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

  

                         Laws of Minnesota 1990 

                        CHAPTER 480-H.F.No. 2480 
           An act relating to taxation; recodifying and providing 
          for the administration of certain taxes; making 
          corrections and changes in the administration, 
          collection, and enforcement of taxes, aids, credits, 
          and refunds; transferring certain powers and duties; 
          granting certain powers to counties; imposing 
          penalties; amending Minnesota Statutes 1988, sections 
          60A.198, by adding a subdivision; 69.771, subdivision 
          3; 69.772, subdivision 2a; 69.774, subdivision 1; 
          116K.04, subdivision 4; 270.65; 270.67, subdivisions 1 
          and 2; 270.68, subdivisions 1 and 3; 270.69, 
          subdivisions 2, 3, 7, 8, and by adding a subdivision; 
          270.70, subdivision 1; 270A.03, subdivisions 2, 5, and 
          7; 270A.04, subdivision 2; 270A.08, subdivision 2; 
          274.01, subdivision 1; 275.54; 276.111; 277.15; 
          279.03, subdivision 2, and by adding a subdivision; 
          279.37, subdivision 1a; 282.01, subdivision 4; 282.09, 
          subdivision 1; 282.261, subdivision 2; 287.21, 
          subdivision 2; 290.05, subdivision 4; 290.17, 
          subdivision 5; 290.39, subdivision 5; 290.49, 
          subdivision 3; 290.92, subdivisions 6a, 12, 23, and 
          24; 290.93, subdivision 1; 290A.03, subdivision 3; 
          290A.04, subdivision 1; 290A.07, subdivision 3; 
          290A.19; 296.06, subdivision 2; 296.18, subdivisions 2 
          and 3; 296.25; 297A.01, subdivision 8; 297A.03, 
          subdivision 2; 297A.041; 297A.14, subdivision 1; 
          297A.18; 297A.211, subdivision 3; 297A.25, subdivision 
          31; 297A.255, by adding a subdivision; 297B.035, 
          subdivision 1; 299F.21, subdivision 1; 349.212, by 
          adding a subdivision; 477A.011, by adding a 
          subdivision; 524.3-1001; 524.3-301; Minnesota Statutes 
          1989 Supplement, sections 38.18; 50.14, subdivision 4; 
          69.021, subdivision 6; 110.70; 118.12; 163.04, 
          subdivision 3; 163.06, subdivision 6; 165.10, 
          subdivision 1; 168.013, subdivision 5; 168A.10, 
          subdivision 1; 270.06; 270.73, subdivision 1; 270B.07, 
          by adding a subdivision; 272.16; 273.01; 273.11, 
          subdivision 1; 279.01, subdivision 1; 290.39, 
          subdivision 4; 290.92, subdivision 4c; 290.9201, 
          subdivisions 7 and 8; 290.9705, subdivision 4; 
          297A.17; 298.28, subdivision 4; 365.025, subdivision 
          4; 368.01, subdivision 23; 368.44; 368.47; 370.01; 
          383.06; 385.31; 386.34; 412.081, subdivision 1; 
          412.221, subdivision 2; 430.102, subdivision 2; 
          465.04; 469.177, subdivision 1a; 471.24; 471.73; 
          475.58, subdivision 2; 475.73, subdivision 1; 
          477A.011, subdivision 15; 505.173, subdivision 1; 
          Minnesota Statutes Second 1989 Supplement, sections 
          10A.31, subdivision 5; 60A.15, subdivision 1; 273.124, 
          subdivision 6; 273.13, subdivision 25; 273.1391, 
          subdivision 2; 273.1398, subdivisions 1, 2, 5, 5a, and 
          6; 274.14; 274.175; 275.07, subdivision 3; 275.50, 
          subdivision 5; 275.51, subdivisions 3f, 3h, and 6; 
          276.09; 276.10; 276.11, subdivision 1; 277.01, 
          subdivision 1; 277.02; 277.05; 277.06; 287.29, 
          subdivision 1; 290.17, subdivision 2; 290.92, 
          subdivision 4b; 290A.04, subdivisions 2h and 2i; 
          297A.01, subdivision 3; 290A.07, subdivision 2a; 
          349.212, subdivision 4; 373.40, subdivision 1; 
          473F.08, subdivision 8a; 477A.012, subdivision 3; 
          477A.013, subdivision 3; Laws 1989, chapter 28, 
          section 24; and Laws 1989, First Special Session 
          chapter 1, articles 3, section 35; and 9, section 86; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 270; proposing coding for new law as Minnesota 
          Statutes, chapter 289A; repealing Minnesota Statutes 
          1988, sections 270.08; 270.10, subdivision 4; 270.651; 
          272.70; 290.05, subdivision 5; 290.067, subdivision 5; 
          290.23, subdivision 15; 290.281, subdivision 5; 
          290.29; 290.37, as amended; 290.39, as amended; 
          290.391; 290.40; 290.41; 290.42; 290.43; 290.44; 
          290.45; 290.46; 290.47; 290.49; 290.50, as amended; 
          290.52; 290.521; 290.522; 290.523, as amended; 290.53, 
          subdivisions 1, 1a, 2, 2a, 3, 3a, 4, 5, 7, 8, 9, 10, 
          and 11; 290.54; 290.56; 290.57; 290.58; 290.59; 
          290.611, subdivision 5; 290.612; 290.65; 290.92, 
          subdivisions 6, 7, 8, 11, 13, 14, 15, and 18; 290.923, 
          subdivision 7; 290.93; 290.931; 290.932; 290.933; 
          290.934, as amended; 290.935; 290.936; 290.974; 
          290A.06; 290A.11, subdivisions 1, 2, 3, and 4; 
          290A.111; 290A.112, as amended; 290A.12; 291.09; 
          291.11; 291.131; 291.14; 291.15, subdivisions 1 and 3; 
          291.215, subdivisions 2 and 3; 291.31, subdivisions 1 
          and 2; 291.32; 296.027; 296.16, subdivision 3; 296.17, 
          subdivision 13; 296.18, subdivisions 3a and 7; 296.24; 
          297A.08; 297A.121; 297A.15, subdivision 3; 297A.26, 
          subdivisions 1 and 4; 297A.27; 297A.275; 297A.29; 
          297A.30; 297A.31; 297A.32; 297A.33, subdivisions 1, 3, 
          4, and 5; 297A.34; 297A.35; 297A.37; 297A.39, 
          subdivisions 1, 2, 2a, 3, 4, 5, 7, and 8; 297A.40; 
          297A.41, 297A.42; 297A.431; 297A.44, subdivision 2; 
          Minnesota Statutes 1989 Supplement, sections 290.9201, 
          subdivisions 4, 5, 9, and 10; 290.9705, subdivision 2; 
          290A.11, subdivision 1a; and 297A.20; Minnesota 
          Statutes Second 1989 Supplement, sections 270.77 and 
          290.38; Minnesota Rules, parts 8052.0100; 8052.0200; 
          and 8130.7800. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                ARTICLE 1

