38 and 550.39. 
    (d) A notice of tax lien filed pursuant to this section has 
priority over any security interest arising under chapter 336, 
article 9, which is perfected prior in time to the lien imposed 
by this section, but only if:  
    (1) the perfected security interest secures property not in 
existence at the time the notice of tax lien is filed; and 
    (2) the property comes into existence after the 45th day 
following the day on which the notice of tax lien is filed, or 
after the secured party has actual notice or knowledge of the 
tax lien filing, whichever is earlier. 
    (e) The lien imposed by this section shall be enforceable 
from the time the lien arises and for ten years from the date of 
filing the notice of lien.  A notice of lien may be renewed by 
the commissioner before the expiration of the ten-year period 
for an additional ten years.  The delinquent employer must 
receive notice of the renewal. 
    (f) The lien imposed by this section shall be enforceable 
by levy as authorized in subdivision 8 or by judgment lien 
foreclosure as authorized in chapter 550.  
    Sec. 32.  Minnesota Statutes 1986, section 268.161, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [LIMITATION FOR HOMESTEAD PROPERTY.] The lien 
imposed by this section is a lien upon property defined as 
homestead property in chapter 510.  The lien may be enforced 
only upon the sale, transfer, or conveyance of the homestead 
property. 
    Sec. 33.  Minnesota Statutes 1986, section 268.161, 
subdivision 8, is amended to read:  
    Subd. 8.  [LEVY.] (a) If any contribution or reimbursement 
payable to the department is not paid when due, the amount may 
be collected by the commissioner, a duly authorized 
representative, or by the sheriff of any county to whom the 
commissioner has issued a warrant, who may levy upon all 
property and rights of property of the person liable for the 
contribution or reimbursement, (except that which is exempt from 
execution pursuant to section 550.37), or property on which 
there is a lien provided by subdivision 1.  The terms 
"contribution or reimbursement" shall include any penalty, 
interest, and costs.  The term "levy" includes the power of 
distraint and seizure by any means.  Before a levy is made or 
warrant issued, notice and demand for payment of the amount due 
shall be given to the person liable for the contribution or 
reimbursement at least ten days prior to the levy or issuing of 
a warrant.  
    (b) Upon the commissioner issuing a warrant, the sheriff 
shall proceed within 60 days to levy upon the rights to property 
of the employer within the employer's county, except the 
homestead and household goods of the employer and property of 
the employer not liable to attachment, garnishment, or sale on 
any final process issued from any court under the provisions of 
section 550.37, and shall sell so much thereof as is required to 
satisfy the contribution, reimbursement, interest, and 
penalties, together with the commissioner's costs.  The sales 
shall, as to their manner, be governed by the law applicable to 
sales of like property on execution issued against property upon 
a judgment of a court of record.  The proceeds of the sales, 
less the sheriff's costs, shall be turned over to the 
commissioner, who shall retain a part thereof as is required to 
satisfy the contribution, reimbursement, interest, penalties, 
and costs, and pay over any balance to the employer.  
    (c) If the commissioner has reason to believe that 
collection of the contribution or reimbursement is in jeopardy, 
notice and demand for immediate payment of the amount may be 
made by the commissioner.  If the contribution or reimbursement 
is not paid, the commissioner may proceed to collect by levy or 
issue a warrant without regard to the ten-day period provided 
herein.  
    (d) In making the execution of the levy and in collecting 
the contribution or reimbursement due, the commissioner shall 
have all of the powers provided in chapter 550 and in any other 
law for purposes of effecting an execution against property in 
this state.  The sale of property levied upon and the time and 
manner of redemption therefrom shall be as provided in chapter 
550.  The seal of the court, subscribed by the court 
administrator, as provided in section 550.04, shall not be 
required.  The levy for collection of contributions or 
reimbursements may be made whether or not the commissioner has 
commenced a legal action for collection of the amount. 
    (e) Where a jeopardy assessment or any other assessment has 
been made by the commissioner, the property seized for 
collection of the contribution or reimbursement shall not be 
sold until any determination of liability, rate or benefit 
charges has become final.  No sale shall be made unless the 
contribution or reimbursement remain unpaid for a period of more 
than 30 days after the determination becomes final.  Seized 
property may be sold at any time if:  
    (1) the employer consents in writing to the sale; or 
    (2) the commissioner determines that the property is 
perishable or may become greatly reduced in price or value by 
keeping, or that the property cannot be kept without great 
expense.  
