Minnesota Session Laws - 1989, Regular Session

  

                         Laws of Minnesota 1989 

                        CHAPTER 324-S.F.No. 462 
           An act relating to judicial procedure; clarifying, 
          modifying, and recodifying tax court powers and 
          procedures; making technical corrections and 
          eliminating redundant and unnecessary language and 
          obsolete references; requiring releases of liens 
          issued in error to state that the lien was erroneous; 
          amending Minnesota Statutes 1988, sections 270.07, 
          subdivision 1; 270.10, by adding a subdivision; 
          270.69, by adding a subdivision; 271.01, subdivisions 
          1 and 5; 271.02; 271.04; 271.06, subdivisions 1, 2, 3, 
          and 7; 271.07; 271.13; 271.15; 271.17; 271.18; 271.21, 
          subdivisions 2 and 10; 277.011, subdivision 7; 278.01, 
          subdivision 1; 278.02; 278.03; 278.08, subdivision 1; 
          297.43, subdivision 1; and 297C.14, subdivision 1; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 270; repealing Minnesota Statutes 1988, 
          sections 60A.151; 271.01, subdivision 6; 271.061; 
          271.21, subdivision 4; and 271.22.  
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  [270.021] [EX-OFFICERS AND EX-EMPLOYEES NOT TO 
REPRESENT CLIENTS; PENALTY.] 
    An officer or employee of the department of revenue may 
not, for a period of one year after the term of office has ended 
or employment has terminated, act as counsel, attorney, or agent 
for a taxpayer in connection with a claim or proceeding pending 
in the department.  An officer or employee of the department of 
revenue may not act as counsel, attorney, or agent for a 
taxpayer at any time after termination of the office or 
employment in connection with a claim or proceeding of which the 
person has knowledge that was acquired during the term of office 
or employment.  A violation of this section is a gross 
misdemeanor. 
    Sec. 2.  [270.022] [FILING OFFICERS.] 
    The commissioner of revenue is the filing officer and 
custodian of the books, files, and records of the department of 
revenue.  The commissioner may certify copies of the books, 
files, and records in the custody of the commissioner for all 
purposes in the same manner as other custodians of public 
records.  The commissioner may authorize other officers or 
employees of the department of revenue to certify books, files, 
and records in the custody of the commissioner.  The 
authorization must be made by a written order stating the 
documents that may be certified and must be filed with the 
secretary of state.  
    Sec. 3.  [270.0601] [TAX COURT APPEALS.] 
    The powers of examination, investigation, and subpoena, and 
the power to administer oaths and take testimony granted to the 
commissioner of revenue and officers and employees of the 
department of revenue in section 270.06 do not apply to a matter 
that has been appealed to the tax court.  
    Sec. 4.  Minnesota Statutes 1988, section 270.07, 
subdivision 1, is amended to read:  
    Subdivision 1.  (a) The commissioner of revenue shall 
prescribe the form of all blanks and books required under this 
chapter and shall hear and determine all matters of grievance 
relating to taxation.  Except as otherwise provided by law, the 
commissioner shall have power to grant such reduction or 
abatement of gross tax capacities or taxes and of any costs, 
penalties or interest thereon as the commissioner may deem just 
and equitable, and to order the refundment, in whole or in part, 
of any taxes, costs, penalties or interest thereon which have 
been erroneously or unjustly paid.  Application therefor shall 
be submitted with a statement of facts in the case and the 
favorable recommendation of the county board or of the board of 
abatement of any city where any such board exists, and the 
county auditor of the county wherein such tax was levied or 
paid.  In the case of gross earnings taxes the application may 
be made directly to the commissioner without the favorable 
action of the county board and county auditor, and the 
commissioner shall direct that any gross earnings taxes which 
may have been erroneously or unjustly paid shall be applied 
against unpaid taxes due from the applicant for such 
refundment.  In the case of taxes other than gross earnings 
taxes, the order may be made only on application and approval as 
provided in this paragraph.  No reduction, abatement, or 
refundment of any special assessments made or levied by any 
municipality for local improvements shall be made unless it is 
also approved by the board of review or similar taxing authority 
of such municipality.  