                               PROCEDURES
    Section 1.  [289A.01] [APPLICATION OF CHAPTER.] 
    This chapter applies to taxes administered by or paid to 
the commissioner under chapters 290, 290A, 291, and 297A. 
    Sec. 2.  [289A.02] [DEFINITIONS.] 
    Subdivision 1.  [APPLICABILITY.] Unless the context clearly 
requires otherwise, the following terms used in this chapter 
have the following meanings. 
    Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
commissioner of revenue of the state of Minnesota or a person to 
whom the commissioner has delegated functions. 
    Subd. 3.  [TAXPAYER.] "Taxpayer" means a person subject to, 
or liable for, a state tax; a person required to file a return 
with respect to, or to pay, or withhold or collect and remit, a 
state tax; or a person required to obtain a license or a permit 
or to keep records under a law imposing a state tax. 
    Subd. 4.  [PERSON.] "Person" means an individual, 
partnership, corporation, association, governmental unit or 
agency, or public or private organization of any kind, under a 
duty to comply with state tax laws because of its character or 
position. 
    Subd. 5.  [OTHER WORDS.] Unless specifically defined in 
this chapter, or unless the context clearly indicates otherwise, 
the words used in this chapter have the same meanings as they 
are defined in chapters 290, 290A, 291, and 297A. 
    Sec. 3.  [289A.08] [FILING REQUIREMENTS FOR INDIVIDUAL 
INCOME, FIDUCIARY INCOME, CORPORATE FRANCHISE, AND ENTERTAINMENT 
TAXES.] 
    Subdivision 1.  [GENERALLY; INDIVIDUALS.] (a) A taxpayer 
must file a return for each taxable year the taxpayer is 
required to file a return under section 6012 of the Internal 
Revenue Code of 1986, as amended through December 31, 1989, 
except that an individual who is not a Minnesota resident for 
any part of the year is not required to file a Minnesota income 
tax return if the individual's gross income derived from 
Minnesota sources as determined under sections 290.081, 
paragraph (a), and 290.17, is less than the filing requirements 
for a single individual who is a full year resident of Minnesota.
    (b) The decedent's final income tax return, and other 
income tax returns for prior years where the decedent had gross 
income in excess of the minimum amount at which an individual is 
required to file and did not file, must be filed by the 
decedent's personal representative, if any.  If there is no 
personal representative, the return or returns must be filed by 
the transferees, as defined in section 289A.38, subdivision 13, 
who receive property of the decedent. 
    (c) The term "gross income," as it is used in this section, 
has the same meaning given it in section 290.01, subdivision 20. 
    Subd. 2.  [RETURNS FILED BY FIDUCIARIES.] (a) The trustee 
or other fiduciary of property held in trust must file a return 
with respect to the taxable net income of the trust or estate if 
it exceeds an amount determined by the commissioner and if the 
trust belongs to the class of taxable persons. 
    (b) The receivers, trustees in bankruptcy, or assignees 
operating the business or property of a taxpayer must file a 
return with respect to the taxable net income of the taxpayer if 
a return is required. 
    Subd. 3.  [CORPORATIONS.] A corporation that is subject to 
the state's jurisdiction to tax under section 290.014, 
subdivision 5, must file a return, except that a foreign 
operating corporation as defined in section 290.01, subdivision 
6b, is not required to file a return.  The return must be signed 
by a person designated by the corporation.  The commissioner 
shall adopt rules for the filing of one return on behalf of the 
members of an affiliated group of corporations that are required 
to file a combined report.  Members of an affiliated group that 
elect to file one return on behalf of the members of the group 
under rules adopted by the commissioner may change or rescind 
the election by filing the form required by the commissioner.  
     Subd. 4.  [EXEMPT ORGANIZATIONS; UNRELATED BUSINESS 
INCOME.] An exempt organization that is subject to tax on 
unrelated business income under section 290.05, subdivision 3, 
must file a return for each taxable year in which the 
organization is required to file a return under section 6012 of 
the Internal Revenue Code of 1986, as amended through December 
31, 1989, because of the receipt of unrelated business income.  
If an organization is required to file a return under federal 
law but has no federal tax liability for the taxable year, the 
commissioner may provide that the filing requirement under this 
paragraph is satisfied by filing a copy of the taxpayer's 
federal return. 
    Subd. 5.  [ANNUAL RETURN; EXCEPTIONS.] A return under this 
section must cover a 12-month period, except in the following 
cases: 
    (1) A return made by or for a taxpayer in existence for 
less than the whole of a taxable year must cover the part of the 
taxable year the taxpayer was in existence; 
    (2) A taxpayer who, in keeping books, regularly computes 
income on the basis of an annual period that varies from 52 to 
53 weeks and ends always on the same day of the week, and ends 
always (i) on the date that day of the week last occurs in a 
calendar month or (ii) on the date that day of the week falls 
that is nearest to the last day of a calendar month, may compute 
the taxpayer's net income and taxable net income on the basis of 
that annual period in accordance with rules prescribed by the 
commissioner.  If the effective date or the applicability of a 
provision of this chapter or chapter 290 is expressed in terms 
of taxable years beginning or ending with reference to a named 
date that is the first or last day of a month, a taxable year 
must be treated as beginning with the first day of the calendar 
month beginning nearest to the first day of that taxable year, 
or as ending with the last day of the calendar month ending 
nearest to the last day of that taxable year, as the case may 
be; 
    (3) A taxpayer who changes from one taxable year to another 
must make a return for the fractional parts of the year, under 
section 290.32. 
    Subd. 6.  [RETURNS OF MARRIED PERSONS.] A husband and wife 
must file a joint Minnesota income tax return if they filed a 
joint federal income tax return.  If the husband and wife have 
elected to file separate federal income tax returns, they must 
file separate Minnesota income tax returns.  This election to 
file a joint or separate return must be changed if they change 
their election for federal purposes.  In the event taxpayers 
desire to change their election, the change must be done in the 
manner and on the form prescribed by the commissioner.  
    The determination of whether an individual is married shall 
be made under the provisions of section 7703 of the Internal 
Revenue Code of 1986, as amended through December 31, 1989.  
    Subd. 7.  [COMPOSITE INCOME TAX RETURNS FOR NONRESIDENT 
PARTNERS, SHAREHOLDERS, AND BENEFICIARIES.] (a) The commissioner 
may allow a partnership with five or more nonresident partners 
to file a composite return and to pay the tax on behalf of 
nonresident partners who have no other Minnesota source income.  
This composite return must include the names, addresses, social 
security numbers, income allocation, and tax liability for the 
nonresident partners electing to be covered by the composite 
return.  
    (b) The computation of a partner's tax liability must be 
determined by multiplying the income allocated to that partner 
by the highest rate used to determine the tax liability for 
individuals under section 290.06, subdivision 2c.  Nonbusiness 
deductions, standard deductions, or personal exemptions are not 
allowed. 
    (c) The partnership must submit a request to use this 
composite return filing method for nonresident partners on or 
before the due date for filing the individual income tax 
returns.  The request may be made a part of the return filed.  
    (d) The electing partner must not have any Minnesota source 
income other than the income from the partnership and other 
electing partnerships.  If it is determined that the electing 
partner has other Minnesota source income, the inclusion of the 
income and tax liability for that partner under this provision 
will not constitute a return to satisfy the requirements of 
subdivision 1.  The tax paid for the individual as part of the 
composite return is allowed as a payment of the tax by the 
individual on the date on which the composite return payment was 
made.  If the electing nonresident partner has no other 
Minnesota source income, filing of the composite return is a 
return for purposes of subdivision 1. 
    (e) This subdivision does not negate the requirement that 
an individual pay estimated tax if the individual's liability 
would exceed the requirements set forth in section 289A.25.  A 
composite estimate may, however, be filed in a manner similar to 
and containing the information required under paragraph (a). 
    (f) If an electing partner's share of the partnership's 
gross income from Minnesota sources is less than the filing 
requirements for a nonresident under this subdivision, the tax 
liability is zero.  However, a statement showing the partner's 
share of gross income must be included as part of the composite 
return. 
    (g) The election provided in this subdivision is not 
available to any partner other than a full-year nonresident 
individual who has no other Minnesota source income. 
    (h) A corporation defined in section 290.9725 and its 
nonresident shareholders may make an election under this 
paragraph.  The provisions covering the partnership apply to the 
corporation and the provisions applying to the partner apply to 
the shareholder. 
    (i) Estates and trusts distributing current income only and 
the nonresident individual beneficiaries of the estates or 
trusts may make an election under this paragraph.  The 
provisions covering the partnership apply to the estate or 
trust.  The provisions applying to the partner apply to the 
beneficiary.  
    Subd. 8.  [RETURNS OF ENTERTAINMENT ENTITIES.] An 
entertainment entity subject to the tax imposed by section 
290.9201 shall file an annual return for the calendar year with 
the commissioner. 
    Subd. 9.  [VERIFICATION.] If a return is prepared for a 
taxpayer by an individual (or individuals) or a firm (including 
partnerships, corporations, etc.), the individual or firm 
responsible for the preparation must complete the statement of 
verification provided on the tax return forms in the following 
manner: 
    (1) If the individual (or individuals) responsible for the 
preparation of the return is an individual acting in a personal 
capacity, the statement of verification must be signed by the 
individual. 
    (2) If a firm is responsible for the preparation of the 
return, the statement of verification must be signed with the 
firm name.  However, if the firm name is stamped or typed, it 
should be followed by the signature of an individual authorized 
to sign the verification on behalf of the firm.  The firm may 
authorize an officer, member, or employee to sign the 
verification. 
    Verification is not required if the actual preparation of 
the return is a regular and usual incident of the employment of 
one regularly and continuously employed full time by the person 
for whom the return is made (such as a clerk, secretary, 
bookkeeper, etc.). 
    Subd. 10.  [FILING OF PROPER RETURN.] The return must 
specifically set forth the items of gross income, deductions, 
credits against the tax, and any other data necessary for 
computing the amount of any item required for determining the 
amount of the net income tax liability.  The return must be in 
the form the commissioner prescribes.  The filing of a return 
required under this section is considered an assessment. 
    Subd. 11.  [INFORMATION INCLUDED IN INCOME TAX RETURN.] The 
return must state the name of the taxpayer, or taxpayers, if the 
return is a joint return, and the address of the taxpayer in the 
same name or names and same address as the taxpayer has used in 
making the taxpayer's income tax return to the United States, 
and must state the social security number of the taxpayer, or 
taxpayers, if a social security number has been issued by the 
United States with respect to the taxpayers, and must state the 
amount of the taxable income of the taxpayer as it appears on 
the federal return for the taxable year to which the Minnesota 
state return applies.  The taxpayer must attach to the 
taxpayer's Minnesota state income tax return a copy of the 
federal income tax return that the taxpayer has filed or is 
about to file for the period. 
    Subd. 12.  [CONFESSION OF JUDGMENT.] The return must 
contain (1) a written declaration that it is correct and 
complete, and (2) language prescribed by the commissioner 
providing a confession of judgment for the amount of the tax 
shown due to the extent not timely paid. 
    Subd. 13.  [LONG AND SHORT FORMS.] The commissioner shall 
provide a long form individual income tax return and may provide 
a short form individual income tax return.  The returns shall be 
in a form that is consistent with the provisions of chapter 290, 
notwithstanding any other law to the contrary.  The nongame 
wildlife checkoff provided in section 290.431 and the dependent 
care credit provided in section 290.067 must be included on the 
short form.  
    Subd. 14.  [VOTER REGISTRATION FORM.] The commissioner 
shall insert securely in the individual income tax return form 
or instruction booklet a voter registration form, returnable to 
the secretary of state.  The form shall be designed according to 
rules adopted by the secretary of state.  
    Sec. 4.  [289A.09] [FILING REQUIREMENTS FOR TAXES WITHHELD 
FROM WAGES FROM COMPENSATION OF ENTERTAINERS AND FROM PAYMENTS 
TO OUT-OF-STATE CONTRACTORS; AND TAXES WITHHELD BY PARTNERSHIPS 
AND SMALL BUSINESS CORPORATIONS.] 
    Subdivision 1.  [RETURNS.] (a) An employer who is required 
to deduct and withhold tax under section 290.92, subdivision 2a 
or 3, and a person required to deduct and withhold tax under 
section 290.923, subdivision 2, must file a return with the 
commissioner for each quarterly period unless otherwise 
prescribed by the commissioner.  
     (b) A person or corporation required to make deposits under 
section 290.9201, subdivision 8, must file an entertainer 
withholding tax return with the commissioner. 
     (c) A person required to withhold an amount under section 
290.9705, subdivision 1, must file a return. 
    (d) A partnership required to deduct and withhold tax under 
section 290.92, subdivision 4b, must file a return. 
     (e) An S corporation required to deduct and withhold tax 
under section 290.92, subdivision 4c, must also file a return.  
     (f) Returns must be filed in the form and contain the 
information prescribed by the commissioner.  Every return must 
contain a written declaration that it is correct and complete, 
and a confession of judgment for the amount of tax shown due, to 
the extent not timely paid. 
    Subd. 2.  [WITHHOLDING STATEMENT TO EMPLOYEE OR PAYEE AND 
TO COMMISSIONER.] (a) A person required to deduct and withhold 
from an employee a tax under section 290.92, subdivision 2a or 
3, or section 290.923, subdivision 2, or who would have been 
required to deduct and withhold a tax under section 290.92, 
subdivision 2a or 3, or persons required to withhold tax under 
section 290.923, subdivision 2, determined without regard to 
section 290.92, subdivision 19, if the employee or payee had 
claimed no more than one withholding exemption, or who paid 
wages or made payments not subject to withholding under section 
290.92, subdivision 2a or 3, or section 290.923, subdivision 2, 
to an employee or person receiving royalty payments in excess of 
$600, or who has entered into a voluntary withholding agreement 
with a payee under section 290.92, subdivision 20, must give 
every employee or person receiving royalty payments in respect 
to the remuneration paid by the person to the employee or person 
receiving royalty payments during the calendar year, on or 
before January 31 of the succeeding year, or, if employment is 
terminated before the close of the calendar year, within 30 days 
after the date of receipt of a written request from the employee 
if the 30-day period ends before January 31, a written statement 
showing the following: 
    (1) name of the person; 
    (2) the name of the employee or payee and the employee's or 
payee's social security account number; 
    (3) the total amount of wages as that term is defined in 
section 290.92, subdivision 1(1); the total amount of 
remuneration subject to withholding under section 290.92, 
subdivision 20; the amount of sick pay as required under section 
6051(f) of the Internal Revenue Code of 1986, as amended through 
December 31, 1989; and the amount of royalties subject to 
withholding under section 290.923, subdivision 2; and 
    (4) the total amount deducted and withheld as tax under 
section 290.92, subdivision 2a or 3, or 290.923, subdivision 2. 
    (b) The statement required to be furnished by this 
paragraph with respect to any remuneration must be furnished at 
those times, must contain the information required, and must be 
in the form the commissioner prescribes. 
    (c) The commissioner may prescribe rules providing for 
reasonable extensions of time, not in excess of 30 days, to 
employers or payers required to give the statements to their 
employees or payees under this subdivision. 
    (d) A duplicate of any statement made under this 
subdivision and in accordance with rules prescribed by the 
commissioner, along with a reconciliation in the form the 
commissioner prescribes of the statements for the calendar year, 
including a reconciliation of the quarterly returns required to 
be filed under subdivision 1, must be filed with the 
commissioner on or before February 28 of the year after the 
payments were made.  
    (e) The employer must submit the statements required to be 
sent to the commissioner on magnetic media, if the magnetic 
media was required to satisfy the federal reporting requirements 
of section 6011(e) of the Internal Revenue Code of 1986, as 
amended through December 31, 1989, and the regulations issued 
under it. 
    Sec. 5.  [289A.10] [FILING REQUIREMENTS FOR ESTATE TAX 
RETURNS.] 
    Subdivision 1.  [RETURN REQUIRED.] In the case of a 
decedent who has an interest in property with a situs in 
Minnesota, the personal representative must submit a Minnesota 
estate tax return to the commissioner, on a form prescribed by 
the commissioner, in instances in which a federal estate tax 
return is required to be filed. 
    The return must be accompanied by a federal estate tax 
return, a schedule of the assets in the estate at their date of 
death values, and must contain a computation of the Minnesota 
estate tax due.  The return must be signed by the personal 
representative. 
    Subd. 2.  [DOCUMENTS REQUIRED.] The commissioner may 
designate on the return the documents that are required to be 
filed together with the return to determine the computation of 
tax.  
    Subd. 3.  [DEFINITIONS.] For purposes of this section, the 
definitions contained in section 291.005 apply. 
    Sec. 6.  [289A.11] [FILING REQUIREMENTS FOR SALES AND USE 
TAX RETURNS.] 
    Subdivision 1.  [RETURN REQUIRED.] Except as provided in 
section 289A.18, subdivision 4, for the month in which taxes 
imposed by sections 297A.01 to 297A.44 are payable, or for which 
a return is due, a return for the preceding reporting period 
must be filed with the commissioner in the form the commissioner 
prescribes.  The return must be verified by a written 
declaration that it is made under the criminal penalties for 
making a false return, and in addition must contain a confession 
of judgment for the amount of the tax shown due to the extent 
not timely paid.  A person making sales at retail at two or more 
places of business may file a consolidated return subject to 
rules prescribed by the commissioner.  
    Subd. 2.  [LIQUOR SALES.] A person required to collect the 
tax imposed by section 297A.02, subdivision 3, on sales of 
intoxicating liquor and nonintoxicating malt liquor, shall 
report the total sales tax liability, including the sales tax on 
items other than intoxicating liquor and nonintoxicating malt 
liquor, on a distinct sales tax return prescribed by the 
commissioner.  
    Subd. 3.  [WHO MUST FILE RETURN.] For purposes of the sales 
tax, a return must be filed by a retailer who is required to 
hold a permit.  For the purposes of the use tax, a return must 
be filed by a retailer required to collect the tax and by a 
person buying any items, the storage, use or other consumption 
of which is subject to the use tax, who has not paid the use tax 
to a retailer required to collect the tax.  The returns must be 
signed by the person filing the return or by the person's agent 
duly authorized in writing. 
    Sec. 7.  [289A.12] [FILING REQUIREMENTS FOR INFORMATION 
RETURNS AND REPORTS.] 
    Subdivision 1.  [REPORTS BY EXEMPT CORPORATIONS, 
ORGANIZATIONS, ESTATES, AND TRUSTS.] Corporations, estates, 
trusts, and organizations exempt from state income and franchise 
taxes under section 290.05, subdivision 2, must file with the 
commissioner of revenue an initial report that furnishes the 
information required under section 290.05, subdivision 4, 
paragraph (a), and later annual reports as required by section 
290.05, subdivision 4.  
    Subd. 2.  [RETURNS REQUIRED OF BANKS; COMMON TRUST 
FUNDS.] A bank maintaining a common trust fund must make a 
return for a taxable year, stating specifically with respect to 
the fund, the items of gross income and deductions provided by 
section 290.281, subdivision 1.  The return must include the 
names and addresses of the participants entitled to share the 
net income if distributed and the amount of the proportionate 
share of each participant.  
    Subd. 3.  [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 
AND S CORPORATIONS.] (a) Partnerships must make a return for 
each taxable year.  The return must conform to the requirements 
of section 290.31, and must include the names and addresses of 
the partners entitled to a distributive share in their taxable 
net income, gain, loss, or credit, and the amount of the 
distributive share to which each is entitled.  The return must 
contain a written declaration that it is correct and complete.  
A partnership required to file a return for a partnership 
taxable year must furnish a copy of the information required to 
be shown on the return to a person who is a partner at any time 
during the taxable year, on or before the day on which the 
return for the taxable year was filed. 
    (b) The fiduciary of an estate or trust making the return 
required to be filed under section 289A.08, subdivision 2, for a 
taxable year must give a beneficiary who receives a distribution 
from the estate or trust with respect to the taxable year or to 
whom any item with respect to the taxable year is allocated, a 
statement containing the information required to be shown on the 
return, on or before the date on which the return was filed. 
    (c) An S corporation must make a return for a taxable year 
during which an election under section 290.9725 is in effect, 
stating specifically the names and addresses of the persons 
owning stock in the corporation at any time during the taxable 
year, the number of shares of stock owned by a shareholder at 
all times during the taxable year, the shareholder's pro rata 
share of each item of the corporation for the taxable year, and 
other information the commissioner requires.  An S corporation 
required to file a return under this paragraph for any taxable 
year must furnish a copy of the information shown on the return 
to the person who is a shareholder at any time during the 
taxable year, on or before the day on which the return for the 
taxable year was filed. 
    Subd. 4.  [RETURNS BY PERSONS, CORPORATIONS, COOPERATIVES, 
GOVERNMENTAL ENTITIES, OR SCHOOL DISTRICTS.] To the extent 
required by section 6041 of the Internal Revenue Code of 1986, 
as amended through December 31, 1989, a person, corporation, or 
cooperative, the state of Minnesota and its political 
subdivisions, and a city, county, and school district in 
Minnesota, making payments in the regular course of a trade or 
business during the taxable year to any person or corporation of 
$600 or more on account of rents or royalties, or of $10 or more 
on account of interest, or $10 or more on account of dividends 
or patronage dividends, or $600 or more on account of either 
wages, salaries, commissions, fees, prizes, awards, pensions, 
annuities, or any other fixed or determinable gains, profits or 
income, not otherwise reportable under section 289A.09, 
subdivision 2, or on account of earnings of $10 or more 
distributed to its members by savings, building and loan 
associations or credit unions chartered under the laws of this 
state or the United States, (1) must make a return (except in 
cases where a valid agreement to participate in the combined 
federal and state information reporting system has been entered 
into, and the return is filed only with the commissioner of 
internal revenue under the applicable filing and informational 
reporting requirements of the Internal Revenue Code of 1986, as 
amended through December 31, 1989) with respect to the payments 
in excess of the amounts named, giving the names and addresses 
of the persons to whom the payments were made, the amounts paid 
to each, and (2) must make a return with respect to the total 
number of payments and total amount of payments, for each 
category of income named, which were in excess of the amounts 
named.  This subdivision does not apply to the payment of 
interest or dividends to a person who was a nonresident of 
Minnesota for the entire year.  
    A person, corporation, or cooperative required to file 
returns under this subdivision must file the returns on magnetic 
media if magnetic media was used to satisfy the federal 
reporting requirement under section 6011(e) of the Internal 
Revenue Code of 1986, as amended through December 31, 1989, 
unless the person establishes to the satisfaction of the 
commissioner that compliance with this requirement would be an 
undue hardship.  
    Subd. 5.  [RETURNS BY BROKERS.] The commissioner may, 
within 30 days after notice and demand, require a person doing 
business as a broker to give the commissioner the names and 
addresses of customers for whom they have transacted business, 
and the details regarding gross proceeds and other information 
concerning the transactions as will enable the commissioner to 
determine whether the income tax due on profits or gains of 
those customers has been paid.  The provisions of section 6045 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1989, which define terms and require that a 
statement be furnished to the customer apply.  
    Subd. 6.  [RETURNS BY AGENTS.] The commissioner may, within 
30 days after notice and demand, require a person acting as 
agent for another to make a return furnishing the information 
reasonably necessary to properly assess and collect the tax 
imposed by chapter 290 upon the person for whom the agent acts.  
    Subd. 7.  [RETURNS FOR REAL PROPERTY HOLDINGS OF ALIENS.] A 
person or corporation required to make a return under section 
6039C (relating to information return on a foreign person 
holding a United States real property interest) of the Internal 
Revenue Code of 1986, as amended through December 31, 1989, must 
make a similar return for the commissioner for foreign persons 
holding a Minnesota real property interest.  
    Subd. 8.  [RETURNS FOR UNEMPLOYMENT COMPENSATION.] A person 
who makes payments of unemployment compensation totaling $10 or 
more to any individual during a calendar year and who is 
required to make and file a return under section 6050B of the 
Internal Revenue Code of 1986, as amended through December 31, 
1989, must file a copy of the return with the commissioner. 
    Subd. 9.  [RETURNS FOR PAYMENTS OF REMUNERATION FOR 
SERVICES AND DIRECT SALES.] A person who is required to make a 
return under section 6041A (relating to information returns 
regarding payments of remuneration for services and direct 
sales) of the Internal Revenue Code of 1986, as amended through 
December 31, 1989, must file a copy of the return containing the 
information required under that section with the commissioner.  
The provisions of that section govern the requirements of a 
statement that must be given to persons with respect to whom 
information is required to be given.  
    Subd. 10.  [RETURNS RELATING TO SOCIAL SECURITY 
BENEFITS.] The appropriate federal official who is required to 
make a return under section 6050F (relating to social security 
benefits) of the Internal Revenue Code of 1986, as amended 
through December 31, 1989, shall file a copy of the return 
containing the information required under that section with the 
commissioner.  
    Subd. 11.  [RETURNS BY TRUSTEES.] The trustee of an 
individual retirement account and the issuer of an endowment 
contract or an individual retirement annuity who is required to 
make a report under section 408(i) of the Internal Revenue Code 
of 1986, as amended through December 31, 1989, must file with 
the commissioner a copy of that report containing the 
information required under that subsection.  The provisions of 
that subsection govern when the reports are to be filed and the 
requirements of a statement that must be given to persons with 
respect to whom information must be given.  
    Subd. 12.  [STATEMENTS TO PAYEES.] A person making a return 
under subdivisions 4 to 10 must furnish to a person whose name 
is set forth in the return a written statement showing the name 
and address of the person making the return, and the aggregate 
amount of payments to the person shown on the return.  
    This written statement must be given to the person on or 
before January 31 of the year following the calendar year for 
which the return was made.  A duplicate of this written 
statement, along with a reconciliation of all the statements for 
the calendar year in the form the commissioner prescribes, must 
be furnished to the commissioner on or before February 28 of the 
year following the calendar year for which the return was made.  
    Subd. 13.  [SUPPLYING OF SOCIAL SECURITY NUMBER.] An 
individual with respect to whom a return, statement, or other 
document is required under this section to be made by another 
person must furnish to that person the individual's social 
security account number.  A person required under this section 
to make a return, statement, or other document with respect to 
another person who is an individual must request from that 
individual and must include in the return, statement, or other 
document the individual's social security account number.  A 
return of an estate or trust with respect to its liability for 
tax, and any statement or other document in its support, is 
considered a return, statement, or other document with respect 
to the individual beneficiary of the estate or trust; otherwise, 
a return of an individual with respect to the individual's 
liability for tax, or any statement or other document in its 
support, is not considered a return, statement, or other 
document with respect to another person.  
    Sec. 8.  [289A.18] [DUE DATES FOR FILING OF RETURNS.] 
    Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES; PARTNERSHIP AND S 
CORPORATION RETURNS; INFORMATION RETURNS.] The returns required 
to be made under sections 289A.08 and 289A.12 must be filed at 
the following times: 
    (1) returns made on the basis of the calendar year must be 
filed on April 15 following the close of the calendar year, 
except that returns of corporations must be filed on March 15 
following the close of the calendar year; 
    (2) returns made on the basis of the fiscal year must be 
filed on the 15th day of the fourth month following the close of 
the fiscal year, except that returns of corporations must be 
filed on the 15th day of the third month following the close of 
the fiscal year; 
    (3) returns for a fractional part of a year must be filed 
on the 15th day of the fourth month following the end of the 
month in which falls the last day of the period for which the 
return is made, except that the returns of corporations must be 
filed on the 15th day of the third month following the end of 
the month in which falls the last day of the period for which 
the return is made; 
    (4) in the case of a final return of a decedent for a 
fractional part of a year, the return must be filed on the 15th 
day of the fourth month following the close of the 12-month 
period that began with the first day of that fractional part of 
a year; 
    (5) in the case of the return of a cooperative association, 
returns must be filed on or before the 15th day of the ninth 
month following the close of the taxable year; 
    (6) if a corporation has been divested from a unitary group 
and files a return for a fractional part of a year in which it 
was a member of a unitary business that files a combined report 
under section 290.34, subdivision 2, the divested corporation's 
return must be filed on the 15th day of the third month 
following the close of the common accounting period that 
includes the fractional year; and 
    (7) returns of entertainment entities must be filed on 
April 15 following the close of the calendar year. 
    Subd. 2.  [WITHHOLDING RETURNS, ENTERTAINER WITHHOLDING 
RETURNS, RETURNS FOR WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE 
CONTRACTORS, AND WITHHOLDING RETURNS FROM PARTNERSHIPS AND SMALL 
BUSINESS CORPORATIONS.] Withholding returns are due on or before 
the last day of the month following the close of the quarterly 
period.  However, if the return shows timely deposits in full 
payment of the taxes due for that period, the return may be 
filed on or before the tenth day of the second calendar month 
following the period.  An employer, in preparing a quarterly 
return, may take credit for monthly deposits previously made for 
that quarter.  Entertainer withholding tax returns are due 
within 30 days after each performance.  Returns for withholding 
from payments to out-of-state contractors are due within 30 days 
after the payment to the contractor.  Returns for withholding by 
partnerships are due on or before the due date specified for 
filing partnership returns.  Returns for withholding by small 
business corporations are due on or before the due date 
specified for filing corporate franchise tax returns. 
    Subd. 3.  [ESTATE TAX RETURNS.] An estate tax return must 
be filed with the commissioner within nine months after the 
decedent's death.  
    Subd. 4.  [SALES AND USE TAX RETURNS.] Sales and use tax 
returns must be filed on or before the 20th day of the month 
following the close of the preceding reporting period.  In 
addition, on or before June 20 of a year, a retailer who has a 
May liability of $1,500 or more must file a return with the 
commissioner for one-half of the estimated June liability, in 
addition to filing a return for the May liability.  On or before 
August 20 of a year, the retailer must file a return showing the 
actual June liability.  
    Subd. 5.  [PROPERTY TAX REFUND CLAIMS.] A claim for a 
refund based on property taxes payable must be filed with the 
commissioner on or before August 15 of the year in which the 
property taxes are due and payable.  Any claim for refund based 
on rent paid must be filed on or before August 15 of the year 
following the year in which the rent was paid.  
    Sec. 9.  [289A.19] [EXTENSIONS FOR FILING RETURNS.] 
    Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
ENTERTAINMENT TAX, AND INFORMATION RETURNS.] When, in the 
commissioner's judgment, good cause exists, the commissioner may 
extend the time for filing individual and fiduciary income tax 
returns, entertainment tax returns, and information returns for 
not more than six months.  If an extension to file the federal 
individual or fiduciary income tax return or information return 
has been granted under section 6081 of the Internal Revenue Code 
of 1986, as amended through December 31, 1989, the time for 
filing the state return is extended for that period.  The 
commissioner may require the taxpayer to file a tentative return 
when the regularly required return is due, and to pay a tax on 
the basis of the tentative return at the times required for the 
payment of taxes on the basis of the regularly required return 
from the taxpayer.  
    Subd. 2.  [CORPORATE FRANCHISE TAXES.] The commissioner may 
grant an extension of up to seven months for filing the return 
of a corporation subject to tax under chapter 290 if:  
    (1) the corporation files a tentative return when the 
regularly required return is due; 
    (2) the corporation pays the tax on the basis of the 
tentative return and the amount of tax, determined without 
regard to any prepayment of tax, shown on the tentative return, 
or the amount of tax paid on or before the regular due date of 
the return, is at least 90 percent of the amount shown on the 
corporation's regularly required return; 
    (3) the balance due shown on the regularly required return 
is paid on or before the extended due date of the return; and 
    (4) interest on any balance due is paid at the rate 
specified in section 270.75 from the regular due date of the 
return until the tax is paid.  
    Subd. 3.  [WITHHOLDING RETURNS.] Where good cause exists, 
the commissioner may grant an extension of time of not more than 
60 days for filing a withholding return.  
    Subd. 4.  [ESTATE TAX RETURNS.] Where good cause exists, 
the commissioner may extend the time for filing an estate tax 
return for not more than six months.  When an extension to file 
the federal estate tax return has been granted under section 
6081 of the Internal Revenue Code of 1986, as amended through 
December 31, 1989, the time for filing the estate tax return is 
extended for that period.  
    Subd. 5.  [SALES AND USE TAX RETURNS.] Where good cause 
exists, the commissioner may extend the time for filing sales 
and use tax returns for not more than 60 days. 
    Subd. 6.  [PROPERTY TAX REFUND RETURNS.] Where good cause 
exists, the commissioner may extend the time for filing claims 
under chapter 290A for not more than six months.  A claim filed 
after the original or extended due date shall be allowed if the 
initial claim is filed within one year after the original due 
date for filing the claim, subject to the provisions of section 
289A.60, subdivision 12, paragraph (e). 
    Sec. 10.  [289A.20] [DUE DATES FOR MAKING PAYMENTS OF TAX.] 
    Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] (a) Individual 
income, fiduciary, and corporate franchise taxes must be paid to 
the commissioner on or before the date the return must be filed 
under section 289A.18, subdivision 1, or the extended due date 
as provided in section 289A.19, unless an earlier date for 
payment is provided.  
    Notwithstanding any other law, a taxpayer whose unpaid 
liability for income or corporate franchise taxes, as reflected 
upon the return, is $1 or less need not pay the tax.  
     (b) Entertainment taxes must be paid on or before the date 
the return must be filed under section 289A.18, subdivision 1. 
    Subd. 2.  [WITHHOLDING FROM WAGES, ENTERTAINER WITHHOLDING, 
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, AND 
WITHHOLDING BY PARTNERSHIPS AND SMALL BUSINESS 
CORPORATIONS.] (a) A tax required to be deducted and withheld 
during the quarterly period must be paid on or before the last 
day of the month following the close of the quarterly period, 
unless an earlier time for payment is provided.  A tax required 
to be deducted and withheld from compensation of an entertainer 
and from a payment to an out-of-state contractor must be paid on 
or before the date the return for such tax must be filed under 
section 289A.18, subdivision 2.  Taxes required to be deducted 
and withheld by partnerships and S corporations must be paid on 
or before the date the return must be filed under section 
289A.18, subdivision 2. 
    (b)(1) Unless clause (2) applies, if during any calendar 
month, other than the last month of the calendar quarter, the 
aggregate amount of the tax withheld during that quarter under 
section 290.92, subdivision 2a or 3, or under section 290.923, 
subdivision 2, exceeds $500, the employer shall deposit the 
aggregate amount with the commissioner within 15 days after the 
close of the calendar month.  (2) If at the close of any 
eighth-monthly period the aggregate amount of undeposited taxes 
is $3,000 or more, the employer, or person withholding tax under 
section 290.92, subdivision 2a or 3, or section 290.923, 
subdivision 2, shall deposit the undeposited taxes with the 
commissioner within three banking days after the close of the 
eighth-monthly period.  For purposes of this clause, the term 
"eighth-monthly period" means the first three days of a calendar 
month, the fourth day through the seventh day of a calendar 
month, the eighth day through the 11th day of a calendar month, 
the 12th day through the 15th day of a calendar month, the 16th 
day through the 19th day of a calendar month, the 20th day 
through the 22nd day of a calendar month, the 23rd day through 
the 25th day of a calendar month, or the part of a calendar 
month following the 25th day of the month.  
    (c) The commissioner may prescribe by rule other return 
periods or deposit requirements.  In prescribing the reporting 
period, the commissioner may classify payors according to the 
amount of their tax liability and may adopt an appropriate 
reporting period for the class that the commissioner judges to 
be consistent with efficient tax collection.  In no event will 
the duration of the reporting period be more than one year. 
    (d) If less than the correct amount of tax is paid to the 
commissioner, proper adjustments with respect to both the tax 
and the amount to be deducted must be made, without interest, in 
the manner and at the times the commissioner prescribes.  If the 
underpayment cannot be adjusted, the amount of the underpayment 
will be assessed and collected in the manner and at the times 
the commissioner prescribes. 
    Subd. 3.  [ESTATE TAX.] Taxes imposed by chapter 291 take 
effect at and upon the death of the person whose estate is 
subject to taxation and are due and payable on or before the 
expiration of nine months from that death. 
    Subd. 4.  [SALES AND USE TAX.] (a) The taxes imposed by 
chapter 297A are due and payable to the commissioner monthly on 
or before the 20th day of the month following the month in which 
the taxable event occurred or following another reporting period 
as the commissioner prescribes.  
    (b) A vendor having a liability of $1,500 or more in May of 
a year must remit the June liability in the following manner: 
    (1) On or before June 20 of the year, the vendor must remit 
the actual May liability and one-half of the estimated June 
liability to the commissioner.  
    (2) On or before August 20 of the year, the vendor must pay 
any additional amount of tax not remitted in June. 
     (c) When a retailer located outside of a city that imposes 
a local sales and use tax collects use tax to be remitted to 
that city, the retailer is not required to remit the tax until 
the amount collected reaches $10. 
    Sec. 11.  [289A.25] [PAYMENT OF ESTIMATED TAX BY 
INDIVIDUALS.] 
    Subdivision 1.  [REQUIREMENTS TO PAY.] An individual must, 
when prescribed in subdivision 3, paragraph (b), make payments 
of estimated tax.  The term "estimated tax" means the amount the 
individual estimates is the sum of the taxes imposed by chapter 
290 for the taxable year.  If the individual is an infant or 
incompetent person, the payments must be made by the 
individual's guardian.  If joint payments on estimated tax are 
made but a joint return is not made for the taxable year, the 
estimated tax for that year may be treated as the estimated tax 
of either the husband or the wife or may be divided between them.
    Notwithstanding the provisions of this section, no payments 
of estimated tax are required if the estimated tax, as defined 
in this subdivision, less the credits allowed against the tax, 
is less than $500.  
    Subd. 2.  [ADDITIONS TO TAX FOR UNDERPAYMENT.] (a) In the 
case of any underpayment of estimated tax by an individual, 
except as provided in subdivision 6 or 7, there must be added to 
and become a part of the taxes imposed by chapter 290, for the 
taxable year an amount determined at the rate specified in 
section 270.75 upon the amount of the underpayment for the 
period of the underpayment. 
    (b) For purposes of paragraph (a), the amount of 
underpayment shall be the excess of 
    (1) the amount of the installment required to be paid, over 
    (2) the amount, if any, of the installment paid on or 
before the last day prescribed for the payment. 
    Subd. 3.  [PERIOD OF UNDERPAYMENT.] (a) The period of the 
underpayment shall run from the date the installment was 
required to be paid to the earlier of the following dates: 
    (1) The 15th day of the fourth month following the close of 
the taxable year. 
    (2) With respect to any part of the underpayment, the date 
on which that part is paid.  For purposes of this clause, a 
payment of estimated tax on any installment date is considered a 
payment of any unpaid required installments in the order in 
which the installments are required to be paid. 
    (b) For purposes of this subdivision, there shall be four 
required installments for a taxable year.  The times for payment 
of installments shall be:  
     For the following
     required installments:     The due date is:
         1st                    April 15
         2nd                    June 15
         3rd                    September 15
         4th                    January 15 of the following
                                 taxable year 
    Subd. 4.  [NO ADDITION TO TAX WHERE TAX IS SMALL.] No 
addition to tax is imposed under subdivision 2 for a taxable 
year if the tax shown on the return for the taxable year (or, if 
no return is filed, the tax) reduced by the credits allowable is 
less than $500.  
    Subd. 5.  [AMOUNT OF REQUIRED INSTALLMENT.] The amount of 
any installment required to be paid shall be 25 percent of the 
required annual payment except as provided in clause (3).  The 
term "required annual payment" means the lesser of 
    (1) 90 percent of the tax shown on the return for the 
taxable year or 90 percent of the tax for the year if no return 
is filed, or 
    (2) the total tax liability shown on the return of the 
individual for the preceding taxable year, if a return showing a 
liability for the taxes was filed by the individual for the 
preceding taxable year of 12 months, or 
    (3) an amount equal to the applicable percentage of the tax 
for the taxable year computed by placing on an annualized basis 
the taxable income and alternative minimum taxable income for 
the months in the taxable year ending before the month in which 
the installment is required to be paid.  The applicable 
percentage of the tax is 22.5 percent in the case of the first 
installment, 45 percent for the second installment, 67.5 percent 
for the third installment, and 90 percent for the fourth 
installment.  For purposes of this clause, the taxable income 
and alternative minimum taxable income shall be placed on an 
annualized basis by 
    (i) multiplying by 12 (or in the case of a taxable year of 
less than 12 months, the number of months in the taxable year) 
the taxable income and alternative minimum taxable income 
computed for the months in the taxable year ending before the 
month in which the installment is required to be paid; and 
    (ii) dividing the resulting amount by the number of months 
in the taxable year ending before the month in which the 
installment date falls. 
    Subd. 6.  [EXCEPTION TO ADDITION TO TAX.] No addition to 
the tax shall be imposed under this section for any taxable year 
if:  
    (1) the individual did not have liability for tax for the 
preceding taxable year, 
    (2) the preceding taxable year was a taxable year of 12 
months, and 
    (3) the individual was a resident of Minnesota throughout 
the preceding taxable year.  
    Subd. 7.  [WAIVER OF ADDITION TO TAX.] No addition to the 
tax is imposed under this section with respect to an 
underpayment to the extent the commissioner determines that the 
provisions of section 6654(e)(3) of the Internal Revenue Code of 
1986, as amended through December 31, 1989, apply. 
    Subd. 8.  [APPLICATION OF SECTION; TAX WITHHELD ON 
WAGES.] For purposes of this section, the estimated tax must be 
computed without reduction for the amount that the individual 
estimates as the individual's credit under section 290.92, 
subdivision 12 (relating to tax withheld at source on wages), 
and any other refundable credits allowed against income tax 
liability, and the amount of those credits for the taxable year 
is considered a payment of estimated tax, and an equal part of 
those amounts is considered paid on the installment date, 
determined under subdivision 3, paragraph (b), for that taxable 
year, unless the taxpayer establishes the dates on which the 
amounts were actually withheld, in which case the amounts so 
withheld are considered payments of estimated tax on the dates 
on which the amounts were actually withheld. 
    Subd. 9.  [SPECIAL RULE FOR RETURN FILED ON OR BEFORE 
JANUARY 31.] If, on or before January 31 of the following 
taxable year, the taxpayer files a return for the taxable year 
and pays in full the amount computed on the return as payable, 
then no addition to tax is imposed under subdivision 2 with 
respect to any underpayment of the fourth required installment 
for the taxable year. 
    Subd. 10.  [SPECIAL RULE FOR FARMERS AND FISHERMEN.] For 
purposes of this section, if an individual is a farmer or 
fisherman as defined in section 6654(f)(2) of the Internal 
Revenue Code of 1986, as amended through December 31, 1989, for 
a taxable year, only one installment is required for the taxable 
year, the due date of which is January 15 of the following 
taxable year, the amount of which is equal to the required 
annual payment determined under subdivision 5 by substituting 
"66-2/3 percent" for "90 percent," and subdivision 9 shall be 
applied by substituting "March 1" for "January 31," and by 
treating the required installment described as the fourth 
required installment. 
    Subd. 11.  [FISCAL YEAR TAXPAYER.] The application of this 
section to taxable years beginning other than January 1 must be 
made by substituting, for the months named in this section, the 
months that correspond.  This section must be applied to taxable 
years of less than 12 months, under rules issued by the 
commissioner. 
    Subd. 12.  [TRUSTS AND ESTATES.] The provisions of this 
section do not apply to an estate or trust. 
    Subd. 13.  [OVERPAYMENT OF ESTIMATED TAX INSTALLMENT.] If 
an installment payment of estimated tax exceeds the correct 
amount of the installment payment, the overpayment must be 
credited against the unpaid installments, if any. 
    Sec. 12.  [289A.26] [PAYMENT OF ESTIMATED TAX BY 
CORPORATIONS.] 
    Subdivision 1.  [MINIMUM LIABILITY.] A corporation subject 
to taxation under chapter 290 (excluding section 290.92) must 
make payment of estimated tax for the taxable year if its tax 
liability so computed can reasonably be expected to exceed $500, 
or in accordance with rules prescribed by the commissioner for 
an affiliated group of corporations electing to file one return 
as permitted under section 289A.08, subdivision 3. 
    Subd. 2.  [AMOUNT AND TIME FOR PAYMENT OF 
INSTALLMENTS.] The estimated tax payment required under 
subdivision 1 must be paid in four equal installments on or 
before the 15th day of the third, sixth, ninth, and 12th month 
of the taxable year.  
    Subd. 3.  [SHORT TAXABLE YEAR.] (a) A corporation with a 
short taxable year of less than 12 months, but at least four 
months, must pay estimated tax in equal installments on or 
before the 15th day of the third, sixth, ninth, and final month 
of the short taxable year, to the extent applicable based on the 
number of months in the short taxable year.  
    (b) A corporation is not required to make estimated tax 
payments for a short taxable year unless its tax liability 
before the first day of the last month of the taxable year can 
reasonably be expected to exceed $500.  
    (c) No payment is required for a short taxable year of less 
than four months. 
    Subd. 4.  [UNDERPAYMENT OF ESTIMATED TAX.] If there is an 
underpayment of estimated tax by a corporation, there shall be 
added to the tax for the taxable year an amount determined at 
the rate in section 270.75 on the amount of the underpayment, 
determined under subdivision 5, for the period of the 
underpayment determined under subdivision 6.  This subdivision 
does not apply in the first taxable year that a corporation is 
subject to the tax imposed under section 290.02. 
    Subd. 5.  [AMOUNT OF UNDERPAYMENT.] For purposes of 
subdivision 4, the amount of the underpayment is the excess of 
    (1) the required installment, over 
    (2) the amount, if any, of the installment paid on or 
before the last date prescribed for payment. 
    Subd. 6.  [PERIOD OF UNDERPAYMENT.] The period of the 
underpayment runs from the date the installment was required to 
be paid to the earlier of the following dates: 
    (1) the 15th day of the third month following the close of 
the taxable year; or 
    (2) with respect to any part of the underpayment, the date 
on which that part is paid.  For purposes of this clause, a 
payment of estimated tax shall be credited against unpaid 
required installments in the order in which those installments 
are required to be paid. 
    Subd. 7.  [REQUIRED INSTALLMENTS.] (a) Except as otherwise 
provided in this subdivision, the amount of a required 
installment is 25 percent of the required annual payment. 
    (b) Except as otherwise provided in this subdivision, the 
term "required annual payment" means the lesser of: 
    (1) 90 percent of the tax shown on the return for the 
taxable year, or if no return is filed, 90 percent of the tax 
for that year; or 
    (2) 100 percent of the tax shown on the return of the 
corporation for the preceding taxable year provided the return 
was for a full 12-month period, showed a liability, and was 
filed by the corporation. 
    (c) Except for determining the first required installment 
for any taxable year, paragraph (b), clause (2), does not apply 
in the case of a large corporation.  The term "large 
corporation" means a corporation or any predecessor corporation 
that had taxable net income of $1,000,000 or more for any 
taxable year during the testing period.  The term "testing 
period" means the three taxable years immediately preceding the 
taxable year involved.  A reduction allowed to a large 
corporation for the first installment that is allowed by 
applying paragraph (b), clause (2), must be recaptured by 
increasing the next required installment by the amount of the 
reduction. 
    (d) In the case of a required installment, if the 
corporation establishes that the annualized income installment 
is less than the amount determined in paragraph (a), the amount 
of the required installment is the annualized income installment 
and the recapture of previous quarters' reductions allowed by 
this paragraph must be recovered by increasing later required 
installments to the extent the reductions have not previously 
been recovered. 
    (e) The "annualized income installment" is the excess, if 
any, of: 
    (1) an amount equal to the applicable percentage of the tax 
for the taxable year computed by placing on an annualized basis 
the taxable income: 
    (i) for the first two months of the taxable year, in the 