    (f) Where a levy has been made to collect contributions or 
reimbursements pursuant to this subdivision and the property 
seized is properly included in a formal proceeding commenced 
under sections 524.3-401 to 524.3-505 and maintained under full 
supervision of the court, the property shall not be sold until 
the probate proceedings are completed or until the court so 
orders.  
    (g) The property seized shall be returned by the 
commissioner if the owner gives a surety bond equal to the 
appraised value of the owner's interest in the property, as 
determined by the commissioner, or deposits with the 
commissioner security in a form and amount as the commissioner 
deems necessary to insure payment of the liability, but not more 
than twice the liability. 
    (h) Notwithstanding any other law to the contrary, if a 
levy or sale pursuant to this section would irreparably injure 
rights in property which the court determines to be superior to 
rights of the state in the property, the district court may 
grant an injunction to prohibit the enforcement of the levy or 
to prohibit the sale. 
    (i) Any person who fails or refuses to surrender without 
reasonable cause any property or rights to property subject to 
levy upon demand by the commissioner shall be personally liable 
to the department in an amount equal to the value of the 
property or rights not so surrendered, but not exceeding the 
amount of contribution or reimbursement for the collection of 
which the levy has been made.  Any amount recovered under this 
subdivision shall be credited against the contribution or 
reimbursement liability for the collection of which the levy was 
made.  The term "person" includes an officer or employee of a 
corporation or a member or employee of a partnership who, as an 
officer, employee, or member is under a duty to surrender the 
property or rights to property or to discharge the obligation.  
    (j) Any action taken by the commissioner pursuant to this 
subdivision shall not constitute an election by the department 
to pursue a remedy to the exclusion of any other remedy.  
    (k) After the commissioner has seized the property of any 
person, that person may, upon giving 48 hours notice to the 
commissioner and to the court, bring a claim for equitable 
relief before the district court for the release of the property 
to the employer upon terms and conditions as the court may deem 
equitable. 
    (l) Any person in possession of (or obligated with respect 
to) property or rights to property subject to levy upon which a 
levy has been made who, upon demand by the commissioner, 
surrenders the property or rights to property or who pays a 
liability under this subdivision shall be discharged from any 
obligation or liability to the person liable for the payment of 
the delinquent contribution or reimbursement with respect to the 
property or rights to property so surrendered or paid.  
    (m) Notwithstanding any other provisions of law to the 
contrary, the notice of any levy authorized by this section may 
be served by certified or registered mail or by delivery by an 
employee or agent of the department of jobs and training. 
    (n) It shall be lawful for the commissioner to release the 
levy upon all or part of the property or rights to property 
levied upon if the commissioner determines that the release will 
facilitate the collection of the liability, but the release 
shall not operate to prevent any subsequent levy.  If the 
commissioner determines that property has been wrongfully levied 
upon, it shall be lawful for the commissioner to return:  
    (1) the specific property levied upon, at any time; or 
    (2) an amount of money equal to the amount of money levied 
upon, at any time before the expiration of nine months from the 
date of levy. 
    (o) Notwithstanding section 52.12, a levy by the 
commissioner made pursuant to the provisions of this section 
upon an employer's funds on deposit in a financial institution 
located in this state, shall have priority over any unexercised 
right of setoff of the financial institution to apply the levied 
funds toward the balance of an outstanding loan or loans owed by 
the employer to the financial institution.  A claim by the 
financial institution that it exercised its right to setoff 
prior to the levy by the commissioner must be substantiated by 
evidence of the date of the setoff, and shall be verified by the 
sworn statement of a responsible corporate officer of the 
financial institution.  Furthermore, for purposes of determining 
the priority of any levy made under this section, the levy shall 
be treated as if it were an execution made pursuant to chapter 
550.  
    Sec. 34.  Minnesota Statutes 1986, section 268.161, 
subdivision 9, is amended to read:  
    Subd. 9.  [PERSONAL LIABILITY.] Any officer, director, or 
any employee having 20 percent ownership interest of a 
corporation which is an employer under sections 268.03 to 268.24 
who has control of or supervision over the filing of and 
responsibility for filing contribution reports or of making 
payment of contributions under these sections, and who willfully 
fails to file the reports or to make payments as required, shall 
be personally liable for contributions or reimbursement, 
including interest, penalties, and costs in the event the 
corporation does not pay to the department those amounts for 
which the employer is liable.  