    (b) The commissioner has the power to grant reductions or 
abatements of gross earnings tax.  An application for reduction 
of gross earnings taxes may be made directly to the commissioner 
without the favorable action of the county board and county 
auditor.  The commissioner shall direct that any gross earnings 
taxes that may have been erroneously or unjustly paid be applied 
against unpaid taxes due from the applicant. 
    (c) The commissioner shall forward to the county auditor a 
copy of the order made by the commissioner in all cases in which 
the approval of the county board is required. 
    (d) The commissioner may refer any question that may arise 
in reference to the true construction of this chapter to the 
attorney general, and the decision thereon shall be in force and 
effect until annulled by the judgment of a court of competent 
jurisdiction.  The commissioner shall forward to the county 
auditor a copy of the order by the commissioner made in all 
cases in which the approval of the county board is required. 
    (e) The commissioner may by written order abate, reduce, or 
refund any penalty or interest imposed by any law relating to 
taxation, if in the commissioner's opinion the failure to timely 
pay the tax or failure to timely file the return is due to 
reasonable cause.  Such order shall, in the case of real and 
personal property taxes, be made only on application and 
approval as provided in this section; in the case of all other 
taxes, such The order shall be made on application of the 
taxpayer to the commissioner and,. 
    (f) If the an order issued under this subdivision is for an 
abatement, reduction or refund of over $5,000, it shall be valid 
only if approved in writing by the attorney general. 
    (g) An appeal may not be taken to the tax court from any 
order of the commissioner of revenue made in the exercise of the 
discretionary authority granted in this subdivision paragraph 
(a) with respect to the reduction or abatement of real or 
personal property taxes in response to a taxpayer's application 
for an abatement, reduction or refund of taxes, gross tax 
capacities, costs, penalties or interest. 
    Sec. 5.  Minnesota Statutes 1988, section 270.10, is 
amended by adding a subdivision to read:  
    Subd. 1a.  [NOTIFICATION TO TAXPAYER.] At the same time 
that notice of the assessment, determination, or order of the 
commissioner is given to a taxpayer, the taxpayer must be 
notified in writing of the right to appeal to the tax court, and 
if applicable, to the small claims division.  In any notice of 
assessment, determination, or order dealing with property 
valuation or assessment for property tax purposes by the 
commissioner of revenue or a local unit of government, the 
taxpayer must be notified in writing that a taxpayer must appeal 
to the town or city board of equalization and to the county 
board of equalization before appealing to the small claims 
division of the tax court, except for those taxpayers whose 
original assessments are determined by the commissioner of 
revenue.  
     Sec. 6.  Minnesota Statutes 1988, section 270.69, is 
amended by adding a subdivision to read: 
    Subd. 11.  [ERRONEOUS LIENS.] If the commissioner of 
revenue determines that the filing of the notice of any lien was 
erroneous, within 14 days after the determination, the 
commissioner must issue a certificate of release of the lien.  
The certificate must include a statement that the filing of the 
lien was erroneous.  In the event that the claim is erroneous, 
reasonable attorney fees shall be paid. 
    Sec. 7.  Minnesota Statutes 1988, section 271.01, 
subdivision 1, is amended to read:  
    Subdivision 1.  [MEMBERSHIP, APPOINTMENT, QUALIFICATIONS.] 
There is hereby created a tax court as an independent agency of 
the executive branch of the government.  The tax court is a 
court of record.  The tax court shall consist of three judges, 
each of whom shall be a citizen of the state, appointed by the 
governor, by and with the advice and consent of the senate, for 
a term of six years commencing at the expiration of the 
preceding term.  Any vacancy shall be filled by the governor for 
the unexpired term, subject to confirmation by the senate.  The 
terms of the judges shall end on the first Monday in January.  
The terms of the judges shall be staggered.  The initial three 
terms to be filled pursuant to Laws 1977, chapter 307 will 
expire on the first Monday in January in the following years:  
1979, 1981, and 1983, the term of one judge expiring on the 
first Monday of each odd-numbered year.  Judges may serve until 
their successors are appointed and qualify.  They shall be 
selected on the basis of their experience with and knowledge of 
taxation and tax laws.  The judges of the tax court shall be 
subject to the provisions of the Minnesota Constitution, article 
VI, section 6, the jurisdiction of the commission on judicial 
standards, as provided in sections 490.15 and 490.16, and the 
provisions of the code of judicial conduct. 