case of the first required installment; 
    (ii) for the first two months or for the first five months 
of the taxable year, in the case of the second required 
installment; 
    (iii) for the first six months or for the first eight 
months of the taxable year, in the case of the third required 
installment; and 
    (iv) for the first nine months or for the first 11 months 
of the taxable year, in the case of the fourth required 
installment, over 
    (2) the aggregate amount of any prior required installments 
for the taxable year.  
    (3) For the purpose of this paragraph, the annualized 
income shall be computed by placing on an annualized basis the 
taxable income for the year up to the end of the month preceding 
the due date for the quarterly payment multiplied by 12 and 
dividing the resulting amount by the number of months in the 
taxable year (2, 5, 6, 8, 9, or 11 as the case may be) referred 
to in clause (1). 
    (4) The "applicable percentage" used in clause (1) is: 
     For the following                 The applicable
     required installments:            percentage is:
               1st                         22.5
               2nd                         45
               3rd                         67.5
               4th                         90
    (f)(1) If this paragraph applies, the amount determined for 
any installment must be determined in the following manner: 
    (i) take the taxable income for the months during the 
taxable year preceding the filing month; 
    (ii) divide that amount by the base period percentage for 
the months during the taxable year preceding the filing month; 
    (iii) determine the tax on the amount determined under item 
(ii); and 
    (iv) multiply the tax computed under item (iii) by the base 
period percentage for the filing month and the months during the 
taxable year preceding the filing month.  
    (2) For purposes of this paragraph: 
    (i) the "base period percentage" for a period of months is 
the average percent that the taxable income for the 
corresponding months in each of the three preceding taxable 
years bears to the taxable income for the three preceding 
taxable years; 
    (ii) the term "filing month" means the month in which the 
installment is required to be paid; 
    (iii) this paragraph only applies if the base period 
percentage for any six consecutive months of the taxable year 
equals or exceeds 70 percent; and 
    (iv) the commissioner may provide by rule for the 
determination of the base period percentage in the case of 
reorganizations, new corporations, and other similar 
circumstances.  
    (3) In the case of a required installment determined under 
this paragraph, if the corporation determines that the 
installment is less than the amount determined in paragraph (a), 
the amount of the required installment is the amount determined 
under this paragraph and the recapture of previous quarters' 
reductions allowed by this paragraph must be recovered by 
increasing later required installments to the extent the 
reductions have not previously been recovered.  
    Subd. 8.  [DEFINITION OF TAX.] The term "tax" as used in 
this section means the tax imposed by chapter 290. 
    Subd. 9.  [FAILURE TO FILE AN ESTIMATE.] In the case of a 
corporation that fails to file an estimated tax for a taxable 
year when one is required, the period of the underpayment runs 
from the four installment dates in subdivision 2 or 3, whichever 
applies, to the earlier of the periods in subdivision 6, clauses 
(1) and (2).  
    Subd. 10.  [PAYMENT ON ACCOUNT.] Payment of the estimated 
tax or any installment of it shall be considered payment on 
account of the taxes imposed by chapter 290, for the taxable 
year. 
    Subd. 11.  [OVERPAYMENT OF ESTIMATED TAX INSTALLMENT.] If 
the amount of an installment payment of estimated tax exceeds 
the amount determined to be the correct amount of the 
installment payment, the overpayment must be credited against 
the unpaid installments, if any.  
    Sec. 13.  [289A.30] [EXTENSIONS FOR PAYING TAX.] 
    Subdivision 1.  [INDIVIDUAL AND FIDUCIARY INCOME, CORPORATE 
FRANCHISE TAX.] Where good cause exists, the commissioner may 
extend the time for payment of the amount determined as an 
individual or fiduciary income tax or corporate franchise tax by 
the taxpayer, or an amount determined as a deficiency, for a 
period of not more than six months from the date prescribed for 
the payment of the tax. 
    Subd. 2.  [ESTATE TAX.] Where good cause exists, the 
commissioner may extend the time for payment of estate tax for a 
period of not more than six months.  If an extension to pay the 
federal estate tax has been granted under section 6161 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1989, the time for payment of the estate tax without penalty is 
extended for that period.  A taxpayer who owes at least $5,000 
in taxes and who, under section 6161 or 6166 of the Internal 
Revenue Code of 1986, as amended through December 31, 1989, has 
been granted an extension for payment of the tax shown on the 
return, may elect to pay the tax due to the commissioner in 
equal amounts at the same time as required for federal 
purposes.  A taxpayer electing to pay the tax in installments 
must notify the commissioner in writing no later than nine 
months after the death of the person whose estate is subject to 
taxation.  If the taxpayer fails to pay an installment on time, 
unless it is shown that the failure is due to reasonable cause, 
the election is revoked and the entire amount of unpaid tax plus 
accrued interest is due and payable 90 days after the date on 
which the installment was payable.  
    Sec. 14.  [289A.31] [LIABILITY FOR PAYMENT OF TAX.] 
    Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES.] (a) Individual 
income, fiduciary income, and corporate franchise taxes, and 
interest and penalties, must be paid by the taxpayer upon whom 
the tax is imposed, except in the following cases:  
    (1) The tax due from a decedent for that part of the 
taxable year in which the decedent died during which the 
decedent was alive and the taxes, interest, and penalty due for 
the prior years must be paid by the decedent's personal 
representative, if any.  If there is no personal representative, 
the taxes, interest, and penalty must be paid by the 
transferees, as defined in section 289A.38, subdivision 13, to 
the extent they receive property from the decedent; 
    (2) The tax due from an infant or other incompetent person 
must be paid by the person's guardian or other person authorized 
or permitted by law to act for the person; 
    (3) The tax due from the estate of a decedent must be paid 
by the estate's personal representative; 
    (4) The tax due from a trust, including those within the 
definition of a corporation, as defined in section 290.01, 
subdivision 4, must be paid by a trustee; and 
    (5) The tax due from a taxpayer whose business or property 
is in charge of a receiver, trustee in bankruptcy, assignee, or 
other conservator, must be paid by the person in charge of the 
business or property so far as the tax is due to the income from 
the business or property. 
     (b) Entertainment taxes are the joint and several liability 
of the entertainer and the entertainment entity.  The payor is 
liable to the state for the payment of the tax required to be 
deducted and withheld under section 290.9201, subdivision 7, and 
is not liable to the entertainer for the amount of the payment. 
    Subd. 2.  [JOINT INCOME TAX RETURNS.] If a joint income tax 
return is made by a husband and wife, the liability for the tax 
is joint and several.  A spouse who is relieved of a liability 
attributable to a substantial underpayment under section 6013(e) 
of the Internal Revenue Code of 1986, as amended through 
December 31, 1989, is also relieved of the state income tax 
liability on the substantial underpayment.  
     In the case of individuals who were a husband and wife 
prior to the dissolution of their marriage, for tax liabilities 
reported on a joint or combined return, the liability of each 
person is limited to the proportion of the tax due on the return 
that equals that person's proportion of the total tax due if the 
husband and wife filed separate returns for the taxable year.  
This provision is effective only when the commissioner receives 
written notice of the marriage dissolution from the husband or 
wife.  No refund may be claimed by an ex-spouse for any taxes 
paid before receipt by the commissioner of the written notice. 
    Subd. 3.  [TRANSFEREES AND FIDUCIARIES.] The amounts of the 
following liabilities are, except as otherwise provided in 
section 289A.38, subdivision 13, assessed, collected, and paid 
in the same manner and subject to the same provisions and 
limitations as a deficiency in a tax imposed by chapter 290, 
including any provisions of law for the collection of taxes: 
    (1) the liability, at law or in equity, of a transferee of 
property of a taxpayer for tax, including interest, additional 
amounts, and additions to the tax provided by law, imposed upon 
the taxpayer by chapter 290; and 
    (2) the liability of a fiduciary under subdivision 4 for 
the payment of tax from the estate of the taxpayer.  The 
liability may reflect the amount of tax shown on the return or 
any deficiency in tax.  
    Subd. 4.  [TAX AS A PERSONAL DEBT OF A FIDUCIARY.] The tax 
imposed by chapter 290, and interest and penalties, is a 
personal debt of the taxpayer from the time the liability 
arises, regardless of when the time for discharging the 
liability by payment occurs.  The debt is, in the case of the 
personal representative of the estate of a decedent and in the 
case of any fiduciary, that of the individual in the 
individual's official or fiduciary capacity only, unless the 
individual has voluntarily distributed the assets held in that 
capacity without reserving sufficient assets to pay the tax, 
interest, and penalties, in which event the individual is 
personally liable for the deficiency.  
    Subd. 5.  [WITHHOLDING TAX, WITHHOLDING FROM PAYMENTS TO 
OUT-OF-STATE CONTRACTORS, AND WITHHOLDING BY PARTNERSHIPS AND 
SMALL BUSINESS CORPORATIONS.] (a) Except as provided in 
paragraph (b), an employer or person withholding tax under 
section 290.92 or 290.923, subdivision 2, who fails to pay to or 
deposit with the commissioner a sum or sums required by those 
sections to be deducted, withheld, and paid, is personally and 
individually liable to the state for the sum or sums, and added 
penalties and interest, and is not liable to another person for 
that payment or payments.  The sum or sums deducted and withheld 
under section 290.92, subdivision 2a or 3, or 290.923, 
subdivision 2, must be held as a special fund in trust for the 
state of Minnesota.  
    (b) If the employer or person withholding tax under section 
290.92 or 290.923, subdivision 2, fails to deduct and withhold 
the tax in violation of those sections, and later the taxes 
against which the tax may be credited are paid, the tax required 
to be deducted and withheld will not be collected from the 
employer.  This does not, however, relieve the employer from 
liability for any penalties and interest otherwise applicable 
for failure to deduct and withhold.  
    (c) Liability for payment of withholding taxes includes a 
responsible person or entity described in the personal liability 
provisions of section 270.101.  
    (d) Liability for payment of withholding taxes includes a 
third party lender or surety described in section 290.92, 
subdivision 22.  
     (e) A partnership or S corporation required to withhold and 
remit tax under section 290.92, subdivisions 4b and 4c, is 
liable for payment of the tax to the commissioner, and a person 
having control of or responsibility for the withholding of the 
tax or the filing of returns due in connection with the tax is 
personally liable for the tax due. 
    (f) A payor of sums required to be withheld under section 
290.9705, subdivision 1, is liable to the state for the amount 
required to be deducted, and is not liable to an out-of-state 
contractor for the amount of the payment. 
    Subd. 6.  [ESTATE TAX.] The personal representative and 
person to whom property that is subject to taxation under this 
chapter is transferred, other than a bona fide purchaser, 
mortgagee, or lessee, is personally liable for that tax, until 
its payment, to the extent of the value of the property at the 
time of the transfer.  The exemption from personal liability 
extends to subsequent transferees from bona fide purchasers, 
mortgagees, and lessees.  
    Subd. 7.  [SALES AND USE TAX.] (a) The sales and use tax 
required to be collected by the retailer under chapter 297A 
constitutes a debt owed by the retailer to Minnesota, and the 
sums collected must be held as a special fund in trust for the 
state of Minnesota. 
     A retailer who does not maintain a place of business within 
this state as defined by section 297A.21, subdivision 1, shall 
not be indebted to Minnesota for amounts of tax that it was 
required to collect but did not collect unless the retailer knew 
or had been advised by the commissioner of its obligation to 
collect the tax.  
    (b) The use tax required to be paid by a purchaser is a 
debt owed by the purchaser to Minnesota. 
    (c) The tax imposed by sections 297A.01 to 297A.44, and 
interest and penalties, is a personal debt of the individual 
required to file a return from the time the liability arises, 
irrespective of when the time for payment of that liability 
occurs.  The debt is, in the case of the executor or 
administrator of the estate of a decedent and in the case of a 
fiduciary, that of the individual in an official or fiduciary 
capacity unless the individual has voluntarily distributed the 
assets held in that capacity without reserving sufficient assets 
to pay the tax, interest, and penalties, in which case the 
individual is personally liable for the deficiency. 
    (d) Liability for payment of sales and use taxes includes 
any responsible person or entity described in the personal 
liability provisions of section 270.101. 
    Sec. 15.  [289A.35] [ASSESSMENTS.] 
    The commissioner shall make determinations, corrections, 
and assessments with respect to state taxes, including interest, 
additions to taxes, and assessable penalties.  The commissioner 
may audit and adjust the taxpayer's computation of federal 
taxable income to make it conform with the provisions of section 
290.01, subdivisions 19 to 19g, or the items of federal tax 
preferences or federal credit amounts to make them conform with 
the provisions of chapter 290.  If a taxpayer fails to file a 
required return, the commissioner, from information in the 
commissioner's possession or obtainable by the commissioner, may 
make a return for the taxpayer.  The return will be prima facie 
correct and valid.  If a return has been filed, the commissioner 
shall examine the return and make any audit or investigation 
that is considered necessary.  The commissioner may use 
statistical or other sampling techniques consistent with 
generally accepted accounting principles in examining returns or 
records and making assessments. 
    Sec. 16.  [289A.36] [EXAMINATIONS; AUDITS AND COLLECTIONS.] 
    Subdivision 1.  [EXAMINATION OF TAXPAYER.] To determine the 
accuracy of a return or report, or in fixing liability under 
state tax law, or for the purpose of collection, the 
commissioner may make reasonable examinations or investigations 
of a taxpayer's place of business, tangible personal property, 
equipment, computer systems and facilities, pertinent books, 
records, papers, vouchers, computer printouts, accounts, and 
documents.  
    Subd. 2.  [ACCESS TO RECORDS OF OTHER PERSONS IN CONNECTION 
WITH EXAMINATION OF TAXPAYER.] When conducting an investigation 
or an audit of a taxpayer, or for the purpose of collection, the 
commissioner may examine, except where privileged by law, the 
relevant records and files of any person, business, institution, 
financial institution, state agency, agency of the United States 
government, or agency of any other state where permitted by 
statute, agreement, or reciprocity.  The commissioner may compel 
production of these records by subpoena.  A subpoena may be 
served directly by the commissioner. 
    Subd. 3.  [POWER TO COMPEL TESTIMONY.] In the 
administration of state tax law, the commissioner may: 
    (1) administer oaths or affirmations and compel by subpoena 
the attendance of witnesses, testimony, and the production of a 
person's pertinent books, records, papers, or other data; 
    (2) examine under oath or affirmation any person regarding 
the business of any taxpayer concerning any relevant matter 
incident to the administration of state tax law.  The fees of 
witnesses required by the commissioner to attend a hearing are 
equal to those allowed to witnesses appearing before courts of 
this state.  The fees must be paid in the manner provided for 
the payment of other expenses incident to the administration of 
state tax law; and 
    (3) in addition to other remedies that may be available, 
bring an action in equity by the state against a taxpayer for an 
injunction ordering the taxpayer to file a complete and proper 
return or amended return.  The district courts of this state 
have jurisdiction over the action and disobedience of an 
injunction issued under this clause will be punished as a 
contempt of district court. 
    Subd. 4.  [THIRD PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 
IS KNOWN.] An investigation may extend to a person that the 
commissioner determines has access to information that may be 
relevant to the examination or investigation.  When a subpoena 
requiring the production of records as described in subdivision 
2 is served on a third-party recordkeeper, written notice of the 
subpoena must be mailed to the taxpayer and to any other person 
who is identified in the subpoena.  The notices must be given 
within three days of the day on which the subpoena is served.  
Notice to the taxpayer required by this section is sufficient if 
it is mailed to the last address on record with the commissioner.
    The provisions of this subdivision relating to notice to 
the taxpayer or other parties identified in the subpoena do not 
apply if there is reasonable cause to believe that the giving of 
notice may lead to attempts to conceal, destroy, or alter 
records relevant to the examination, to prevent the 
communication of information from other persons through 
intimidation, bribery, or collusion, or to flee to avoid 
prosecution, testifying, or production of records. 
    Subd. 5.  [THIRD PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 
IS NOT KNOWN.] A subpoena that does not identify the person or 
persons whose tax liability is being investigated may be served 
only if: 
    (1) the subpoena relates to the investigation of a 
particular person or ascertainable group or class of persons; 
    (2) there is a reasonable basis for believing that the 
person or group or class of persons may fail or may have failed 
to comply with tax laws administered by the commissioner; 
    (3) the information sought to be obtained from the 
examination of the records, and the identity of the person or 
persons with respect to whose liability the subpoena is issued, 
is not readily available from other sources; 
    (4) the subpoena is clear and specific concerning the 
information sought to be obtained; and 
    (5) the information sought to be obtained is limited solely 
to the scope of the investigation.  
    The party served with a subpoena that does not identify the 
person or persons with respect to whose tax liability the 
subpoena is issued may, within 20 days after service of the 
subpoena, petition the district court in the judicial district 
in which that party is located for a determination concerning 
whether the commissioner has complied with the requirements in 
clauses (1) to (5), and thus, whether the subpoena is 
enforceable.  If no petition is made by the party served within 
the time prescribed, the subpoena has the effect of a court 
order. 
    Subd. 6.  [REQUEST BY TAXPAYER FOR SUBPOENA.] When the 
commissioner has the power to issue a subpoena for investigative 
or auditing purposes, the commissioner shall honor a reasonable 
request by the taxpayer to issue a subpoena on the taxpayer's 
behalf, if in connection with the investigation or audit. 
    Subd. 7.  [APPLICATION TO COURT FOR ENFORCEMENT OF 
SUBPOENA.] The commissioner or the taxpayer may apply to the 
district court of the county of the taxpayer's residence, place 
of business, or county where the subpoena can be served as with 
any other case at law, for an order compelling the appearance of 
the subpoenaed witness or the production of the subpoenaed 
records.  If the subpoenaed party fails to comply with the order 
of the court, the party may be punished by the court as for 
contempt.  
    Subd. 8.  [COST OF PRODUCTION OF RECORDS.] The cost of 
producing records of a third party required by a subpoena must 
be paid by the taxpayer, if the taxpayer requests the subpoena 
to be issued, or if the taxpayer has the records available but 
has refused to provide them to the commissioner.  In other cases 
where the taxpayer cannot produce records and the commissioner 
then initiates a subpoena for third-party records, the 
commissioner shall pay the reasonable cost of producing the 
records.  The commissioner may later assess the reasonable costs 
against the taxpayer if the records contribute to the 
determination of an assessment of tax against the taxpayer. 
    Sec. 17.  [289A.37] [ORDER OF ASSESSMENT.] 
    Subdivision 1.  [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 
TAXPAYER.] (a) When a return has been filed and the commissioner 
determines that the tax disclosed by the return is different 
than the tax determined by the examination, the commissioner 
shall send an order of assessment to the taxpayer.  The order 
must explain the basis for the assessment and must explain the 
taxpayer's appeal rights.  An order of assessment is final when 
made but may be reconsidered by the commissioner under section 
289A.65. 
    (b) An amount of unpaid tax shown on the order must be paid 
to the commissioner:  (1) within 60 days after notice of the 
amount and demand for its payment have been mailed to the 
taxpayer by the commissioner; or (2) if an administrative appeal 
is filed under section 289A.65, within 60 days following the 
determination of the appeal. 
    Subd. 2.  [ERRONEOUS REFUNDS.] An erroneous refund is 
considered an underpayment of tax on the date made.  An 
assessment of a deficiency arising out of an erroneous refund 
may be made at any time within two years from the making of the 
refund.  If part of the refund was induced by fraud or 
misrepresentation of a material fact, the assessment may be made 
at any time. 
    Subd. 3.  [ASSESSMENT PRESUMED VALID.] A return or 
assessment of tax made by the commissioner is prima facie 
correct and valid.  The taxpayer has the burden of establishing 
its incorrectness or invalidity in any related action or 
proceeding. 
    Subd. 4.  [AGGREGATE REFUND OR ASSESSMENT.] The 
commissioner, on examining returns of a taxpayer for more than 
one year or period, may issue one order covering the period 
under examination that reflects the aggregate refund or 
additional tax due. 
    Subd. 5.  [SUFFICIENCY OF NOTICE.] An order of assessment, 
sent postage prepaid by United States mail to the taxpayer at 
the taxpayer's last known address, is sufficient even if the 
taxpayer is deceased or is under a legal disability, or, in the 
case of a corporation, has terminated its existence, unless the 
department has been provided with a new address by a party 
authorized to receive notices of assessment. 
    Subd. 6.  [ORDER OF ASSESSMENT IF JOINT INCOME TAX RETURN.] 
If a joint income tax return is filed by a husband and wife, an 
order of assessment may be a single joint notice.  If the 
commissioner has been notified by either spouse that that 
spouse's address has changed and if that spouse requests it, 
then, instead of the single joint notice mailed to the last 
known address of the husband and wife, a duplicate or original 
of the joint notice must be sent to the requesting spouse at the 
address designated by the requesting spouse.  The other joint 
notice must be mailed to the other spouse at that spouse's last 
known address.  An assessment is not invalid for failure to send 
it to a spouse if the spouse actually receives the notice in the 
same period as if it had been mailed to that spouse at the 
correct address or if the spouse has failed to provide an 
address to the commissioner other than the last known address. 
    Sec. 18.  [289A.38] [LIMITATIONS ON TIME FOR ASSESSMENT OF 
TAX.] 
    Subdivision 1.  [GENERAL RULE.] Except as otherwise 
provided in this section, the amount of taxes assessable must be 
assessed within 3-1/2 years after the date the return is filed. 
    Subd. 2.  [FILING DATE.] For purposes of this section, a 
tax return filed before the last day prescribed by law for 
filing is considered to be filed on the last day. 
    Subd. 3.  [ESTATE TAXES.] Estate taxes must be assessed 
within 180 days after the return and the documents required 
under section 289A.10, subdivision 2, have been filed. 
    Subd. 4.  [PROPERTY TAX REFUND.] For purposes of computing 
the limitation under this section, the due date of the property 
tax refund return as provided for in chapter 290A is the due 
date for an income tax return covering the year in which the 
rent was paid or the year preceding the year in which the 
property taxes are payable. 
    Subd. 5.  [FALSE OR FRAUDULENT RETURN; NO 
RETURN.] Notwithstanding the limitations under subdivisions 1 
and 3, the tax may be assessed at any time if a false or 
fraudulent return is filed or when a taxpayer fails to file a 
return. 
    Subd. 6.  [OMISSION IN EXCESS OF 25 PERCENT.] Additional 
taxes may be assessed within 6-1/2 years after the due date of 
the return or the date the return was filed, whichever is later, 
if: 
    (1) the taxpayer omits from gross income an amount properly 
includable in it that is in excess of 25 percent of the amount 
of gross income stated in the return; 
    (2) the taxpayer omits from a sales or withholding tax 
return an amount in excess of 25 percent of the taxes reported 
in the return; or 
    (3) the taxpayer omits from the gross estate assets in 
excess of 25 percent of the gross estate reported in the return. 
    Subd. 7.  [FEDERAL TAX CHANGES.] If the amount of income, 
items of tax preference, deductions, or credits for any year of 
a taxpayer as reported to the Internal Revenue Service is 
changed or corrected by the commissioner of Internal Revenue or 
other officer of the United States or other competent authority, 
or where a renegotiation of a contract or subcontract with the 
United States results in a change in income, items of tax 
preference, deductions, or credits, or, in the case of estate 
tax, where there are adjustments to the taxable estate resulting 
in a change to the credit for state death taxes, the taxpayer 
shall report the change or correction or renegotiation results 
in writing to the commissioner, in the form required by the 
commissioner.  The report must be submitted within 90 days after 
the final determination and must concede the accuracy of the 
determination or state how it is wrong.  A taxpayer filing an 
amended federal tax return must also file a copy of the amended 
return with the commissioner of revenue within 90 days after 
filing the amended return. 
    Subd. 8.  [FAILURE TO REPORT CHANGE OR CORRECTION OF 
FEDERAL RETURN.] If a taxpayer fails to make a report as 
required by subdivision 7, the commissioner may recompute the 
tax, including a refund, based on information available to the 
commissioner.  The tax may be recomputed within six years after 
the report should have been filed, notwithstanding any period of 
limitations to the contrary. 
    Subd. 9.  [REPORT MADE OF CHANGE OR CORRECTION OF FEDERAL 
RETURN.] If a taxpayer is required to make a report under 
subdivision 7, and does report the change or files a copy of the 
amended return, the commissioner may recompute and reassess the 
tax due, including a refund (1) within one year after the report 
or amended return is filed with the commissioner, 
notwithstanding any period of limitations to the contrary, or 
(2) within any other applicable period stated in this section, 
whichever period is longer.  The period provided for the 
carryback of any amount of loss or credit is also extended as 
provided in this subdivision, notwithstanding any law to the 
contrary.  
    Subd. 10.  [INCORRECT DETERMINATION OF FEDERAL ADJUSTED 
GROSS INCOME.] Notwithstanding any other provision of this 
chapter, if a taxpayer whose gross income is determined under 
section 290.01, subdivisions 20 and 20e, omits from income an 
amount that will under the Internal Revenue Code of 1986, as 
amended through December 31, 1989, extend the statute of 
limitations for the assessment of federal income taxes, or 
otherwise incorrectly determines the taxpayer's federal adjusted 
gross income resulting in adjustments by the Internal Revenue 
Service, then the period of assessment and determination of tax 
will be that under the Internal Revenue Code of 1986, as amended 
through December 31, 1989.  When a change is made to federal 
income during the extended time provided under this subdivision, 
the provisions under subdivisions 7 to 9 regarding additional 
extensions apply. 
    Subd. 11.  [NET OPERATING LOSS CARRYBACK.] If a deficiency 
of tax is attributable to a net operating loss carryback that 
has been disallowed in whole or in part, the deficiency may be 
assessed at any time that a deficiency for the taxable year of 
the loss may be assessed. 
    Subd. 12.  [REQUEST FOR EARLY AUDIT FOR INDIVIDUAL INCOME, 
FIDUCIARY INCOME, AND CORPORATE FRANCHISE TAXES.] (a) Tax must 
be assessed within 18 months after written request for an 
assessment has been made in the case of income received (1) 
during the lifetime of a decedent, (2) by the decedent's estate 
during the period of administration, (3) by a trustee of a 
terminating trust or other fiduciary who, because of custody of 
assets, would be liable for the payment of tax under section 
289A.31, subdivision 4, or (4) by a corporation.  A proceeding 
in court for the collection of the tax must begin within two 
years after written request for the assessment (filed after the 
return is made and in the form the commissioner prescribes) by 
the personal representative or other fiduciary representing the 
estate of the decedent, or by the trustee of a terminating trust 
or other fiduciary who, because of custody of assets, would be 
liable for the payment of tax under section 289A.31, subdivision 
4, or by the corporation.  Except as provided in section 
289A.42, subdivision 1, an assessment must not be made after the 
expiration of 3-1/2 years after the return was filed, and an 
action must not be brought after the expiration of four years 
after the return was filed. 
    (b) Paragraph (a) only applies in the case of a corporation 
if: 
    (1) the written request notifies the commissioner that the 
corporation contemplates dissolution at or before the expiration 
of the 18-month period; 
    (2) the dissolution is begun in good faith before the 
expiration of the 18-month period; and 
    (3) the dissolution is completed within the 18-month period.
    Subd. 13.  [TIME LIMIT FOR ASSESSMENT AND COLLECTION FOR 
TRANSFEREE OR FIDUCIARY.] The period of limitation for 
assessment and collection of any liability of a transferee or 
fiduciary is as follows:  
    (1) In the case of the liability of an initial transferee 
of the property of the taxpayer, the tax may be assessed within 
one year after the expiration of the period of limitation of 
assessment against the taxpayer.  The tax may be collected by 
action brought within one year after the expiration of the 
period of limitation for the starting of an action against the 
taxpayer.  
    (2) In the case of the liability of the transferee of a 
transferee of the property of the taxpayer, the tax may be 
assessed within one year after the expiration of the period of 
limitation for assessment against the preceding transferee, but 
only if within 3-1/2 years after the expiration of the period of 
limitation for assessment against the taxpayer.  The tax may be 
collected by action brought within one year after the expiration 
of the period of limitation for the starting of an action 
against the preceding transferee, but only if within four years 
after the expiration of the period of limitation for bringing an 
action against the taxpayer; except that if before the 
expiration of the period of limitation for the assessment of the 
liability of the transferee a court proceeding for the 
collection of the tax or liability has been begun against the 
taxpayer or last preceding transferee, liability of the 
transferee expires one year after the return of execution in the 
court proceeding and the period of limitation for collection by 
action will expire one year after the liability is assessed.  
    (3) In the case of the liability of a fiduciary, the tax 
may be assessed up to one year after the liability arises or not 
later than the expiration of the period for collection of the 
tax for which the liability arises, whichever is later, and may 
be collected by action brought within one year after assessment. 
    (4) For the purposes of this subdivision, if the taxpayer 
is deceased, or in the case of a corporation, has ended its 
existence, the period of limitation for assessment against the 
taxpayer will be the period that would be in effect had death or 
termination of existence not occurred. 
    As used in this subdivision, the term "transferee" includes 
heir, legatee, devisee, and distributee.  
    Subd. 14.  [FAILURE TO TIMELY FILE WITHHOLDING 
RECONCILIATION.] If an employer fails to timely file the 
reconciliation required by section 289A.09, subdivision 2, 
paragraph (d), withholding taxes may be assessed within the 
period prescribed in subdivision 1, or within one year from the 
date the reconciliation is filed with the commissioner, 
whichever is later. 
    Sec. 19.  [289A.39] [LIMITATIONS; ARMED SERVICES.] 
    Subdivision 1.  [EXTENSIONS FOR SERVICE MEMBERS.] The 
limitations of time provided by this chapter and chapter 290 
relating to income taxes and chapter 271 relating to the tax 
court for filing returns, paying taxes, claiming refunds, 
commencing action thereon, appealing to the tax court from 
orders relating to income taxes, and appealing to the Supreme 
Court from decisions of the tax court relating to income taxes 
are extended, with respect to an individual, for the period 
during which the individual serves in the armed forces of the 
United States, or serves in support of the armed forces and as 
provided in section 7508 of the Internal Revenue Code of 1986, 
as amended through December 31, 1989, or serves in an area 
designated by the president as a combat zone or is hospitalized 
outside the United States as a result of injury received while 
serving in the combat during that time and for a further period 
of six months.  
    Subd. 2.  [INTEREST AND PENALTIES.] Interest on income tax 
must not be assessed or collected from an individual, and 
interest must not be paid upon an income tax refund to any 
individual, with respect to whom, and for the period during 
which, the limitations or time are extended as provided in 
subdivision 1.  A penalty will not be assessed or collected from 
an individual for failure during that period to perform an act 
required by the laws described in subdivision 1. 
    Subd. 3.  [ASSESSMENTS; ACTIONS.] The time limitations 
provided for the assessment of a tax, penalty, or interest, are 
extended, with respect to those individuals and for the period 
provided in subdivision 1 and for a further period of six 
months; and the time limitations for the commencement of action 
to collect a tax, penalty, or interest from those individuals 
are extended for a period ending six months after the expiration 
of the time for assessment as provided in this section.  
    Subd. 4.  [APPLICABILITY.] Nothing in this section reduces 
the time within which an act is required or permitted under this 
chapter. 
    Subd. 5.  [EXTENSION LIMITATIONS.] This section does not 
extend the time for performing any of the acts set forth in this 
chapter beyond the expiration of three months after the 
appointment of a personal representative or guardian, in this 
state, for any individual described in this section, except as 
provided in subdivision 6. 
    Subd. 6.  [DEATH WHILE SERVING IN ARMED FORCES.] If an 
individual dies while in active service as a member of the 
military or naval forces of the United States or of any of the 
United Nations, an income tax imposed under chapter 290 will not 
be imposed for the taxable year in which the individual dies.  
Income tax imposed for a prior taxable year that is unpaid at 
the date of death (including additions to the tax, penalties) 
must not be assessed, and if assessed, the assessment must be 
abated.  In addition, upon the filing of a claim for refund 
within seven years from the date the return was filed, the tax 
paid or collected with respect to any taxable year beginning 
after December 31, 1949, during which the decedent was in active 
service must be refunded.  
    Subd. 7.  [DEATH OF CIVILIAN WHILE OUTSIDE UNITED STATES.] 
If an individual dies while a civilian employee of the United 
States as a result of wounds or injuries incurred while the 
individual was a civilian employee of the United States, and 
which were incurred outside the United States in a terroristic 
or military action, a tax imposed by chapter 290 does not apply 
with respect to the taxable year in which the death falls and 
with respect to any prior taxable years in the period beginning 
with the last taxable year ending before the taxable year in 
which the wounds or injury were incurred.  Terroristic or 
military action has the meaning given it in section 692(c)(2) of 
the Internal Revenue Code of 1986, as amended through December 
31, 1989. 
    Sec. 20.  [289A.40] [LIMITATIONS ON CLAIMS FOR REFUND.] 
    Subdivision 1.  [TIME LIMIT; GENERALLY.] Unless otherwise 
provided in this chapter, a claim for a refund of an overpayment 
of state tax must be filed within 3-1/2 years from the date 
prescribed for filing the return, plus any extension of time 
granted for filing the return, but only if filed within the 
extended time, or two years from the time the tax is paid in 
full, whichever period expires later. 
    Subd. 2.  [BAD DEBT LOSS.] If a claim relates to an 
overpayment because of a failure to deduct a loss due to a bad 
debt or to a security becoming worthless, the claim is 
considered timely if filed within seven years from the date 
prescribed for the filing of the return.  The refund or credit 
is limited to the amount of overpayment attributable to the loss.
    Subd. 3.  [NET OPERATING LOSS; INDIVIDUALS.] A refund or 
credit must be allowed for a net operating loss carryback to any 
taxable year authorized by section 290.095, or section 172 of 
the Internal Revenue Code of 1986, as amended through December 
31, 1989, but the refund or credit is limited to the amount of 
overpayment arising from the carryback.  
    Sec. 21.  [289A.41] [BANKRUPTCY; SUSPENSION OF TIME.] 
    The running of the period during which a tax must be 
assessed or collection proceedings commenced is suspended during 
the period from the date of a filing of a petition in bankruptcy 
until 30 days after either notice to the commissioner of revenue 
that the bankruptcy proceedings have been closed or dismissed, 
or the automatic stay has been terminated or has expired, 
whichever occurs first. 
    The suspension of the statute of limitations under this 
section applies to the person the petition in bankruptcy is 
filed against and other persons who may also be wholly or 
partially liable for the tax.  
    Sec. 22.  [289A.42] [CONSENT TO EXTEND STATUTE.] 
    Subdivision 1.  [EXTENSION AGREEMENT.] If before the 
expiration of time prescribed in sections 289A.38 and 289A.40 
for the assessment of tax or the filing of a claim for refund, 
both the commissioner and the taxpayer have consented in writing 
to the assessment or filing of a claim for refund after that 
time, the tax may be assessed or the claim for refund filed at 
any time before the expiration of the agreed upon period.  The 
period may be extended by later agreements in writing before the 
expiration of the period previously agreed upon. 
    Subd. 2.  [FEDERAL EXTENSIONS.] A taxpayer who consents to 
an extension of time for the assessment of federal income taxes 
must notify the commissioner within 90 days of the execution of 
the consent.  The period in which the commissioner may recompute 
the tax is also extended, notwithstanding any period of 
limitations to the contrary, as follows:  
    (1) for the periods provided in section 289A.38, 
subdivisions 8 and 9; 
    (2) for six months following the expiration of the extended 
federal period of limitations when no change is made by the 
federal authority. 
    Sec. 23.  [289A.50] [CLAIMS FOR REFUNDS.] 
    Subdivision 1.  [GENERAL RIGHT TO REFUND.] (a) Subject to 
the requirements of this section and section 289A.40, a taxpayer 
who has paid a tax in excess of the taxes lawfully due and who 
files a written claim for refund will be refunded or credited 
the overpayment of the tax determined by the commissioner to be 
erroneously paid.  
    (b) The claim must specify the name of the taxpayer, the 
date when and the period for which the tax was paid, the kind of 
tax paid, the amount of the tax that the taxpayer claims was 
erroneously paid, the grounds on which a refund is claimed, and 
other information relative to the payment and in the form 
required by the commissioner.  An income tax, estate tax, or 
corporate franchise tax return, or amended return claiming an 
overpayment constitutes a claim for refund.  
    (c) When, in the course of an examination, and within the 
time for requesting a refund, the commissioner determines that 
there has been an overpayment of tax, the commissioner shall 
refund or credit the overpayment to the taxpayer and no demand 
is necessary.  If the overpayment exceeds $1, the amount of the 
overpayment must be refunded to the taxpayer.  If the amount of 
the overpayment is less than $1, the commissioner is not 
required to refund.  In these situations, the commissioner does 
not have to make written findings or serve notice by mail to the 
taxpayer. 
    (d) If the amount allowable as a credit for withholding or 
estimated taxes exceeds the tax against which the credit is 
allowable, the amount of the excess is considered an overpayment.
     (e) If the entertainment tax withheld at the source exceeds 
by $1 or more the taxes, penalties, and interest reported in the 
return of the entertainment entity or imposed by section 
290.9201, the excess must be refunded to the entertainment 
entity.  If the excess is less than $1, the commissioner need 
not refund that amount. 
     (f) If the surety deposit required for a construction 
contract exceeds the liability of the out-of-state contractor, 
the commissioner shall refund the difference to the contractor. 
    (g) An action of the commissioner in refunding the amount 
of the overpayment does not constitute a determination of the 
correctness of the return of the taxpayer.  
    (h) There is appropriated from the general fund to the 
commissioner of revenue the amount necessary to pay refunds 
allowed under this section. 
    Subd. 2.  [REFUND OF SALES TAX TO VENDORS; LIMITATION.] If 
a vendor has collected from a purchaser and remitted to the 
state a tax on a transaction that is not subject to the tax 
imposed by chapter 297A, the tax is refundable to the vendor 
only if and to the extent that it is credited to amounts due to 
the vendor by the purchaser or returned to the purchaser by the 
vendor. 
    Subd. 3.  [WITHHOLDING TAX AND ENTERTAINER WITHHOLDING TAX 
REFUNDS.] When there is an overpayment of withholding tax by an 
employer or a person making royalty payments, or an overpayment 
of entertainer withholding tax by the payor, a refund allowable 
under this section is limited to the amount of the overpayment 
that was not deducted and withheld from employee wages or from 
the royalty payments, or from the compensation of an entertainer.
    Subd. 4.  [NOTICE OF REFUND.] The commissioner shall 
determine the amount of refund, if any, that is due, and notify 
the taxpayer of the determination as soon as practicable after a 
claim has been filed.  
    Subd. 5.  [WITHHOLDING OF REFUNDS FROM CHILD SUPPORT 
DEBTORS.] (a) If a court of this state finds that a person 
obligated to pay child support is delinquent in making payments, 
the amount of child support unpaid and owing, including attorney 
fees and costs incurred in ascertaining or collecting child 
support, must be withheld from a refund due the person under 
chapter 290.  The public agency responsible for child support 
enforcement or the parent or guardian of a child for whom the 
support, attorney fees, and costs are owed may petition the 
district or county court for an order providing for the 
withholding of the amount of child support, attorney fees, and 
costs unpaid and owing as determined by court order.  The person 
from whom the refund may be withheld must be notified of the 
petition under the rules of civil procedure before the issuance 
of an order under this subdivision.  The order may be granted on 
a showing to the court that required support payments, attorney 
fees, and costs have not been paid when they were due. 
    (b) On order of the court and on payment of $3 to the 
commissioner, the commissioner shall withhold the money from the 
refund due to the person obligated to pay the child support.  
The amount withheld shall be remitted to the public agency 
responsible for child support enforcement or to the parent or 
guardian petitioning on behalf of the child, after any 
delinquent tax obligations of the taxpayer owed to the revenue 
department have been satisfied.  An amount received by the 
responsible public agency or the petitioning parent or guardian 
in excess of the amount of public assistance spent for the 
benefit of the child to be supported, or the amount of any 
support, attorney fees, and costs that had been the subject of 
the claim under this subdivision that has been paid by the 
taxpayer before the diversion of the refund, must be paid to the 
person entitled to the money.  If the refund is based on a joint 
return, the part of the refund that must be paid to the 
petitioner is the proportion of the total refund that equals the 
proportion of the total federal adjusted gross income of the 
spouses that is the federal adjusted gross income of the spouse 
who is delinquent in making the child support payments. 
    (c) A petition filed under this subdivision remains in 
effect with respect to any refunds due under this section until 
the support money, attorney fees, and costs have been paid in 
full or the court orders the commissioner to discontinue 
withholding the money from the refund due the person obligated 
to pay the support, attorney fees, and costs.  If a petition is 
filed under this subdivision and a claim is made under chapter 
270A with respect to the individual's refund and notices of both 
are received before the time when payment of the refund is made 
on either claim, the claim relating to the liability that 
accrued first in time must be paid first.  The amount of the 
refund remaining must then be applied to the other claim.  
    Subd. 6.  [OFFSETTING OF INCOME TAX 
REFUNDS.] Notwithstanding any other law to the contrary, in the 
case of an overpayment, the commissioner, within the applicable 
period of limitations, may credit the amount of the overpayment 
against a liability with respect to Minnesota income tax on the 
part of the person who made the overpayment or against a 
liability with respect to Minnesota income tax on the part of 
either spouse who filed a joint return for the taxable year in 
which the overpayment was made and must refund a balance of more 
than $1 to the person if the taxpayer so requests. 
    Subd. 7.  [REMEDIES.] (a) If the taxpayer is notified by 
the commissioner that the refund claim is denied in whole or in 
part, the taxpayer may: 
    (1) file an administrative appeal as provided in section 
289A.65, or an appeal with the tax court, within 60 days after 
issuance of the commissioner's notice of denial; or 
    (2) file an action in the district court to recover the 
refund. 
    (b) An action in the district court on a denied claim for 
refund must be brought within 18 months of the date of the 
denial of the claim by the commissioner. 
    (c) No action in the district court or the tax court shall 
be brought within six months of the filing of the refund claim 
unless the commissioner denies the claim within that period. 
    (d) If a taxpayer files a claim for refund and the 
commissioner has not issued a denial of the claim, the taxpayer 
may bring an action in the district court or the tax court at 
any time after the expiration of six months of the time the 
claim was filed, but within four years of the date that the 
claim was filed. 
    (e) The commissioner and the taxpayer may agree to extend 
the period for bringing an action in the district court. 
    (f) An action for refund of tax by the taxpayer must be 
brought in the district court of the district in which lies the 
county of the taxpayer's residence or principal place of 
business.  In the case of an estate or trust, the action must be 
brought at the principal place of its administration.  Any 
action may be brought in the district court for Ramsey county. 
    Subd. 8.  [MISTAKE DISCOVERED BY COMMISSIONER.] If money 
has been erroneously collected from a taxpayer or other person, 
the commissioner shall, within the period named in section 
289A.40 for filing a claim for refund, and, subject to the 
provisions of section 270.07, subdivision 5, chapter 270A, and 
this section, grant a refund to that taxpayer or other person. 
    Sec. 24.  [289A.55] [INTEREST PAYABLE TO COMMISSIONER.] 
    Subdivision 1.  [INTEREST RATE.] When interest is required 
under this section, interest is computed at the rate specified 
in section 270.75.  
    Subd. 2.  [LATE PAYMENT.] If a tax is not paid within the 
time named by law for payment, the unpaid tax bears interest 
from the date the tax should have been paid until the date the 
tax is paid.  
    Subd. 3.  [EXTENSIONS.] When an extension of time for 
payment has been granted, interest must be paid from the date 
the payment should have been made, if no extension had been 
granted, until the date the tax is paid. 
    Subd. 4.  [ADDITIONAL ASSESSMENTS.] When a taxpayer is 
liable for additional taxes because of a redetermination by the 
commissioner, or for any other reason, the additional taxes bear 
interest from the time the tax should have been paid, without 
regard to an extension allowed, until the date the tax is paid. 
    Subd. 5.  [EXCESSIVE CLAIMS FOR REFUNDS UNDER CHAPTER 
290A.] When it is determined that a claim for a property tax 
refund was excessive, the amount that the taxpayer must repay 
bears interest from the date the claim was paid until the date 
of repayment. 
    Subd. 6.  [ERRONEOUS REFUNDS.] In the case of an erroneous 
refund, interest begins to accrue from the date the refund was 
paid unless the erroneous refund results from a mistake of the 
department, in which case no interest or penalty will be 
imposed, unless the deficiency assessment is not satisfied 
within 60 days of the order. 
    Subd. 7.  [INSTALLMENT PAYMENTS; ESTATE TAX.] Interest must 
be paid on unpaid installment payments of the tax authorized 
under section 289A.30, subdivision 2, beginning on the date the 
tax was due without regard to extensions allowed or extensions 
elected, at the rate of interest in effect under section 270.75, 
nine months following the date of death. 
    Subd. 8.  [INTEREST ON JUDGMENTS.] Notwithstanding section 
549.09, if judgment is entered in favor of the commissioner with 
regard to any tax, the judgment bears interest at the rate given 
in section 270.75 from the date the judgment is entered until 
the date of payment. 
    Subd. 9.  [INTEREST ON PENALTIES.] (a) A penalty imposed 
under section 289A.60, subdivision 1, 2, 3, 4, 5, or 6, bears 
interest from the date the return or payment was required to be 
filed or paid, including any extensions, to the date of payment 
of the penalty. 
    (b) A penalty not included in paragraph (a) bears interest 
only if it is not paid within ten days from the date of notice.  
In that case interest is imposed from the date of notice to the 
date of payment. 
    Sec. 25.  [289A.56] [INTEREST ON OVERPAYMENTS.] 
    Subdivision 1.  [INTEREST RATE.] When interest is due on an 
overpayment under this section, it must be computed at the rate 
specified in section 270.76. 
    Subd. 2.  [CORPORATE FRANCHISE, INDIVIDUAL AND FIDUCIARY 
INCOME, AND ENTERTAINER TAX OVERPAYMENTS.] Interest must be paid 
on an overpayment refunded or credited to the taxpayer from the 
date of payment of the tax until the date the refund is paid or 
credited.  For purposes of this subdivision, the prepayment of 
tax made by withholding of tax at the source or payment of 
estimated tax before the due date is considered paid on the last 
day prescribed by law for the payment of the tax by the 
taxpayer.  A return filed before the due date is considered as 
filed on the due date. 
    When the amount of tax withheld at the source or paid as 
estimated tax or allowable as other refundable credits, or 
withheld from compensation of entertainers, exceeds the tax 
shown on the original return by $10, the amount refunded bears 
interest from 90 days after (1) the due date of the return of 
the taxpayer, or (2) the date on which the original return is 
filed, whichever is later, until the date the refund is paid to 
the taxpayer.  Where the amount to be refunded is less than $10, 
no interest is paid.  However, to the extent that the basis for 
the refund is a net operating loss carryback, interest is 
computed only from the end of the taxable year in which the loss 
occurs. 
    Subd. 3.  [WITHHOLDING TAX, ENTERTAINER WITHHOLDING TAX, 
WITHHOLDING FROM PAYMENTS TO OUT-OF-STATE CONTRACTORS, ESTATE 
TAX, AND SALES TAX OVERPAYMENTS.] When a refund is due for 
overpayments of withholding tax, entertainer withholding tax, 
withholding from payments to out-of-state contractors, estate 
tax, or sales tax, interest is computed from the date of payment 
to the date the refund is paid or credited.  For purposes of 
this subdivision, the date of payment is the later of the date 
the tax was finally due or was paid. 
    Subd. 4.  [CAPITAL EQUIPMENT REFUNDS.] Notwithstanding 
subdivision 3, for refunds payable under section 297A.15, 
subdivision 5, interest is computed from the date the refund 
claim is filed with the commissioner. 
    Subd. 5.  [SALES OR MOTOR VEHICLE EXCISE TAX; RETAILERS.] 
In the case of a refund allowed under section 297A.211, 
subdivision 3, interest is allowed only from the date on which 
the person has both registered as a retailer and filed a claim 
for refund. 
    Subd. 6.  [PROPERTY TAX REFUNDS UNDER CHAPTER 290A.] (a) 
When a renter is owed a property tax refund, an unpaid refund 
bears interest after August 14, or 60 days after the refund 
claim was made, whichever is later, until the date the refund is 
paid. 
    (b) When any other claimant is owed a property tax refund, 
the unpaid refund bears interest after September 29, or 60 days 
after the refund claim was made, whichever is later, until the 
date the refund is paid. 
    Sec. 26.  [289A.60] [CIVIL PENALTIES.] 