    Any personal representative of the estate of a decedent or 
fiduciary who voluntarily distributes the assets filed therein 
without reserving a sufficient amount to pay the contributions, 
interest, and penalties due pursuant to this chapter shall be 
personally liable for the deficiency. 
    The personal liability of any person as provided herein 
shall survive dissolution, reorganization, bankruptcy, 
receivership, or assignment for the benefit of creditors.  For 
the purposes of this subdivision, all wages paid by the 
corporation shall be considered earned from the person 
determined to be personally liable. 
    An official designated by the commissioner shall make an 
initial determination as to the personal liability under this 
section.  The determination shall be final unless the person 
found to be personally liable shall within 30 days after mailing 
of notice of determination to the person's last known address 
file a written appeal.  Proceedings on the appeal shall be 
conducted in the same manner as an appeal from a determination 
of employer liability under section 268.12, subdivision 13. 
    Sec. 35.  [268.162] [LIABILITY OF SUCCESSOR.] 
    Subdivision 1.  [ACQUISITION OF ORGANIZATION, TRADE, OR 
BUSINESS.] Any individual or organization, whether or not an 
employing unit, which acquires all or part of the organization, 
trade, or business or all or part of the assets thereof from an 
employer, is jointly and severally liable, in an amount not to 
exceed the reasonable value of that part of the organization, 
trade, or business or assets acquired, for the contributions due 
and unpaid by the employer, and the amount of liability shall, 
in addition, be a lien against the property or assets so 
acquired which shall be prior to all other unrecorded liens. 
    Subd. 2.  [REASONABLE VALUE.] An official, designated by 
the commissioner, upon the official's own motion or upon 
application of the potential successor, shall determine the 
reasonable value of the organization, trade, or business or 
assets acquired by the successor based on available 
information.  The determination shall be final unless the 
successor, within 30 days after the mailing of notice of the 
determination to the successor's last known address, files a 
written appeal from it.  Any appeals of a determination under 
this subdivision shall be conducted in the same manner as an 
appeal under section 268.12, subdivision 13. 
    Subd. 3.  [STATEMENT OF AMOUNT DUE.] Prior to the date of 
acquisition, the commissioner shall furnish the potential 
successor with a written statement of the predecessor's 
contributions due and unpaid, on record as of the date of 
issuance, only upon the written request of the potential 
successor and the written release of the predecessor.  No 
release is required after the date of acquisition. 
    Subd. 4.  [ADDITIONAL REMEDY.] The remedy provided by this 
section is in addition to all other existing remedies against 
the employer or his successor and is not an election by the 
department to pursue this remedy to the exclusion of any other 
remedy. 
    Sec. 36.  [268.163] [LIABILITY OF THIRD PARTIES TO ASSURE 
PAYMENT OF AMOUNTS DUE FROM CONTRACTORS, SUBCONTRACTORS, AND 
EMPLOYEE LEASING FIRMS. 
    Subdivision 1.  [CONTRACTORS.] A contractor, who is or 
becomes an employer under this chapter, who contracts with any 
subcontractor, who is or becomes an employer under this chapter, 
is directly liable for the payment of all the contributions, 
interest, penalties, and collection costs which are due or 
become due from the subcontractor with respect to wages paid for 
employment on the contract, unless the contractor requires the 
subcontractor to provide a good and sufficient bond guaranteeing 
the payment of all contributions, interest, penalties, and 
collection costs which may become due.  The words "contractor" 
and "subcontractor" includes individuals, partnerships, firms, 
or corporations, or other association of persons engaged in the 
construction industry. 
    Subd. 2.  [EMPLOYEE LEASING FIRMS.] A person whose 
workforce consists of 50 percent or more of workers provided by 
employee leasing firms, is directly liable for the payment of 
all the contributions, penalties, interest, and collection costs 
which are due or become due from wages paid for employment on 
the contract, unless the contract requires the employee leasing 
firm to provide a good and sufficient bond guaranteeing the 
payment of all contributions, penalties, interest, and 
collection costs which may become due.  "Employee leasing firm" 
means an employing unit that provides its employees to other 
firms, persons, and employing units without severing its 
employer-employee relationship with the worker for the services 
performed for the lessee. 