    Sec. 8.  Minnesota Statutes 1988, section 271.01, 
subdivision 5, is amended to read:  
    Subd. 5.  [JURISDICTION.] The tax court shall have 
statewide jurisdiction.  Except for an appeal to the supreme 
court or any other appeal allowed under this subdivision, the 
tax court shall be the sole, exclusive, and final authority for 
the hearing and determination of all questions of law and fact 
arising under the tax laws of the state, as defined in this 
subdivision, in those cases that have been appealed to the tax 
court and in any case that has been transferred by the district 
court to the tax court.  The tax court shall have no 
jurisdiction in any case that does not arise under the tax laws 
of the state or in any criminal case or in any case determining 
or granting title to real property or in any case that is under 
the jurisdiction of the probate court.  The small claims 
division of the tax court shall have no jurisdiction in any case 
dealing with property valuation or assessment for property tax 
purposes until the taxpayer has appealed the valuation or 
assessment to the town or city board of equalization and to the 
county board of equalization, except for those taxpayers whose 
original assessments are determined by the commissioner of 
revenue.  The tax court shall have no jurisdiction in any case 
involving an order of the state board of equalization unless a 
taxpayer contests the valuation of property.  Only the taxes, 
aids and related matters contained in chapters 60A, 69, 124, 
270, 272, 273, 274, 275, 276, 277, 278, 279, 285, 287, 288, 290, 
290A, 291, 292, 293, 294, 295, 296, 297, 297A, 297B, 297C, 297D, 
298, 299, 299F, 473, 473F, and 477A Laws governing taxes, aids, 
and related matters administered by the commissioner of revenue, 
laws dealing with property valuation, assessment or taxation of 
property for property tax purposes, and any other laws that 
contain provisions authorizing review of taxes, aids, and 
related matters by the tax court shall be considered tax laws of 
this state subject to the jurisdiction of the tax court.  This 
subdivision shall not be construed to prevent an appeal, as 
provided by law, to an administrative agency, board of 
equalization, or to the commissioner of revenue.  Wherever used 
in this chapter, the term commissioner shall mean the 
commissioner of revenue, unless otherwise specified. 
    Sec. 9.  Minnesota Statutes 1988, section 271.02, is 
amended to read:  
    271.02 [OFFICERS.] 
    The judges of the tax court shall choose a chief judge of 
the tax court.  The chief judge of the tax court shall appoint 
one of the judges to serve as the administrator, who shall be 
custodian of the court's files and records and shall coordinate 
and make hearing assignments.  The administrator may, and 
appoint employees who shall be in the unclassified service.  The 
chief judge who is appointed the administrator may delegate 
administrative duties to the employees appointed and may select 
one employee to act in the administrator's place as the 
assistant administrator.  The court administrator of district 
court in each county shall be the court administrator of the tax 
court in that county.  Filing fees and library fees deposited 
with the court administrator of district court in the capacity 
of court administrator of the tax court and in cases originally 
commenced in district court and transferred to the tax court 
shall be retained by the court administrator of district court.  
The court administrator of the tax court in each county shall be 
subject to the supervision of the administrator in tax court 
matters. 
    Sec. 10.  Minnesota Statutes 1988, section 271.04, is 
amended to read:  
    271.04 [HEARINGS.] 
    The tax court shall hold hearings and meetings as may be 
prescribed by the rules of the tax court.  The principal office 
of the tax court shall be at the capitol in Saint Paul, but it 
shall hold hearings at any other place within the state, so that 
taxpayers may appear before the court with as little 
inconvenience and expense to the taxpayer as is practicable.  
The tax court shall be allowed to use the district court and 
county court court room in all of the counties.  The 
administrator of the tax court shall consult with the court 
administrator of the district and county court judges involved 
before a schedule of court room to be used by the tax court is 
established.  Each tax court judge may hear and decide cases.  
Upon petition by a party to a case, or upon a motion by a tax 
court judge, and approval by a majority of the tax court, a case 
may be tried before the entire tax court.  When an appeal is 
taken by a resident taxpayer from an order of the commissioner, 
not involving property taxes, venue for the case shall be, at 
the election of the taxpayer, in Ramsey county or in the 
district court judicial district in which the taxpayer resides.  
Venue shall be in Ramsey county for an appeal taken by a 
nonresident taxpayer from an order of the commissioner.  Venue 
for all other cases arising under the tax laws of the state 
shall be in the same judicial district as if the case was being 
tried in district court. 