    Subdivision 1.  [PENALTY FOR FAILURE TO PAY TAX.] If a tax 
is not paid or amounts required to be withheld are not remitted 
within the time specified for payment, a penalty must be added 
to the amount required to be shown as tax.  The penalty is three 
percent of the tax not paid on or before the date specified for 
payment of the tax 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 of 
30 days during which the failure continues, not exceeding 24 
percent in the aggregate. 
    Subd. 2.  [PENALTY FOR FAILURE TO MAKE AND FILE RETURN.] If 
a taxpayer fails to make and file a return within the time 
prescribed or an extension, a penalty is added to the tax.  The 
penalty is three percent of the amount of tax not paid on or 
before the date prescribed for payment of the tax including any 
extensions if the failure is for not more than 30 days, with an 
additional five percent of the amount of tax remaining unpaid 
during each additional 30 days or fraction of 30 days, during 
which the failure continues, not exceeding 23 percent in the 
aggregate. 
    If a taxpayer fails to file a return, other than an income 
tax return of an individual, within 60 days of the date 
prescribed for filing of the return (determined with regard to 
any extension of time for filing), the addition to tax under 
this subdivision must not be less than the lesser of:  (1) $200; 
or (2) the greater of (a) 25 percent of the amount required to 
be shown as tax on the return without reduction for any payments 
made or refundable credits allowable against the tax, or (b) $50.
    Subd. 3.  [COMBINED PENALTIES.] When penalties are imposed 
under subdivisions 1 and 2, except for the minimum penalty under 
subdivision 2, the penalties imposed under both subdivisions 
combined must not exceed 38 percent. 
    Subd. 4.  [SUBSTANTIAL UNDERSTATEMENT OF LIABILITY; 
PENALTY.] The commissioner of revenue shall impose a penalty for 
substantial understatement of any tax payable to the 
commissioner, except a tax imposed under chapter 297A. 
    There must be added to the tax an amount equal to 20 
percent of the amount of any underpayment attributable to the 
understatement.  There is a substantial understatement of tax 
for the period if the amount of the understatement for the 
period exceeds the greater of:  (1) ten percent of the tax 
required to be shown on the return for the period; or (2)(a) 
$10,000 in the case of a corporation other than an S corporation 
as defined in section 290.9725 when the tax is imposed by 
chapter 290, or (b) $5,000 in the case of any other taxpayer, 
and in the case of a corporation any tax not imposed by chapter 
290.  The term "understatement" means the excess of the amount 
of the tax required to be shown on the return for the period, 
over the amount of the tax imposed that is shown on the return.  
The amount of the understatement shall be reduced by that part 
of the understatement that is attributable to the tax treatment 
of any item by the taxpayer if there is or was substantial 
authority for the treatment, or any item with respect to which 
the relevant facts affecting the item's tax treatment are 
adequately disclosed in the return or in a statement attached to 
the return.  The special rules in cases involving tax shelters 
provided in section 6662(d)(2)(C) of the Internal Revenue Code 
of 1986, as amended through December 31, 1989, shall apply and 
shall apply to a tax shelter the principal purpose of which is 
the avoidance or evasion of state taxes.  The commissioner may 
abate all or any part of the addition to the tax provided by 
this section on a showing by the taxpayer that there was 
reasonable cause for the understatement, or part of it, and that 
the taxpayer acted in good faith.  The additional tax and 
penalty shall bear interest at the rate specified in section 
270.75 from the time the tax should have been paid until paid. 
    Subd. 5.  [PENALTY FOR INTENTIONAL DISREGARD OF LAW OR 
RULES.] If part of an additional assessment is due to negligence 
or intentional disregard of the provisions of the applicable tax 
laws or rules of the commissioner, but without intent to 
defraud, there must be added to the tax an amount equal to ten 
percent of the additional assessment.  
    Subd. 6.  [PENALTY FOR FALSE OR FRAUDULENT RETURN, 
EVASION.] If a person files a false or fraudulent return, or 
attempts in any manner to evade or defeat a tax or payment of 
tax, there is imposed on the person a penalty equal to 50 
percent of the tax, less amounts paid by the person on the basis 
of the false or fraudulent return, due for the period to which 
the return related.  
    Subd. 7.  [PENALTY FOR FRIVOLOUS RETURN.] If an individual 
files what purports to be a tax return required by chapter 290 
but which does not contain information on which the substantial 
correctness of the assessment may be judged or contains 
information that on its face shows that the assessment is 
substantially incorrect and the conduct is due to a position 
that is frivolous or a desire that appears on the purported 
return to delay or impede the administration of Minnesota tax 
laws, then the individual shall pay a penalty of $500.  In a 
proceeding involving the issue of whether or not a person is 
liable for this penalty, the burden of proof is on the 
commissioner.  
    Subd. 8.  [PENALTY FOR FAILURE TO FILE INFORMATIONAL 
RETURN.] In the case of a failure to file an informational 
return required by section 289A.12 with the commissioner on the 
date prescribed (determined with regard to any extension of time 
for filing), the person failing to file the return shall pay a 
penalty of $50 for each failure or in the case of a partnership, 
S corporation, or fiduciary return, $50 for each partner, 
shareholder, or beneficiary; but the total amount imposed on the 
delinquent person for all failures during any calendar year must 
not exceed $25,000.  If a failure to file a return is due to 
intentional disregard of the filing requirement, then the 
penalty imposed under the preceding sentence must not be less 
than an amount equal to:  
    (1) in the case of a return not described in clause (2) or 
(3), ten percent of the aggregate amount of the items required 
to be reported; 
    (2) in the case of a return required to be filed under 
section 289A.12, subdivision 5, five percent of the gross 
proceeds required to be reported; and 
    (3) in the case of a return required to be filed under 
section 289A.12, subdivision 9, relating to direct sales, $100 
for each failure; however, the total amount imposed on the 
delinquent person for intentional failures during a calendar 
year must not exceed $50,000.  The penalty must be collected in 
the same manner as a delinquent income tax.  
    Subd. 9.  [PENALTIES FOR FAILURE TO GIVE ANNUAL REPORT 
INFORMATION BY EXEMPT INDIVIDUALS, CORPORATIONS.] In the case of 
a failure to give annual report information as prescribed by 
section 290.05, subdivision 4, the exempt individual or 
corporation shall pay the commissioner a penalty of $100 for 
each failure.  
    Subd. 10.  [PENALTY FOR FAILURE TO PROVIDE SOCIAL SECURITY 
NUMBER AS REQUIRED.] A person who is required by law to:  (1) 
give the person's social security account number to another 
person; or (2) include in a return, statement, or other document 
made with respect to another person that individual's social 
security account number, who fails to comply with the 
requirement when prescribed, must pay a penalty of $50 for each 
failure.  The total amount imposed on a person for failures 
during a calendar year must not exceed $25,000.  
    Subd. 11.  [PENALTIES RELATING TO INFORMATION REPORTS, 
WITHHOLDING.] (a) When a person required under section 289A.409 
subdivision 2, to give a statement to an employee or payee and a 
duplicate statement to the commissioner, or to give a 
reconciliation of the statements and quarterly returns to the 
commissioner, gives a false or fraudulent statement to an 
employee or payee or a false or fraudulent duplicate statement 
or reconciliation of statements and quarterly returns to the 
commissioner, or fails to give a statement or the reconciliation 
in the manner, when due, and showing the information required by 
section 289A.09, subdivision 2, or rules prescribed by the 
commissioner under that section, that person is liable for a 
penalty of $50 for an act or failure to act.  The total amount 
imposed on the delinquent person for failures during a calendar 
year must not exceed $25,000.  
    (b) In addition to any other penalty provided by law, an 
employee who gives a withholding exemption certificate or a 
residency affidavit to an employer that the employee has reason 
to know contains a materially incorrect statement is liable to 
the commissioner of revenue for a penalty of $500 for each 
instance.  
    (c) In addition to any other penalty provided by law, an 
employer who fails to submit a copy of a withholding exemption 
certificate or a residency affidavit required by section 290.92, 
subdivision 5a, clause (1)(a), (1)(b), or (2) is liable to the 
commissioner of revenue for a penalty of $50 for each instance.  
    (d) An employer or payor who fails to file an application 
for a withholding account number, as required by section 290.92, 
subdivision 24, is liable to the commissioner for a penalty of 
$100.  
    Subd. 12.  [PENALTIES RELATING TO PROPERTY TAX REFUNDS.] 
(a) If the commissioner determines that a property tax refund 
claim is or was excessive and was filed with fraudulent intent, 
the claim must be disallowed in full.  If the claim has been 
paid, the amount disallowed may be recovered by assessment and 
collection. 
    (b) If it is determined that a property tax refund claim is 
excessive and was negligently prepared, ten percent of the 
corrected claim must be disallowed.  If the claim has been paid, 
the amount disallowed must be recovered by assessment and 
collection.  
    (c) An owner or managing agent who knowingly fails to give 
a certificate of rent constituting property tax to a renter, as 
required by section 290A.19, paragraph (a), is liable to the 
commissioner for a penalty of $100 for each failure. 
    (d) If the owner or managing agent knowingly gives rent 
certificates that report total rent constituting property taxes 
in excess of the amount of actual property taxes paid on the 
rented part of a property, the owner or managing agent is liable 
for a penalty equal to the greater of (1) $100 or (2) 50 percent 
of the excess that is reported. 
    (e) A claim filed after the original or extended due date 
will be reduced by five percent of the amount otherwise 
allowable, plus an additional five percent for each month of 
delinquency, not exceeding a total reduction of 25 percent, 
which may be canceled or reduced by the commissioner if the 
delinquency is due to reasonable cause.  In any event, no claim 
is allowed if the initial claim is filed more than one year 
after the original due date for filing the claim.  
    Subd. 13.  [PENALTIES FOR TAX RETURN PREPARERS.] (a) If an 
understatement of liability with respect to a return or claim 
for refund is due to a willful attempt in any manner to 
understate the liability for a tax by a person who is a tax 
return preparer with respect to the return or claim, the person 
shall pay to the commissioner a penalty of $500.  If a part of a 
property tax refund claim is excessive due to a willful attempt 
in any manner to overstate the claim for relief allowed under 
chapter 290A by a person who is a tax refund or return preparer, 
the person shall pay to the commissioner a penalty of $500 with 
respect to the claim.  These penalties may not be assessed 
against the employer of a tax return preparer unless the 
employer was actively involved in the willful attempt to 
understate the liability for a tax or to overstate the claim for 
refund.  These penalties are income tax liabilities and may be 
assessed at any time as provided in section 289A.38, subdivision 
5. 
    (b) A civil action in the name of the state of Minnesota 
may be commenced to enjoin any person who is a tax return 
preparer doing business in this state from further engaging in 
any conduct described in paragraph (c).  An action under this 
paragraph must be brought by the attorney general in the 
district court for the judicial district of the tax return 
preparer's residence or principal place of business, or in which 
the taxpayer with respect to whose tax return the action is 
brought resides.  The court may exercise its jurisdiction over 
the action separate and apart from any other action brought by 
the state of Minnesota against the tax return preparer or any 
taxpayer. 
    (c) In an action under paragraph (b), if the court finds 
that a tax return preparer has: 
    (1) engaged in any conduct subject to a civil penalty under 
section 289A.60 or a criminal penalty under section 289A.63; 
    (2) misrepresented the preparer's eligibility to practice 
before the department of revenue, or otherwise misrepresented 
the preparer's experience or education as a tax return preparer; 
    (3) guaranteed the payment of any tax refund or the 
allowance of any tax credit; or 
    (4) engaged in any other fraudulent or deceptive conduct 
that substantially interferes with the proper administration of 
state tax law, and injunctive relief is appropriate to prevent 
the recurrence of that conduct, 
the court may enjoin the person from further engaging in that 
conduct. 
    (d) If the court finds that a tax return preparer has 
continually or repeatedly engaged in conduct described in 
paragraph (c), and that an injunction prohibiting that conduct 
would not be sufficient to prevent the person's interference 
with the proper administration of state tax laws, the court may 
enjoin the person from acting as a tax return preparer.  The 
court may not enjoin the employer of a tax return preparer for 
conduct described in paragraph (c) engaged in by one or more of 
the employer's employees unless the employer was also actively 
involved in that conduct. 
    (e) For purposes of this subdivision, the term 
"understatement of liability" means an understatement of the net 
amount payable with respect to a tax imposed by state tax law, 
or an overstatement of the net amount creditable or refundable 
with respect to a tax.  The determination of whether or not 
there is an understatement of liability must be made without 
regard to any administrative or judicial action involving the 
taxpayer.  For purposes of this subdivision, the amount 
determined for underpayment of estimated tax under either 
section 289A.25 or 289A.26 is not considered an understatement 
of liability. 
    (f) For purposes of this subdivision, the term 
"overstatement of claim" means an overstatement of the net 
amount refundable with respect to a claim for property tax 
relief provided by chapter 290A.  The determination of whether 
or not there is an overstatement of a claim must be made without 
regard to administrative or judicial action involving the 
claimant. 
    (g) For purposes of this section, the term "tax refund or 
return preparer" means an individual who prepares for 
compensation, or who employs one or more individuals to prepare 
for compensation, a return of tax, or a claim for refund of 
tax.  The preparation of a substantial part of a return or claim 
for refund is treated as if it were the preparation of the 
entire return or claim for refund.  An individual is not 
considered a tax return preparer merely because the individual: 
    (1) gives typing, reproducing, or other mechanical 
assistance; 
    (2) prepares a return or claim for refund of the employer, 
or an officer or employee of the employer, by whom the 
individual is regularly and continuously employed; 
    (3) prepares a return or claim for refund of any person as 
a fiduciary for that person; or 
    (4) prepares a claim for refund for a taxpayer in response 
to a tax order issued to the taxpayer. 
    Subd. 14.  [PENALTY FOR USE OF SALES TAX EXEMPTION 
CERTIFICATES TO EVADE TAX.] A person who uses an exemption 
certificate to buy property that will be used for purposes other 
than the exemption claimed, with the intent to evade payment of 
sales tax to the seller, is subject to a penalty of $100 for 
each transaction where that use of an exemption certificate has 
occurred.  
    Subd. 15.  [ACCELERATED PAYMENT OF JUNE SALES TAX 
LIABILITY; PENALTY FOR UNDERPAYMENT.] If a vendor is required by 
law to submit an estimation of June sales tax liabilities and 
one-half payment by a certain date, and the vendor fails to 
remit the balance due by the date required, the vendor shall pay 
a penalty equal to ten percent of the amount of actual June 
liability required to be paid in June less the amount remitted 
in June.  The penalty must not be imposed, however, if the 
amount remitted in June equals the lesser of:  (1) 45 percent of 
the actual June liability, or (2) 50 percent of the preceding 
May's liability.  
    Subd. 16.  [PENALTY FOR SALES AFTER REVOCATION.] A person 
who engages in the business of making retail sales after 
revocation of a permit under section 297A.07 is liable for a 
penalty of $100 for each day the person continues to make 
taxable sales. 
    Subd. 17.  [OPERATOR OF FLEA MARKETS; PENALTY.] A person 
who fails to comply with the provisions of section 297A.041 is 
subject to a penalty of $100 for each day of each selling event 
that the operator fails to obtain evidence that a seller is the 
holder of a valid seller's permit issued under section 297A.04.  
    Subd. 18.  [PAYMENT OF PENALTIES.] The penalties imposed by 
this section are collected and paid in the same manner as taxes. 
    Subd. 19.  [PENALTIES ARE ADDITIONAL.] The civil penalties 
imposed by this section are in addition to the criminal 
penalties imposed by this chapter. 
    Sec. 27.  [289A.63] [CRIMINAL PENALTIES.] 
    Subdivision 1.  [PENALTIES FOR KNOWING FAILURE TO FILE OR 
PAY; WILLFUL EVASION.] (a) A person required to file a return, 
report, or other document with the commissioner, who knowingly, 
rather than accidentally, inadvertently, or negligently, fails 
to file it when required, is guilty of a gross misdemeanor.  A 
person required to file a return, report, or other document who 
willfully attempts in any manner to evade or defeat a tax by 
failing to file it when required, is guilty of a felony.  
    (b) A person required to pay or to collect and remit a tax, 
who knowingly, rather than accidentally, inadvertently, or 
negligently, fails to do so when required, is guilty of a gross 
misdemeanor.  A person required to pay or to collect and remit a 
tax, who willfully attempts to evade or defeat a tax law by 
failing to do so when required, is guilty of a felony.  
    Subd. 2.  [FALSE OR FRAUDULENT RETURNS; PENALTIES.] (a) A 
person who files with the commissioner a return, report, or 
other document, known by the person to be fraudulent or false 
concerning a material matter, is guilty of a felony.  
    (b) A person who knowingly aids or assists in, or advises 
in the preparation or presentation of a return, report, or other 
document that is fraudulent or false concerning a material 
matter, whether or not the falsity or fraud committed is with 
the knowledge or consent of the person authorized or required to 
present the return, report, or other document, is guilty of a 
felony.  
    Subd. 3.  [SALES WITHOUT PERMIT; VIOLATIONS.] (a) A person 
who engages in the business of making retail sales in Minnesota 
without the permit or permits required under chapter 297A, or a 
responsible officer of a corporation who so engages in business, 
is guilty of a gross misdemeanor.  
    (b) A person who engages in the business of making retail 
sales in Minnesota after revocation of a permit under section 
297A.07, when the commissioner has not issued a new permit, is 
guilty of a felony. 
    Subd. 4.  [ADVERTISING NO SALES OR USE TAX; VIOLATION.] It 
is a misdemeanor for a person to broadcast or publish, or 
arrange to have broadcast or published, an advertisement in a 
publication or broadcast media, printed, distributed, broadcast, 
or intended to be received in this state, that states that no 
sales or use tax is due, when the person knows the advertisement 
is false.  
    Subd. 5.  [EMPLOYEE GIVING EMPLOYER FALSE INFORMATION.] An 
employee required to supply information to an employer under 
section 290.92, subdivisions 4a and 5, who knowingly fails to 
supply information or who knowingly supplies false or fraudulent 
information to an employer, is guilty of a gross misdemeanor.  
    Subd. 6.  [COLLECTION OF TAX; PENALTY.] An agent, 
canvasser, or employee of a retailer, who is not authorized by 
permit from the commissioner, may not collect the sales tax as 
imposed by chapter 297A, nor sell, solicit orders for, nor 
deliver, any tangible personal property in this state.  An 
agent, canvasser, or employee violating the provisions of 
sections 297A.14 to 297A.25 is guilty of a misdemeanor.  
    Subd. 7.  [UNAUTHORIZED DISCLOSURE.] Any person disclosing 
any particulars of any tax return, without the written consent 
of the taxpayer making such return, in violation of the 
provisions of section 290.611, is guilty of a gross misdemeanor. 
    Subd. 8.  [CRIMINAL PENALTIES.] Criminal penalties imposed 
by this section are in addition to any civil penalties imposed 
by this chapter.  
    Subd. 9.  [STATUTE OF LIMITATIONS.] Notwithstanding section 
628.26, or any other provision of the criminal laws of this 
state, an indictment may be found and filed, or a complaint 
filed, upon a criminal offense named in this section, in the 
proper court within six years after the offense is committed.  
    Subd. 10.  [PERSON DEFINED.] The term "person" as used in 
this section includes any officer or employee of a corporation 
or a member or employee of a partnership who as an officer, 
member, or employee is under a duty to perform the act in 
respect to which the violation occurs. 
    Sec. 28.  Minnesota Statutes 1988, section 290.05, 
subdivision 4, is amended to read: 
    Subd. 4.  (a) Corporations, individuals, estates, trusts or 
organizations claiming exemption under the provisions of 
subdivision 2 shall furnish information as to concerning their 
exempt status under the Internal Revenue Code.  
    (b) Such Corporations, individuals, estates, trusts, and 
organizations shall file with the commissioner of revenue a copy 
of any an annual report that is required to be filed with the 
Internal Revenue Service, no later than ten days after filing 
the same it with the Internal Revenue Service.  Any An annual 
report required of a pension plan under sections 6057 to 6059 of 
the Internal Revenue Code of 1954, does not need to be filed 
with the commissioner.  
    Any person required to file a copy of a federal return 
pursuant to the preceding paragraph who willfully fails to file 
such return shall be guilty of a misdemeanor.  
    (c) In the event that If the Internal Revenue Service 
revokes, cancels or suspends, in whole or part, the exempt 
status of any corporation, individual, estate, trust or 
organization referred to in clause paragraph (a), or if the 
amount of gross income, deductions, credits, items of tax 
preference or taxable income is changed or corrected by either 
the taxpayer or the Internal Revenue Service, or if the taxpayer 
consents to any extension of time for assessment of federal 
income taxes such, the corporation, individual, estate, trust or 
organization shall notify the commissioner in writing of such 
the action within 90 days thereafter after that date. 
    (d) The periods of limitations contained in section 290.56 
shall 289A.42, subdivision 2, apply whenever when there has been 
any action referred to in clause paragraph (c), notwithstanding 
any period of limitations to the contrary.  
    Sec. 29.  Minnesota Statutes Second 1989 Supplement, 
section 290.92, subdivision 4b, is amended to read: 
    Subd. 4b.  [WITHHOLDING BY PARTNERSHIPS.] (a) A partnership 
shall deduct and withhold a tax as provided in paragraph (b) 
when the partnership pays or credits amounts to any of its 
nonresident individual partners on account of their distributive 
shares of partnership income for a taxable year of the 
partnership. 
    (b) The amount of tax withheld is determined by multiplying 
the partner's distributive share allocable to Minnesota under 
section 290.17, paid or credited during the taxable year by the 
highest rate used to determine the income tax liability for an 
individual under section 290.06, subdivision 2c, except that the 
amount of tax withheld may be determined based on tables 
provided by the commissioner if the partner submits a 
withholding exemption certificate under subdivision 5. 
    (c) A partnership required to deduct and withhold tax under 
this subdivision shall file a return with the commissioner.  The 
tax required to be deducted and withheld during that year must 
be paid with the return.  The return and payment is due on or 
before the due date specified for filing the partnership return 
under section 290.42. 
    (d) A partnership required to withhold and remit tax under 
this subdivision is liable for payment of the tax to the 
commissioner, and a person having control of or responsibility 
for the withholding of the tax or the filing of returns due 
under this subdivision is personally liable for the tax due.  
The commissioner may reduce or abate the tax withheld under this 
subdivision if the partnership had reasonable cause to believe 
that no tax was due under this section. 
    (e) (d) Notwithstanding paragraph (a), a partnership is not 
required to deduct and withhold tax for a nonresident partner if:
    (1) the partner elects to have the tax due paid as part of 
the partnership's composite return under section 290.39, 
subdivision 5; 
    (2) the partner has Minnesota assignable federal adjusted 
gross income from the partnership of less than $1,000; or 
    (3) the partnership is liquidated or terminated, the income 
was generated by a transaction related to the termination or 
liquidation, and no cash or other property was distributed in 
the current or prior taxable year; or 
    (4) the distributive shares of partnership income are 
attributable to: 
    (i) income required to be recognized because of discharge 
of indebtedness; 
    (ii) income recognized because of a sale, exchange, or 
other disposition of real estate, depreciable property, or 
property described in section 179 of the Internal Revenue Code 
of 1986, as amended through December 31, 1988; or 
    (iii) income recognized on the sale, exchange, or other 
disposition of any property that has been the subject of a basis 
reduction pursuant to section 108, 734, 743, 754, or 1017 of the 
Internal Revenue Code of 1986, as amended through December 31, 
1988, 
to the extent that the income does not include cash received or 
receivable or, if there is cash received or receivable, to the 
extent that the cash is required to be used to pay indebtedness 
by the partnership or a secured debt on partnership property. 
    (f) (e) For purposes of subdivisions 6, paragraph (1)(c), 
subdivision 6a, 7, 11, and 15, and sections 289A.09, subdivision 
2, 289A.20, subdivision 2, paragraph (c), 289A.50, 289A.56, 
289A.60, and 289A.63, a partnership is considered an employer.  
    (g) (f) To the extent that income is exempt from 
withholding under paragraph (e) (d), clause (4), the 
commissioner has a lien in an amount up to the amount that would 
be required to be withheld with respect to the income of the 
partner attributable to the partnership interest, but for the 
application of paragraph (e) (d), clause (4).  The lien arises 
under section 270.69 from the date of assessment of the tax 
against the partner, and attaches to that partner's share of the 
profits and any other money due or to become due to that partner 
in respect of the partnership.  Notice of the lien may be sent 
by mail to the partnership, without the necessity for recording 
the lien.  The notice has the force and effect of a levy under 
section 270.70, and is enforceable against the partnership in 
the manner provided by that section.  Upon payment in full of 
the liability subsequent to the notice of lien, the partnership 
must be notified that the lien has been satisfied.  
    Sec. 30.  Minnesota Statutes 1989 Supplement, section 
290.92, subdivision 4c, is amended to read: 
    Subd. 4c.  [WITHHOLDING BY SMALL BUSINESS CORPORATIONS.] 
(a) A corporation having a valid election in effect under 
section 290.9725 shall deduct and withhold a tax as provided in 
paragraph (b) when it pays or credits amounts to any of its 
nonresident individual shareholders as dividends or as their 
share of the corporations's undistributed taxable income for the 
taxable year. 
     (b) The amount of tax withheld is determined by multiplying 
the amount of dividends or undistributed income allocable to 
Minnesota under section 290.17, paid or credited to a 
nonresident shareholder during the taxable year by the highest 
rate used to determine the income tax liability of an individual 
under section 290.06, subdivision 2c, except that the amount of 
tax withheld may be determined based on tables provided by the 
commissioner if the shareholder submits a withholding exemption 
certificate under subdivision 5. 
    (c) A corporation required to deduct and withhold tax under 
this subdivision shall file a return with the commissioner.  The 
tax required to be deducted and withheld during that year must 
be paid with the return.  The return and payment is due on or 
before the due date specified for filing the corporate income 
tax return under section 290.42. 
    (d) A corporation required to withhold and remit tax under 
this section is liable for payment of the tax to the 
commissioner, and a person having control of or responsibility 
for the withholding of the tax or the filing of returns due 
under this subdivision is personally liable for the tax due.  
    (e) Notwithstanding paragraph (a), a corporation is not 
required to deduct and withhold tax for a nonresident 
shareholder, if: 
    (1) the shareholder elects to have the tax due paid as part 
of the corporation's composite return under section 290.39, 
subdivision 5; 
    (2) the shareholder has Minnesota assignable federal 
adjusted gross income from the corporation of less than $1,000; 
or 
    (3) the corporation is liquidated or terminated, the income 
was generated by a transaction related to the termination or 
liquidation, and no cash or other property was distributed in 
the current or prior taxable year. 
    (f) (d) For purposes of subdivisions 6, paragraph (1)(c), 
subdivision 6a, 7, 11, and 15, and sections 289A.09, subdivision 
2, 289A.20, subdivision 2, paragraph (c), 289A.50, 289A.56, 
289A.60, and 289A.63, a corporation is considered an employer. 
    Sec. 31.  Minnesota Statutes 1988, section 290.92, 
subdivision 6a, is amended to read: 
    Subd. 6a.  [FAILURE TO COMPLY WITH WITHHOLDING PROVISIONS.] 
(a) Whenever any When a person who is required to deduct, 
withhold, pay over, or deposit any tax imposed by this chapter, 
at the time and in the manner prescribed by law or rules fails 
to deduct, withhold, or pay over such the tax, or fails to make 
deposits or payments of such the tax and is notified of any such 
the failure by notice served upon the person in the manner 
prescribed for service of a summons in civil actions, then all 
the requirements of paragraph (b) shall be complied with met.  
In the case of a corporation, partnership or trust, notice 
served upon an officer, partner or trustee shall, for purposes 
of this subdivision, be deemed to be considered notice served 
upon such the corporation, partnership, or trust and all their 
officers, partners, or trustees thereof. 
    (b) Any A person who is required to deduct, withhold, pay 
over, or deposit any a tax imposed by this chapter, if notice 
has been served upon such that person in accordance with 
paragraph (a), shall thereafter after that date deduct, withhold 
, and collect such the taxes and shall (not later than the end 
of the second banking day after any amount of such taxes is 
deducted, withheld or collected) deposit such the taxes in a 
separate account in a bank, savings bank or savings and loan 
association and shall keep the amount of such the taxes in such 
that account until payment over paid to the state of Minnesota.  
Any such The account shall constitute constitutes and must be 
designated as a special fund in trust for the state of Minnesota 
payable to the state of Minnesota by such that person as 
trustee.  It shall be the duty of such The person upon whom such 
notice is served to shall notify the commissioner of revenue in 
writing of the name and address of the bank, savings bank or 
savings and loan association wherein such the account is kept, 
together with such other information as the commissioner may 
require.  In lieu of the trust fund account, the commissioner 
may, when necessary in order to secure the withholding of the 
tax imposed by this chapter, require an employer to file with 
the department of revenue a bond in an amount determined by the 
commissioner, or in lieu thereof of it, security in a form and 
in an amount as the commissioner determines, not to exceed more 
than twice the estimated average liability for future monthly 
withholding tax periods.  
    (c) The commissioner of revenue, on being satisfied with 
respect to any notification made under paragraph (a) of this 
subdivision that all the requirements of law and rules with 
respect to the taxes imposed by this chapter have been and will 
henceforth be complied with, may cancel such the 
notification.  Such The cancellation shall take effect at such 
the time as is specified in the notice of such the 
cancellation.  All notices authorized or required under this 
subdivision shall must be in such the form as the commissioner 
may determine determines. 
    (d) Any person who fails to comply with any provisions of 
this subdivision shall, in addition to any other penalties 
provided by law, be guilty of a gross misdemeanor, except that 
the provisions of this paragraph shall not apply 
    (1) to any person if such person shows that there was 
reasonable doubt as to (a) whether the law required deduction, 
withholding or payment of tax or (b) what person was required by 
law to deduct, withhold or pay; or 
    (2) to any person, if such person shows that the failure to 
comply with the provisions of paragraph (b) is due to 
circumstances beyond the person's control.  A lack of funds 
existing immediately after the payment of wages (whether or not 
created by such payment) shall not be considered to be 
circumstances beyond the control of a person.  
    Sec. 32.  Minnesota Statutes 1988, section 290.92, 
subdivision 24, is amended to read: 
    Subd. 24.  [APPLICATION FOR ACCOUNT NUMBER.] An employer, 
or person withholding tax under section 290.923, desiring to 
engage in business in Minnesota shall file with the commissioner 
an application for a withholding account number on or before the 
due date of the first payment required to be made under the 
provisions of subdivision 6.  An application for an account 
number shall must be made upon a form prescribed by the 
commissioner and shall set forth.  It must give the name of the 
employer or payor, the location of the place or places of 
business, the names, addresses and social security numbers of 
the owners or partners, or if the employer or payor is a 
corporation of the officers, or if the employer or payor is a 
trust of the trustees, and such other information as the 
commissioner may require.  The application shall must be filed 
by the owner if the employer or payor is a natural person; by a 
member or partner if the employer or payor is an association or 
partnership; by a trustee if the employer or payor be a trust, 
or by a person authorized to sign the application if the 
employer or payor is a corporation. 
    No fee shall be charged for the application. 
    The account number is not assignable. 
    An employer or payor who fails to file an application for a 
withholding account number shall be liable to the commissioner 
for a penalty of $100.  The penalty shall be collected in the 
same manner as delinquent withholding tax is collected.  The 
commissioner may abate this penalty. 
    Sec. 33.  Minnesota Statutes 1989 Supplement, section 
290.9201, subdivision 7, is amended to read: 
    Subd. 7.  [WITHHOLDING ON COMPENSATION OF ENTERTAINERS.] 
The tax on compensation of an entertainer must be withheld at a 
rate of two percent of all compensation paid to the 
entertainment entity by the person or corporation having legal 
control of the payment of the compensation.  The payor is liable 
to the state for the payment of the tax required to be deducted 
and withheld, and is not liable to a person for the amount of 
the payment.  The compensation subject to withholding under this 
section is not subject to the withholding provisions of section 
290.92, subdivision 2a, 3, or 28, except the provisions of 
section sections 290.92, subdivisions 6a, 7, 14, 15, and 18, 
270.06, paragraph (16), 289A.09, subdivision 2, 289A.60, and 
289A.63 shall apply to withholding under this section as if the 
withholding were upon wages. 
    Sec. 34.  Minnesota Statutes 1989 Supplement, section 
290.9201, subdivision 8, is amended to read: 
    Subd. 8.  [DEPOSIT OF ENTERTAINER WITHHOLDING.] (a) The 
person or corporation having legal control of the payment of 
compensation taxable under this section shall deposit the 
earnings tax with the commissioner, and shall file an 
entertainer withholding tax return with the commissioner, within 
30 days of each performance. 
    (b) The withholding tax return must be in the form 
prescribed by the commissioner. 
    Sec. 35.  Minnesota Statutes 1989 Supplement, section 
290.9705, subdivision 4, is amended to read: 
    Subd. 4.  [DEPOSITS USED AS SURETY FOR COMPLIANCE WITH 
INCOME AND SALES TAX PROVISIONS.] The amounts deposited with the 
commissioner under subdivisions 2 and 3 subdivision 1 are 
considered a surety to guarantee payment of income, franchise, 
withholding, and sales and use taxes of the contractor.  The 
commissioner shall retain the money deposited until the 
commissioner determines the contractor's liability for state 
income, franchise, sales and use taxes, and taxes withheld under 
section 290.92.  If the deposit exceeds the liability, the 
commissioner shall refund the difference to the contractor with 
interest at the rate specified in section 270.76 computed from 
the dates the amounts were deposited with the commissioner.  
    Sec. 36.  Minnesota Statutes Second 1989 Supplement, 
section 290A.07, subdivision 2a, is amended to read: 
    Subd. 2a.  A claimant who is a renter or a homeowner who 
occupies a manufactured home, as defined in section 274.19, 
subdivision 8, paragraph (c), shall receive full payment after 
August 1 and prior to before August 15 or 60 days after receipt 
of the application, whichever is later.  Interest shall be added 
at the rate specified in section 270.76 from August 15 or 60 
days after receipt of the application whichever is later. 
    Sec. 37.  Minnesota Statutes 1988, section 290A.07, 
subdivision 3, is amended to read: 
    Subd. 3.  Any A claimant not included in subdivision 2a 
shall receive full payment after September 15 and prior to 
before September 30.  Interest shall be added at the rate 
specified in section 270.76 from September 30 or 60 days after 
receipt of the application, whichever is later.  Interest will 
be computed until the date the claim is paid. 
    Sec. 38.  Minnesota Statutes 1988, section 290A.19, is 
amended to read: 
    290A.19 [OWNER OR MANAGING AGENT TO FURNISH RENT 
CERTIFICATE; PENALTY.] 
    (a) The owner or managing agent of any property for which 
rent is paid for occupancy as a homestead shall must furnish a 
certificate of rent constituting property tax to each a person 
who is a renter on December 31, in the form prescribed by the 
commissioner.  If the renter moves prior to before December 31, 
the owner or managing agent has the option to either provide may 
give the certificate to the renter at the time of moving, or 
mail the certificate to the forwarding address if an address has 
been provided by the renter.  The certificate shall must be made 
available to the renter not later than January 31 before 
February 1 of the year following the year in which the rent was 
paid.  
    (b) Any owner or managing agent who willfully fails to 
furnish a certificate to the renter and the commissioner as 
required by this section is liable to the commissioner for a 
penalty of $100 for each act or failure to act.  The penalty 
shall be assessed and collected in the manner provided in 
chapter 290 for the assessment and collection of income tax.  If 
the owner or managing agent willfully furnishes certificates 
that report total rent constituting property taxes in excess of 
the amount of actual property taxes paid on the rented part of a 
property, as determined under this section, the owner or 
managing agent is liable for a penalty equal to the greater of 
(1) $100 or (2) 50 percent of the excess that is reported.  If 
the owner or managing agent reports a total amount of rent 
constituting property taxes that exceeds by ten percent or more 
the actual property taxes, the report is deemed to be willful. 
    (c) If the owner or managing agent elects to provide 
provides the renter with the certificate at the time of moving, 
rather than after December 31, the amount of rent constituting 
property taxes shall must be computed as follows: 
    (i) The net tax shall must be reduced by 1/12 for each 
month remaining in the calendar year. 
    (ii) In calculating the denominator of the fraction 
pursuant to under section 290A.03, subdivision 11, the gross 
rent paid through the last month of claimant's occupancy shall 
must be substituted for "the gross rent paid for the calendar 
year for the property in which the unit is located." 
    (d) (c) The certificate of rent constituting property taxes 
shall must include the address of the property, including the 
county, and the property tax parcel identification number and 
any additional information which that the commissioner 
determines is appropriate. 
    (e) (d) If the owner or managing agent fails to provide the 
renter with a certificate of rent constituting property taxes, 
the commissioner shall allocate the net tax on the building to 
the unit on a square footage basis or other appropriate basis as 
the commissioner determines.  The renter shall supply the 
commissioner with a statement from the county treasurer which 
that gives the amount of property tax on the parcel, the address 
and property tax parcel identification number of the property, 
and the number of units in the building. 
    (f) The owner or managing agent must file a copy of the 
certificate of rent paid with the commissioner before April 15 
of the year following the year in which the rent was paid.  The 
commissioner may require that each owner or managing agent 
report on a single form the total property taxes for a property 
and the allocation of the property taxes as rent constituting 
property taxes among the renters of the property. 
    Sec. 39.  Minnesota Statutes 1988, section 297A.03, 
subdivision 2, is amended to read: 
    Subd. 2.  It shall be unlawful for any retailer to 
advertise or hold out or state to the public or any customer, 
directly or indirectly, that the tax or any part thereof will be 
assumed or absorbed by the retailer, or that it will not be 
added to the sales price or that, if added, it or any part 
thereof will be refunded except that In computing the tax to be 
collected as the result of any transaction amounts of tax less 
than one-half of one cent may be disregarded and amounts of tax 
if of one-half cent or more may be considered an additional cent.
If the sales price of any sale at retail is eight cents or less, 
no tax shall be collected.  Any person violating this provision 
shall be guilty of a misdemeanor. 
    Sec. 40.  Minnesota Statutes 1988, section 297A.041, is 
amended to read: 
    297A.041 [OPERATOR OF FLEA MARKETS; SELLER'S PERMITS 
REQUIRED; PENALTY.] 
    The operator of a flea market, craft show, antique show, 
coin show, stamp show, comic book show, convention exhibit area, 
or similar selling event, as a prerequisite to renting or 
leasing space on the premises owned or controlled by the 
operator to a person desiring to engage in or conduct business 
as a seller, shall obtain evidence that the seller is the holder 
of a valid seller's permit issued pursuant to under section 
297A.04, or a written statement from the seller that the seller 
is not offering for sale any item that is taxable under this 
chapter.  
    Flea market, craft show, antique show, coin show, stamp 
show, comic book show, convention exhibit area, or similar 
selling event, as used in this section, means an activity 
involving a series of sales sufficient in number, scope, and 
character to constitute a regular course of business, and which 
that would not qualify as an isolated or occasional sale 
pursuant to under section 297A.25, subdivision 12.  
    Any operator who fails or refuses to comply with the 
provisions of this section shall be subject to a penalty payable 
to the commissioner of revenue of $100 for each day of each 
selling event that the operator fails to obtain evidence that 
the seller is the holder of a valid seller's permit issued 
pursuant to section 297A.04.  
    This section does not apply to an operator of a flea 
market, craft show, antique show, coin show, stamp show, comic 
book show, convention exhibit area, or similar selling event 
which that is:  (1) held in conjunction with a community 
sponsored festival which that has a duration of four or fewer 
consecutive days no more than once a year; or (2) conducted by a 
nonprofit organization annually or less frequently.  
    Sec. 41.  Minnesota Statutes 1989 Supplement, section 
297A.17, is amended to read: 
    297A.17 [TAX TO BE COLLECTED; STATUS AS DEBT.] 
    The use tax required to be collected by the retailer 
constitutes a debt owed by the retailer to Minnesota and shall 
be a debt from the purchaser to the retailer recoverable at law 
in the same manner as other debts.  A retailer who does not 
maintain a place of business within this state, as defined in 
section 297A.21, subdivision 1, shall not be indebted to 
Minnesota for amounts of use tax which it was required to 
collect but did not collect unless the retailer knew or had been 
advised by the commissioner of its obligation to collect the use 
tax. 
    Sec. 42.  Minnesota Statutes 1988, section 297A.18, is 
amended to read: 
    297A.18 [ADVERTISING NO TAX; MINIMUM TAX.] 
    It shall be unlawful for any retailer to advertise or hold 
out or state to the public or to any customer, directly or 
indirectly, that the use tax or any part thereof will be assumed 
or absorbed by the retailer, or that it will not be added to the 
sales price or that, if added, it or any part thereof will be 
refunded except that In computing the tax to be collected as the 
result of any transaction amounts of tax less than one-half of 
one cent may be disregarded and amounts of tax of one-half cent 
or more may be considered an additional cent. 
    It is unlawful for a person to broadcast or publish, or 
arrange to have broadcast or published, an advertisement in a 
publication or broadcast media, printed, distributed, broadcast, 
or intended to be received in this state, that states that no 
sales or use tax is due under this chapter, when the person 
knows the advertisement is false. 
    Sec. 43.  Minnesota Statutes 1988, section 297A.211, 
subdivision 3, is amended to read: 
    Subd. 3.  Any A person who pays the tax to the seller as 
provided in under section 297A.03 or pays the tax to the motor 
vehicle registrar as required by section 297B.02 and who meets 
the requirements of section 297A.211 at the time of the sale, 
except that the person has not registered as a retailer pursuant 
to under this section at the time of the sale, may register as a 
retailer, make a return, and file for a refund of the difference 
between the tax calculated under section 297A.02, 297A.14, or 
297B.02 and the tax calculated under subdivision 2.  The person 
must file for a refund within the time limitations provided in 
section 297A.35.  Notwithstanding the provisions of section 
297A.35, subdivision 1, interest shall be allowed for any refund 
allowed under this subdivision only from the date on which the 
person has both registered as a retailer and filed a claim for 
refund.  
    Sec. 44.  [PURPOSE.] 
    It is the intent of the legislature to simplify Minnesota's 
tax laws by consolidating and recodifying tax administration and 
compliance provisions now contained in several chapters of 
Minnesota Statutes.  Due to the complexity of the 
recodification, prior provisions are repealed on the effective 
date of the new provisions.  The repealed provisions, however, 
continue to remain in effect until superseded by the analogous 
provision in the new law. 
    Sec. 45.  [REPEALER.] 
    Minnesota Statutes 1988, sections 270.651; 290.05, 
subdivision 5; 290.067, subdivision 5; 290.281, subdivision 5; 
290.29; 290.37, as amended by Laws 1989, First Special Session 
chapter 1, article 10, section 32; 290.39, as amended by Laws 
1989, chapter 335, article 1, section 188; 290.391; 290.40; 
290.41; 290.42; 290.43; 290.44; 290.45; 290.46; 290.47; 290.49; 
290.50, as amended by Laws 1989, chapter 184, article 2, section 
20; 290.521; 290.522; 290.523, as amended by Laws 1989, chapter 
184, article 2, section 21; 290.53, subdivisions 1, 1a, 2, 2a, 
3, 3a, 4, 7, 8, 9, 10, and 11; 290.54; 290.56; 290.57; 290.58; 
290.59; 290.611, subdivision 5; 290.65; 290.92, subdivisions 6, 
7, 8, 11, 13, 14, 15, and 18; 290.923, subdivision 7; 290.93; 
290.931; 290.932; 290.933; 290.934, as amended by Laws 1989, 
First Special Session chapter 1, article 10, section 37; 
290.935; 290.936; 290.974; 290A.06; 290A.11, subdivisions 1, 2, 
3, and 4; 290A.111; 290A.112, as amended by Laws 1989, chapter 
184, article 2, section 26; 290A.12; 291.09; 291.11; 291.131; 
291.14; 291.15, subdivisions 1 and 3; 291.215, subdivisions 2 
and 3; 291.31, subdivision 1; 291.32; 297A.08; 297A.121; 
297A.15, subdivision 3; 297A.26, subdivisions 1 and 4; 297A.27; 
297A.275; 297A.30; 297A.31; 297A.32; 297A.33, subdivisions 1, 3, 
4, and 5; 297A.34; 297A.35; 297A.39, subdivisions 1, 2, 2a, 3, 
4, 7, and 8; 297A.40; 297A.41; 297A.42; and 297A.44, subdivision 
2, are repealed.  Minnesota Statutes 1989 Supplement, sections 
290.9201, subdivisions 4, 5, 9, and 10; 290.9705, subdivision 2; 
290A.11, subdivision 1a; and 297A.20, are repealed.  Minnesota 
Statutes Second 1989 Supplement, sections 270.77 and 290.38 are 
repealed.  Minnesota Rules, parts 8052.0100, 8052.0200, and 
8130.7800, are repealed. 
    Sec. 46.  [INSTRUCTIONS TO REVISOR.] 
    (a) If a provision of a section of Minnesota Statutes 
repealed or amended by this article is amended by the 1990 
regular session, the revisor shall codify the amendment 
consistent with the recodification of the affected section by 
this act, notwithstanding any law to the contrary.  
    (b) In the next edition of Minnesota Statutes, in the 
sections referred to in column A, the revisor of statutes shall 
delete the reference in column B and insert the reference in 
column C.  The revisor may change the references in column C to 
the sections of Minnesota Statutes in which the bill sections 
are compiled. 
        Column A             Column B            Column C 
     60A.15, subd. 6      290.53, subd. 1    289A.60, subd. 1 
     60A.15, subd. 9a     290.53, subd. 2    289A.60, subd. 2 
     60A.15, subd. 9b     290.53, subd. 3a   289A.60, subd. 6 
     60A.15, subd. 9c     290.53, subd. 3    289A.60, subd. 5 
     60A.15, subd. 9d     290.53, subd. 4    289A.63, 
                                             subds. 1 and 3 
     60A.199, subd. 4     290.53, subd. 2    289A.60, subd. 2 
     60A.199, subd. 5     290.53, subd. 3a   289A.60, subd. 6 
     60A.199, subd. 6     290.53, subd. 3    289A.60, subd. 5 
     69.59                290.53             289A.60 
     115B.24, subd. 4     290.936            289A.50 
     270.10, subd. 1      290.42, clause (6) 289A.19, 
                                             subds. 1 and 2 
     270A.07, subd. 5     290.92, subd. 13,  289A.56, subd. 2 
                          clause (1) 
     290.01, subd. 10     290.40(2)          289A.08, subd. 5 
     290.05, subd. 4      290.56             289A.38, 
                                             subds. 8 and 9 
     290.095, subd. 7     290.37, subd. 1    289A.08, subd. 9 
     290.095, subd. 9     290.46             289A.40 
     290.095, subd. 9     290.50             289A.50 
     290.30               290.29             289A.31, subd. 3 
     290.371, subd. 2     290.37             289A.08 
     290.923, subd. 3     290.92, subd. 6    289A.09 and 
                                             289A.20, subd. 2 
     290.923, subd. 4     290.92, subd. 7    289A.09, subd. 2 
     290A.24              290.93             289A.25 
     291.09, subd. 3a     291.11             289A.42, subd. 1 
     297.09, subd. 1      Minnesota Statutes 270.06 
                          1945, 290.56 to 
                          290.58 
     297.37, subd. 1      290.56 to 290.58   270.06 
     297A.04              297A.27, subd. 2   289A.11, subd. 3 
     297A.15, subd. 5     297A.34            289A.40 
     297A.211, subd. 2    297A.26 and        289A.20, subd. 4 
                          297A.27            and 289A.11 
     297A.211, subd. 3    297A.35            289A.40 
     299F.21, subd. 2     290.53, subd. 1    289A.60, subd. 1 
     299F.23, subd. 2     290.53, subd. 2    289A.60, subd. 2 
     299F.23, subd. 3     290.53, subd. 3a   289A.60, subd. 6 
     299F.23, subd. 4     290.53, subd. 3    289A.60, subd. 5 
     302A.821, subd. 1    290.37             289A.08 
     302A.821, subd. 1    290.974            289A.12, subd. 3 
     349.2121, subd. 6    297A.39            289A.60 
     356.62               290.41             289A.12 
     356.62               290.42             289A.12 
     388.051, subd. 2     290.53, subds. 4   289A.63, subds. 1, 
                          and 11             2, 4, and 6 
                          290.92, subd. 15 
                          290A.11, subd. 2 
                          297A.08 
                          297A.39, subds. 4 
                          and 8 
     469.171, subd. 10    290.50             289A.50 
     588.21               290.39, subd. 1    289A.36, subd. 3 
    Sec. 47.  [EFFECTIVE DATES.] 
    Sections 1, 2, and 44 are effective the day following final 
enactment. 
    Sections 15 and 16 are effective for audits or 
investigations initiated on or after August 1, 1990. 
    Section 17 is effective for assessments or other 
determinations made on or after August 1, 1990. 
    Section 18 is effective for returns becoming due on or 
after August 1, 1990. 
    Sections 20 and 23 are effective for overpayments of taxes 
or other payments first becoming due on or after August 1, 1990. 
    Section 24 is effective for interest on amounts first 
becoming due to the commissioner on or after August 1, 1990. 
    Sections 3 to 14 and 25 are effective for returns, reports, 
taxes, or other payments first becoming due on or after August 
1, 1990, except that the exclusion for foreign operating 
corporations from the filing requirements in section 3 is 
effective on the effective date of Minnesota Statutes, section 
290.01, subdivision 6b. 
    Section 26 is effective for payments, returns, reports, or 
other documents first becoming due, or acts committed, on or 
after August 1, 1990. 
    Section 27 is effective for crimes committed on or after 
August 1, 1990. 
    Sections 19, 21, 22, 28 to 43, and 45 are effective August 
1, 1990. 