    Subd. 3.  [DETERMINATION OF LIABILITY.] An official 
designated by the commissioner shall make an initial 
determination as to the liability under this section.  The 
determination shall be final unless the contractor or person 
found to be liable files a written appeal within 30 days after 
mailing of notice of determination to the person's last known 
address.  Proceedings on the appeal shall be conducted in the 
same manner as an appeal from a determination of employer 
liability under section 268.12, subdivision 13. 
    Sec. 37.  [268.164] [UNEMPLOYMENT TAX CLEARANCES; ISSUANCES 
OF LICENSES.] 
     Subdivision 1.  [UNEMPLOYMENT CLEARANCE REQUIRED.] The 
state or a political subdivision of the state may not issue, 
transfer, or renew a license for the conduct of any profession, 
trade, or business, if the commissioner notifies the licensing 
authority that the applicant owes the state delinquent 
contributions, reimbursements, or benefit overpayments.  The 
commissioner may not notify the licensing authority unless the 
applicant owes $500 or more to the unemployment compensation 
fund.  A licensing authority that has received a notice from the 
commissioner may issue, transfer, or renew the applicant's 
license only if (a) the commissioner issues an unemployment tax 
clearance certificate; and (b) the commissioner or the applicant 
forwards a copy of the clearance to the licensing authority. 
    Subd. 2.  [ISSUANCE OF CLEARANCE.] The commissioner may 
issue an unemployment tax clearance certificate only if (a) the 
applicant does not owe the state any delinquent contributions, 
reimbursements, or benefit overpayments; or (b) the applicant 
has entered into a payment agreement to liquidate the delinquent 
contributions, reimbursements, or benefit overpayments and is 
current with all the terms of that payment agreement. 
    For the purposes of this section, "applicant" means:  (a) 
an individual if the license is issued to or in the name of an 
individual or the corporation or partnership if the license is 
issued to or in the name of a corporation or partnership; or (b) 
an officer of a corporation or a member of a partnership who is 
liable for the delinquent contributions, reimbursements, or 
benefit overpayments. 
    Subd. 3.  [NOTICE AND RIGHT TO HEARING.] At least 30 days 
before the commissioner notifies a licensing authority pursuant 
to subdivision 1, a notice and demand for payment of the amount 
due shall be given to the applicant.  If the applicant disputes 
the amount due, the applicant must request a hearing in writing 
within 30 days after the mailing of the notice and demand for 
payment to the applicant's last known address.  Proceedings on 
the appeal of the amount due shall be conducted in the same 
manner as an appeal from a determination of employer liability 
under section 268.12, subdivision 13. 
     Subd. 4.  [LICENSING AUTHORITY; DUTIES.] Upon request of 
the commissioner, the licensing authority must provide the 
commissioner with a list of all applicants, including the name, 
address, business name and address, social security number, and 
business identification number of each applicant.  The 
commissioner may request from a licensing authority a list of 
the applicants no more than once each calendar year.  
Notwithstanding section 268.12, the commissioner may release 
information necessary to accomplish the purpose of this section. 
     Subd. 5.  [OTHER REMEDIES.] Any action taken by the 
commissioner pursuant to this section is not an election by the 
commissioner to pursue a remedy to the exclusion of any other 
remedy.  
     Sec. 38.  [268.165] [WITHHOLDING OF BENEFITS FOR UNPAID 
CONTRIBUTIONS.] 
    Subdivision 1.  [WITHHOLDING OF UNEMPLOYMENT 
BENEFITS.] Notwithstanding section 268.17, the commissioner may 
deduct and withhold up to 50 percent of each unemployment 
compensation payment payable to an individual under this chapter 
for unpaid contributions, interest, penalties, and costs which 
the individual has been determined liable to pay. 
    Subd. 2.  [EFFECT OF PAYMENTS.] Any amounts deducted and 
withheld under this section shall be treated as if paid to the 
individual as benefits and paid by the individual to the 
department in satisfaction of the individual's delinquent 
contributions, interest, penalties, and costs. 
    Subd. 3.  [PRIORITY OF WITHHOLDING.] Any amounts deducted 
and withheld under this section have priority over any other 
levy, garnishment, attachment, execution, or setoff, except for 
the recoupment of benefit overpayments allowed under section 
268.18. 