    Sec. 11.  Minnesota Statutes 1988, section 271.06, 
subdivision 1, is amended to read:  
    Subdivision 1.  [MANNER.] Except as otherwise provided by 
in section 270.07, subdivision 1, paragraph (a), or any other 
law, an appeal to the tax court may be taken, in the manner 
herein provided, from any official order of the commissioner of 
revenue respecting any tax, fee, or assessment, or any matter 
pertaining thereto, including the imposition of interest and 
penalty, or any matter concerning the tax laws listed in over 
which the court is granted jurisdiction under section 271.01, 
subdivision 5, by any person directly interested therein or 
affected thereby, or by any political subdivision of the state, 
directly or indirectly, interested therein or affected thereby, 
or by the attorney general in behalf of the state, or by any 
resident taxpayer of the state in behalf of the state in case 
the attorney general, upon request, shall refuse to appeal.  
Notwithstanding subdivision 2, when an appeal is taken to the 
tax court in any case dealing with property valuation, 
assessment, or taxation for property tax purposes, the 
provisions of section 274.19, subdivisions 4 and 5, section 
277.011, and chapter 278 shall apply as if the appeal had been 
taken to the district court. 
    Sec. 12.  Minnesota Statutes 1988, section 271.06, 
subdivision 2, is amended to read:  
    Subd. 2.  [TIME; NOTICE; INTERVENTION.] Except as otherwise 
provided by law, within 60 days after notice of the making and 
filing of an order of the commissioner of revenue, the 
appellant, or the appellant's attorney, shall serve a notice of 
appeal upon the commissioner and file the original, with proof 
of such service, with the tax court administrator or with the 
court administrator of district court acting as court 
administrator of the tax court; provided, that a the tax court 
judge, for cause shown, may by written order extend the time for 
appealing for an additional period not exceeding 30 days.  The 
notice of appeal shall be in the form prescribed by the tax 
court.  Within five days after receipt, the commissioner shall 
transmit a copy of the notice of appeal to the attorney general 
in all cases where the amount at issue exceeds $100.  The 
attorney general shall represent the commissioner, if requested, 
upon all such appeals except in cases where the attorney general 
has appealed in behalf of the state, or in other cases where the 
attorney general deems it against the interests of the state to 
represent the commissioner, in which event the attorney general 
may intervene or be substituted as an appellant in behalf of the 
state at any stage of the proceedings. 
    Upon a final determination of any other matter concerning 
the tax laws listed in over which the court is granted 
jurisdiction under section 271.01, subdivision 5, the taxpayer 
or the taxpayer's attorney shall file a petition or notice of 
appeal as provided by law with the court administrator of 
district court, acting in the capacity of court administrator of 
the tax court, with proof of service of the petition or notice 
of appeal as required by law and within the time required by 
law.  As used in this subdivision, "final determination" 
includes a notice of assessment and equalization for the year in 
question received from the local assessor, an order of the local 
board of equalization, or an order of a county board of 
equalization. 
    The tax court shall prescribe a filing system so that the 
notice of appeal or petition filed with the district court 
administrator acting as court administrator of the tax court is 
forwarded to the tax court administrator.  In the case of an 
appeal or a petition concerning property valuation for which the 
assessor, a local board of equalization, a county board of 
equalization or the commissioner of revenue has issued an order, 
the officer issuing the order shall be notified of the filing of 
the appeal.  The notice of appeal or petition shall be in the 
form prescribed by the tax court. 
    Sec. 13.  Minnesota Statutes 1988, section 271.06, 
subdivision 3, is amended to read:  
    Subd. 3.  [PLEADINGS.] Within 20 30 days after the service 
and filing of the notice of appeal, unless the appeal be 
theretofore dismissed, the commissioner or the appropriate unit 
of government shall make, certify, and file with the tax court a 
return comprising composed of a copy of any application or 
petition by which the proceeding was instituted and of any other 
material paper preceding the order of the commissioner or the 
appropriate unit of government, a copy of the order appealed 
from, a statement of each finding of fact and ruling of law made 
by the commissioner or the appropriate unit of government in the 
matter, all relevant correspondence or other communication, and 
a denial, admission, or explanation with respect to each 
allegation of fact in the notice so far as not covered by the 
order or findings; provided, that any judge of the tax court, 
for cause shown, may extend the time for filing such return for 
an additional period not exceeding 30 days.  Where the 
commissioner is required to transmit a copy of the notice of 
appeal to the attorney general, the commissioner shall, within 
ten days after service of the notice of appeal upon the 
commissioner, transmit to the attorney general a complete copy 
of all papers required for the return. Allegations of new matter 
in the return shall be deemed to be denied by the appellant. 