                               ARTICLE 2

                              COLLECTIONS
    Section 1.  Minnesota Statutes 1989 Supplement, section 
270.06, is amended to read: 
     270.06 [POWERS AND DUTIES.] 
     The commissioner of revenue shall: 
     (1) have and exercise general supervision over the 
administration of the assessment and taxation laws of the state, 
over assessors, town, county, and city boards of review and 
equalization, and all other assessing officers in the 
performance of their duties, to the end that all assessments of 
property be made relatively just and equal in compliance with 
the laws of the state; 
     (2) confer with, advise, and give the necessary 
instructions and directions to local assessors and local boards 
of review throughout the state as to their duties under the laws 
of the state; 
     (3) direct proceedings, actions, and prosecutions to be 
instituted to enforce the laws relating to the liability and 
punishment of public officers and officers and agents of 
corporations for failure or negligence to comply with the 
provisions of the laws of this state governing returns of 
assessment and taxation of property, and cause complaints to be 
made against local assessors, members of boards of equalization, 
members of boards of review, or any other assessing or taxing 
officer, to the proper authority, for their removal from office 
for misconduct or negligence of duty; 
     (4) require county attorneys to assist in the commencement 
of prosecutions in actions or proceedings for removal, 
forfeiture and punishment for violation of the laws of this 
state in respect to the assessment and taxation of property in 
their respective districts or counties; 
    (5) require town, city, county, and other public officers 
to report information as to the assessment of property, 
collection of taxes received from licenses and other sources, 
and such other information as may be needful in the work of the 
department of revenue, in such form and upon such blanks as the 
commissioner may prescribe; 
    (6) require individuals, copartnerships, companies, 
associations, and corporations to furnish information concerning 
their capital, funded or other debt, current assets and 
liabilities, earnings, operating expenses, taxes, as well as all 
other statements now required by law for taxation purposes; 
    (7) summon witnesses, at a time and place reasonable under 
the circumstances, to appear and give testimony, and to produce 
books, records, papers and documents relating to any tax matter 
which the commissioner may have authority to investigate or 
determine.  Provided, that any summons which does not identify 
the person or persons with respect to whose tax liability the 
summons is issued may be served only if (a) the summons relates 
to the investigation of a particular person or ascertainable 
group or class of persons, (b) there is a reasonable basis for 
believing that such person or group or class of persons may fail 
or may have failed to comply with any tax law administered by 
the commissioner, (c) the information sought to be obtained from 
the examination of the records (and the identity of the person 
or persons with respect to whose liability the summons is 
issued) is not readily available from other sources, (d) the 
summons is clear and specific as to the information sought to be 
obtained, and (e) the information sought to be obtained is 
limited solely to the scope of the investigation.  Provided 
further that the party served with a summons which does not 
identify the person or persons with respect to whose tax 
liability the summons is issued shall have the right, within 20 
days after service of the summons, to petition the district 
court for the judicial district in which lies the county in 
which that party is located for a determination as to whether 
the commissioner of revenue has complied with all the 
requirements in (a) to (e), and thus, whether the summons is 
enforceable.  If no such petition is made by the party served 
within the time prescribed, the summons shall have the force and 
effect of a court order; 
     (8) cause the deposition of witnesses residing within or 
without the state, or absent therefrom, to be taken, upon notice 
to the interested party, if any, in like manner that depositions 
of witnesses are taken in civil actions in the district court, 
in any matter which the commissioner may have authority to 
investigate or determine; 
     (9) investigate the tax laws of other states and countries 
and to formulate and submit to the legislature such legislation 
as the commissioner may deem expedient to prevent evasions of 
assessment and taxing laws, and secure just and equal taxation 
and improvement in the system of assessment and taxation in this 
state; 
    (10) consult and confer with the governor upon the subject 
of taxation, the administration of the laws in regard thereto, 
and the progress of the work of the department of revenue, and 
furnish the governor, from time to time, such assistance and 
information as the governor may require relating to tax matters; 
    (11) transmit to the governor, on or before the third 
Monday in December of each even-numbered year, and to each 
member of the legislature, on or before November 15 of each even 
numbered year, the report of the department of revenue for the 
preceding years, showing all the taxable property in the state 
and the value of the same, in tabulated form; 
    (12) inquire into the methods of assessment and taxation 
and ascertain whether the assessors faithfully discharge their 
duties, particularly as to their compliance with the laws 
requiring the assessment of all property not exempt from 
taxation; 
    (13) exercise and perform such further powers and duties as 
may be required or imposed upon the commissioner of revenue by 
law; administer and enforce the assessment and collection of 
state taxes and, from time to time, make, publish, and 
distribute rules for the administration and enforcement of state 
tax laws.  The rules have the force of law; 
    (14) promulgate rules having the force and effect of law, 
for the administration and enforcement of the property 
tax; prepare blank forms for the returns required by state tax 
law and distribute them throughout the state, furnishing them 
subject to charge on application; 
    (15) execute and administer any agreement with the 
secretary of the treasury of the United States regarding the 
exchange of information and administration of the tax laws of 
both the United States and the state of Minnesota; prescribe 
rules governing the qualification and practice of agents, 
attorneys, or other persons representing taxpayers before the 
commissioner.  The rules may require that those persons, agents, 
and attorneys show that they are of good character and in good 
repute, have the necessary qualifications to give taxpayers 
valuable services, and are otherwise competent to advise and 
assist taxpayers in the presentation of their case before being 
recognized as representatives of taxpayers.  After due notice 
and opportunity for hearing, the commissioner may suspend and 
disbar from further practice before the commissioner any person, 
agent, or attorney who is shown to be incompetent or 
disreputable, who refuses to comply with the rules, or who with 
intent to defraud, willfully or knowingly deceives, misleads, or 
threatens a taxpayer or prospective taxpayer, by words, 
circular, letter, or by advertisement.  This clause does not 
curtail the rights of individuals to appear in their own behalf 
or partners or corporations' officers to appear in behalf of 
their respective partnerships or corporations; 
    (16) appoint agents as the commissioner considers necessary 
to make examinations and determinations.  The agents have the 
rights and powers conferred on the commissioner to examine 
books, records, papers, or memoranda, subpoena witnesses, 
administer oaths and affirmations, and take testimony.  Upon 
demand of an agent, the clerk or court administrator of any 
court shall issue a subpoena for the attendance of a witness or 
the production of books, papers, records, or memoranda before 
the agent.  The commissioner may also issue subpoenas. 
Disobedience of subpoenas issued under this chapter shall be 
punished by the district court of the district in which the 
subpoena is issued, or in the case of a subpoena issued by the 
commissioner, by the district court of the district in which the 
party served with the subpoena is located, in the same manner as 
contempt of the district court; 
    (17) appoint and employ additional help, purchase supplies 
or materials, or incur other expenditures in the enforcement of 
state tax laws as considered necessary.  The salaries of all 
agents and employees provided for in this chapter shall be fixed 
by the appointing authority, subject to the approval of the 
commissioner of administration; 
     (18) execute and administer any agreement with the 
secretary of the treasury of the United States or a 
representative of another state regarding the exchange of 
information and administration of the tax laws; 
    (16) (19) administer and enforce the provisions of sections 
325D.30 to 325D.42, the Minnesota unfair cigarette sales 
act; and 
    (17) (20) authorize the use of unmarked motor vehicles to 
conduct seizures or criminal investigations pursuant to the 
commissioner's authority.; and 
     (21) exercise other powers and perform other duties 
required of or imposed upon the commissioner of revenue by law.  
    Sec. 2.  [270.101] [PERSONAL LIABILITY.] 
    Subdivision 1.  [LIABILITY IMPOSED.] A person who, either 
singly or jointly with others, has the control of, supervision 
of, or responsibility for filing returns or reports, paying 
taxes, or collecting or withholding and remitting taxes and who 
fails to do so, or a person who is liable under any other law, 
is liable for the payment of taxes, penalties, and interest 
arising under chapters 296, 297, 297A, and 297C, or sections 
290.92, 349.212, and 349.2121. 
    Subd. 2.  [PERSON DEFINED.] The term "person" includes, but 
is not limited to, a corporation, estate, trust, organization, 
or association, whether organized for profit or not, an officer 
or director of a corporation, a member of a partnership, an 
employee, a third party (including, but not limited to, a 
financial institution, lender, or surety), and any other 
individual or entity. 
    Subd. 3.  [PROCEDURE FOR ASSESSMENT.] The commissioner may 
assess liability for the taxes described in subdivision 1 
against a person liable under this section.  The assessment may 
be based upon information available to the commissioner.  It 
must be made within the prescribed period of limitations for 
assessing the underlying tax.  An order assessing personal 
liability under this section is reviewable under section 289A.65 
and is appealable to tax court. 
    Sec. 3.  Minnesota Statutes 1988, section 270.65, is 
amended to read: 
    270.65 [DATE OF ASSESSMENT; DEFINITION.] 
    For purposes of this chapter and chapters 290, 296, and 
297A, taxes administered by the commissioner, the term "date of 
assessment" means the date a return was filed or the date a 
return should have been filed, whichever is later; or, in the 
case of taxes determined by the commissioner, "date of 
assessment" means the date of the order assessing taxes; or, in 
the case of an amended return filed by the taxpayer, the 
assessment date is the date the return was filed with the 
commissioner. 
    Sec. 4.  [270.652] [ALLOCATION OF PAYMENT.] 
    In the discretion of the commissioner of revenue, payments 
received for taxes may be credited first to the oldest liability 
not secured by a judgment or lien.  For liabilities to which 
payments are applied, the commissioner may credit payments first 
to penalties, next to interest, and then to the tax due. 
    Sec. 5.  Minnesota Statutes 1988, section 270.67, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LIABILITY AGREEMENTS.] The commissioner of 
revenue, or any officer or employee of the department of revenue 
authorized in writing by the commissioner, is authorized to 
enter into an agreement in writing with any taxpayer, or duly 
authorized agent or representative of the taxpayer, relating to 
the liability of the taxpayer in respect of any state tax 
administered by the commissioner for any taxable period ending 
prior to the date of the agreement.  If the agreement is 
approved by the commissioner within the time stated in the 
agreement, or later agreed to, The agreement shall be final and 
conclusive; and, except upon a showing of fraud or malfeasance, 
or misrepresentation of a material fact, the case shall not be 
reopened as to the matters agreed upon, or the agreement 
modified, by any officer, employee, or agent of the state; and, 
in any suit, action, or proceeding, the agreement, or any 
determination, assessment, collection, payment, abatement, 
refund, or credit made in accordance with the agreement, shall 
not be annulled, modified, set aside, or disregarded.  
    Sec. 6.  Minnesota Statutes 1988, section 270.67, 
subdivision 2, is amended to read: 
    Subd. 2.  [EXTENSION AGREEMENTS.] When any portion of any 
tax payable to the commissioner of revenue together with 
interest and penalty thereon, if any, has not been paid six 
months from the date prescribed by law for its payment, the 
commissioner may extend the time for payment for a further 
period not to exceed 36 months.  When the authority of this 
section is invoked, the extension shall be evidenced by written 
agreement signed by the taxpayer and the commissioner, stating 
the amount of the tax with penalty and interest, if any, and 
providing for the payment of the amount in regular weekly, 
semimonthly or monthly installments.  The agreement shall 
contain a confession of judgment for the amount and for any 
unpaid portion thereof and shall provide that the commissioner 
may forthwith enter judgment against the taxpayer in the 
district court of the county of residence as shown upon the 
taxpayer's tax return for the unpaid portion of the amount 
specified in the extension agreement.  The commissioner may 
accept other collateral the commissioner considers appropriate 
to secure satisfaction of the tax liability.  The principal sum 
specified in the agreement shall bear interest at the rate 
specified in section 270.75 on all unpaid portions thereof until 
the same has been fully paid or the unpaid portion thereof has 
been entered as a judgment.  The judgment shall bear interest at 
the rate specified in section 270.75.  If it appears to the 
commissioner that the tax reported by the taxpayer is in excess 
of the amount actually owing by the taxpayer, the extension 
agreement or the judgment entered pursuant thereto shall be 
corrected.  If after making the extension agreement or entering 
judgment with respect thereto, the commissioner determines that 
the tax as reported by the taxpayer is less than the amount 
actually due, the commissioner shall assess a further tax in 
accordance with the provisions of law applicable to the tax.  
The authority granted to the commissioner by this section is in 
addition to any other authority granted to the commissioner by 
law to extend the time of payment or the time for filing a 
return and shall not be construed in limitation thereof.  
    Sec. 7.  Minnesota Statutes 1988, section 270.68, 
subdivision 1, is amended to read: 
    Subdivision 1.  [LEGAL ACTION.] In addition to all other 
methods authorized by law for the collection of tax, if any tax 
payable to the commissioner of revenue or to the department of 
revenue, including penalties and interest thereon, is not paid 
within 60 days after it is required by law to be paid, the 
commissioner of revenue may, proceed under this subdivision.  
Within five years after the date of assessment of the tax, or, 
if the action is to renew a judgment, at any time before the 
judgment's expiration, the commissioner may bring an action at 
law against the person liable for the payment or collection of 
the tax, in the name of the state, for the recovery of the tax 
and interest and penalties due in respect thereof.  The action 
shall be brought in the district court of the judicial district 
in which lies the county of the residence or principal place of 
business within this state of the taxpayer, or, in the case of 
an estate or trust, of the place of its principal 
administration, and for this purpose the place named as such in 
the return, if any, made by the taxpayer shall be conclusive 
against the taxpayer in this matter.  If no place is named in 
the return, the action may be commenced in Ramsey county.  The 
action shall be commenced by filing with the court administrator 
a statement showing the name and address of the taxpayer, if 
known, an itemized summary of the taxable periods and the type 
of tax, the tax due and unpaid and the interest and penalties 
due with respect thereto under the provisions of law applicable 
to the tax, and shall contain a prayer that the court adjudge 
the taxpayer to be indebted on account of the taxes, interest, 
and penalties in the amount specified in the statement; a copy 
of the statement shall be furnished to the court administrator 
therewith.  The court administrator shall mail a copy of the 
statement by certified mail to the taxpayer at the address given 
in the return, if any; and, if no address is given, then at to 
the taxpayer's last known address, within five days after the 
same is filed, except that, if the taxpayer's address is not 
known, notice shall be made by posting a copy of the statement 
for ten days in the place in the courthouse where public notices 
are regularly posted.  To litigate the claim, or any 
part thereof of it, the taxpayer shall file a verified serve an 
answer with the court administrator setting forth objections to 
the claim, or any part thereof; the answer shall be filed upon 
the commissioner on or before the 20th day after the date of 
mailing the statement; or, if notice has been given by posting, 
on or before the 20th day after the expiration of the period 
during which the notice was required to be posted.  If no answer 
is filed served within the specified time, the court 
administrator, upon the filing of an affidavit of default, shall 
enter judgment for the state in the amount prayed for, plus 
costs of $10.  If an answer is filed, the issues raised shall 
stand for trial as soon as possible after the filing of the 
answer, and the court shall determine the issues and direct 
judgment accordingly; and, if the taxes, interest, or penalties 
are sustained to any extent over the amount rendered by the 
taxpayer, shall assess $10 costs against the taxpayer.  The 
court shall disregard all technicalities and matters of form not 
affecting the substantial merits.  The commissioner may call 
upon the county attorney or the attorney general to conduct the 
proceedings on behalf of the state.  Execution shall be issued 
upon the judgment at the request of the commissioner, and the 
execution shall, in all other respects, be governed by the laws 
applicable to executions issued on judgments.  Only the 
homestead and household goods of the judgment debtor shall be 
exempt from seizure and sale upon the execution.  
    Sec. 8.  Minnesota Statutes 1988, section 270.68, 
subdivision 3, is amended to read: 
    Subd. 3.  [TAX PRESUMED VALID.] The tax, as assessed by the 
commissioner, with any penalties included therein, shall be 
presumed to be valid and correctly determined and assessed, and 
the burden shall be upon the taxpayer to show its incorrectness 
or invalidity.  The A statement filed by the commissioner with 
the court administrator, as provided in subdivision 1, or any 
other certificate by the commissioner of showing the amount of 
the tax and penalties as determined or assessed by the 
commissioner, shall be is admissible in evidence and shall 
establish prima facie the facts set forth therein.  
    Sec. 9.  Minnesota Statutes 1988, section 270.69, 
subdivision 2, is amended to read: 
    Subd. 2.  [FILING OF LIENS NECESSARY FOR ENFORCEABILITY 
AGAINST CERTAIN PERSONS.] The lien imposed by subdivision 1 is 
not enforceable against any purchaser, mortgagee, pledgee, 
holder of a uniform commercial code security interest, 
mechanic's lienor, or judgment lien creditor whose interest has 
been duly perfected or is entitled to protection under 
applicable provisions of state law, until a notice of lien has 
been filed by the commissioner of revenue in the office of the 
county recorder of the county in which the real 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 to a 
corporation, partnership, or other organization, in the office 
of the secretary of state, or in the case of personal property 
belonging to a resident individual, in the office of the county 
recorder of the county of residence of the individual.  
Notwithstanding any other law to the contrary, the department of 
revenue is exempt from the payment of fees at the time the lien 
is offered for filing or recording.  The fee for filing or 
recording the lien must be paid at the time the release of lien 
is offered for filing or recording.  Notwithstanding any law to 
the contrary, the fee for filing or recording the lien or the 
release of lien is $15. 
    Sec. 10.  Minnesota Statutes 1988, section 270.69, 
subdivision 3, is amended to read: 
    Subd. 3.  [EXEMPT PROPERTY.] The lien imposed on personal 
property by this section, even though properly filed, is not 
enforceable: (1) against a purchaser with respect to tangible 
personal property purchased at retail, in the ordinary course of 
the seller's trade or business, unless at the time of purchase 
the purchaser intends the purchase to or knows the purchase will 
hinder, evade, or defeat the collection of a tax; or (2) against 
the personal property listed as exempt in sections 550.37, 
550.38, and 550.39. 
    Sec. 11.  Minnesota Statutes 1988, section 270.69, 
subdivision 7, is amended to read: 
    Subd. 7.  [NOTICE OF MORTGAGE FORECLOSURE OR CONTRACT 
TERMINATION.] If a lien has been filed by the commissioner of 
revenue against real property pursuant to this section, and, 
subsequent to the recording of the lien, In the case of a 
mortgage foreclosure upon the real property is commenced under 
chapter 580, or a termination of contract of sale of the real 
property is commenced under section 559.21, if the commissioner 
has filed a lien under this section before the foreclosure sale 
or date of termination, notice of the mortgage foreclosure or 
termination of contract of sale shall be mailed to the 
commissioner not less than 25 days prior to the foreclosure sale 
or date of termination.  Provided, notice need not be given 
pursuant to this subdivision if the lien of the commissioner has 
been filed within 30 days or less prior to the foreclosure sale 
or date of termination.  The contents of the notice shall be as 
prescribed in section 7425(c)(1) of the Internal Revenue Code of 
1954, as amended through December 31, 1982. must contain the 
following information:  (1) the name and address of the 
taxpayer; (2) a copy of the notice of mortgage foreclosure or 
contract for deed cancellation; (3) a copy of the lien filed by 
the commissioner; (4) the total unpaid balance of the mortgage 
or contract for deed; (5) a legal description of the property; 
and (6) the fair market value of the property.  
    Sec. 12.  Minnesota Statutes 1988, section 270.69, 
subdivision 8, is amended to read: 
    Subd. 8.  [FILING ENTITLEMENT.] Execution of notices of 
liens or of other notices affecting state tax liens by the 
original or facsimile signature of the commissioner of revenue 
or a delegate entitles them to be filed, and no other 
attestation, certification, or acknowledgment is necessary.  
    Sec. 13.  Minnesota Statutes 1988, section 270.69, is 
amended by adding a subdivision to read: 
    Subd. 12.  [LIEN RELEASE FEE.] A fee of $25 must be paid to 
the commissioner of revenue for each duplicate of an original 
release of lien. 
    Sec. 14.  Minnesota Statutes 1988, section 270.70, 
subdivision 1, is amended to read: 
    Subdivision 1.  [AUTHORITY OF COMMISSIONER.] If any tax 
payable to the commissioner of revenue or to the department of 
revenue is not paid when due, such tax may be collected by the 
commissioner of revenue within five years after the date of 
assessment of the tax, or if a lien has been filed, during the 
period the lien is enforceable, or if the tax judgment has been 
filed, within the statutory period of enforcement of a valid tax 
judgment, by a levy upon all property and rights to property, 
including any property in the possession of law enforcement 
officials, of the person liable for the payment or collection of 
such tax (except that which is exempt from execution pursuant to 
section 550.37) or property on which there is a lien provided in 
section 270.69.  For this purpose, the term "tax" shall include 
any penalty, interest and costs properly payable.  The term 
"levy" includes the power of distraint and seizure by any means. 
    Sec. 15.  Minnesota Statutes 1989 Supplement, section 
270.73, subdivision 1, is amended to read: 
    Subdivision 1.  [POSTING, NOTICE.] Pursuant to section 
270B.12, subdivision 4, the commissioner shall, by the 15th of 
each month, submit to the commissioner of public safety a list 
of all taxpayers who are required to withhold or collect the tax 
imposed by section 290.92 or 297A.02, or local sales and use tax 
payable to the commissioner of revenue, and who are 30 days or 
more delinquent in either filing a tax return or paying the 
tax.  At least ten days before notifying the commissioner of 
public safety, the commissioner of revenue shall notify the 
taxpayer of the intended action. 
     The commissioner of public safety shall post the list in 
the same manner as provided in section 340A.318, subdivision 3.  
The list will prominently show the date of posting.  If a 
taxpayer previously listed cures the delinquency by filing all 
returns and paying all taxes, the commissioner shall notify the 
commissioner of public safety within two business days that the 
delinquency was cured. 
    Sec. 16.  Minnesota Statutes 1988, section 290.92, 
subdivision 23, is amended to read: 
    Subd. 23.  [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 
(1) The commissioner may, within five years after the date of 
assessment of the tax, or if a lien has been filed under section 
270.69, within the statutory period for enforcement of the lien, 
give notice to any employer deriving income which has a taxable 
situs in this state regardless of whether the income is exempt 
from taxation, that an employee of that employer is delinquent 
in a certain amount with respect to any state taxes, including 
penalties, interest and costs.  The commissioner can proceed 
under this subdivision only if the tax is uncontested or if the 
time for appeal of the tax has expired.  The commissioner shall 
not proceed under this subdivision until the expiration of 30 
days after mailing to the taxpayer, at the taxpayer's last known 
address, a written notice of (a) the amount of taxes, interest, 
and penalties due from the taxpayer and demand for their 
payment, and (b) the commissioner's intention to require 
additional withholding by the taxpayer's employer pursuant to 
this subdivision.  The effect of the notice shall expire 180 
days after it has been mailed to the taxpayer provided that the 
notice may be renewed by mailing a new notice which is in 
accordance with this subdivision.  The renewed notice shall have 
the effect of reinstating the priority of the original claim.  
The notice to the taxpayer shall be in substantially the same 
form as that provided in section 571.41.  The notice shall 
further inform the taxpayer of the wage exemptions contained in 
section 550.37, subdivision 14.  If no statement of exemption is 
received by the commissioner within 30 days from the mailing of 
the notice, the commissioner may proceed under this 
subdivision.  The notice to the taxpayer's employer may be 
served by mail or by delivery by an employee of the department 
of revenue and shall be in substantially the same form as 
provided in section 571.495.  Upon receipt of notice, the 
employer shall withhold from compensation due or to become due 
to the employee, the total amount shown by the notice, subject 
to the provisions of section 571.55.  The employer shall 
continue to withhold each pay period until the total amount 
shown by the notice is paid in full released by the commissioner 
under section 270.709.  Upon receipt of notice by the employer, 
the claim of the state of Minnesota shall have priority over any 
subsequent garnishments or wage assignments.  The commissioner 
may arrange between the employer and the employee for 
withholding a portion of the total amount due the employee each 
pay period, until the total amount shown by the notice plus 
accrued interest has been withheld. 
      The "compensation due" any employee is defined in 
accordance with the provisions of section 571.55.  The maximum 
withholding allowed under this subdivision for any one pay 
period shall be decreased by any amounts payable pursuant to a 
garnishment action with respect to which the employer was served 
prior to being served with the notice of delinquency and any 
amounts covered by any irrevocable and previously effective 
assignment of wages; the employer shall give notice to the 
department of the amounts and the facts relating to such 
assignments within ten days after the service of the notice of 
delinquency on the form provided by the department of revenue as 
noted in this subdivision.  In crediting amounts withheld 
against delinquent taxes of an employee, the department shall 
apply amounts withheld in the following order:  penalties, 
interest, tax and costs. 
    (2) If the employee ceases to be employed by the employer 
before the full amount set forth in a notice of delinquency plus 
accrued interest has been withheld, the employer shall 
immediately notify the commissioner in writing of the 
termination date of the employee and the total amount withheld.  
No employer may discharge any employee by reason of the fact 
that the commissioner has proceeded under this subdivision.  If 
an employer discharges an employee in violation of this 
provision, the employee shall have the same remedy as provided 
in section 571.61, subdivision 2. 
    (3) Within ten days after the expiration of such pay 
period, the employer shall, by the date prescribed in 
subdivision 6, remit to the commissioner, on a form and in the 
manner prescribed by the commissioner, the amount withheld 
during the calendar quarter each pay period under this 
subdivision.  Should any employer, after notice, willfully fail 
to withhold in accordance with the notice and this subdivision, 
or willfully fail to remit any amount withheld as required by 
this subdivision, the employer shall be liable for the total 
amount set forth in the notice together with accrued interest 
which may be collected by any means provided by law relating to 
taxation.  No amount required to be paid by an employer by 
reason of the employer's failure to remit under this 
subdivision, may be deducted from the gross income of the 
employer, under sections 290.09, subdivision 4 or 290.01, 
subdivisions 20 to 20f.  Any amount collected from the employer 
for failure to withhold or for failure to remit under this 
subdivision shall be credited to the employee's account in the 
following manner:  penalties, interest, tax and costs. 
    (4) Clauses (1), (2) and (3), except provisions imposing a 
liability on the employer for failure to withhold or remit, 
shall apply to cases in which the employer is the United States 
or any instrumentality thereof or this state or any municipality 
or other subordinate unit thereof. 
     (5) The commissioner shall refund to the employee excess 
amounts withheld from the employee under this subdivision.  If 
any excess results from payments by the employer because of 
willful failure to withhold or remit as prescribed in clause (3) 
above, the excess attributable to the employer's payment shall 
be refunded to the employer. 
     (6) Employers required to withhold delinquent taxes, 
penalties, interest and costs under this subdivision shall not 
be required to compute any additional interest, costs or other 
charges to be withheld. 
    (7) The collection remedy provided to the commissioner by 
this subdivision shall have the same legal effect as if it were 
a levy made pursuant to section 270.70.  
    Sec. 17.  Minnesota Statutes 1988, section 524.3-1001, is 
amended to read: 
    524.3-1001 [FORMAL PROCEEDINGS TERMINATING ADMINISTRATION; 
TESTATE OR INTESTATE; ORDER OF DISTRIBUTION, DECREE, AND GENERAL 
PROTECTION.] 
    (a) (1) A personal representative or any interested person 
may petition for an order of complete settlement of the estate.  
The personal representative may petition at any time, and any 
other interested person may petition after one year from the 
appointment of the original personal representative except that 
no petition under this section may be entertained until the time 
for presenting claims which arose prior to the death of the 
decedent has expired. The petition may request the court to 
determine testacy, if not previously determined, to consider the 
final account or compel or approve an accounting and 
distribution, to construe any will or determine heirs and 
adjudicate the final settlement and distribution of the estate.  
After notice to all interested persons and hearing the court may 
enter an order or orders, on appropriate conditions, determining 
the persons entitled to distribution of the estate, and, as 
circumstances require, approving settlement and directing or 
approving distribution of the estate and discharging the 
personal representative from further claim or demand of any 
interested person. 
    (2) In such petition for complete settlement of the estate, 
the petitioner may apply for a decree.  Upon the hearing, if in 
the best interests of interested persons, the court may issue 
its decree which shall determine the persons entitled to the 
estate and assign the same to them in lieu of ordering the 
assignment by the personal representative.  The decree shall 
name the heirs and distributees, state their relationship to the 
decedent, describe the property, and state the proportions or 
part thereof to which each is entitled.  In the estate of a 
testate decedent, no heirs shall be named in the decree unless 
all heirs be ascertained. 
   (3) In solvent estates, the hearing may be waived by 
written consent to the proposed account and decree of 
distribution or order of distribution by all heirs or 
distributees, and the court may then enter its order allowing 
the account and issue its decree or order of distribution. 
   (4) Where a decree or order for distribution is issued, the 
personal representative shall not be discharged until all 
property is paid or transferred to the persons entitled thereto, 
and the personal representative has otherwise fully discharged 
the trust.  If objections are an order assessing estate tax or 
request for documents is filed with the court by the 
commissioner of revenue, no discharge shall be issued until the 
objections are determined assessment is paid or the request is 
complied with.  If no objection order assessing estate tax or 
request for documents is filed, the court shall have the power 
to settle and distribute the estate and discharge the personal 
representative without regard to tax obligations. 
   (b) If one or more heirs or devisees were omitted as 
parties in, or were not given notice of, a previous formal 
testacy proceeding, the court, on proper petition for an order 
of complete settlement of the estate under this section, and 
after notice to the omitted or unnotified persons and other 
interested parties determined to be interested on the assumption 
that the previous order concerning testacy is conclusive as to 
those given notice of the earlier proceeding, may determine 
testacy as it affects the omitted persons and confirm or alter 
the previous order of testacy as it affects all interested 
persons as appropriate in the light of the new proofs.  In the 
absence of objection by an omitted or unnotified person, 
evidence received in the original testacy proceeding shall 
constitute prima facie proof of due execution of any will 
previously admitted to probate, or of the fact that the decedent 
left no valid will if the prior proceedings determined this fact.
    Sec. 18.  [REPEALER.] 
    (a) Minnesota Statutes 1988, section 270.10, subdivision 4, 
is repealed. 
    (b) Minnesota Statutes 1988, section 270.08 is repealed. 
    (c) Minnesota Statutes 1988, sections 290.53, subdivision 5 
and 297A.39, subdivision 5, are repealed. 
    (d) Minnesota Statutes 1988, sections 290.52; 291.31, 
subdivision 2; 297A.29; and 297A.37, are repealed. 
    Sec. 19.  [EFFECTIVE DATES.] 
    Sections 1, 3, 13, 15, 16, 17, and 18, paragraph (d), are 
effective August 1, 1990. 
    Sections 5, 6, 7, 8, 14, and 18, paragraph (b), are 
effective the day following final enactment. 
    Sections 9 and 10 are effective for liens imposed on or 
after August 1, 1990. 
    Section 11 is effective for mortgage foreclosures or 
terminations of contracts of sale of real property commenced 
after August 1, 1990. 
    Section 12 is effective for notices executed on or after 
August 1, 1990. 
    Sections 4 and 18, paragraph (c), are effective for 
payments received on or after August 1, 1990. 
    Sections 2 and 18, paragraph (a), are effective for taxes 
becoming due on or after August 1, 1990. 

                               ARTICLE 3

                    GASOLINE AND SPECIAL FUEL TAXES
    Section 1.  Minnesota Statutes 1988, section 296.18, 
subdivision 2, is amended to read: 
    Subd. 2.  [FAILURE TO USE OR SELL GASOLINE OR SPECIAL FUEL 
FOR INTENDED PURPOSES; REPORTS REQUIRED.] (1) Any person who 
shall buy aviation gasoline or special fuel for aircraft use and 
who shall have paid the excise taxes due thereon directly or 
indirectly through the amount of the tax being included in the 
price thereof, or otherwise, and shall use said gasoline or 
special fuel in motor vehicles or shall knowingly sell it to any 
person for use in motor vehicles shall, on or before the 
twenty-third day of the month following that in which such 
gasoline or special fuel was so used or sold, report the fact of 
such use or sale to the commissioner in such form as the 
commissioner may prescribe. 
    (2) Any person who shall buy gasoline other than aviation 
gasoline and who shall have paid the motor vehicle gasoline 
excise tax directly or indirectly through the amount of the tax 
being included in the price of the gasoline, or otherwise, who 
shall knowingly sell such gasoline to any person to be used for 
the purpose of producing or generating power for propelling 
aircraft, or who shall receive, store, or withdraw from storage 
such gasoline to be used for that purpose, shall, on or before 
the 23rd day of the month following that in which such gasoline 
was so sold, stored, or withdrawn from storage, report the fact 
of such sale, storage, or withdrawal from storage to the 
commissioner in such form as the commissioner may prescribe. 
             (3) Any person who shall buy aviation gasoline or special 
fuel for aircraft use and who shall have paid the excise taxes 
directly or indirectly through the amount of the tax being 
included in the price thereof, or otherwise, who shall not use 
it in motor vehicles or receive, sell, store, or withdraw it 
from storage for the purpose of producing or generating power 
for propelling aircraft, shall be reimbursed and repaid the 
amount of the tax paid upon filing with the commissioner a 
signed claim in writing in such form and containing such 
information as the commissioner shall require and accompanied by 
the original invoice thereof.  By signing any such claim which 
is false or fraudulent, the applicant shall be subject to the 
penalties provided in this section 296.25 for knowingly or 
willfully making a false claim.  The claim shall set forth the 
total amount of the aviation gasoline or special fuel for 
aircraft use so purchased and used by the applicant, and shall 
state when and for what purpose it was used.  When a claim 
contains an error in computation or preparation, the 
commissioner is authorized to adjust the claim in accordance 
with the evidence shown on the claim or other information 
available to the commissioner.  The commissioner, on being 
satisfied that the claimant is entitled to payment, shall 
approve the claim and transmit it to the commissioner of 
finance.  No repayment shall be made unless the claim and 
invoice shall be filed with the commissioner within one year 
from the date of the purchase.  The postmark on the envelope in 
which the claim is mailed shall determine the date of filing. 
    Sec. 2.  Minnesota Statutes 1988, section 296.18, 
subdivision 3, is amended to read: 
    Subd. 3.  [PENALTIES CIVIL PENALTY FOR FILING FALSE 
CLAIMS CLAIM.] Every person who shall make any false statement 
in any claim or invoice filed with the commissioner, or 
knowingly file with the commissioner any claim or invoice 
containing any false statement or collect or cause to be paid to 
the person or to another a refund without being entitled 
thereto, when acting pursuant to the provisions of subdivision 1 
or 2, clause 3, shall forfeit the full amount of the claim and 
be guilty of a misdemeanor.  Every A person who violates section 
296.25, subdivision 1, paragraph (a) or (b), shall forfeit the 
full amount of the claim.  In addition, a person who is 
convicted under the provisions of this subdivision shall section 
296.25, subdivision 1, paragraph (a) or (b), for filing a false 
statement or claim shall, in addition to any criminal penalties 
imposed, be prohibited from filing with the commissioner any 
claim for refund upon gasoline purchased within six months after 
such conviction. 
    Sec. 3.  Minnesota Statutes 1988, section 296.25, is 
amended to read: 
    296.25 [VIOLATIONS, CRIMINAL PENALTIES.] 
    Subdivision 1.  [PENALTIES IMPOSED.] Any person who fails 
to comply with any provisions of sections 296.01 to 296.421, or 
who makes any false statement in any report, record, or sales 
ticket required by sections 296.12, 296.14, 296.17, subdivision 
5, 296.18, subdivision 2, or 296.21, shall be guilty of a 
misdemeanor.  A minimum fine of $200 shall be imposed on a 
person who fails to obtain a license or trip permit required 
under section 296.17, subdivisions 10 and 17.  
    Prosecutions commenced under this section may be brought in 
the county in which the defendant resides or in Ramsey county.  
    The county attorney of any county in which the action is 
commenced, shall on request of the commissioner of revenue, 
prosecute violations of this chapter.  Costs, fees, and expenses 
incurred by any county attorney in litigation in connection with 
the action may be paid from appropriations to the commissioner 
of revenue for the administration of this chapter. (a) A person 
who fails to comply with a provision of sections 296.01 to 
296.421, or who knowingly provides false information, including, 
but not limited to, false odometer readings, or who knowingly 
makes a false statement in a report, record, claim, or sales 
ticket required by sections 296.12; 296.14; 296.17, subdivisions 
5, or 7 to 22; 296.18, subdivision 2; or 296.21, is guilty of a 
gross misdemeanor. 
    (b) A person who willfully attempts in any manner to evade 
or defeat any tax imposed by sections 296.01 to 296.421, 
including, but not limited to, making and subscribing any false 
statement in any report, record, claim, or sales ticket required 
by sections 296.12; 296.14; 296.17, subdivisions 5, or 7 to 22; 
296.18, subdivision 2; and 296.21; or making a false claim for a 
refund under section 296.18, subdivision 4, is guilty of a 
felony. 
    (c) It is a misdemeanor for a person to operate, or cause 
to be operated, a licensed motor vehicle on the public highways 
of this state on special fuel on which the excise tax provided 
by this chapter has not been paid or the liability therefore 
assumed by another person licensed under this chapter.  A person 
who uses gasoline, delivered into an on-farm bulk storage tank 
and on which no tax has been collected, for propelling a motor 
vehicle on the public highways of this state is also guilty of a 
misdemeanor. 
    (d) An officer or employee of the state of Minnesota 
charged with the enforcement of a provision of sections 296.01 
to 296.421 who is employed by or who engages in business as a 
distributor or dealer in petroleum products is guilty of a 
misdemeanor. 
    (e) The authorization in this chapter for the collection of 
the excise taxes by persons other than the commissioner for and 
in behalf of the state of Minnesota establishes a fiduciary 
relationship, for the violation of which, in failure to make 
payment when due and payable, the person so authorized to 
collect these excise taxes shall be deemed guilty of a violation 
of section 609.54, and punished accordingly. 
     (f) A minimum fine of $200 shall be imposed on a person who 
fails to obtain a license or trip permit required under section 
296.17, subdivisions 10 and 17. 
    Subd. 2.  [PROSECUTION OF VIOLATIONS.] It is a misdemeanor 
for any person to operate, or cause to be operated, a licensed 
motor vehicle on the public highways of this state on special 
fuel on which the excise tax provided by this chapter has not 
been paid or the liability therefor assumed by another person 
licensed under this chapter.  Prosecutions under this section 
may be brought in the county in which the defendant resides or 
in Ramsey county.  On request of the commissioner of revenue, 
the county attorney of a county in which the action is commenced 
shall prosecute violations of this chapter.  Costs, fees, and 
expenses incurred by any county attorney in litigation in 
connection with the action may be paid from appropriations to 
the commissioner of revenue for the administration of this 
chapter. 
    Sec. 4.  [REPEALER.] 
    Minnesota Statutes 1988, sections 296.027; 296.16, 
subdivision 3; 296.17, subdivision 13; 296.18, subdivisions 3a 
and 7; and 296.24, are repealed. 
    Sec. 5.  [EFFECTIVE DATES.] 
    Section 1 is effective for sales occurring on or after 
August 1, 1990. 
    Section 2 is effective for statements or claims filed on or 
after August 1, 1990. 
    Section 3 is effective for acts or violations occurring on 
or after August 1, 1990. 
    Section 4 is effective August 1, 1990. 