    Sec. 39.  [268.166] [CANCELLATION OF DELINQUENT 
CONTRIBUTIONS.] 
    Notwithstanding section 10.12, the commissioner may cancel 
as uncollectible any contributions, reimbursements, penalties, 
or the interest or costs thereon, which remain unpaid six years 
after the amounts have been determined by the commissioner to be 
due and payable.  This section does not prohibit the 
commissioner from collecting any amounts secured by a notice of 
lien or a judgment which are older than six years. 
    Sec. 40.  Minnesota Statutes 1986, section 268.18, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ERRONEOUS PAYMENTS.] Any claimant for 
benefits who, by reason of the claimant's own mistake or through 
the error of any individual engaged in the administration of 
sections 268.03 to 268.24 or because of a determination or 
redetermination issued pursuant to section 268.10, subdivision 
2, has received any sum as benefits to which the claimant was 
not entitled under these sections, shall promptly return such 
benefits in cash to the nearest office of the Minnesota 
department of jobs and training.  If such claimant fails to 
return such benefits, the department of jobs and training shall, 
as soon as it discovers such erroneous payment, determine the 
amount thereof and notify said individual to return the same.  
Unless the claimant files a written appeal with the department 
of jobs and training within 15 days after the mailing of the 
notice of determination to the claimant's last known address or 
personal delivery of the notice, the determination shall become 
final.  If the claimant files an appeal with the department in 
writing within the time aforesaid the matter shall be set for 
hearing before a referee of the department and heard as other 
benefit matters are heard in accordance with section 268.10 with 
the same rights of review as outlined for benefit cases in that 
section.  The commissioner of the department of jobs and 
training is hereby authorized to deduct from any future benefits 
payable to the claimant under these sections in either the 
current or any subsequent benefit year an amount equivalent to 
the overpayment determined, except that no single deduction 
shall exceed 50 percent of the amount of the payment from which 
the deduction is made, or the overpayment may be collected 
without interest by civil action in the name of the commissioner 
the same as contributions or reimbursements under section 
268.161.  If a claimant has been overpaid benefits under the law 
of another state due to error and that state certifies to the 
department the facts involved and that the individual is liable 
under its law to repay the benefits and requests the department 
to recover the overpayment, the commissioner is authorized to 
deduct from future benefits payable to the claimant in either 
the current or any subsequent benefit year an amount equivalent 
to the amount of overpayment determined by that state, except 
that no single deduction shall exceed 50 percent of the amount 
of the payment from which the deduction is made.  Benefits paid 
for weeks more than three years prior to the discovery of error 
are not erroneous payments. 
    Sec. 41.  Minnesota Statutes 1986, section 268.18, 
subdivision 2, is amended to read:  
    Subd. 2.  [FRAUD.] Any claimant who files a claim for or 
receives benefits by knowingly and willfully misrepresenting or 
misstating any material fact or by knowingly and willfully 
failing to disclose any material fact which would make the 
claimant ineligible for benefits under sections 268.03 to 268.24 
is guilty of fraud.  After the discovery of facts by the 
commissioner indicating fraud in claiming or obtaining benefits 
under sections 268.03 to 268.24, the commissioner is hereby 
authorized to make a determination that the claimant was 
ineligible for each week with reference to which benefits were 
claimed or obtained by fraud for the amount as was in excess of 
what the claimant would have been entitled to had the claimant 
not made the fraudulent statements or failed to disclose any 
material facts.  The commissioner also may disqualify an 
individual from benefits for one to 52 weeks in which the 
claimant is otherwise eligible for benefits following the week 
in which the fraud was determined.  A disqualification imposed 
for fraud shall not be removed by subsequent insured work or the 
expiration of a benefit year but shall not apply to any week 
more than 104 weeks after the week in which the fraud was 
determined.  The claimant shall promptly repay in cash to the 
department of jobs and training any benefits fraudulently 
obtained.  Unless the claimant files a written appeal with the 
department of jobs and training within 15 days after the mailing 
of the notice of determination to the claimant's last known 
address or personal delivery of the notice, the determination 
shall become final.  If the claimant appeals from the 
determination within the time above specified the matter shall 
be referred to a referee for a hearing as in other benefit cases 
and thereafter the procedure for review shall be the same as set 
forth in section 268.10.  The commissioner is hereby authorized 
to deduct from future benefits payable to the claimant in either 
the current or any subsequent benefit year an amount equivalent 
to the amount of overpayment determined disregarding the 50 
percent limitation provided for in subdivision 1 or the 
overpayment may be collected without interest by civil action in 
the name of the commissioner the same as contributions or 
reimbursements under section 268.161.  If a claimant has been 
overpaid benefits under the law of another state due to fraud 
and that state certifies to the department the facts involved 
and that the individual is liable to repay the benefits and 
requests the department to recover the overpayment, the 
commissioner is authorized to deduct from future benefits 
payable to the claimant in either the current or any subsequent 
benefit year an amount equivalent to the amount of overpayment 
determined by that state disregarding the 50 percent limitation 
provided for in subdivision 1.  A determination of fraud may be 
made at any time.  