    Sec. 14.  Minnesota Statutes 1988, section 271.06, 
subdivision 7, is amended to read:  
    Subd. 7.  [RULES.] The rules of evidence and civil 
procedure for the district court of Minnesota shall govern the 
procedures in the tax court, where practicable.  The rules of 
the tax court in effect on July 1, 1977 shall govern until 
superseded.  The tax court may make additional rules when the 
law or special circumstances so require, provided that before 
any additional rule is adopted, the tax court first holds a 
public hearing thereon, affording all affected interests an 
opportunity to participate, and gives notice of its intention to 
hold a hearing at least 30 days prior to the date set for the 
hearing by United States mail, to representatives of 
associations or other interested groups or persons who have 
registered their names with the court for that purpose and in 
the state register.  The notice in the state register shall 
include the full text of the rule proposed for adoption.  The 
tax court shall make available at least one free copy of the 
proposed rule to any person requesting it.  At the public 
hearing the tax court shall make an affirmative presentation of 
facts establishing the need for and reasonableness of the rule 
proposed for adoption and fulfilling any relevant substantive or 
procedural requirements imposed on the tax court by law.  After 
the hearing ends, 20 days shall be allowed for written material 
to be submitted and recorded in the hearing record.  If the tax 
court approves the rule, the tax court shall promptly publish a 
notice of adoption in the state register.  A rule is effective 
five working days after the notice of adoption is published in 
the state register unless a later date is specified in the 
rule.  Any rule adopted after July 1, 1977, which is not 
published in the state register, shall be of no effect.  The tax 
court is exempt from the administrative procedure act but, to 
the extent authorized by law to adopt rules, may use the 
provisions of section 14.38, subdivisions 5 to 9 The tax court 
may adopt rules under chapter 14.  The rules in effect on 
January 1, 1989, apply until superseded.  
    Sec. 15.  Minnesota Statutes 1988, section 271.07, is 
amended to read: 
    271.07 [STENOGRAPHIC REPORT; TRANSCRIPT.] 
    Except in the small claims division, the tax court shall 
provide for a verbatim stenographic report of all proceedings 
had before it upon appeals, as required by the laws relating to 
proceedings in district court.  In case of a review by the 
supreme court of an order of the tax court, transcripts of the 
proceedings before the tax court shall be furnished to the tax 
court, the commissioner, and the attorney general upon request, 
and the cost thereof shall be paid out of funds appropriated 
therefor upon such terms as the tax court may prescribe.  
Transcripts shall be furnished to other parties by the reporter 
at the same legal rates applicable at the time to the district 
court reporters of the county in which the case was tried, but 
no transcript shall be made for or delivered to such other party 
unless the party shall deposit the estimated cost thereof, in 
advance, with the court administrator, subject to payment of the 
actual cost therefrom as soon as determined. 
    Sec. 16.  Minnesota Statutes 1988, section 271.13, is 
amended to read:  
    271.13 [MAY COMPEL ATTENDANCE OF WITNESSES.] 
    The commissioner of revenue, The tax court, and each judge 
of the tax court shall, respectively, have power to subpoena and 
compel the attendance of witnesses and the production of books, 
records, papers, and documents at any hearing or investigation 
at any place within the state in any matter within the scope of 
their authority, and shall also have power to administer oaths 
to witnesses and to take testimony under oath.  Disobedience of 
an order of the tax court or any subpoena or refusal by any 
witness to be sworn or to testify upon any material matter at 
any such hearing or investigation shall be punishable in like 
manner as a contempt of the district court, in proceedings 
instituted upon complaint of the authority issuing the order or 
subpoena in the district court of the county where the order was 
made or the subpoena was made returnable.  Subpoenas for 
witnesses or the production of documentary evidence shall be 
issued at the request of any party to the proceeding.  Subpoenas 
may be signed by the commissioner or by a judge of the tax court 
or by the administrator or the court administrator of the tax 
court in on behalf of the tax court, as the case may be.  The 
commissioner of revenue shall no longer exercise this power in 
any matter that has been appealed to the tax court. 