                               ARTICLE 4 

                  SALES AND USE, MOTOR VEHICLE EXCISE,
AND PETROLEUM PRODUCTS TAXES
    Section 1.  Minnesota Statutes 1989 Supplement, section 
168A.10, subdivision 1, is amended to read: 
    Subdivision 1.  If an owner transfers interest in a vehicle 
other than by the creation of a security interest, the owner 
shall at the time of the delivery of the vehicle execute an 
assignment and warranty of title to the transferee and shall 
state the actual selling price in the space provided therefor on 
the certificate.  With respect to motor vehicles subject to the 
provisions of section 325E.15, the transferor shall also, in the 
space provided therefor on the certificate, state the true 
cumulative mileage registered on the odometer or that the actual 
mileage is unknown if the odometer reading is known by the 
transferor to be different from the true mileage.  The 
transferor shall cause the certificate and assignment to be 
delivered to the transferee immediately. 
    Sec. 2.  Minnesota Statutes 1988, section 296.06, 
subdivision 2, is amended to read: 
    Subd. 2.  [REQUIREMENTS FOR ISSUANCE.] A distributor's 
license shall be issued to any responsible person qualifying as 
a distributor who makes application therefor, and who shall pay 
to the commissioner at the time thereof and annually thereafter 
a license fee of $10, and who shall further comply with the 
following conditions: 
     (1) A written application shall be made in a manner 
approved by the commissioner, who shall require the applicant or 
licensee to deposit with the state treasurer securities of the 
United States government or the state of Minnesota or to execute 
and file a bond, with a corporate surety approved by the 
commissioner, to the state of Minnesota in an amount to be 
determined by the commissioner and in a form to be fixed by the 
commissioner and approved by the attorney general, and which 
shall be conditioned for the payment when due of all excise 
taxes, inspection fees, penalties, and accrued interest arising 
in the ordinary course of business or by reason of any 
delinquent money which may be due the state of Minnesota; the 
bond shall cover all places of business within the state where 
petroleum products are received by the licensee; and the 
applicant or licensee shall designate and maintain an agent in 
this state upon whom service may be had for all purposes of this 
section.  
     (2) An initial applicant for a distributor's license shall 
furnish a bond in a minimum sum of $3,000 for the first year; 
    (3) The commissioner, on reaching the opinion that the bond 
given by a licensee is inadequate in amount to fully protect the 
state, shall require an additional bond in such amount as the 
commissioner deems sufficient; 
    (4) A licensee who desires to be exempt from depositing 
securities or furnishing such bond, as hereinbefore provided 
shall furnish an itemized financial statement showing the assets 
and the liabilities of the applicant and if it shall appear to 
the commissioner, from the financial statement or otherwise, 
that the applicant is financially responsible, then the 
commissioner may exempt such applicant from depositing such 
securities or furnishing such bond until the commissioner 
otherwise orders.  
    (5) The premium on any bond required under clauses (1) and 
(2), and on any additional bond required under clause (3), shall 
be paid by the commissioner out of a bond premium fund required 
to be set up from an appropriation by the legislature from 
whatever funds are available.  All of said bonds required during 
each license period shall be purchased by the commissioner of 
administration from the lowest responsible bidder after 
advertising for competitive bids in the manner prescribed by 
Laws 1939, chapter 431, article II, as amended.  The 
commissioner of administration shall call for bids within a 
reasonable period prior to the commencement of license period.  
    (6) Each license period shall be for one year ending each 
June 30.  
    (7) (6) Upon application to the commissioner and compliance 
by the applicant with the provisions of this subdivision, the 
commissioner also shall issue a distributor's license to (a) any 
person engaged in this state in the bulk storage of petroleum 
products and the distribution thereof by tank car or tank truck 
or both, and (b) any person holding an unrevoked license as a 
distributor since January 1, 1947, and (c) any person holding a 
license and performing a function under the motor fuel tax law 
of an adjoining state equivalent to that of a distributor under 
this act, who desires to ship or deliver petroleum products from 
that state to persons in this state not licensed as distributors 
in this state and who agrees to assume with respect to all 
petroleum products so shipped or delivered the liabilities of a 
distributor receiving petroleum products in this state, 
provided, however, that any such license shall be issued only 
for the purpose of permitting such person to receive in this 
state the petroleum products so shipped or delivered.  Except as 
herein provided, all persons licensed as distributors under this 
clause shall have the same rights and privileges and be subject 
to the same duties, requirements and penalties as other licensed 
distributors.  
    Sec. 3.  Minnesota Statutes Second 1989 Supplement, section 
297A.01, subdivision 3, is amended to read: 
    Subd. 3.  A "sale" and a "purchase" includes, but is not 
limited to, each of the following transactions: 
     (a) Any transfer of title or possession, or both, of 
tangible personal property, whether absolutely or conditionally, 
and the leasing of or the granting of a license to use or 
consume tangible personal property other than manufactured homes 
used for residential purposes for a continuous period of 30 days 
or more, for a consideration in money or by exchange or barter; 
     (b) The production, fabrication, printing or processing of 
tangible personal property for a consideration for consumers who 
furnish either directly or indirectly the materials used in the 
production, fabrication, printing, or processing; 
    (c) The furnishing, preparing, or serving for a 
consideration of food, meals or drinks, not including.  "Sale" 
does not include: 
     (1) meals or drinks served to patients, inmates, or persons 
residing at hospitals, sanitariums, nursing homes, senior 
citizens homes, and correctional, detention, and detoxification 
facilities, 
    (2) meals or drinks purchased for and served exclusively to 
individuals who are 60 years of age or over and their spouses or 
to the handicapped and their spouses by governmental agencies, 
nonprofit organizations, agencies, or churches or pursuant to 
any program funded in whole or part through 42 USCA sections 
3001 through 3045, wherever delivered, prepared or served, or 
    (3) meals and lunches served at public and private schools, 
universities or colleges.  "Sales" also includes meals furnished 
by employers to employees at less than fair market value, except 
meals furnished to employees of restaurants, resorts, and 
hotels, and except meals furnished at no charge to employees of 
hospitals, nursing homes, boarding care homes, sanitariums, 
group homes, and correctional, detention, and detoxification 
facilities, who are required to eat with the patients, 
residents, or inmates residing in them.  Notwithstanding section 
297A.25, subdivision 2, taxable food or meals include, but are 
not limited to, the following:  
    (i) heated food or drinks; 
    (ii) sandwiches prepared by the retailer; 
     (iii) single sales of prepackaged ice cream or ice milk 
novelties prepared by the retailer; 
     (iv) hand-prepared or dispensed ice cream or ice milk 
products including cones, sundaes, and snow cones; 
     (v) soft drinks and other beverages prepared or served by 
the retailer; 
     (vi) gum; 
     (vii) ice; 
     (viii) all food sold in vending machines; 
     (ix) party trays prepared by the retailers; and 
     (x) all meals and single servings of packaged snack food, 
single cans or bottles of pop, sold in restaurants and bars; 
     (d) The granting of the privilege of admission to places of 
amusement, recreational areas, or athletic events, except a 
world championship football game sponsored by the national 
football league, and the privilege of having access to and the 
use of amusement devices, tanning facilities, reducing salons, 
steam baths, turkish baths, massage parlors, health clubs, and 
spas or athletic facilities; 
     (e) The furnishing for a consideration of lodging and 
related services by a hotel, rooming house, tourist court, motel 
or trailer camp and of the granting of any similar license to 
use real property other than the renting or leasing thereof for 
a continuous period of 30 days or more; 
     (f) The furnishing for a consideration of electricity, gas, 
water, or steam for use or consumption within this state, or 
local exchange telephone service, intrastate toll service, and 
interstate toll service, if that service originates from and is 
charged to a telephone located in this state; the tax imposed on 
amounts paid for telephone services is the liability of and 
shall be paid by the person paying for the services.  The 
furnishing for a consideration of access to telephone services 
by a hotel to its guests is a sale under this clause.  Sales by 
municipal corporations in a proprietary capacity are included in 
the provisions of this clause.  The furnishing of water and 
sewer services for residential use shall not be considered a 
sale; 
    (g) The furnishing for a consideration of cable television 
services, including charges for basic monthly service, charges 
for monthly premium service, and charges for any other similar 
television services; 
    (h) Notwithstanding subdivision 4, and section 297A.25, 
subdivision 9, the sales of horses including claiming sales and 
fees paid for breeding a stallion to a mare.  This clause 
applies to sales and fees with respect to a horse to be used for 
racing whose birth has been recorded by the Jockey Club or the 
United States Trotting Association or the American Quarter Horse 
Association; 
    (i) The furnishing for a consideration of parking services, 
whether on a contractual, hourly, or other periodic basis, 
except for parking at a meter; 
    (j) The furnishing for a consideration of services listed 
in this paragraph: 
    (i) laundry and dry cleaning services including cleaning, 
pressing, repairing, altering, and storing clothes, linen 
services and supply, cleaning and blocking hats, and carpet, 
drapery, upholstery, and industrial cleaning.  Laundry and dry 
cleaning services do not include services provided by coin 
operated facilities operated by the customer; 
    (ii) motor vehicle washing, waxing, and cleaning services, 
including services provided by coin-operated facilities operated 
by the customer, and rustproofing, undercoating, and towing of 
motor vehicles; 
    (iii) building and residential cleaning, maintenance, and 
disinfecting and exterminating services; 
     (iv) services provided by detective agencies, security 
services, burglar, fire alarm, and armored car services not 
including services performed within the jurisdiction they serve 
by off-duty licensed peace officers as defined in section 
626.84, subdivision 1; 
    (v) pet grooming services; 
     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
services; garden planting and maintenance; arborist services; 
tree, bush, and shrub planting, pruning, bracing, spraying, and 
surgery; and tree trimming for public utility lines. 
The services listed in this paragraph are taxable under section 
297A.02 if the service is performed wholly within Minnesota or 
if the service is performed partly within and partly without 
Minnesota and the greater proportion of the service is performed 
in Minnesota, based on the cost of performance.  In applying the 
provisions of this chapter, the terms "tangible personal 
property" and "sales at retail" include taxable services and the 
provision of taxable services, unless specifically provided 
otherwise.  Services performed by an employee for an employer 
are not taxable under this paragraph.  Services performed by a 
partnership or association for another partnership or 
association are not taxable under this paragraph if one of the 
entities owns or controls more than 80 percent of the voting 
power of the equity interest in the other entity.  Services 
performed between members of an affiliated group of corporations 
are not taxable.  For purposes of this section, "affiliated 
group of corporations" includes those entities that would be 
classified as a member of an affiliated group under United 
States Code, title 26, section 1504, and who are eligible to 
file a consolidated tax return for federal income tax purposes; 
and 
     (vii) solid waste collection and disposal services as 
described in section 297A.45; 
     (k) A "sale" and a "purchase" includes the transfer of 
computer software, meaning information and directions that 
dictate the function performed by data processing equipment.  A 
"sale" and a "purchase" does not include the design, 
development, writing, translation, fabrication, lease, or 
transfer for a consideration of title or possession of a custom 
computer program; and 
    (l) The granting of membership in a club, association, or 
other organization if: 
    (1) the club, association, or other organization makes 
available for the use of its members sports and athletic 
facilities (without regard to whether a separate charge is 
assessed for use of the facilities); and 
    (2) use of the sports and athletic facilities is not made 
available to the general public on the same basis as it is made 
available to members.  
Granting of membership includes both one-time initiation fees 
and periodic membership dues.  Sports and athletic facilities 
include golf courses, tennis, racquetball, handball and squash 
courts, basketball and volleyball facilities, running tracks, 
exercise equipment, swimming pools, and other similar athletic 
or sports facilities.  The provisions of this paragraph do not 
apply to camps or other recreation facilities owned and operated 
by an exempt organization under section 501(c)(3) of the 
Internal Revenue Code of 1986, as amended through December 31, 
1986, for educational and social activities for young people 
primarily age 18 and under.  
    Sec. 4.  Minnesota Statutes 1988, section 297A.01, 
subdivision 8, is amended to read: 
    Subd. 8.  "Sales price" means the total consideration 
valued in money, for a retail sale whether paid in money or 
otherwise, excluding therefrom any amount allowed as credit for 
tangible personal property taken in trade for resale, without 
deduction for the cost of the property sold, cost of materials 
used, labor or service cost, interest, or discount allowed after 
the sale is consummated, the cost of transportation incurred 
prior to the time of sale, any amount for which credit is given 
to the purchaser by the seller, or any other expense 
whatsoever.  A deduction may be made for charges for services 
that are part of the sale, including charges up to 15 percent in 
lieu of tips, if the consideration for such charges is 
separately stated, but no deduction shall be allowed for charges 
for services that are part of a sale as defined in subdivision 
3, clauses (b) to (f) (l).  A deduction may also be made for 
interest, financing, or carrying charges, charges for labor or 
services used in installing or applying the property sold or 
transportation charges if the transportation occurs after the 
retail sale of the property only if the consideration for such 
charges is separately stated.  There shall not be included in 
"sales price" cash discounts allowed and taken on sales or the 
amount refunded either in cash or in credit for property 
returned by purchasers. 
    Sec. 5.  Minnesota Statutes 1988, section 297A.14, 
subdivision 1, is amended to read: 
    Subdivision 1.  [IMPOSITION.] For the privilege of using, 
storing or consuming in Minnesota tangible personal property, 
tickets or admissions to places of amusement and athletic 
events, electricity, gas, and local exchange telephone 
service or taxable services purchased for use, storage or 
consumption in this state, a use tax is imposed on every person 
in this state at the rate of tax imposed under section 297A.02 
on the sales price of sales at retail of the items, unless the 
tax imposed by section 297A.02 was paid on the sales price.  
    Sec. 6.  Minnesota Statutes 1988, section 297A.25, 
subdivision 31, is amended to read: 
    Subd. 31.  [SALES BY GOVERNMENT TAXABLE.] This section 
shall not be construed to exempt the gross receipts from sales 
of tangible personal property or taxable services purchased from 
the United States or any of its agencies or instrumentalities, 
or the state of Minnesota, its agencies, instrumentalities or 
political subdivisions by ultimate consumers, and such purchases 
are hereby declared to be subject to tax, except as they may be 
otherwise exempted. 
    Sec. 7.  Minnesota Statutes 1988, section 297A.255, is 
amended by adding a subdivision to read: 
    Subd. 5.  There is specifically exempted from the 
provisions of this chapter the purchase or use of aircraft 
registered in the state of Minnesota by a corporation or 
partnership when the transfer constitutes a transfer within the 
meaning of section 351 or 721 of the Internal Revenue Code of 
1986, as amended through December 31, 1989. 
    Sec. 8.  Minnesota Statutes 1988, section 297B.035, 
subdivision 1, is amended to read: 
    Subdivision 1.  Except as provided in this section, motor 
vehicles purchased for resale in the ordinary course of business 
or used by any motor vehicle dealer, as defined in section 
168.011, subdivision 21, who is licensed under section 168.27, 
subdivision 2 or 3, which bear dealer plates as authorized by 
section 168.27, subdivision 16, shall be exempt from the 
provisions of this chapter. 
    Sec. 9.  [EFFECTIVE DATE.] 
    Sections 1 to 8 are effective July 1, 1990.  

                               ARTICLE 5 

           INCOME AND FRANCHISE TAXES AND PROPERTY TAX REFUNDS
    Section 1.  Minnesota Statutes Second 1989 Supplement, 
section 10A.31, subdivision 5, is amended to read: 
    Subd. 5.  In each calendar year the money in the general 
account shall be allocated to candidates as follows: 
     (1) 21 percent for the offices of governor and lieutenant 
governor together; 
     (2) 3.6 percent for the office of attorney general; 
     (3) 1.8 percent each for the offices of secretary of state, 
state auditor, and state treasurer; 
     (4) In each calendar year during the period in which state 
senators serve a four-year term, 23-1/3 percent for the office 
of state senator and 46-2/3 percent for the office of state 
representative; 
     (5) In each calendar year during the period in which state 
senators serve a two-year term, 35 percent each for the offices 
of state senator and state representative. 
     In each calendar year the money in each party account shall 
be allocated as follows: 
     (1) 14 percent for the offices of governor and lieutenant 
governor together; 
     (2) 2.4 percent for the office of attorney general; 
     (3) 1.2 percent each for the offices of secretary of state, 
state auditor, and state treasurer; 
     (4) In each calendar year during the period in which state 
senators serve a four-year term, 23-1/3 percent for the office 
of state senator and 46-2/3 percent for the office of state 
representative; 
    (5) In each calendar year during the period in which state 
senators serve a two-year term, 35 percent each for the offices 
of state senator and state representative; 
    (6) ten percent for the state committee of a political 
party; money allocated to each state committee under this clause 
must be deposited in a separate account and must be spent for 
only those items enumerated in section 10A.275; money allocated 
to a state committee under this clause must be paid to the 
committee by the state treasurer as notified by the state 
ethical practices board as it is received in the account on a 
monthly basis, with payment on the 15th day of the calendar 
month following the month in which the tax returns were received 
processed by the department of revenue, provided that these 
distributions would be equal to 90 percent of the amount of 
money indicated in the department of revenue's weekly unedited 
reports of income tax returns for that and property tax refund 
returns processed in the month, as notified by the department of 
revenue to the state ethical practices board.  The amounts paid 
to each state committee are subject to final annual biennial 
adjustment and settlement as indicated according to the at the 
time of each certification by required of the commissioner of 
revenue under subdivision 6 subdivisions 7 and 10.  If the total 
amount of total payments received before September 15 by a state 
committee for the period reflected on a certification by the 
department of revenue is greater than different from the amount 
certified by the commissioner of revenue on September 15, the 
total amount of payments distributed between September 1 and 
December 31 that should have been received during the period 
according to the certification, each subsequent monthly payment 
must be reduced by increased or decreased to the fullest extent 
possible until the amount of the overpayment is recovered or the 
underpayment is distributed. 
    To assure that moneys will be returned to the counties from 
which they were collected, and to assure that the distribution 
of those moneys rationally relates to the support for particular 
parties or for particular candidates within legislative 
districts, money from the party accounts for legislative 
candidates shall be distributed as follows: 
    Each candidate for the state senate and state house of 
representatives whose name is to appear on the ballot in the 
general election shall receive money from the candidate's party 
account set aside for candidates of the state senate or state 
house of representatives, whichever applies, according to the 
following formula; 
    For each county within the candidate's district the 
candidate's share of the dollars allocated in that county to the 
candidate's party account and set aside for that office shall be:
    (a) The sum of the votes cast in the last general election 
in that part of the county in the candidate's district for all 
candidates of that candidate's party (i) whose names appeared on 
the ballot in each voting precinct of the state and (ii) for the 
state senate and state house of representatives, divided by 
      (b) The sum of the votes cast in that county in the last 
general election for all candidates of that candidate's party 
(i) whose names appeared on the ballot in each voting precinct 
in the state and (ii) for the state senate and state house of 
representatives, multiplied by 
      (c) The amount in the candidate's party account allocated 
in that county and set aside for the candidates for the office 
for which the candidate is running. 
      The sum of all the county shares calculated in the formula 
above is the candidate's share of the candidate's party account. 
      In a year in which an election for the state senate occurs, 
with respect to votes for candidates for the state senate only, 
"last general election" means the last general election in which 
an election for the state senate occurred. 
      For any party under whose name no candidate's name appeared 
on the ballot in each voting precinct in the state in the last 
general election, amounts in the party's account shall be 
allocated based on (a) the number of people voting in the last 
general election in that part of the county in the candidate's 
district, divided by (b) the number of the people voting in that 
county in the last general election, multiplied by (c) the 
amount in the candidate's party account allocated in that county 
and set aside for the candidates for the office for which the 
candidate is running. 
      In a year in which the first election after a legislative 
reapportionment is held, "the candidate's district" means the 
newly drawn district, and voting data from the last general 
election will be applied to the area encompassing the newly 
drawn district notwithstanding that the area was in a different 
district in the last general election. 
      If in a district there was no candidate of a party for the 
state senate or state house of representatives in the last 
general election, or if a candidate for the state senate or 
state house of representatives was unopposed, the vote for that 
office for that party shall be the average vote of all the 
remaining candidates of that party in each county of that 
district whose votes are included in the sums in clauses (a) and 
(b).  The average vote shall be added to the sums in clauses (a) 
and (b) before the calculation is made for all districts in the 
county. 
      Money from a party account not distributed to candidates 
for state senator and representative in any election year shall 
be returned to the general fund of the state.  Money from a 
party account not distributed to candidates for other offices in 
an election year shall be returned to the party account for 
reallocation to candidates as provided in clauses (1) to (6) in 
the following year.  Money from the general account refused by 
any candidate shall be distributed to all other qualifying 
candidates in proportion to their shares as provided in this 
subdivision.  
    Sec. 2.  Minnesota Statutes Second 1989 Supplement, section 
290.17, subdivision 2, is amended to read:  
    Subd. 2.  [INCOME NOT DERIVED FROM CONDUCT OF A TRADE OR 
BUSINESS.] The income of a taxpayer subject to the allocation 
rules that is not derived from the conduct of a trade or 
business must be assigned in accordance with paragraphs (a) to 
(f):  
    (a)(1) Subject to paragraphs (a)(2) and (a)(3), income from 
labor or personal or professional services is assigned to this 
state if, and to the extent that, the labor or services are 
performed within it; all other income from such sources is 
treated as income from sources without this state.  
    Severance pay shall be considered income from labor or 
personal or professional services. 
    (2) In the case of an individual who is a nonresident of 
Minnesota and who is an athlete or entertainer, income from 
compensation for labor or personal services performed within 
this state shall be determined in the following manner:  
    (i) The amount of income to be assigned to Minnesota for an 
individual who is a nonresident salaried athletic team employee 
shall be determined by using a fraction in which the denominator 
contains the total number of days in which the individual is 
under a duty to perform for the employer, and the numerator is 
the total number of those days spent in Minnesota; and 
    (ii) The amount of income to be assigned to Minnesota for 
an individual who is a nonresident, and who is an athlete or 
entertainer not listed in clause (i), for that person's athletic 
or entertainment performance in Minnesota shall be determined by 
assigning to this state all income from performances or athletic 
contests in this state.  
     (3) For purposes of this section, amounts received by a 
nonresident from the United States, its agencies or 
instrumentalities, the Federal Reserve Bank, the state of 
Minnesota or any of its political or governmental subdivisions, 
or a Minnesota volunteer firefighters' relief association, by 
way of payment as a pension, public employee retirement benefit, 
or any combination of these, or as a retirement or survivor's 
benefit made from a plan qualifying under section 401, 403, 408, 
or 409, or as defined in section 403(b) or 457 of the Internal 
Revenue Code of 1986, as amended through December 31, 1987, are 
not considered income derived from carrying on a trade or 
business or from performing personal or professional services in 
Minnesota, and are not taxable under this chapter.  
     (b) Income or gains from tangible property located in this 
state that is not employed in the business of the recipient of 
the income or gains must be assigned to this state. 
    (c) Except upon the sale of a partnership interest or the 
sale of stock of an S corporation, income or gains from 
intangible personal property not employed in the business of the 
recipient of the income or gains must be assigned to this state 
if the recipient of the income or gains is a resident of this 
state or is a resident trust or estate.  
    Gain on the sale of a partnership interest is allocable to 
this state in the ratio of the original cost of partnership 
tangible property in this state to the original cost of 
partnership tangible property everywhere, determined at the time 
of the sale.  If more than 50 percent of the value of the 
partnership's assets consists of intangibles, gain or loss from 
the sale of the partnership interest is allocated to this state 
in accordance with the sales factor of the partnership for its 
first full tax period immediately preceding the tax period of 
the partnership during which the partnership interest was sold. 
    Gain on the sale of stock held in an S corporation is 
allocable to this state in the ratio of the original cost of 
tangible property of the S corporation within this state to the 
original cost of tangible property of the S corporation 
everywhere an amount equal to the gain on the sale of the stock 
multiplied by the ratio that was used to compute the amount of S 
corporation income assignable to Minnesota in the tax year 
preceding the year of sale. 
    Gain on the sale of goodwill or income from a covenant not 
to compete that is connected with a business operating all or 
partially in Minnesota is allocated to this state to the extent 
that the income from the business in the year preceding the year 
of sale was assignable to Minnesota under subdivision 3.  
    (d) Income from the operation of a farm shall be assigned 
to this state if the farm is located within this state and to 
other states only if the farm is not located in this state.  
    (e) Income from winnings on Minnesota pari-mutuel betting 
tickets, the Minnesota state lottery, and lawful gambling as 
defined in section 349.12, subdivision 2, conducted within the 
boundaries of the state of Minnesota shall be assigned to this 
state.  
    (f) All items of gross income not covered in paragraphs (a) 
to (e) and not part of the taxpayer's income from a trade or 
business shall be assigned to the taxpayer's domicile. 
    Sec. 3.  Minnesota Statutes 1988, section 290.17, 
subdivision 5, is amended to read:  
    Subd. 5.  [SPECIAL RULES.] Notwithstanding subdivisions 3 
and 4, all income from the operation of the following types of 
businesses must be allocated as follows:  
    (a) All income from the operation of a farm is assigned to 
this state if the farm is located within this state and no such 
income is assigned to this state if the farm is located without 
this state.  
    (b) Income from a trade or business consisting principally 
of the performance of personal or professional services is 
assigned to this state if, and to the extent that, the services 
are performed within this state.  
    (c) For athletic teams when the visiting team does not 
share in the gate receipts, all of the team's income is assigned 
to the state in which the team's operation is based.  
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
290.39, subdivision 4, is amended to read:  
    Subd. 4.  [VOTER REGISTRATION FORM.] The commissioner shall 
insert securely in each individual income tax return form or 
instruction booklet distributed in an even-numbered for an 
odd-numbered year a voter registration form, returnable to the 
secretary of state, designed according to rules adopted by the 
secretary of state.  This requirement applies to forms and 
booklets supplied to post offices, banks, and other outlets, as 
well as to those mailed directly to taxpayers.  
    Sec. 5.  Minnesota Statutes 1988, section 290.39, 
subdivision 5, is amended to read:  
    Subd. 5.  [PARTNERSHIPS; NONRESIDENT PARTNERS.] (a) The 
commissioner may allow a partnership with five or more 
nonresident partners to file a composite return on behalf of 
nonresident partners who have no other Minnesota source income.  
This composite return must include the names, addresses, social 
security numbers, income allocation, and tax liability for all 
nonresident partners electing to be covered by the composite 
return.  
    (b) The computation of each partner's tax liability will be 
determined by multiplying the income allocated to that partner 
by the highest rate used to determine the tax liability for 
individuals under section 290.06, subdivision 2c.  Nonbusiness 
deductions, standard deductions, or personal exemptions are not 
allowed.  
    (c) The partnership must submit a request to use this 
composite return filing method for nonresident partners on or 
before the due date for filing the individual income tax 
return.  The request may be made a part of the return 
filed.  The requesting partnership must file a composite return 
in the form prescribed by the commissioner of revenue.  The 
filing of a composite return is considered a request to use the 
composite return filing method.  
    (d) The electing partner must not have any Minnesota source 
income other than the income from the partnership and other 
electing partnerships.  If it is determined that the electing 
partner has other Minnesota source income, the inclusion of the 
income and tax liability for that partner under this provision 
will not constitute a return to satisfy the requirements of 
subdivision 1.  The penalty for failure to file a return as 
provided in section 290.53, subdivision 2, is assessed from the 
due date for filing a return until a noncomposite return is 
filed.  The tax paid for such an individual as part of the 
composite return is allowed as a payment of the tax by the 
individual on the date on which the composite return payment was 
made.  If the electing nonresident partner has no other 
Minnesota source income, filing of the composite return 
constitutes a return for purposes of subdivision 1.  
    (e) This subdivision does not preclude the requirement that 
an individual pay estimated tax if the individual's liability 
would exceed the requirements set forth in section 290.93.  
However, a composite estimate may be filed in a manner similar 
to and containing the same information required under paragraph 
(a).  
    (f) If an electing partner's share of the partnership's 
gross income from Minnesota sources is less than the filing 
requirements for a nonresident under section 290.37, subdivision 
1, the tax liability is zero.  However, a statement showing the 
partner's share of gross income must be included as part of the 
composite return.  
    (g) The election provided in this subdivision is not 
available to any partner other than a full-year nonresident 
individual who has no other Minnesota source income.  
    (h) A corporation defined in section 290.9725 and its 
nonresident shareholders may make an election under this 
subdivision.  The provisions covering the partnership apply to 
the corporation and the provisions applying to the partner apply 
to each shareholder.  
    (i) Estates and trusts distributing current income only and 
the nonresident individual beneficiaries of such estates or 
trusts may make an election under this subdivision.  The 
provisions covering the partnership apply to the estate or 
trust.  The provisions applying to the partner apply to each 
beneficiary.  
    Sec. 6.  Minnesota Statutes 1988, section 290.49, 
subdivision 3, is amended to read:  
    Subd. 3.  [OMISSION IN EXCESS OF 25 PERCENT.] If the 
taxpayer omits from gross income an amount properly includable 
therein which is in excess of 25 percent of the amount of gross 
income stated in the return, the tax may be assessed, or a 
proceeding in court for the collection of such tax may be begun 
at any time within 6-1/2 years after the return was filed.  
    For purposes of this subdivision, the term "gross income" 
shall mean gross income as defined in section 290.37, 
subdivision 1, clause (c) 290.01, subdivision 20.  
    Sec. 7.  Minnesota Statutes 1988, section 290.92, 
subdivision 12, is amended to read:  
    Subd. 12.  [WITHHELD AMOUNT, CREDIT AGAINST TAX.] The 
amount deducted and withheld as tax under subdivision 2a or, 3, 
4b, or 4c or section 290.923, subdivision 2, during any calendar 
year upon the wages, partnership income, or "S" corporation 
income of any individual or person receiving royalty payments 
shall be allowed as a credit to the recipient of the income 
against the taxes imposed by this chapter or by chapter 298, for 
a taxable year beginning in such calendar year.  If more than 
one taxable year begins in such calendar year, such amount shall 
be allowed as a credit against the taxes for the last taxable 
year so beginning.  
    Sec. 8.  Minnesota Statutes 1988, section 290.92, 
subdivision 23, is amended to read:  
    Subd. 23.  [WITHHOLDING BY EMPLOYER OF DELINQUENT TAXES.] 
(1) The commissioner may, within five years after the date of 
assessment of the tax, give notice to any employer deriving 
income which has a taxable situs in this state regardless of 
whether the income is exempt from taxation, that an employee of 
that employer is delinquent in a certain amount with respect to 
any state taxes, including penalties, interest and costs.  The 
commissioner can proceed under this subdivision only if the tax 
is uncontested or if the time for appeal of the tax has 
expired.  The commissioner shall not proceed under this 
subdivision until the expiration of 30 days after mailing to the 
taxpayer, at the taxpayer's last known address, a written notice 
of (a) the amount of taxes, interest, and penalties due from the 
taxpayer and demand for their payment, and (b) the 
commissioner's intention to require additional withholding by 
the taxpayer's employer pursuant to this subdivision.  The 
effect of the notice shall expire 180 days after it has been 
mailed to the taxpayer provided that the notice may be renewed 
by mailing a new notice which is in accordance with this 
subdivision.  The renewed notice shall have the effect of 
reinstating the priority of the original claim.  The notice to 
the taxpayer shall be in substantially the same form as that 
provided in section 571.41.  The notice shall further inform the 
taxpayer of the wage exemptions contained in section 550.37, 
subdivision 14.  If no statement of exemption is received by the 
commissioner within 30 days from the mailing of the notice, the 
commissioner may proceed under this subdivision.  The notice to 
the taxpayer's employer may be served by mail or by delivery by 
an employee of the department of revenue and shall be in 
substantially the same form as provided in section 571.495.  
Upon receipt of notice, the employer shall withhold from 
compensation due or to become due to the employee, the total 
amount shown by the notice, subject to the provisions of section 
571.55.  The employer shall continue to withhold each pay period 
until the total amount shown by the notice is paid in full.  
Upon receipt of notice by the employer, the claim of the state 
of Minnesota shall have priority over any subsequent 
garnishments or wage assignments.  The commissioner may arrange 
between the employer and the employee for withholding a portion 
of the total amount due the employee each pay period, until the 
total amount shown by the notice plus accrued interest has been 
withheld.  
    The "compensation due" any employee is defined in 
accordance with the provisions of section 571.55.  The maximum 
withholding allowed under this subdivision for any one pay 
period shall be decreased by any amounts payable pursuant to a 
garnishment action with respect to which the employer was served 
prior to being served with the notice of delinquency and any 
amounts covered by any irrevocable and previously effective 
assignment of wages; the employer shall give notice to the 
department of the amounts and the facts relating to such 
assignments within ten days after the service of the notice of 
delinquency on the form provided by the department of revenue as 
noted in this subdivision.  In crediting amounts withheld 
against delinquent taxes of an employee, the department shall 
apply amounts withheld in the following order:  penalties, 
interest, tax, and costs.  
    (2) If the employee ceases to be employed by the employer 
before the full amount set forth in a notice of delinquency plus 
accrued interest has been withheld, the employer shall 
immediately notify the commissioner in writing of the 
termination date of the employee and the total amount withheld.  
No employer may discharge any employee by reason of the fact 
that the commissioner has proceeded under this subdivision.  If 
an employer discharges an employee in violation of this 
provision, the employee shall have the same remedy as provided 
in section 571.61, subdivision 2.  
    (3) The employer shall, by the date prescribed in 
subdivision 6, remit to the commissioner, on a form and in the 
manner prescribed by the commissioner, the amount withheld 
during the calendar quarter under this subdivision.  Should any 
employer, after notice, willfully fail to withhold in accordance 
with the notice and this subdivision, or willfully fail to remit 
any amount withheld as required by this subdivision, the 
employer shall be liable for the total amount set forth in the 
notice together with accrued interest which may be collected by 
any means provided by law relating to taxation.  No amount 
required to be paid by an employer by reason of the employer's 
failure to remit under this subdivision, may be deducted from 
the gross income of the employer, under sections 290.09, 
subdivision 4 or 290.01, subdivisions 20 to 20f.  Any amount 
collected from the employer for failure to withhold or for 
failure to remit under this subdivision shall be credited to the 
employee's account in the following manner:  penalties, 
interest, tax, and costs.  
    (4) Clauses (1), (2) and (3), except provisions imposing a 
liability on the employer for failure to withhold or remit, 
shall apply to cases in which the employer is the United States 
or any instrumentality thereof or this state or any municipality 
or other subordinate unit thereof.  
    (5) The commissioner shall refund to the employee excess 
amounts withheld from the employee under this subdivision.  If 
any excess results from payments by the employer because of 
willful failure to withhold or remit as prescribed in clause (3) 
above, the excess attributable to the employer's payment shall 
be refunded to the employer.  
    (6) Employers required to withhold delinquent taxes, 
penalties, interest, and costs under this subdivision shall not 
be required to compute any additional interest, costs or other 
charges to be withheld.  
    (7) The collection remedy provided to the commissioner by 
this subdivision shall have the same legal effect as if it were 
a levy made pursuant to section 270.70.  
    Sec. 9.  Minnesota Statutes 1988, section 290.93, 
subdivision 1, is amended to read:  
    Subdivision 1.  [REQUIREMENT OF DECLARATION.] (1) Every 
individual shall, at the time prescribed in subdivision 5, make 
and file with the commissioner a declaration of estimated tax 
for the taxable year if 
    the gross income (for purposes of this subdivision and 
subdivision 5 as defined in section 290.37, subdivision 1, 
clause (c) 290.01, subdivision 20) for the taxable year can 
reasonably be expected to exceed the gross income amounts set 
forth in section 290.37, subdivision 1 pertaining to the 
requirements for making a return.  
    (2) If the individual is an infant or incompetent person, 
the declaration shall be made by the individual's guardian. 
    (3) Notwithstanding the provisions of this section, no 
declaration is required if the estimated tax (as defined in 
subdivision 3) is less than $500.  
    Sec. 10.  Minnesota Statutes 1988, section 290A.03, 
subdivision 3, is amended to read:  
    Subd. 3.  [INCOME.] (1) "Income" means the sum of the 
following:  
    (a) the greater of federal adjusted gross income as defined 
in the Internal Revenue Code or zero; and 
    (b) the sum of the following amounts to the extent not 
included in clause (a):  
    (i) all nontaxable income; 
    (ii) the amount of a passive activity loss that is not 
disallowed as a result of section 469, paragraph (i) or (1) of 
the Internal Revenue Code and the amount of passive activity 
loss carryover allowed under section 469(b) of the Internal 
Revenue Code; 
    (iii) an amount equal to the total of any discharge of 
qualified farm indebtedness of a solvent individual excluded 
from gross income under section 108(g) of the Internal Revenue 
Code; 
    (iv) cash public assistance and relief; 
    (v) any pension or annuity (including railroad retirement 
benefits, all payments received under the federal Social 
Security Act, supplemental security income, and veterans 
benefits), which was not exclusively funded by the claimant or 
spouse, or which was funded exclusively by the claimant or 
spouse and which funding payments were excluded from federal 
adjusted gross income in the years when the payments were made; 
    (vi) interest received from the federal or a state 
government or any instrumentality or political subdivision 
thereof; 
    (vii) workers' compensation; 
    (viii) nontaxable strike benefits; 
    (ix) the gross amounts of payments received in the nature 
of disability income or sick pay as a result of accident, 
sickness, or other disability, whether funded through insurance 
or otherwise; 
    (x) a lump sum distribution under section 402(e)(3) of the 
Internal Revenue Code; 
    (xi) contributions made by the claimant to an individual 
retirement account, including a qualified voluntary employee 
contribution; simplified employee pension plan; self-employed 
retirement plan; cash or deferred arrangement plan under section 
401(k) of the Internal Revenue Code; or deferred compensation 
plan under section 457 of the Internal Revenue Code; and 
    (xii) nontaxable scholarship or fellowship grants.  
    In the case of an individual who files an income tax return 
on a fiscal year basis, the term "federal adjusted gross income" 
shall mean federal adjusted gross income reflected in the fiscal 
year ending in the calendar year.  Federal adjusted gross income 
shall not be reduced by the amount of a net operating loss 
carryback or carryforward or a capital loss carryback or 
carryforward allowed for the year.  
    (2) "Income" does not include 
    (a) amounts excluded pursuant to the Internal Revenue Code, 
sections 101(a), 102, and 121; 
    (b) amounts of any pension or annuity which was exclusively 
funded by the claimant or spouse and which funding payments were 
not excluded from federal adjusted gross income in the years 
when the payments were made; 
    (c) surplus food or other relief in kind supplied by a 
governmental agency; 
    (d) relief granted under this chapter; or 
    (e) child support payments received under a temporary or 
final decree of dissolution or legal separation.  
    (3) The sum of the following amounts shall may be 
subtracted from income:  
    (a) for the claimant's first dependent, the exemption 
amount multiplied by 1.4; 
    (b) for the claimant's second dependent, the exemption 
amount multiplied by 1.3; 
    (c) for the claimant's third dependent, the exemption 
amount multiplied by 1.2; 
    (d) for the claimant's fourth dependent, the exemption 
amount multiplied by 1.1; 
    (e) for the claimant's fifth dependent, the exemption 
amount; and 
    (f) if the claimant or claimant's spouse was disabled or 
attained the age of 65 prior to June 1 of the year for which the 
taxes were levied or rent paid, the exemption amount.  
    For purposes of this subdivision, the "exemption amount" 
means the exemption amount under section 151(d) of the Internal 
Revenue Code of 1986, as amended through December 31, 1987, for 
the taxable year for which the income is reported.  
    Sec. 11.  Minnesota Statutes 1988, section 290A.04, 
subdivision 1, is amended to read: 
    Subdivision 1.  A refund shall be allowed each claimant in 
the amount that property taxes payable or rent constituting 
property taxes exceed the percentage of the household income of 
the claimant specified in subdivision 2 in the year for which 
the taxes were levied or in the year in which the rent was paid 
as specified in subdivision 2.  If the amount of property taxes 
payable or rent constituting property taxes is equal to or less 
than the percentage of the household income of the claimant 
specified in subdivision 2 in the year for which the taxes were 
levied or in the year in which the rent was paid, the claimant 
shall not be eligible for a state refund pursuant to this 
section.  For purposes of claiming this refund, a claimant who 
owns a homestead part of the year and rents part of the year may 
add the rent constituting property taxes to the qualifying tax 
on the homestead.  
    Sec. 12.  Minnesota Statutes Second 1989 Supplement, 
section 290A.04, subdivision 2h, is amended to read: 
    Subd. 2h.  (a) If the gross property taxes payable on a 
homestead increase more than ten percent over the net property 
taxes payable in the prior year on the same property that is 
owned by the same owner in both years, and the amount of that 
increase is $40 or more for taxes payable in 1990 and 1991, $60 
or more for taxes payable in 1992, $80 or more for taxes payable 
in 1993, and $100 or more for taxes payable in 1994, a claimant 
who is a homeowner shall be allowed an additional refund equal 
to the sum of (1) 75 percent of the first $250 of the amount of 
the increase over ten percent for taxes payable in 1990 and 
1991, 75 percent of the first $275 of the amount of the increase 
over ten percent for taxes payable in 1992, 75 percent of the 
first $300 of the amount of the increase over ten percent for 
taxes payable in 1993, and 75 percent of the first $325 of the 
amount of the increase over ten percent for taxes payable in 
1994, and (2) 90 percent of the amount of the increase over ten 
percent plus $250 for taxes payable in 1990 and 1991, 90 percent 
of the amount of the increase over ten percent plus $275 for 
taxes payable in 1992, 90 percent of the amount of the increase 
over ten percent plus $300 for taxes payable in 1993, and 90 
percent of the amount of the increase over ten percent plus $325 
for taxes payable in 1994.  This subdivision shall not apply to 
any increase in the net gross property taxes payable 
attributable to improvements made to the homestead after the 
assessment date for the prior year's taxes. 
    (b) For purposes of this subdivision, the following terms 
have the meanings given: 
      (1) "Net property taxes payable" means property taxes 
payable after reductions made under sections 273.13, 
subdivisions 22 and 23; 273.132; 273.135; 273.1391; and 273.42, 
subdivision 2, and any other state paid property tax credits and 
after the deduction of tax refund amounts for which the claimant 
qualifies pursuant to subdivision 2 and this subdivision.  
     (2) "Gross property taxes" means net property taxes payable 
determined without regard to the refund allowed under this 
subdivision. 
     (c) In addition to the other proofs required by this 
chapter, each claimant under this subdivision shall file with 
the property tax refund return a copy of the property tax 
statement for taxes payable in the preceding year or other 
documents required by the commissioner. 
    On or before December 1, 1990, and December 1 of each of 
the following three years, the commissioner shall estimate the 
cost of making the payments provided by this subdivision for 
taxes payable in the following year.  Notwithstanding the open 
appropriation provision of section 290A.23, if the estimated 
total refund claims exceed the following amounts for the taxes 
payable year designated, the commissioner shall decrease the 
percentages of the excess taxes the state will pay and increase 
the dollar amount of tax increase which must occur before a 
taxpayer qualifies for a refund. 
     Taxes payable in:         Appropriation limit
       1991                      $7,000,000
       1992                      $6,500,000
       1993                      $6,000,000
       1994                      $5,500,000
    The commissioner shall make the adjustments so that half of 
the estimated savings come from decreasing the percentages of 
the excess taxes the state will pay and half of the estimated 
savings come from increasing the dollar amount of the tax 
increase which must occur before a taxpayer qualifies for a 
refund.  The determinations of the revised percentages and 
thresholds by the commissioner are not rules subject to chapter 
14. 
    Sec. 13.  Minnesota Statutes Second 1989 Supplement, 
section 290A.04, subdivision 2i, is amended to read: 
    Subd. 2i.  If the net property taxes payable in 1990 on a 
seasonal residential and recreational property, not devoted to 
commercial use, increase more than ten percent over the net 
property taxes payable in 1989 and if the amount is $40 or more, 
one claimant individual who is an owner of the property in both 
years is allowed a refund equal to 75 percent of the first $250 
of the excess of the increase over ten percent.  This 
subdivision does not apply to the portion of an increase in 
taxes payable that are attributable to improvements to the 
property. 
    The individual claiming the refund can use only one 
contiguous seasonal residential and recreational property in 
computing the refund and is allowed only one refund.  For the 
purposes of this subdivision, a husband and wife are treated as 
one individual. 
    In addition to the other proofs required by this chapter, 
each claimant individual claiming a refund under this 
subdivision shall file with the application a copy of the 
property tax statement for property taxes payable in 1989 and 
1990 and any other documents required by the commissioner. 
    Sec. 14.  Laws 1989, chapter 28, section 24, is amended to 
read:  
    Sec. 24.  [FEDERAL CHANGES.] 
    The changes made by sections 1002, 1004, 1006, 1008, 1009, 
1011, 1014, 1018, 3041, 6002, 6026, and 6286 6282 of the 
Technical and Miscellaneous Revenue Act of 1988, Public Law 
Number 100-647, which affect the computation of Minnesota gross 
income as defined in Minnesota Statutes, section 290.01, 
subdivision 20; lump sum distributions as allowed by Minnesota 
Statutes, section 290.032; accounting provision applied under 
Minnesota Statutes, section 290.07; contribution deduction 
allowed by Minnesota Statutes, sections 290.089 and 290.21; 
depreciation, amortization, and expensing provisions allowed 
under Minnesota Statutes, section 290.09; the recognition rules 
for distributions and reorganization rules provided by Minnesota 
Statutes, sections 290.13 to 290.139; and the grantor trust and 
reversionary interest rule exceptions and limitations under 
Minnesota Statutes, sections 290.23 and 290.25, for years 
beginning before January 1, 1987, shall be in effect at the same 
time they become effective for federal income tax purposes. 
    The additional statute of limitations to file amended 
returns allowing contributions to institutions of higher 
education and allowing an election to claim losses on deposits 
in certain insolvent financial institutions under provisions of 
sections 6001 and 1009 of the Technical and Miscellaneous 
Revenue Act of 1988, shall apply to Minnesota for the same 
period as the federal period applies plus an additional six 
months.  
    The waiver of the estimated tax penalties provided by 
section 1019 of the Technical and Miscellaneous Revenue Act of 
1988, shall also apply to Minnesota to the extent the 
underpayment was created or increased by any provisions of the 
changes due to applying the federal law changes.  
    Sec. 15.  [REPEALER.] 
    Minnesota Statutes 1988, section 290.23, subdivision 15, is 
repealed.  
    Sec. 16.  [EFFECTIVE DATE.] 
    Section 1 is effective on the day following final enactment.
Sections 3, 5, and 15 are effective for taxable years beginning 
after December 31, 1989.  Sections 2 and 7 are effective for 
taxable years beginning after December 31, 1988.  Section 10 is 
effective for claims based on rent paid in 1989 and subsequent 
years and claims based on property taxes payable in 1990 and 
subsequent years.  Sections 11 and 12 are effective beginning 
for property taxes payable in 1990.  Section 13 is effective 
beginning for property taxes paid in 1990.  