    Sec. 42.  Minnesota Statutes 1986, section 268.18, is 
amended by adding a subdivision to read: 
    Subd. 2a.  [OFFSET OF STATE AND FEDERAL UNEMPLOYMENT 
BENEFITS.] To the extent permissible under the laws and 
constitution of the United States, the commissioner is 
authorized to enter into or cooperate in arrangements or 
reciprocal agreements with the United States Secretary of Labor, 
whereby, overpayments of unemployment benefits as determined 
under applicable federal law, with respect to benefits or 
allowances for unemployment provided under a federal program 
administered by this state under an agreement with the United 
States Secretary of Labor, may be recovered by offset from 
unemployment benefits otherwise payable under this chapter or 
any such federal program.  As provided by reciprocal agreement, 
benefit overpayments as determined under subdivisions 1 and 2 
may be recovered by offset from benefits or allowances for 
unemployment otherwise payable under a federal program 
administered by this state. 
    Sec. 43.  Minnesota Statutes 1986, section 268.18, 
subdivision 3, is amended to read:  
    Subd. 3.  [FALSE REPRESENTATIONS; CONCEALMENT OF FACTS; 
PENALTY.] Whoever makes a false statement or representation 
knowing it to be false or knowingly fails to disclose a material 
fact to obtain or increase any benefit or other payment (a) 
Whoever obtains, or attempts to obtain, or aids or abets any 
person to obtain by means of a willfully false statement or 
representation, by intentional concealment of a material fact, 
or by impersonation or other fraudulent device, benefits to 
which the person is not entitled or benefits greater than that 
to which the person is entitled under sections 268.03 to 268.24 
this chapter, or under the employment security law of any state 
or of the federal government or of a foreign government, either 
personally or for any other person, shall be guilty of a gross 
misdemeanor theft and shall be sentenced pursuant to section 
609.52, subdivision 3, clauses (1), (2), and (5).  The amount of 
the benefits incorrectly paid shall be the difference between 
the amount of benefits actually received and the amount which 
the person would have been entitled under state and federal law 
had the department been informed of all material facts. 
    (b) Any employing unit or any officer or agent of an 
employing unit or any other person who makes a false statement 
or representation knowing it to be false, or who knowingly fails 
to disclose a material fact, to prevent or reduce the payment of 
benefits to any individual entitled thereto, or to avoid 
becoming or remaining a subject employer or to avoid or reduce 
any contribution or other payment required from an employing 
unit under those sections this chapter or under the employment 
security law of any state or of the federal government, or who 
willfully fails or refuses to make any such contributions or 
other payment or to furnish any reports at the time when 
required hereunder or shall be guilty of a gross misdemeanor 
unless the benefit underpayment, contribution, or other payment 
involved exceeds $250, in which event the person is guilty of a 
felony.  
    (c) Any person who willfully fails to produce or permit the 
inspection or copying of books, papers, records, or memoranda as 
required hereunder, or when requested under section 268.12, 
subdivision 8, or to furnish any required reports other than 
contribution reports shall be guilty of a gross misdemeanor. 
    Sec. 44.  Minnesota Statutes 1986, section 268.18, 
subdivision 4, is amended to read:  
    Subd. 4.  [CANCELLATION OF BENEFITS PAID THROUGH ERROR OR 
FRAUD.] When benefits paid through error or fraud are not repaid 
or deducted from subsequent benefit amounts as provided for in 
subdivisions 1 and 2 within six years after the date of the 
determination that benefits were paid through error or fraud 
irrespective of subsequent partial recovery dates, the 
commissioner may, in a manner the commissioner prescribes by 
rule, shall cancel as uncollectible the overpayment balance, and 
no administrative or legal proceedings shall be instituted under 
the Minnesota economic security law to enforce collection of 
those amounts.  The commissioner may cancel at any time benefits 
paid through error or fraud which the commissioner determines 
are uncollectible due to death or bankruptcy. 