    Sec. 17.  Minnesota Statutes 1988, section 271.15, is 
amended to read:  
    271.15 [WHO MAY ADMINISTER OATHS.] 
    The commissioner of revenue, Each judge of the tax court, 
the administrator and court administrators of the tax court, and 
all other officers and employees of the department and of the 
tax court shall, respectively, have power to administer oaths 
and to take and certify acknowledgments so far as they may deem 
necessary to the proper discharge of their respective duties, 
and may authenticate the same with the seal of the department or 
the tax court, as the case may be.  The commissioner of revenue 
and any officer and employee of the department shall no longer 
exercise this power in any matter that has been appealed to the 
tax court.  
    Sec. 18.  Minnesota Statutes 1988, section 271.17, is 
amended to read:  
    271.17 [FILING OFFICERS.] 
    The commissioner of the department of revenue and The tax 
court administrator and the district court administrators of the 
tax court shall be the filing officers and custodians of the 
books, files, and records of their respective agencies the tax 
court.  The commissioner, administrator, and clerks, and their 
deputies shall, respectively, have power to certify and 
authenticate copies of the books, files, and records in their 
custody for all purposes in like manner and with like effect as 
other custodians of public records.  Any other officer or 
employee of the department thereto authorized by the 
commissioner by written order filed with the secretary of state 
shall have like power to certify and authenticate copies of any 
books, files, and records of the department specified in the 
order, other than those of the tax court.  A judge of the tax 
court and any other officer or employee of the tax court thereto 
authorized by the tax court by written order filed with the 
administrator of the tax court shall also have like power to 
certify and authenticate copies of any books, files, and records 
of the tax court specified in the order. 
    Sec. 19.  Minnesota Statutes 1988, section 271.18, is 
amended to read:  
    271.18 [EX-OFFICERS AND EX-EMPLOYEES EX-JUDGES NOT TO 
REPRESENT CLIENTS; EXCEPTION; VIOLATION.] 
    No officer, judge, or employee of the department of 
revenue, or the tax court, except referees appointed for the 
small claims division, shall, within one year after the office 
or employment has terminated, act as counsel, attorney, or agent 
for a taxpayer in connection with any claim or proceeding 
pending in the department of revenue or in the tax court at the 
time of termination.  No officer, judge, referee, or employee 
shall, at any time after the termination of the office or 
employment, act as counsel, attorney, or agent in connection 
with any claim or proceeding of which the person terminated has 
knowledge which was acquired in the course of a term of office 
or employment in the department or in the tax court.  Any 
violation of the provisions of this section shall be a gross 
misdemeanor. 
    Sec. 20.  Minnesota Statutes 1988, section 271.21, 
subdivision 2, is amended to read:  
    Subd. 2.  At the election of the taxpayer, the small claims 
division shall have jurisdiction only in the following matters: 
    (a) any case concerning the in cases involving valuation, 
assessment, or taxation of residential property homesteaded by 
the taxpayer real or personal property, if the taxpayer has 
satisfied the requirements of section 271.01, subdivision 5, and 
in the case of nonhomestead property, the assessor's estimated 
market value is less than $100,000; or 
    (b) any other case concerning the tax laws as defined in 
section 271.01, subdivision 5, in which the amount in 
controversy does not exceed $5,000, including penalty and 
interest. 
    Sec. 21.  Minnesota Statutes 1988, section 271.21, 
subdivision 10, is amended to read:  
    Subd. 10.  Whenever the small claims division trial docket 
becomes congested with appeals involving valuation, 
classification, and assessment of property for tax purposes, the 
judges of the tax court may appoint referees to hear the 
property tax cases appealed to the small claims division.  Each 
referee shall have authority to hear and decide the cases heard 
as small claims referee.  Each referee shall be a citizen of 
Minnesota and shall have experience with and knowledge of tax 
law or property taxation and property values, depending on the 
case at issue.  A referee shall be paid at a rate of 80 percent 
of the salary of the judges of the county district court in that 
county, prorated by the length of time served as a referee.  
Each referee shall receive actual and necessary expenses paid or 
incurred in the performance of duties. 