                               ARTICLE 6 
INSURANCE TAXES 
    Section 1.  Minnesota Statutes Second 1989 Supplement, 
section 60A.15, subdivision 1, is amended to read:  
    Subdivision 1.  [DOMESTIC AND FOREIGN COMPANIES.] (a) On or 
before April 15, June 15, and December 15 of each year, every 
domestic and foreign company, including town and farmers' mutual 
insurance companies and domestic mutual insurance companies, 
shall pay to the commissioner of revenue installments equal to 
one-third of the insurer's total estimated tax for the current 
year.  Except as provided in paragraph (b), installments must be 
based on a sum equal to two percent of the premiums described in 
paragraph (c).  
    (b) For town and farmers' mutual insurance companies and 
mutual property and casualty insurance companies other than 
those (i) writing life insurance, or (ii) whose total assets at 
the end of the preceding calendar year exceed $1,600,000,000, 
the installments must be based on an amount equal to the 
following percentages of the premiums described in paragraph (c):
    (1) for premiums paid after December 31, 1988, and before 
January 1, 1992, one percent; and 
    (2) for premiums paid after December 31, 1991, one-half of 
one percent. 
    (c) Installments under paragraph (a) or (b) are percentages 
of gross premiums less return premiums on all direct business 
received by the insurer in this state, or by its agents for it, 
in cash or otherwise, during such year, excepting premiums 
written for marine insurance as specified in subdivision 6.  
    (d) Failure of a company to make payments of at least 
one-third of either (1) the total tax paid during the previous 
calendar year or (2) 80 percent of the actual tax for the 
current calendar year shall subject the company to the penalty 
and interest provided in this section, unless the total tax for 
the current tax year is $500 or less. 
    Sec. 2.  Minnesota Statutes 1988, section 60A.198, is 
amended by adding a subdivision to read:  
    Subd. 6.  [ALLOCATION OF PREMIUMS ACCORDING TO LOCATION OF 
SUBJECT MATTER.] If the insurance described in subdivision 4 
also covers a subject of insurance residing, located, or to be 
performed outside this state, for the purposes of this section, 
a proper pro rata portion of the entire premium payable for all 
of that insurance must be allocated according to the subjects of 
insurance residing, located, or to be performed in this state. 
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
69.021, subdivision 6, is amended to read:  
    Subd. 6.  [CALCULATION OF APPORTIONMENT OF AID TO 
COUNTIES.] With respect to firefighters, one-half of the state 
aid available shall be distributed to the counties in proportion 
to their population as shown by the last official statewide 
federal census.  The remaining one-half of the state aid 
available shall be distributed to the counties in proportion to 
their net tax capacity, excluding mineral values.  
    In the case of incorporated or municipal fire departments 
furnishing fire protection to cities, towns or townships in 
other counties as evidenced by valid fire service contracts 
filed with the commissioner of commerce and county auditor the 
distribution to the respective counties shall be adjusted 
proportionately to take into consideration the crossover fire 
protection service.  Necessary adjustments shall be made to 
subsequent apportionments.  
    The state aid available in respect to peace officers shall 
not exceed the amount of tax collected and shall be distributed 
to the counties in proportion to the total number of active 
peace officers, as defined in section 69.011, subdivision 1, 
clause (g), in each county who are employed either by 
municipalities maintaining police departments or by the county.  
Any necessary adjustments shall be made to subsequent 
apportionments.  
    Sec. 4.  Minnesota Statutes 1988, section 69.771, 
subdivision 3, is amended to read:  
    Subd. 3.  [REMEDY FOR NONCOMPLIANCE; DETERMINATION.] Any 
municipality in which there exists a firefighters' relief 
association as specified in subdivision 1 which does not comply 
with the applicable provisions of sections 69.771 to 69.776 or 
the provisions of any applicable special law relating to the 
funding or financing of the association shall not qualify 
initially to receive, or be entitled subsequently to retain, 
fire state aid pursuant to sections 69.011 to 69.051 until the 
reason for disqualification is remedied, whereupon the 
municipality or relief association, if otherwise qualified, 
shall be entitled to again receive fire state aid for the year 
occurring immediately subsequent to the year in which the 
disqualification is remedied.  The commissioner of commerce 
state auditor shall determine if a municipality to which a 
firefighters' relief association is directly associated or a 
firefighters' relief association fails to comply with the 
provisions of sections 69.771 to 69.776 or the funding or 
financing provisions of any applicable special law based upon 
the information contained in the annual financial report of the 
firefighters' relief association required pursuant to section 
69.051.  
    Sec. 5.  Minnesota Statutes 1988, section 69.772, 
subdivision 2a, is amended to read:  
    Subd. 2a.  [DETERMINATION OF ACCRUED LIABILITY FOR 
RECIPIENTS OF INSTALLMENT PAYMENTS.] Each firefighters' relief 
association which pays a lump sum service pension in installment 
payments to a retired firefighter pursuant to section 424A.02, 
subdivision 8, shall determine the accrued liability of the 
special fund of the firefighters' relief association relative to 
each retired member receiving a lump sum service pension in 
installment payments calculated individually as the sum of each 
future installment payment discounted at an interest rate of 
five percent, compounded annually, from the date the installment 
payment is scheduled to be paid to December 31.  If the bylaws 
of the relief association provide for the payment of interest on 
unpaid installments, the amount of interest, projected to 
December 31, shall be added to the accrued liability 
attributable to each retired member.  The sum of the accrued 
liability attributable to each retired member of the relief 
association receiving a lump sum service pension in installment 
payments shall be the total additional accrued liability of the 
special fund of the relief association as of December 31, and 
shall be added to the accrued liability of the special fund of 
the relief association calculated pursuant to subdivision 2 for 
purposes of calculating the financial requirements of the relief 
association and the minimum obligation of the municipality 
pursuant to subdivision 3.  
    To the extent that the commissioner of commerce state 
auditor deems it to be necessary or practical, the commissioner 
state auditor may specify and issue procedures, forms or 
mathematical tables for use in performing the calculations 
required pursuant to this subdivision.  
    Sec. 6.  Minnesota Statutes 1988, section 69.774, 
subdivision 1, is amended to read:  
    Subdivision 1.  [AUTHORIZED INCLUSION IN FIRE STATE AID 
PROGRAM; COVERED NONPROFIT CORPORATIONS.] This section shall 
apply to any independent nonprofit firefighting corporation 
incorporated or organized pursuant to chapter 317 which operates 
exclusively for firefighting purposes, which is composed of 
volunteer firefighters, which has a duly established separate 
subsidiary incorporated firefighters' relief association which 
provides retirement coverage for or pays a service pension to a 
retired firefighter or a retirement benefit to a surviving 
dependent of either an active or a retired firefighter, and 
which operates subject to the service pension minimum 
requirements for entitlement to and maximums for a service 
pension contained in section 424A.02, or a special law modifying 
those requirements or maximums.  Notwithstanding any law to the 
contrary, a municipality contracting with an independent 
nonprofit firefighting corporation shall be included in the 
distribution of fire state aid to the appropriate county auditor 
by the commissioner of commerce state auditor only if the 
independent nonprofit firefighting corporation complies with the 
provisions of this section.  
    Sec. 7.  Minnesota Statutes 1988, section 299F.21, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ESTIMATED INSTALLMENT PAYMENTS.] On or 
before April 15, June 15, and December 15 of each year, every 
licensed insurance company, including reciprocals or 
interinsurance exchanges, doing business in the state, excepting 
farmers' mutual fire insurance companies and township mutual 
fire insurance companies, shall pay to the commissioner of 
revenue installments equal to one-third of, a tax upon its fire 
premiums or assessments or both, based on a sum equal to 
one-half of one percent of the estimated fire premiums and 
assessments, less return premiums and dividends, on all direct 
business received by it in this state, or by its agents for it, 
in cash or otherwise, during the year, including premiums on 
policies covering fire risks only on automobiles, whether 
written under floater form or otherwise.  In the case of a 
mutual company or reciprocal exchange the dividends or savings 
paid or credited to members in this state shall be construed to 
be return premiums.  The money so received into the state 
treasury shall be credited to the general fund.  A company that 
fails to make payments of at least one-third of either (1) the 
total tax paid during the previous calendar year or (2) 80 
percent of the actual tax for the current calendar year is 
subject to the penalty and interest provided in this chapter, 
unless the total tax for the current tax year is $500 or less.  
    Sec. 8.  [EFFECTIVE DATE.] 
    Sections 1, 2, and 7 are effective for tax years beginning 
after December 31, 1990.  Sections 3, 4, 5, and 6 are effective 
the day after final enactment. 