    Sec. 45.  Minnesota Statutes 1986, section 268.18, 
subdivision 5, is amended to read:  
    Subd. 5.  [ERRONEOUS PAYMENTS; CHARGING.] The amount of 
benefits paid and subsequently determined to have been paid:  
(a) erroneously by the claimant's own mistake; (b) through error 
by any individual engaged in the administration of sections 
268.03 to 268.24; or (c) based upon the claimant's fraudulent 
statements or failure to disclose any material facts, shall not 
be charged to or will be removed from an employer's experience 
rating account for all subsequent rate computations which have 
not become final under section 268.06, and shall not be charged 
to employers electing to reimburse the unemployment fund in 
accordance with section 268.06, for all benefits paid, based 
upon wages for services performed with the employer.  
    Sec. 46.  Minnesota Statutes 1986, section 268.65, 
subdivision 5, is amended to read:  
    Subd. 5.  [EMPLOYER PENALTY.] An employer who enters into 
an on-the-job training agreement with the commissioner and who 
terminates the trainee in a manner other than provided in this 
subdivision shall repay 70 percent of the amount of unemployment 
insurance benefits paid to the individual while in the training 
program with that employer if the termination occurs during the 
training period.  If the termination occurs during the 12-month 
period of guaranteed employment, the employer receives a 
proportional reduction in the amount it must repay.  Penalties 
assessed under this subdivision are in addition to any other 
penalties provided for by this chapter and are subject to the 
same collection procedures that apply to past due contributions 
under this chapter.  Penalties under this subdivision shall be 
paid to the commissioner and credited to the job search and 
relocation fund.  When it is determined to be in the best 
interest of the state, the commissioner may waive all or part of 
the employer penalty.  The commissioner shall use any money 
collected under this paragraph for job search and relocation 
expenses of structurally unemployed workers participating in the 
training program. 
    Sec. 47.  [268.001] [CITATION; JOBS AND TRAINING LAW.] 
    Chapter 268 shall be known and may be cited as the 
"Minnesota Jobs and Training Law." 
    Sec. 48.  Minnesota Statutes 1986, section 270A.09, is 
amended by adding a subdivision to read: 
    Subd. 1a.  Notwithstanding subdivision 1, any debtor 
contesting a setoff claim by the department of jobs and training 
shall have a hearing conducted in the same manner as an appeal 
under section 268.12, subdivision 13. 
    Sec. 49.  Minnesota Statutes 1986, section 508.25, is 
amended to read:  
    508.25 [RIGHTS OF PERSON HOLDING CERTIFICATE OF TITLE.] 
    Every person receiving a certificate of title pursuant to a 
decree of registration and every subsequent purchaser of 
registered land who receives a certificate of title in good 
faith and for a valuable consideration shall hold it free from 
all encumbrances and adverse claims, excepting only the estates, 
mortgages, liens, charges, and interests as may be noted in the 
last certificate of title in the office of the registrar, and 
also excepting any of the following rights or encumbrances 
subsisting against it, if any: 
    (1) Liens, claims, or rights arising or existing under the 
laws or the constitution of the United States, which this state 
cannot require to appear of record; 
    (2) The lien of any real property tax or special assessment 
for which the land has not been sold at the date of the 
certificate of title; 
    (3) Any lease for a period not exceeding three years when 
there is actual occupation of the premises thereunder; 
    (4) All rights in public highways upon the land; 
    (5) The right of appeal, or right to appear and contest the 
application, as is allowed by this chapter; 
    (6) The rights of any person in possession under deed or 
contract for deed from the owner of the certificate of title;  
    (7) Any outstanding mechanics lien rights which may exist 
under sections 514.01 to 514.17.  
    (8) Liens or judgments, notwithstanding section 508.63, 
arising under the laws of this state for the nonpayment of any 
amounts due under chapter 268 or any tax administered by the 
commissioner of revenue. 
    Sec. 50.  [REPEALER.] 
    Minnesota Statutes 1986, section 268.24, is repealed. 
    Approved June 2, 1987