    Sec. 22.  Minnesota Statutes 1988, section 277.011, 
subdivision 7, is amended to read:  
    Subd. 7.  [PENALTIES AND INTEREST.] If the tax be sustained 
in full as levied, the judgment shall include any penalties or 
interest which have then accrued thereon for failure to pay the 
same, or any part thereof, at the time required by law.  If the 
tax is increased, the judgment must include penalty and interest 
on the unpaid part of the original tax assessment, but not on 
the amount of the increase in tax.  If the tax be reduced, no 
penalties and interest shall be included in the judgment because 
of the failure to pay such reduced tax prior to the entry 
thereof. The judgment shall be subject to such interest or 
penalties as would under the law attach to the tax embraced 
therein after the entry thereof. 
    Sec. 23.  Minnesota Statutes 1988, section 278.01, 
subdivision 1, is amended to read:  
    Subdivision 1.  [DETERMINATION OF VALIDITY.] Any person 
having any estate, right, title, or interest in or lien upon any 
parcel of land, who claims that such property has been 
partially, unfairly, or unequally assessed in comparison with 
other property in the city or county (1) city, or (2) county, or 
(3) in the case of a county containing a city of the first 
class, the portion of the county excluding the first class city, 
or that the parcel has been assessed at a valuation greater than 
its real or actual value, or that the tax levied against the 
same is illegal, in whole or in part, or has been paid, or that 
the property is exempt from the tax so levied, may have the 
validity of the claim, defense, or objection determined by the 
district court of the county in which the tax is levied or by 
the tax court by serving two copies of a petition for such 
determination upon the county auditor and, one copy each on the 
county treasurer and the county attorney and filing the 
same, and one copy on the county treasurer.  In counties where 
the office of county treasurer has been combined with the office 
of county auditor, the petitioner must serve the number of 
copies required by the county.  The petitioner must file the 
copies with proof of service, in the office of the court 
administrator of the district court before the 16th day of May 
of the year in which the tax becomes payable.  The county 
auditor shall immediately forward one copy of the petition to 
the appropriate governmental authority in a home rule charter or 
statutory city or town in which the property is located if that 
city or town employs its own certified assessor.  A copy of the 
petition shall also be sent to the school board of the school 
district in which the property is located.  A petition for 
determination under this section may be transferred by the 
district court to the tax court.  An appeal may also be taken to 
the tax court under chapter 271 at any time following receipt of 
the valuation notice required by section 273.121 but prior to 
May 16 of the year in which the taxes are payable. 
    Sec. 24.  Minnesota Statutes 1988, section 278.02, is 
amended to read:  
    278.02 [PETITION MAY INCLUDE SEVERAL PARCELS.] 
    Such petition need not be in any particular form, but shall 
clearly identify the land involved and shall set forth in 
concise language the claim, defense, or objection asserted.  
Several parcels of land in or upon which the petitioner has an 
estate, right, title, interest, or lien may be included in the 
same petition, but only if they are in the same city or town, 
except that contiguous property overlapping city or town 
boundaries may be included in one petition. 
     Sec. 25.  Minnesota Statutes 1988, section 278.03, is 
amended to read:  
    278.03 [PAYMENT OF TAX.] 
    If the proceedings instituted by the filing of the petition 
have not been completed before the 16th day of May next 
following the filing, the petitioner shall pay to the county 
treasurer 50 percent of the tax levied for such year against the 
property involved, unless permission to continue prosecution of 
the petition without such payment is obtained as herein 
provided.  If the proceedings instituted by the filing of the 
petition have not been completed by the next October 16, or, in 
the case of class 1b agricultural homestead, class 2a 
agricultural homestead, and class 2c agricultural nonhomestead 
property, November 16, the petitioner shall pay to the county 
treasurer 50 percent of the unpaid balance of the taxes levied 
for the year against the property involved if the unpaid balance 
is $2,000 or less and 80 percent of the unpaid balance if the 
unpaid balance is over $2,000, unless permission to continue 
prosecution of the petition without payment is obtained as 
herein provided.  The petitioner, upon ten days notice to the 
county attorney and to the county auditor, given at least ten 
days prior to the 16th day of May or the 16th day of October, 
or, in the case of class 1b agricultural homestead, class 2a 
agricultural homestead, and class 2c agricultural nonhomestead 
property, the 16th day of November, may apply to the court for 
permission to continue prosecution of the petition without 
payment; and, if it is made to appear 
    (1) That the proposed review is to be taken in good faith; 
    (2) That there is probable cause to believe that the 
property may be held exempt from the tax levied or that the tax 
may be determined to be less than 50 percent of the amount 
levied; and 
    (3) That it would work a hardship upon petitioner to pay 
the taxes due, 
    the court may permit the petitioner to continue prosecution 
of the petition without payment, or may fix a lesser amount to 
be paid as a condition of continuing the prosecution of the 
petition. 
    Failure to make payment of the amount required when due 
shall operate automatically to dismiss the petition and all 
proceedings thereunder unless the payment is waived by an order 
of the court permitting the petitioner to continue prosecution 
of the petition without payment.  The petition shall be 
automatically reinstated upon payment of the entire tax plus 
interest and penalty if the payment is made within one year of 
the dismissal.  The county treasurer shall, upon request of the 
petitioner, issue duplicate receipts for the tax payment, one of 
which shall be filed by the petitioner in the proceeding. 
    Sec. 26.  Minnesota Statutes 1988, section 278.08, 
subdivision 1, is amended to read:  
    Subdivision 1.  [TAXES DUE INTEREST; PENALTY.] Whether or 
not the tax is sustained in full as levied or increased and 
section 278.03 notwithstanding, the judgment shall include any 
interest which has accrued on the taxes for failure to pay the 
taxes or any part of the taxes as provided in sections 279.01 
and 279.03.  If the tax is reduced, no penalty shall be included 
in the judgment because of the failure to pay the reduced tax 
prior to entry of judgment.  After the judgment is entered, it 
shall be subject to interest and penalty at the rates provided 
in chapter 279 for delinquent payment of property taxes.  The 
judgment must include the following interest:  
    (1) if the tax is sustained in full, interest on the unpaid 
part of the tax computed under section 279.03; 
    (2) if the tax is increased, interest on the unpaid part of 
the tax as originally assessed computed under section 279.03; 
    (3) if the tax is reduced, interest on the difference 
between the tax as recomputed and the amount previously paid 
computed under section 279.03.  
    If the tax is sustained or increased, penalty on the unpaid 
part of the tax as originally assessed computed under section 
279.01 must be included in the judgment.  
     Sec. 27.  Minnesota Statutes 1988, section 297.43, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PENALTY ON UNPAID TAX.] If a tax imposed 
by this chapter, or any part of it, is not paid within the time 
required for the payment, or an extension of time, or within 30 
days after final determination of an appeal to the tax court 
relating to it if the taxpayer is not required to pay the amount 
in dispute pending appeal under section 271.061, there shall be 
added to the tax a penalty equal to three percent of the amount 
remaining unpaid if the failure is for not more than 30 days, 
with an additional penalty of three percent of the amount of tax 
remaining unpaid during each additional 30 days or fraction 
thereof, not exceeding 24 percent in the aggregate. 
    Sec. 28.  Minnesota Statutes 1988, section 297C.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [PENALTY ON UNPAID TAX.] If a tax imposed 
by this chapter, or any part of it, is not paid within the time 
required for the payment, or an extension of time, or within 30 
days after final determination of an appeal to the tax court 
relating to it if the taxpayer is not required to pay the amount 
in dispute pending appeal under section 271.061, there shall be 
added to the tax a penalty equal to three percent of the amount 
remaining unpaid if the failure is for not more than 30 days, 
with an additional penalty of three percent of the amount of tax 
unpaid during each additional 30 days or fraction thereof, not 
exceeding 24 percent in the aggregate. 
    Sec. 29.  [REPEALER.] 
    (a) Minnesota Statutes 1988, sections 271.01, subdivision 
6; 271.21, subdivision 4; and 271.22, are repealed. 
    (b) Minnesota Statutes 1988, sections 60A.151 and 271.061, 
are repealed. 
    Sec. 30.  [EFFECTIVE DATE.] 
    Section 25 is effective the day following final enactment 
and applies to petitions dismissed on or after that date. 
Section 29, paragraph (b), is effective the day following final 
enactment and applies to appeals pending before the tax court 
and appeals filed on or after that date. 
    Presented to the governor May 26, 1989 
    Signed by the governor May 26, 1989, 6:00 p.m.