                               ARTICLE 7 

                  TECHNICAL AND ADMINISTRATIVE CHANGES
    Section 1.  Minnesota Statutes 1988, section 116K.04, 
subdivision 4, is amended to read:  
    Subd. 4.  The commissioner shall: 
    (1) Appoint the state demographer, who shall be compensated 
in accordance with section 43A.18, subdivision 3.  The state 
demographer shall be professionally competent in the field of 
demography and shall possess demonstrated ability, based upon 
past performance; 
    (2) Continuously gather and develop demographic data within 
the state; 
    (3) Design and test methods of research and data 
collection; 
    (4) Periodically prepare population projections for 
designated regions and for the state and may periodically 
prepare projections for each county, or other political or 
geographic division as necessary to carry out the purposes of 
this section; 
    (5) Review, comment, and prepare analysis of population 
estimates and projections made by state agencies, political 
subdivisions, other states, federal agencies or nongovernmental 
persons, institutions or commissions; 
    (6) Serve as the state liaison with the federal bureau of 
census, and coordinate the activities of the state planning 
agency with federal demographic activities to the fullest extent 
possible, and shall aid the legislature in preparing a census 
data plan and form for each decennial census; 
    (7) Compile an annual study of population estimates on the 
basis of county, regional or other political or geographic 
divisions as necessary to carry out the purposes of this 
subdivision and section 116K.05; 
    (8) On or before January 1 of each year, issue a report to 
the legislature containing an analysis of the demographic 
implications of the annual population study and population 
projections; 
    (9) Cause to be prepared maps of all counties in the state, 
all municipalities with a population of 10,000 or more, and any 
other municipalities as deemed necessary for census purposes, 
according to scale and detail recommended by the federal bureau 
of the census, with the maps of cities showing boundaries of 
precincts; and 
    (10) Prepare an estimate of population and of the number of 
households for each governmental subdivision for which the 
metropolitan council does not prepare an annual estimate, and 
shall communicate the estimates to the governing body of each 
governmental subdivision by May 1 of each year.; and 
    (11) Prepare an estimate of population and number of 
households for an area annexed by a governmental subdivision 
subject to levy limits under sections 275.50 to 275.56 if a 
municipal board order under section 414.01, subdivision 14, 
exists for the annexation and if the population in the annexed 
area is equal to either (i) at least 50 people or (ii) at least 
ten percent of the population of a governmental subdivision or 
unorganized territory that is losing area by the annexation.  
The estimate shall be of the population as of the date, within 
the 12-month period after the annexation occurs, for which a 
population estimate for the governmental subdivision is made by 
either the state demographer under clause (10) or by the 
metropolitan council. 
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 
168.013, subdivision 5, is amended to read:  
    Subd. 5.  [CERTAIN VEHICLES SUBJECT TO PERSONAL PROPERTY 
TAX.] Motor vehicles not subject to taxation as provided in 
section 168.012, but subject to taxation as personal property 
within the state under section 273.36 or 273.37, subdivision 1, 
shall be assessed and valued at 33-1/3 percent of the market 
value thereof, have a tax capacity as provided in section 
273.13, subdivision 24, provided, that if the person against 
whom any tax has been levied on the ad valorem basis because of 
any motor vehicle shall, during the calendar year for which such 
tax is levied, be also taxed under the provisions of this 
chapter, then and in that event, upon proper showing, the 
commissioner of revenue shall grant to the person against whom 
said ad valorem tax was levied, such reduction or abatement of 
net tax capacity or taxes as was occasioned by the so-called ad 
valorem tax imposed, and provided further that, if said ad 
valorem tax upon any motor vehicle has been assessed against a 
dealer in new and unused motor vehicles, and the tax imposed by 
this chapter for the required period is thereafter paid by the 
owner, then and in that event, upon proper showing, the 
commissioner of revenue, upon the application of said dealer, 
shall grant to such dealer against whom said ad valorem tax was 
levied such reduction or abatement of net tax capacity or taxes 
as was occasioned by the so-called ad valorem tax imposed. If 
such motor vehicle be registered and taxed under this chapter 
for a fractional part of the calendar year only, then such ad 
valorem tax shall be reduced in the percentage which such 
fractional part of the years bears to a full year.  
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
272.16, is amended to read: 
    272.16 [TRANSFER OF SPECIFIC PART.] 
    Subdivision 1.  [TRANSFER OF SPECIFIC PART.] When any part 
less than the whole of any parcel of land, as charged in the tax 
lists, is conveyed, the county auditor shall transfer the same 
whenever the seller and purchaser agree, in a writing signed by 
them, or personally appear before the county auditor and agree, 
upon the amount of the net tax capacity to be transferred 
therewith; but,.  If the seller and purchaser do not so agree, 
the county auditor shall make such a division of the net tax 
capacity as may appear that appears just to the auditor just.  
If the county auditor is satisfied that the proportion of the 
net tax capacity so agreed to be transferred is greater than the 
proportional value of the land to be transferred therewith, and 
that such the agreement was made by collusion of the parties, 
and with a view fraudulently to evade payment of taxes assessed 
on the entire parcel, the auditor may refuse to make such the 
transfer; and,.  When any such transfer has already been 
procured by fraudulent agreement, the auditor shall cancel the 
same it, and the land so transferred shall be charged with taxes 
in the same manner as though the transfer had not been made.  
    Subd. 2.  [SPECIFIC PART CONVEYED AFTER EXECUTION OF A 
LENDER'S LIEN.] Notwithstanding the provisions of sections 
272.12, 272.121, and 272.162, a lender that acquires, through 
execution of a lien, any part less than the whole of any parcel 
of land, as charged in the tax lists, may convey that part upon 
payment of the proper proportion of taxes due and owing on that 
part.  The county auditor shall determine the proper proportion 
of taxes to be paid.  The lender shall be required to provide 
the county auditor with instruments that document the lender's 
lien and the acquisition of the part. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
273.01, is amended to read:  
    273.01 [LISTING AND ASSESSMENT, TIME.] 
    All real property subject to taxation shall be listed and 
at least one-fourth of the parcels listed shall be appraised 
each year with reference to their value on January 2 preceding 
the assessment so that each parcel shall be reappraised at 
maximum intervals of four years.  All real property becoming 
taxable in any year shall be listed with reference to its value 
on January 2 of that year.  Except as provided in this section 
and section 274.01, subdivision 1, all real property assessments 
shall be completed two weeks prior to the date scheduled for the 
local board of review or equalization.  No changes in valuation 
or classification which are intended to correct errors in 
judgment by the county assessor may be made by the county 
assessor after the board of review or the county board of 
equalization has adjourned; however, corrections of errors that 
are merely clerical in nature or changes that extend homestead 
treatment to property are permitted after adjournment until the 
tax extension date for that assessment year.  Any changes made 
by the assessor after this time adjournment must be fully 
documented and maintained in a file in the assessor's office and 
shall be available for review by any person.  A copy of any 
changes made during this period shall be sent to the county 
board no later than December 31 of the assessment year.  In the 
event a valuation and classification is not placed on any real 
property by the dates scheduled for the local board of review or 
equalization the valuation and classification determined in the 
preceding assessment shall be continued in effect and the 
provisions of section 273.13 shall, in such case, not be 
applicable, except with respect to real estate which has been 
constructed since the previous assessment.  Real property 
containing iron ore, the fee to which is owned by the state of 
Minnesota, shall, if leased by the state after January 2 in any 
year, be subject to assessment for that year on the value of any 
iron ore removed under said lease prior to January 2 of the 
following year.  Personal property subject to taxation shall be 
listed and assessed annually with reference to its value on 
January 2; and, if acquired on that day, shall be listed by or 
for the person acquiring it.  
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
273.11, subdivision 1, is amended to read:  
    Subdivision 1.  [GENERALLY.] Except as provided in 
subdivisions 6, 8, and 9 or section 273.17, subdivision 1, all 
property shall be valued at its market value.  The market value 
as determined pursuant to this section shall be stated such that 
any amount under $100 is rounded up to $100 and any amount 
exceeding $100 shall be rounded to the nearest $100.  In 
estimating and determining such value, the assessor shall not 
adopt a lower or different standard of value because the same is 
to serve as a basis of taxation, nor shall the assessor adopt as 
a criterion of value the price for which such property would 
sell at a forced sale, or in the aggregate with all the property 
in the town or district; but the assessor shall value each 
article or description of property by itself, and at such sum or 
price as the assessor believes the same to be fairly worth in 
money.  In assessing any tract or lot of real property, the 
value of the land, exclusive of structures and improvements, 
shall be determined, and also the value of all structures and 
improvements thereon, and the aggregate value of the property, 
including all structures and improvements, excluding the value 
of crops growing upon cultivated land.  In valuing real property 
upon which there is a mine or quarry, it shall be valued at such 
price as such property, including the mine or quarry, would sell 
for a fair, voluntary sale, for cash.  In valuing real property 
which is vacant, the fact that such property is platted shall 
not be taken into account.  An individual lot of such platted 
property shall not be assessed in excess of the assessment 
valuation of the land as if it were unplatted until the lot is 
improved with a permanent improvement all or a portion of which 
is located upon the lot, or for a period of three years after 
final approval of said plat whichever is shorter.  When a lot is 
sold or construction begun, the net tax capacity of that lot or 
any single contiguous lot fronting on the same street shall be 
eligible for reassessment revaluation.  All property, or the use 
thereof, which is taxable under section 272.01, subdivision 2, 
or 273.19, shall be valued at the market value of such property 
and not at the value of a leasehold estate in such property, or 
at some lesser value than its market value.  
    Sec. 6.  Minnesota Statutes Second 1989 Supplement, section 
273.124, subdivision 6, is amended to read: 
    Subd. 6.  [LEASEHOLD COOPERATIVES.] When one or more 
dwellings or one or more buildings which each contain several 
dwelling units is owned by a nonprofit corporation subject to 
the provisions of chapter 317 and qualifying under section 
501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as 
amended through December 31, 1988, or a limited partnership 
which corporation or partnership operates the property in 
conjunction with a cooperative association, homestead treatment 
may be claimed by the cooperative association on behalf of the 
members of the cooperative for each dwelling unit occupied by a 
member of the cooperative.  The cooperative association must 
provide the assessor with the social security numbers of those 
members.  To qualify for the treatment provided by this 
subdivision, the following conditions must be met:  
    (a) the cooperative association must be organized under 
chapter 308A and all voting members of the board of directors 
must be resident tenants of the cooperative and must be elected 
by the resident tenants of the cooperative; 
    (b) the cooperative association must have a lease for 
occupancy of the property for a term of at least 20 years, which 
permits the cooperative association, while not in default on the 
lease, to participate materially in the management of the 
property, including material participation in establishing 
budgets, setting rent levels, and hiring and supervising a 
management agent; 
     (c) to the extent permitted under state or federal law, the 
cooperative association must have a right under a written 
agreement with the owner to purchase the property if the owner 
proposes to sell it; if the cooperative association does not 
purchase the property it is offered for sale, the owner may not 
subsequently sell the property to another purchaser at a price 
lower than the price at which it was offered for sale to the 
cooperative association unless the cooperative association 
approves the sale; 
     (d) the cooperative must meet one of the following criteria 
with respect to the income of its members:  (1) a minimum of 75 
percent of members must have incomes at or less than 80 percent 
of area median income, (2) a minimum of 40 percent of members 
must have incomes at or less than 60 percent of area median 
income, or (3) a minimum of 20 percent of members must have 
incomes at or less than 50 percent of area median income.  For 
purposes of this clause, "member income" means the income of a 
member existing at the time the member acquires his or her 
cooperative membership, and "median income" means the St. 
Paul-Minneapolis metropolitan area median income as determined 
by the United States Department of Housing and Urban 
Development; 
     (e) if a limited partnership owns the property, it must 
include as the managing general partner a nonprofit organization 
operating under the provisions of chapter 317 and qualifying 
under section 501(c)(3) or 501(c)(4) of the Internal Revenue 
Code of 1986, as amended through December 31, 1988, and the 
limited partnership agreement must provide that the managing 
general partner have sufficient powers so that it materially 
participates in the management and control of the limited 
partnership; 
     (f) prior to becoming a member of a leasehold cooperative 
described in this subdivision, a person must have received 
notice that (1) describes leasehold cooperative property in 
plain language, including but not limited to the effects of 
classification under this subdivision on rents, property taxes 
and tax credits or refunds, and operating expenses, and (2) 
states that copies of the articles of incorporation and bylaws 
of the cooperative association, the lease between the owner and 
the cooperative association, a sample sublease between the 
cooperative association and a tenant, and, if the owner is a 
partnership, a copy of the limited partnership agreement, can be 
obtained upon written request at no charge from the owner, and 
the owner must send or deliver the materials within seven days 
after receiving any request; 
    (g) if a dwelling unit of a building was occupied on the 
60th day prior to the date on which the unit became leasehold 
cooperative property described in this subdivision, then (1) the 
notice described in paragraph (f) must have been sent by first 
class mail to the occupant of the unit at least 60 days prior to 
the date on which the unit became leasehold cooperative 
property, and (2) prior to the mailing of the notice,.  For 
purposes of the notice under this paragraph, the copies of the 
documents referred to in paragraph (f) may be in proposed 
version, provided that any subsequent material alteration of 
those documents made after the occupant has requested a copy 
shall be disclosed to any occupant who has requested a copy of 
the document.  Copies of the documents identified in the notice 
must have been articles of incorporation and certificate of 
limited partnership shall be filed with the secretary of 
state after the expiration of the 60-day period unless the 
change to leasehold cooperative status does not proceed; and 
    (h) the county attorney of the county in which the property 
is located must certify to the assessor that the property meets 
the requirements of this subdivision.  
    Homestead treatment must be afforded to units occupied by 
members of the cooperative association and the units must be 
assessed as provided in subdivision 3, provided that any unit 
not so occupied shall be classified and assessed pursuant to the 
appropriate class.  No more than three acres of land may, for 
assessment purposes, be included with each dwelling unit that 
qualifies for homestead treatment under this subdivision. 
    Sec. 7.  Minnesota Statutes Second 1989 Supplement, section 
273.13, subdivision 25, is amended to read: 
    Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
estate containing four or more units and used or held for use by 
the owner or by the tenants or lessees of the owner as a 
residence for rental periods of 30 days or more.  Class 4a also 
includes hospitals licensed under sections 144.50 to 144.56, 
other than hospitals exempt under section 272.02, and contiguous 
property used for hospital purposes, without regard to whether 
the property has been platted or subdivided.  Class 4a property 
has a class rate of 3.6 percent of market value. 
    (b) Class 4b includes: 
    (1) residential real estate containing less than four 
units, other than seasonal residential, and recreational; 
    (2) post-secondary student housing not to exceed one acre 
of land which is owned by a nonprofit corporation organized 
under chapter 317 and is used exclusively by a sorority or 
fraternity organization for housing; 
    (3) manufactured homes not classified under any other 
provision; 
    (4) a dwelling, garage, and surrounding one acre of 
property on a nonhomestead farm classified under subdivision 23, 
paragraph (b).  
    Class 4b property has a class rate of 3.0 percent of market 
value. 
    (c) Class 4c property includes: 
    (1) a structure that is situated on real property that is 
used for housing for the elderly or for low and moderate income 
families as defined by Title II of the National Housing Act or 
the Minnesota housing finance agency law of 1971 or rules 
promulgated by the agency pursuant thereto and financed by a 
direct federal loan or federally insured loan or a loan made by 
the Minnesota housing finance agency pursuant to the provisions 
of either of those acts and acts amendatory thereof.  This 
clause applies only to property of a nonprofit or limited 
dividend entity.  Property is classified as class 4c under this 
clause for 15 years from the date of the completion of the 
original construction or substantial rehabilitation, or for the 
original term of the loan; 
    (2) a structure that is: 
    (i) situated upon real property that is used for housing 
lower income families or elderly or handicapped persons, as 
defined in section 8 of the United States Housing Act of 1937, 
as amended; and 
    (ii) owned by an entity which has entered into a housing 
assistance payments contract under section 8 which provides 
assistance for 100 percent of the dwelling units in the 
structure, other than dwelling units intended for management or 
maintenance personnel.  Property is classified as class 4c under 
this clause for the term of the housing assistance payments 
contract, including all renewals, or for the term of its 
permanent financing, whichever is shorter; and 
    (3) a qualified low-income building that (i) receives a 
low-income housing credit under section 42 of the Internal 
Revenue Code of 1986, as amended through December 31, 1988; or 
(ii) meets the requirements of that section.  Classification 
pursuant to this clause is limited to buildings the construction 
or rehabilitation of which began after May 1, 1988, and to a 
term of 15 years. 
    For all properties described in clauses (1), (2), and (3) 
and in paragraph (d), the market value determined by the 
assessor must be based on the normal approach to value using 
normal unrestricted rents.  The land on which these structures 
are situated has the class rate given in paragraph (b) if the 
structure contains fewer than four units, and the class rate 
given in paragraph (a) if the structure contains four or more 
units.  
    (4) a parcel of land, not to exceed one acre, and its 
improvements or a parcel of unimproved land, not to exceed one 
acre, if it is owned by a neighborhood real estate trust and at 
least 60 percent of the dwelling units, if any, on all land 
owned by the trust are leased to or occupied by lower income 
families or individuals.  This clause does not apply to any 
portion of the land or improvements used for nonresidential 
purposes.  For purposes of this clause, a lower income family is 
a family with an income that does not exceed 65 percent of the 
median family income for the area, and a lower income individual 
is an individual whose income does not exceed 65 percent of the 
median individual income for the area, as determined by the 
United States Secretary of Housing and Urban Development.  For 
purposes of this clause, "neighborhood real estate trust" means 
an entity which is certified by the governing body of the 
municipality in which it is located to have the following 
characteristics:  (a) it is a nonprofit corporation organized 
under chapter 317; (b) it has as its principal purpose providing 
housing for lower income families in a specific geographic 
community designated in its articles or bylaws; (c) it limits 
membership with voting rights to residents of the designated 
community; and (d) it has a board of directors consisting of at 
least seven directors, 60 percent of whom are members with 
voting rights and, to the extent feasible, 25 percent of whom 
are elected by resident members of buildings owned by the trust; 
and 
     (5) except as provided in subdivision 22, paragraph (c), 
real property devoted to temporary and seasonal residential 
occupancy for recreation purposes, including real property 
devoted to temporary and seasonal residential occupancy for 
recreation purposes and not devoted to commercial purposes for 
more than 225 days in the year preceding the year of 
assessment.  For this purpose, property is devoted to commercial 
use on a specific day if it is used, or offered for use, and a 
fee is charged for the use.  Class 4c also includes commercial 
use real property used exclusively for recreational purposes in 
conjunction with class 4c property devoted to temporary and 
seasonal residential occupancy for recreational purposes, up to 
a total of two acres, provided the property is not devoted to 
commercial recreational use for more than 225 days in the year 
preceding the year of assessment and is located within two miles 
of the class 4c property with which it is used.  Class 4c 
property classified in this clause and clause (6) also includes 
the remainder of class 1c resorts; and 
     (6) real property up to a maximum of one acre of land owned 
by a nonprofit community service oriented organization; provided 
that the property is not used for a revenue-producing activity 
for more than six days in the calendar year preceding the year 
of assessment and the property is not used for residential 
purposes on either a temporary or permanent basis.  For purposes 
of this clause, a "nonprofit community service oriented 
organization" means any corporation, society, association, 
foundation, or institution organized and operated exclusively 
for charitable, religious, fraternal, civic, or educational 
purposes, and which is exempt from federal income taxation 
pursuant to section 501(c)(3), (10), or (19) of the Internal 
Revenue Code of 1986, as amended through December 31, 1988.  For 
purposes of this clause, "revenue-producing activities" shall 
include but not be limited to property or that portion of the 
property that is used as an on-sale intoxicating liquor or 
nonintoxicating malt liquor establishment licensed under chapter 
340A, a restaurant open to the public, bowling alley, a retail 
store, gambling conducted by organizations licensed under 
chapter 349, an insurance business, or office or other space 
leased or rented to a lessee who conducts a for-profit 
enterprise on the premises.  Any portion of the property which 
is used for revenue-producing activities for more than six days 
in the calendar year preceding the year of assessment shall be 
assessed as class 3a.  The use of the property for social events 
open exclusively to members and their guests for periods of less 
than 24 hours, when an admission is not charged nor any revenues 
are received by the organization shall not be considered a 
revenue-producing activity; and 
    Class 4c property has a class rate of 2.4 percent of market 
value.  
    (d) Class 4d property includes any structure: 
    (i) situated on real property that is used for housing for 
the elderly or for low and moderate income families as defined 
by the farmers home administration; 
    (ii) located in a municipality of less than 10,000 
population; and 
    (iii) financed by a direct loan or insured loan from the 
farmers home administration.  Property is classified under this 
clause for 15 years from the date of the completion of the 
original construction or for the original term of the loan.  
    The class rates in paragraph (c), clauses (1), (2), and (3) 
and this clause apply to the properties described in them, only 
in proportion to occupancy of the structure by elderly or 
handicapped persons or low and moderate income families as 
defined in the applicable laws unless construction of the 
structure had been commenced prior to January 1, 1984; or the 
project had been approved by the governing body of the 
municipality in which it is located prior to June 30, 1983; or 
financing of the project had been approved by a federal or state 
agency prior to June 30, 1983.  Classification under this clause 
is only available to property of a nonprofit or limited dividend 
entity. 
    Class 4d property has a class rate of 1.7 percent of market 
value for taxes payable in 1990, and two percent of market value 
for taxes payable thereafter. 
    (e) Residential rental property that would otherwise be 
assessed as class 4 property under paragraph (a); paragraph (b), 
clauses (1) and (2); or paragraph (c), clause (1), (2), (3), or 
(4); or paragraph (d), is assessed at the class rate applicable 
to it under Minnesota Statutes 1988, section 273.13, if it is 
found to be a substandard building under section 273.1316.  
Residential rental property that would otherwise be assessed as 
class 4 property under paragraph (d) is assessed at 2.4 percent 
of market value if it is found to be a substandard building 
under section 273.1316. 
    Sec. 8.  Minnesota Statutes Second 1989 Supplement, section 
273.1391, subdivision 2, is amended to read: 
    Subd. 2.  For taxes payable in 1990 and subsequent years, 
the amount of the reduction authorized by subdivision 1 shall be:
    (a) In the case of property located within a school 
district which does not meet the qualifications of section 
273.134 as a tax relief area, but which is located in a county 
with a population of less than 100,000 in which taconite is 
mined or quarried and wherein a school district is located which 
does meet the qualifications of a tax relief area, and provided 
that at least 90 percent of the area of the school district 
which does not meet the qualifications of section 273.134 lies 
within such county, 57 percent of the tax on qualified property 
located in the school district that does not meet the 
qualifications of section 273.134, provided that the amount of 
said reduction shall not exceed the maximum amounts specified in 
clause (c), and shall not exceed an amount sufficient to reduce 
the effective tax rate on each parcel of property to the product 
of 95 percent of the base year effective tax rate multiplied by 
the ratio of the current year's tax rate to the payable 1989 tax 
rate.  In no case will the reduction for each homestead 
resulting from this credit be less than $10.  The reduction 
provided by this clause shall only be applicable to property 
located within the boundaries of the county described therein.  
    (b) In the case of property located within a school 
district which does not meet the qualifications of section 
273.134 as a tax relief area, but which is located in a school 
district in a county containing a city of the first class and a 
qualifying municipality, but not in a school district containing 
a city of the first class or adjacent to a school district 
containing a city of the first class unless the school district 
so adjacent contains a qualifying municipality, 57 percent of 
the tax, but not to exceed the maximums specified in clause (c), 
and shall not exceed an amount sufficient to reduce the 
effective tax rate on each parcel of property to the product of 
95 percent of the base year effective tax rate multiplied by the 
ratio of the current year's tax rate to the payable 1989 tax 
rate.  In no case will the reduction for each homestead 
resulting from this credit be less than $10. 
    (c) The maximum reduction of the tax up to the taconite 
breakpoint is $200.10 for taxes payable in 1985.  This maximum 
amount shall increase by $15 multiplied by the quantity one 
minus the homestead credit equivalency percentage per year for 
taxes payable in 1986 and subsequent years.  
    For the purposes of this subdivision, "homestead credit 
equivalency percentage" means one minus the ratio of the net tax 
capacity percentage to the gross tax capacity percentage 
applicable to the first $68,000 of the market value of 
residential homesteads, and "effective tax rate" means tax 
divided by the market value of a property, and the "base year 
effective tax rate" means the payable 1988 tax on a property 
with an identical market value to that of the property receiving 
the credit in the current year after application of the credits 
payable under Minnesota Statutes 1988, section 273.13, 
subdivisions 22 and 23, and this section, divided by the market 
value of the property.  
    Sec. 9.  Minnesota Statutes Second 1989 Supplement, section 
273.1398, subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] (a) In this section, the 
terms defined in this subdivision have the meanings given them. 
     (b) "Unique taxing jurisdiction" means the geographic area 
subject to the same set of tax capacity rates. 
     (c) "Gross tax capacity" means the product of the gross 
class rates and estimated market values.  "Total gross tax 
capacity" means the gross tax capacities for all property within 
the unique taxing jurisdiction.  The total gross tax capacity 
used shall be reduced by the sum of (1) the unique taxing 
jurisdiction's gross tax capacity of commercial industrial 
property as defined in section 473F.02, subdivision 3, 
multiplied by the ratio determined pursuant to section 473F.08, 
subdivision 6, for the municipality, as defined in section 
473F.02, subdivision 8, in which the unique taxing jurisdiction 
is located, (2) the gross tax capacity of the captured value of 
tax increment financing districts as defined in section 469.177, 
subdivision 2, and (3) the gross tax capacity of transmission 
lines deducted from a local government's total gross tax 
capacity under section 273.425.  Gross tax capacity cannot be 
less than zero. 
     (d) "Net tax capacity" means the product of the appropriate 
net class rates for the year in which the aid is payable, except 
that for class 3 utility real and personal property the class 
rate applied shall be 5.38 percent, and estimated market values 
for the assessment two years prior to that in which aid is 
payable.  "Total net tax capacity" means the net tax capacities 
for all property within the unique taxing jurisdiction.  The 
total net tax capacity used shall be reduced by the sum of (1) 
the unique taxing jurisdiction's net tax capacity of commercial 
industrial property as defined in section 473F.02, subdivision 
3, multiplied by the ratio determined pursuant to section 
473F.08, subdivision 6, for the municipality, as defined in 
section 473F.02, subdivision 8, in which the unique taxing 
jurisdiction is located, (2) the net tax capacity of the 
captured value of tax increment financing districts as defined 
in section 469.177, subdivision 2, and (3) the net tax capacity 
of transmission lines deducted from a local government's total 
net tax capacity under section 273.425.  For purposes of 
determining the net tax capacity of property referred to in 
clauses (1) and (2), the net tax capacity shall be multiplied by 
the ratio of the highest class rate for class 3a property for 
taxes payable in the year in which the aid is payable to the 
highest class rate for class 3a property in the prior year.  Net 
tax capacity cannot be less than zero. 
     (e) "Equalized market values" are market values that have 
been equalized by dividing the assessor's estimated market value 
for the second year prior to that in which the aid is payable by 
the assessment sales ratios determined by class in the 
assessment sales ratio study conducted by the department of 
revenue pursuant to section 124.2131 in the second year prior to 
that in which the aid is payable.  The equalized market values 
shall equal the unequalized market values divided by the 
assessment sales ratio. 
     (f) "Local tax rate" means the quotient derived by dividing 
the gross taxes levied within a unique taxing jurisdiction for 
taxes payable in 1989 by the gross tax capacity of the unique 
taxing jurisdiction for taxes payable in 1989.  For computation 
of the local tax rate for aid payable in 1991 and subsequent 
years, gross taxes for taxes payable in 1989 exclude equalized 
levies as defined in subdivision 2a.  For purposes of 
computation of the local tax rate only, gross taxes shall not be 
adjusted by inflation or household growth. 
     (g) For purposes of calculating the homestead and 
agricultural credit aid authorized pursuant to subdivision 2, 
the "subtraction factor" is the product of (i) a unique taxing 
jurisdiction's local tax rate; (ii) its total net tax capacity; 
and (iii) 0.9767. 
     (h) For purposes of calculating and allocating homestead 
and agricultural credit aid authorized pursuant to subdivision 2 
and the disparity reduction aid authorized in subdivision 3, 
"gross taxes levied on all properties" or "gross taxes" means 
the total gross taxes levied on all properties except that 
levied on the captured value of tax increment districts as 
defined in section 469.177, subdivision 2, and that levied on 
the portion of commercial industrial properties' assessed value 
or gross tax capacity, as defined in section 473F.02, 
subdivision 3, subject to the areawide tax as provided in 
section 473F.08, subdivision 6, in a unique taxing jurisdiction 
before reduction by any credits for taxes payable in 1989.  
Gross taxes are before any reduction for disparity reduction 
aid.  Gross taxes levied cannot be less than zero.  
     For homestead and agricultural credit aid payable in 1991 
and subsequent years, "gross taxes" or "gross taxes levied on 
all properties" shall mean gross taxes payable in 1989, 
excluding taxes defined as "equalized levies" actual amounts 
levied for the purposes listed in subdivision 2a, multiplied by 
the cost-of-living adjustment factor and the household 
adjustment factor.  
     (i) "Human services aids" means: 
     (1) aid to families with dependent children under sections 
256.82, subdivision 1, and 256.935, subdivision 1; 
     (2) medical assistance under sections 256B.041, subdivision 
5, and 256B.19, subdivision 1; 
     (3) general assistance medical care under section 256D.03, 
subdivision 6; 
     (4) general assistance under section 256D.03, subdivision 
2; 
     (5) work readiness under section 256D.03, subdivision 2; 
     (6) emergency assistance under section 256.871, subdivision 
6; 
     (7) Minnesota supplemental aid under section 256D.36, 
subdivision 1; 
    (8) preadmission screening and alternative care grants 
under section 256B.091; 
    (9) work readiness services under section 256D.051; 
    (10) case management services under section 256.736, 
subdivision 13; 
    (11) general assistance claims processing, medical 
transportation and related costs; and 
    (12) medical assistance, medical transportation and related 
costs. 
    (j) "Adjustment factor" means one plus the percentage 
change in (1) the ratio of estimated market value of residential 
homesteads property to the estimated market value of all taxable 
property within the city or township containing the unique 
taxing jurisdiction based on the assessment one year prior to 
the year in which the aid is payable when compared to the same 
ratio based on the assessment two years prior to the year in 
which the aid is payable.  If the market value of farm 
homesteads exceeds the market value of residential homesteads in 
the city or township containing the unique taxing 
jurisdiction for the assessment two years prior to the year in 
which the aid is payable, "adjusted adjustment factor" means one 
plus the percentage change in the ratio of the estimated market 
value of farm homesteads property to the estimated market value 
of all taxable property within the city or township containing 
the unique taxing jurisdiction based on the assessment one year 
prior to the year in which the aid is payable when compared to 
the same ratio based on the assessment two years prior to the 
year in which the aid is payable.  The adjustment factor cannot 
be less than one.  Estimates of market value for the assessment 
one year prior to the year in which the aid is paid will be made 
on the basis of the abstract submitted pursuant to section 
270.11.  Discrepancies between the estimate and actual market 
values will not result in increased or decreased aid in the year 
in which the estimates are used to compute aid. 
     (k) "Cost-of-living adjustment factor" means one plus the 
percentage, if any, by which: 
     (1) the consumer price index for the calendar year 
preceding that in which aid is payable, exceeds 
     (2) the consumer price index for calendar year 1989.  
     (l) "Consumer price index for any calendar year" means the 
average of the consumer price index as of the close of the 
12-month period ending on May 31 of such calendar year.  
     (m) "Consumer price index" means the last consumer price 
index for all-urban consumers published by the department of 
labor.  For purposes of the preceding sentence, the revision of 
the consumer price index which is most consistent with the 
consumer price index for calendar year 1989 shall be used. 
     (n) "Household adjustment factor" means the number of 
households for the most recent year preceding that in which the 
aids are payable divided by the 1988 number of households.  The 
household adjustment factor cannot be less than one. 
    Sec. 10.  Minnesota Statutes Second 1989 Supplement, 
section 273.1398, subdivision 2, is amended to read: 
    Subd. 2.  [HOMESTEAD AND AGRICULTURAL CREDIT AID.] (a) 
Initial homestead and agricultural credit aid for each unique 
taxing jurisdiction equals the total gross taxes levied on all 
properties, minus the unique taxing jurisdiction's subtraction 
factor.  The commissioner of revenue may, in computing the 
amount of the homestead and agricultural credit aid paid in 
1990, adjust the gross tax capacity, net tax capacity, and gross 
taxes of a taxing jurisdiction for taxes payable in 1989 to 
reflect auditor's errors in computing taxes payable for 1989 in 
unique taxing jurisdictions within independent school district 
Nos. 720 and 792.  Homestead and agricultural credit aid cannot 
be less than zero.  
     (b)(1) The homestead and agricultural credit aid is 
allocated to each local government levying taxes in the unique 
taxing jurisdiction in the proportion that the local 
government's gross taxes bears to the total gross taxes levied 
within the unique taxing jurisdiction.  
     (2) The 1990 homestead and agricultural credit aid so 
determined for school districts for purposes of general 
education levies pursuant to section 124A.23, subdivisions 2 and 
2a, and transportation levies pursuant to section 275.125, 
subdivisions 5 and 5c, shall be multiplied by the ratio of the 
adjusted gross tax capacity based upon the 1988 adjusted gross 
tax capacity to the estimated 1987 adjusted gross tax capacity 
based upon the 1987 adjusted assessed value. 
    (3) If a local government's total tax capacity rate for all 
funds for taxes payable in 1989 varies within the area in which 
it exercises taxing authority, the local government's allocated 
homestead and agricultural credit aid must be further allocated 
between the part of its levy in respect to which the tax 
capacity rate is constant throughout the area in which it 
exercises taxing authority and the part of its levy in respect 
to which the tax capacity rate varies throughout the area in 
which it exercises taxing authority.  
    (c) The calendar year 1990 homestead and agricultural 
credit aid shall be adjusted by the adjustment factor. 
    (d) Payments under this subdivision to counties in 1990 and 
subsequent years shall be reduced by the amount provided in 
section 477A.012, subdivisions 3, paragraph (d), and 4, 
paragraph (d). 
    (e) Payments under this subdivision to cities and towns 
shall be annually reduced by the amount of the homestead and 
agricultural credit aid adjustment, if any, determined for 1990 
under section 477A.013, subdivision 6. 
    Sec. 11.  Minnesota Statutes Second 1989 Supplement, 
section 273.1398, subdivision 5, is amended to read: 
    Subd. 5.  [ADDITIONAL HOMESTEAD AND AGRICULTURAL CREDIT 
GUARANTEE.] Beginning with taxes payable in 1990, each unique 
taxing jurisdiction may receive additional homestead and 
agricultural credit guarantee payments.  
    (1) Each year, the commissioner shall determine the total 
education aids paid under chapters 124 and 124A, homestead and 
agricultural credit aid and disparity reduction aid paid under 
section 273.1398, local government aid to cities, counties, and 
towns paid under chapter 477A, and income maintenance aid human 
services aids, including for aids paid in 1991 and thereafter, 
the amount paid under subdivision 5b, paid to counties for each 
taxing jurisdiction.  The commissioner shall apportion each 
local government's aids to the unique taxing jurisdiction based 
upon the proportion that the unique taxing jurisdiction's tax 
capacity bears to the total tax capacity of the local government.
    (2) Each year, the commissioner will compute a gross tax 
capacity rate for each taxing jurisdiction equal to its total 
levy divided by its gross tax capacity under Minnesota Statutes 
1988, section 273.13.  For each unique taxing jurisdiction, a 
total gross tax capacity rate will be determined.  This total 
gross tax capacity rate will be applied against the gross tax 
capacity of property that would have been eligible for the 
homestead credit or the agricultural credit for taxes payable in 
1989.  An estimated credit amount will be determined for all 
qualifying parcels based upon the credit rate structure in 
effect for taxes payable in 1989.  The resulting credit amounts 
will be summed for all parcels in the unique taxing jurisdiction.
    If the amount determined in clause (2) is greater than the 
amount determined in clause (1), the difference will be 
additional homestead and agricultural credit guarantee payments 
for the unique taxing jurisdiction.  The additional credit 
amount shall proportionately reduce the tax capacity rates of 
all local governments levying taxes within the unique taxing 
jurisdiction in the following year.  The commissioner shall 
certify the amounts of additional credits determined under this 
subdivision to the county auditor at the time provided in 
subdivision 6.  
    Sec. 12.  Minnesota Statutes Second 1989 Supplement, 
section 273.1398, subdivision 5a, is amended to read: 
    Subd. 5a.  [AID ADJUSTMENT FOR COUNTY HUMAN SERVICES AID.] 
(a) There shall be transferred to the human services aid account 
from the payment to a county under subdivision 2 an amount 
representing a county's human services aid increase as 
calculated in subdivision 5b, paragraphs (a) to (c).  The amount 
calculated for each county shall be deducted from the first 
payment to the equally from the July and December payments to 
the county under this section in 1991 and subsequent years.  If 
the deduction exceeds the amount of the first payment, the 
balance shall be subtracted from the second payment.  The amount 
of the payments under subdivision 2 shall not be less than zero 
as a result of this adjustment. 
    Sec. 13.  Minnesota Statutes Second 1989 Supplement, 
section 273.1398, subdivision 6, is amended to read: 
    Subd. 6.  [PAYMENT.] The commissioner shall certify the 
aids provided in subdivisions 2, 2b, 3, and 5 before December 1, 
1989, and October 1 thereafter of the year preceding the 
distribution year to the county auditor of the affected local 
government and pay them and the credit reimbursements to local 
governments other than school districts at the times provided in 
section 477A.015 for payment of local government aid to taxing 
jurisdictions.  Aids and credit reimbursements to school 
districts must be certified to the commissioner of education and 
paid under section 273.1392.  Except for education districts and 
secondary cooperatives that receive revenue according to section 
124.2721 or 124.575, payment shall not be made to any taxing 
jurisdiction that has ceased to levy a property tax nor shall 
homestead and agricultural credit aid be payable on the part of 
a levy to which homestead and agricultural credit aid was 
separately allocated under subdivision 2, paragraph (b), clause 
(2), which is no longer levied. 
    Sec. 14.  Minnesota Statutes 1988, section 274.01, 
subdivision 1, is amended to read:  
    Subdivision 1.  [ORDINARY BOARD; MEETINGS, DEADLINES, 
GRIEVANCES.] (a) The town board of a town, or the council or 
other governing body of a city, is the board of review except in 
cities whose charters provide for a board of equalization.  The 
county assessor shall fix a day and time when the board or the 
board of equalization shall meet in the assessment districts of 
the county.  On or before February 15 of each year the assessor 
shall give written notice of the time to the city or town 
clerk.  Notwithstanding the provisions of any charter to the 
contrary, the meetings must be held between April 1 and May 31 
each year.  The clerk shall give published and posted notice of 
the meeting at least ten days before the date of the meeting.  
The board shall meet at the office of the clerk to review the 
assessment and classification of property in the town or city.  
No changes in valuation or classification which are intended to 
correct errors in judgment by the county assessor may be made by 
the county assessor after the board of review or the county 
board of equalization has adjourned; however, corrections of 
errors that are merely clerical in nature or changes that extend 
homestead treatment to property are permitted after the board of 
review or the county board of equalization has adjourned.  This 
restriction does not apply to corrections of errors that are 
merely clerical or administrative in nature adjournment until 
the tax extension date for that assessment year.  The changes 
must be fully documented and maintained in the assessor's office 
and must be available for review by any person.  A copy of the 
changes made during this period must be sent to the county board 
no later than December 31 of the assessment year.  
    (b) The board shall determine whether the taxable property 
in the town or city has been properly placed on the list and 
properly valued by the assessor.  If real or personal property 
has been omitted, the board shall place it on the list with its 
market value, and correct the assessment so that each tract or 
lot of real property, and each article, parcel, or class of 
personal property, is entered on the assessment list at its 
market value.  No assessment of the property of any person may 
be raised unless the person has been duly notified of the intent 
of the board to do so.  On application of any person feeling 
aggrieved, the board shall review the assessment or 
classification, or both, and correct it as appears just.  
    (c) A local board of review may reduce assessments upon 
petition of the taxpayer but the total reductions must not 
reduce the aggregate assessment made by the county assessor by 
more than one percent.  If the total reductions would lower the 
aggregate assessments made by the county assessor by more than 
one percent, none of the adjustments may be made.  The assessor 
shall correct any clerical errors or double assessments 
discovered by the board of review without regard to the one 
percent limitation.  
    (d) A majority of the members may act at the meeting, and 
adjourn from day to day until they finish hearing the cases 
presented.  The assessor shall attend, with the assessment books 
and papers, and take part in the proceedings, but must not 
vote.  The county assessor, or an assistant delegated by the 
county assessor shall attend the meetings.  The board shall list 
separately, on a form appended to the assessment book, all 
omitted property added to the list by the board and all items of 
property increased or decreased, with the market value of each 
item of property, added or changed by the board, placed opposite 
the item.  The county assessor shall enter all changes made by 
the board in the assessment book.  
    (e) If a person fails to appear in person, by counsel, or 
by written communication before the board after being duly 
notified of the board's intent to raise the assessment of the 
property, or if a person feeling aggrieved by an assessment or 
classification fails to apply for a review of the assessment or 
classification, the person may not appear before the county 
board of equalization for a review of the assessment or 
classification.  This paragraph does not apply if an assessment 
was made after the board meeting, as provided in section 273.01, 
or if the person can establish not having received notice of 
market value at least five days before the local board of review 
meeting.  
    (f) The board of review or the board of equalization must 
complete its work and adjourn within 20 days from the time of 
convening stated in the notice of the clerk, unless a longer 
period is approved by the commissioner of revenue.  No action 
taken after that date is valid.  All complaints about an 
assessment or classification made after the meeting of the board 
must be heard and determined by the county board of 
equalization.  A nonresident may, at any time, before the 
meeting of the board of review file written objections to an 
assessment or classification with the county assessor.  The 
objections must be presented to the board of review at its 
meeting by the county assessor for its consideration.  
    Sec. 15.  Minnesota Statutes Second 1989 Supplement, 
section 274.14, is amended to read:  
    274.14 [LENGTH OF SESSION; RECORD.] 
    The county board of equalization or the special board of 
equalization appointed by it shall meet during the last two 
weeks in June that contain ten meeting days, excluding Saturday 
and Sunday.  No action taken by the county board of review after 
June 30 is valid, except for corrections permitted in sections 
273.01 and 274.01.  The county auditor shall keep an accurate 
record of the proceedings and orders of the board.  The record 
must be published like other proceedings of county 
commissioners.  A copy of the published record must be sent to 
the commissioner of revenue, with the abstract of assessment 
required by section 274.16.  
    Sec. 16.  Minnesota Statutes Second 1989 Supplement, 
section 274.175, is amended to read:  
    274.175 [VALUES FINALIZED.] 
    The assessments recorded by the county assessor and the 
county auditor under sections 273.124, subdivision 9; 274.16; 
274.17; or other law for real and personal property are final on 
July 1 of the assessment year, except for property added to the 
assessment rolls under section 272.02, subdivision 4, or deleted 
because of tax forfeiture pursuant to chapter 281.  No changes 
in value may be made after July 1 of the assessment year, except 
for corrections permitted in sections 273.01 and 274.01. 
    Sec. 17.  Minnesota Statutes Second 1989 Supplement, 
section 275.07, subdivision 3, is amended to read: 
    Subd. 3.  The county auditor shall adjust each local 
government's levy certified under subdivision 1 by the amount of 
homestead and agricultural credit aid certified by section 
273.1398, subdivision 2, reduced by the amount under section 
273.1398, subdivision 5a, and equalization aid certified by 
section 477A.013, subdivision 5.  If a local government's 
homestead and agricultural credit aid was further allocated 
between portions of its levy pursuant to section 273.1398, 
subdivision 2, paragraph (b)(2), the levy or fund to which the 
homestead and agricultural credit aid was allocated is the levy 
or fund which must be adjusted. 
    Sec. 18.  Minnesota Statutes Second 1989 Supplement, 
section 275.50, subdivision 5, is amended to read: 
    Subd. 5.  Notwithstanding any other law to the contrary for 
taxes levied in 1989 payable in 1990 and subsequent years, 
"special levies" means those portions of ad valorem taxes levied 
by governmental subdivisions to: 
    (a) for taxes levied in 1990, payable in 1991 and 
subsequent years, pay the costs not reimbursed by the state or 
federal government, of payments made to or on behalf of 
recipients of aid under any public assistance program authorized 
by law, and the costs of purchase or delivery of social 
services.  The aggregate amounts levied under this clause for 
the costs of purchase or delivery of social services and income 
maintenance programs, other than those identified in section 
273.1398, subdivision 1, paragraph (i), are subject to a maximum 
increase over the amount levied for the previous year of 12 
percent for counties within the metropolitan area as defined in 
section 473.121, subdivision 2, or counties outside the 
metropolitan area but containing a city of the first class, and 
15 percent for other counties.  For purposes of this clause, 
"income maintenance programs" include income maintenance 
programs in section 273.1398, subdivision 1, paragraph (i), to 
the extent the county provides benefits under those programs 
over the statutory mandated standards.  Effective with taxes 
levied in 1990, the portion of this special levy for human 
service programs identified in section 273.1398, subdivision 1, 
paragraph (i), is eliminated; 
     (b) pay the costs of principal and interest on bonded 
indebtedness except on bonded indebtedness issued under section 
471.981, subdivisions 4 to 4c, or to reimburse for the amount of 
liquor store revenues used to pay the principal and interest due 
in the year preceding the year for which the levy limit is 
calculated on municipal liquor store bonds; 
     (c) pay the costs of principal and interest on certificates 
of indebtedness, except tax anticipation or aid anticipation 
certificates of indebtedness, issued for any corporate purpose 
except current expenses or funding an insufficiency in receipts 
from taxes or other sources or funding extraordinary 
expenditures resulting from a public emergency; and to pay the 
cost for certificates of indebtedness issued pursuant to 
sections 298.28 and 298.282; 
     (d) fund the payments made to the Minnesota state armory 
building commission pursuant to section 193.145, subdivision 2, 
to retire the principal and interest on armory construction 
bonds; 
     (e) provide for the bonded indebtedness portion of payments 
made to another political subdivision of the state of Minnesota; 
     (f) pay the amounts required, in accordance with section 
275.075, to correct for a county auditor's error of omission but 
only to the extent that when added to the preceding year's levy 
it is not in excess of an applicable statutory, special law or 
charter limitation, or the limitation imposed on the 
governmental subdivision by sections 275.50 to 275.56 in the 
preceding levy year; 
     (g) pay amounts required to correct for an error of 
omission in the levy certified to the appropriate county auditor 
or auditors by the governing body of a city or town with 
statutory city powers in a levy year, but only to the extent 
that when added to the preceding year's levy it is not in excess 
of an applicable statutory, special law or charter limitation, 
or the limitation imposed on the governmental subdivision by 
sections 275.50 to 275.56 in the preceding levy year; 
     (h) pay amounts required by law to be paid to pay the 
interest on and to reduce the unfunded accrued liability of 
public pension funds in accordance with the actuarial standards 
and guidelines specified in sections 356.215 and 356.216 reduced 
by 106 percent of the amount levied for that purpose in 1976, 
payable in 1977.  For the purpose of this special levy, the 
estimated receipts expected from the state of Minnesota pursuant 
to sections 69.011 to 69.031 or any other state aid expressly 
intended for the support of public pension funds shall be 
considered as a deduction in determining the required levy for 
the normal costs of the public pension funds.  No amount of 
these aids shall be considered as a deduction in determining the 
governmental subdivision's required levy for the reduction of 
the unfunded accrued liability of public pension funds; 
     (i) to compensate the state for the cost of a reassessment 
ordered by the commissioner of revenue pursuant to section 
270.16; 
     (j) pay the debt service on tax increment financing revenue 
bonds to the extent that revenue to pay the bonds or to maintain 
reserves for the bonds is insufficient as a result of the 
provisions of Laws 1988, chapter 719, article 5; 
     (k) pay the cost of hospital care under section 261.21; 
     (l) pay the unreimbursed costs incurred in the previous 
year to satisfy judgments rendered against the governmental 
subdivision by a court of competent jurisdiction in any tort 
action, or to pay the costs of settlements out of court against 
the governmental subdivision in a tort action when substantiated 
by a stipulation for the dismissal of the action filed with the 
court of competent jurisdiction and signed by both the plaintiff 
and the legal representative of the governmental subdivision, 
provided that an appeal for the unreimbursed costs under this 
clause was approved by the commissioner of revenue under section 
275.51, subdivision 3; 
     (m) pay the expenses reasonably and necessarily incurred in 
preparing for or repairing the effects of natural disaster 
including the occurrence or threat of widespread or severe 
damage, injury, or loss of life or property resulting from 
natural causes such as earthquake, fire, flood, wind storm, wave 
action, oil spill, water contamination, air contamination, or 
drought in accordance with standards formulated by the emergency 
services division of the state department of public safety, 
provided that an appeal for the expenses incurred under this 
clause were approved by the commissioner of revenue under 
section 275.51, subdivision 3; 
     (n) pay a portion of the losses in tax receipts to a city 
due to tax abatements or court actions in the year preceding the 
current levy year, provided that an appeal for the tax losses 
was approved by the commissioner of revenue under section 
275.51, subdivision 3.  This special levy is limited to the 
amount of the losses times the ratio of the nonspecial levies to 
total levies for taxes payable in the year the abatements were 
granted.  County governments are not authorized to claim this 
special levy; 
     (o) pay the operating cost of regional library services 
authorized under section 134.34, subject to a maximum increase 
over the previous year of the greater of (1) 103 percent 
multiplied by one plus the percentage increase determined for 
the governmental subdivision under section 275.51, subdivision 
3h, clause (b), or (2) six percent.  If a governmental 
subdivision elected to include some or all of its levy for 
libraries within its adjusted levy limit base in the prior year, 
but elects to claim the levy as a special levy in the current 
levy year, the allowable increase is determined by applying the 
greater percentage determined under clause (1) or (2) to the 
total amount levied for libraries in the prior levy year.  After 
levy year 1989, the increase must not be determined using a base 
amount other than the amount that could have been levied as a 
special levy in the prior year.  In no event shall the special 
levy be less than the minimum levy required under sections 
134.33 and 134.34, subdivisions 1 and 2; 
     (p) pay the amount of the county building fund levy 
permitted under section 373.40, subdivision 6; 
     (q) pay the county's share of the costs levied in 1989, 
1990, and 1991 for the Minnesota cooperative soil survey under 
Minnesota Statutes 1988, section 40.07, subdivision 15; 
     (r) for taxes levied in 1989, payable in 1990 only, pay the 
cost incurred for the minimum share required by counties levying 
for the first time under section 134.34 as required under 
section 134.341.  For taxes levied in 1990, and thereafter, 
counties levying under this provision must levy under clause 
(o), and their allowable increase must be determined with 
reference to the amount levied in 1989 under this paragraph; 
     (s) for taxes levied in 1989, payable in 1990 only, provide 
an amount equal to 50 percent of the estimated amount of the 
reduction in aids to a county under sections 273.1398, 
subdivision 2, paragraph (d), and 477A.012, subdivision 3, for 
aids payable in 1990; 
     (t) for taxes levied in 1990 only by a county in the eighth 
judicial district, provide an amount equal to the amount of the 
levy, if any, that is required under Laws 1989, chapter 335, 
article 3, section 54, subdivision 8; 
    (u) for taxes levied in 1989, payable in 1990 only, pay the 
costs not reimbursed by the state or federal government: 
    (i) for the costs of purchase or delivery of social 
services.  The aggregate amounts levied under this item are 
subject to a maximum increase over the amount levied in the 
previous year of 12 percent for counties within the metropolitan 
area as defined in section 473.121, subdivision 2, or counties 
outside the metropolitan area but containing a city of the first 
class, and 15 percent for other counties. 
    (ii) for payments made to or on behalf of recipients of aid 
under any public assistance program authorized by law.  The 
aggregate amounts levied under this item are subject to a 
maximum increase over the amount levied in the previous year of 
12 percent and must be used only for the public assistance 
programs; and. 
    If the amount levied under this paragraph (u) in 1989 is 
less than the actual expenditures needed for these programs for 
1990, the difference between the actual expenditures and the 
amount levied may be levied in 1990 as a special levy.  If the 
amount levied in 1989 is greater than the actual expenditures 
needed for these programs for 1990, the difference between the 
amount levied and the actual expenditures shall be deducted from 
the 1990 levy limit, payable in 1991; and 
    (v) pay an amount of up to 25 percent of the money sought 
for distribution and approved under section 115A.557, 
subdivision 3, paragraph (b), clause (3). 
    If the amount levied in 1989 is less than the actual 
expenditures needed for these programs for 1990, the difference 
between the actual expenditures and the amount levied may be 
levied in 1990 as a special levy.  If the amount levied in 1989 
is greater than the actual expenditures needed for these 
programs for 1990, the difference between the amount levied and 
the actual expenditures shall be deducted from the 1990 levy 
limit, payable in 1991. 
    Sec. 19.  Minnesota Statutes Second 1989 Supplement, 
section 275.51, subdivision 3f, is amended to read: 
    Subd. 3f.  [LEVY LIMIT BASE.] (a) The property tax levy 
limit base for governmental subdivisions for taxes levied in 
1988 shall be equal to the total actual levy for taxes payable 
in 1988 with additions and subtractions as specified in 
paragraphs (b) and (c).  
     (b) The amounts to be added to the actual 1988 levy are (1) 
the amount of local government aid the governmental subdivision 
was certified to receive in 1988 under sections 477A.011 to 
477A.014, (2) its 1988 taconite aids under sections 298.28 and 
298.282, and (3) its 1988 wetlands and native prairie 
reimbursements under Minnesota Statutes 1986, sections 273.115, 
subdivision 3, and 273.116, subdivision 3. 
     (c) The amounts to be subtracted from the actual 1988 levy 
are (1) any special levies claimed for taxes payable in 1988 
pursuant to Laws 1987, chapter 268, article 5, section 12, 
subdivision 4, clauses (1), (2), (3), and (4); and (2) for a 
governmental subdivision participating in a regional library 
system receiving grants from the department of education under 
section 134.34, the amount levied for taxes payable in 1988 for 
the operating costs of a public library service.  
     (d) For taxes levied in 1989 and subsequent years, a 
governmental subdivision's levy limit base is equal to its 
adjusted levy limit base for the preceding year, provided that 
for taxes levied in 1989, the amount of the administrative 
reimbursement aid received in 1988 shall be added to the base. 
    (e) For taxes levied by a county in 1989, the levy limit 
base determined under paragraph (d) shall be reduced by an 
amount equal to 90 percent of the cost of public defender 
services for felonies and gross misdemeanors and the costs of 
law clerks in the county that are assumed by the state during 
calendar year 1990, less 103 percent of one-half the amount of 
fees collected by the courts in the county during calendar year 
1988.  For taxes levied in 1990, the levy limit base determined 
under paragraph (d) shall first be increased by the product of 
(1) the amount deducted under this paragraph for taxes levied in 
1989 and (2) the adjustments under subdivision 3h, paragraphs 
(a) and (b) for taxes levied in 1989, and then shall be reduced 
by an amount equal to the cost of public defender services for 
felonies and gross misdemeanors and the cost of law clerks in 
the county that are assumed by the state during calendar year 
1991, less the amount of fees collected by the courts in the 
county during calendar year 1989, computed at the rate of $30 
for civil and probate filings and $20 for marriage dissolutions. 
    (f) For taxes levied in 1989 only, by a county that is 
located in the eighth judicial district, the levy limit base 
determined under paragraphs (d) and (e) shall be further reduced 
by an amount equal to 90 percent of the cost of operation of the 
trial courts in the county during calendar year 1990 that are 
assumed by the state and for which an appropriation is provided, 
less 103 percent of the sum of (1) the remaining one-half of the 
amount of fees and (2) 100 percent of the amount of fines 
collected by the courts in the county during calendar year 
1988.  For taxes levied in 1990 only by those counties, the levy 
limit base determined under paragraphs (d) and (e) shall first 
be increased by the product of (1) the amount deducted under 
this paragraph for taxes levied in 1989 and (2) the adjustments 
under subdivision 3h, paragraphs (a) and (b) for taxes levied in 
1989, and then shall be further reduced by an amount equal to 
the cost of operation of the trial courts in the county during 
the first six months of calendar year 1991 that are assumed by 
the state less 50 percent of the amount of fines collected by 
the courts during calendar year 1989. 
     (g) By October 15, 1989, the board of public defense shall 
determine and certify to the commissioner of revenue the pro 
rata share for each county of the state-financed public defense 
services described in paragraph (e) during the six-month period 
beginning July 1, 1990.  By October 15, 1989, the supreme court 
shall determine and certify to the department of revenue for 
each county the pro rata share for each county of the cost of 
providing law clerks during the three-month period beginning 
October 1, 1990, plus, for each county located in the eighth 
judicial district, the cost of operation of the trial courts 
during calendar year 1990. 
     By July 15, 1990, the board of public defense shall 
determine and certify to the department of revenue the pro rata 
share for each county of the state-financed public defense 
services described in paragraph (e) during calendar year 1991.  
By July 15, 1990, the supreme court shall determine and certify 
to the department of revenue for each county the pro rata share 
for each county of the cost of providing law clerks during 
calendar year 1991 plus, for each county located in the eighth 
judicial district, the cost of operation of the trial courts 
during the first six months of 1991. 
     (h) For taxes levied in a county in 1991, the levy limit 
base shall be reduced by an amount equal to the cost in the 
county of court reporters, judicial officers, and district court 
referees and the expenses of law clerks and court reporters as 
authorized in sections 484.545, subdivision 3, and 486.05, 
subdivisions 1 and 1a, as certified by the supreme court 
pursuant to section 477A.012, subdivision 4. 
     (i) If a governmental subdivision received an adjustment to 
its levy limit base for taxes levied in 1988 under section 
275.51, subdivision 3j, its levy limit base for taxes levied in 
1989 must be reduced by the lesser of (1) the adjustment under 
section 275.51, subdivision 3j, or (2) the difference between 
its (i) levy limit for taxes levied in 1988 and its (ii) total 
actual levy for taxes levied in 1988 minus any special levies 
claimed for taxes levied in 1988 under section 275.50, 
subdivision 5. 
    Sec. 20.  Minnesota Statutes Second 1989 Supplement, 
section 275.51, subdivision 3h, is amended to read: 
    Subd. 3h.  [ADJUSTED LEVY LIMIT BASE.] For taxes levied in 
1989 and thereafter, the adjusted levy limit base is equal to 
the levy limit base computed pursuant to subdivision 3f, 
increased by:  
    (a) three percent for taxes levied in 1989 and subsequent 
years; 
    (b) a percentage equal to (1) one-half of the greater of 
the percentage increases in population or in number of 
households, if any, for cities and towns and (2) the lesser of 
the percentage increase in population or the number of 
households, if any, for counties, using figures derived pursuant 
to subdivision 6; 
    (c) the amount of a permanent increase in the levy limit 
base approved at a general or special election held during the 
12-month period ending September 30 four working days after 
December 20 of the levy year under section 275.58, subdivisions 
1 and 2; 
    (d) for levy year 1989, for a county which incurred costs 
since October 1978, for the litigation of federal land claims 
under United States Code, title 18, section 1162; United States 
Code, title 25, section 331; and United States Code, title 28, 
section 1360; an amount of up to the actual costs incurred by 
the county for this purpose.  This adjustment shall not exceed 
$250,000; 
    (e) for levy year 1989, an amount of $1,724,000 for Ramsey 
county for implementing the local government pay equity act 
under sections 471.991 to 471.999.  Furthermore, in levy years 
1990 and 1991, an additional amount of $862,000 shall be added 
to Ramsey county's adjusted levy limit base under this clause 
for each of the two years; and 
     (f) for levy year 1989, an amount equal to the decrease in 
a county's 50 percent share of the powerline taxes extended 
between taxes payable years 1988 and 1989 under section 273.42, 
subdivision 1.  The adjustment shall be determined by the 
department of revenue. 
      For taxes levied in 1989, the adjusted levy limit base is 
reduced by an amount equal to the estimated amount of the 
reduction in aids to a county under sections 273.1398, 
subdivision 2, paragraph (d), and 477A.012, subdivision 3, for 
aids payable in 1990. 
    Sec. 21.  Minnesota Statutes Second 1989 Supplement, 
section 275.51, subdivision 6, is amended to read:  
    Subd. 6.  [POPULATION AND HOUSEHOLD ESTIMATES.] For the 
purpose of determining the amount of tax that a governmental 
subdivision may levy in accordance with limitation established 
by this chapter, the population or the number of households of 
the governmental subdivision shall be that established by the 
last federal census, by a census taken pursuant to section 
275.14, or by an estimate made by the metropolitan council, or 
by the state demographer made pursuant to section 116K.04, 
subdivision 4, whichever is the most recent as to the stated 
date of count or estimate, for the calendar year preceding the 
current levy year.  If the area included in a governmental 
subdivision has increased due to annexation in the 12 months 
prior to the most recent population estimate for the calendar 
year preceding the current levy year and the adjusted levy limit 
base is modified under section 275.54, subdivision 3, the 
percentage increases in population and households determined in 
subdivision 3h are to be based on the change in population and 
number of households in the area included in the governmental 
subdivision before the annexation. 
    Sec. 22.  Minnesota Statutes 1988, section 275.54, is 
amended to read:  
    275.54 [CONSOLIDATION AND ANNEXATION OF GOVERNMENTAL 
SUBDIVISIONS.] 
    Subdivision 1.  If all or part of the area included within 
two or more governmental subdivisions is consolidated, merged, 
or otherwise combined to constitute a single governmental 
subdivision, and differing limitations upon the amount of tax 
levy per capita apply to the governmental subdivisions from 
which the consolidated, merged, or otherwise combined 
governmental subdivision was formed, the limitation applicable 
to the surviving entity for purposes of sections 275.50 to 
275.56 shall be equal to the highest limitation applicable to 
any one of the constituent subdivisions prior to the 
consolidation, merger or other combination.  
    Subd. 2.  If a function or service of one governmental 
subdivision is transferred to another governmental subdivision, 
the levy limitations established by Extra Session Laws 1971, 
chapter 31, shall be adjusted by the commissioner of revenue in 
such manner so as to fairly and equitably reflect the reduced or 
increased property tax burdens of such subdivisions resulting 
from such transfer.  The aggregate of the adjusted limitations 
shall not exceed the aggregate of such limitations prior to 
adjustment.  
    Subd. 3.  [ADJUSTMENTS AFTER ANNEXATION.] If the area 
included within the governmental subdivision is increased due to 
annexation in the 12 months prior to the most recent population 
estimate for the calendar year preceding the current levy year 
and the state demographer prepares a population estimate for the 
annexed area under section 116K.04, subdivision 4, paragraph 
(11), the governmental subdivision's adjusted levy limit base 
under section 275.51, subdivision 3h, must be adjusted in the 
following manner: 
    (a) A percentage will be calculated equal to the percentage 
increase in population in the governmental subdivision due to 
annexation determined by dividing the population of the annexed 
area by the population of the governmental subdivision excluding 
the annexed area, using population estimates for the calendar 
year preceding the current levy year. 
    (b) The governmental subdivision's adjusted levy limit base 
under section 275.51, subdivision 3h, after giving effect to 
paragraphs (a) and (b) of subdivision 3h, but before any other 
paragraphs in section 275.51, subdivision 3h, shall be increased 
by the percentage calculated in paragraph (a) of this 
subdivision. 
    For purposes of section 275.51, subdivision 3f, the term 
"adjusted levy limit base" includes the adjustment made under 
this subdivision for the preceding year. 
    Sec. 23.  Minnesota Statutes 1988, section 287.21, 
subdivision 2, is amended to read: 
    Subd. 2.  The proceeds of the taxes levied and collected 
under sections 287.21 to 287.36 on or after July 1, 1985, shall 
be credited apportioned, 97 percent to the county revenue 
general fund of the state, and three percent to the county 
revenue fund.  
    Sec. 24.  Minnesota Statutes Second 1989 Supplement, 
section 287.29, subdivision 1, is amended to read: 
    Subdivision 1.  On or before the tenth day of each month, 
the county treasurer shall determine and pay to the commissioner 
of revenue for deposit in the state treasury and credit to the 
general fund the state's portion of the receipts from the sale 
of documentary stamps during the preceding month.  The county 
treasurer shall provide any related reports requested by the 
commissioner of revenue. 
    Sec. 25.  Minnesota Statutes 1989 Supplement, section 
298.28, subdivision 4, is amended to read: 
    Subd. 4.  [SCHOOL DISTRICTS.] (a) 27.5 cents per taxable 
ton plus the increase provided in paragraph (d) must be 
allocated to qualifying school districts to be distributed, 
based upon the certification of the commissioner of revenue, 
under paragraphs (b) and (c). 
     (b) 5.5 cents per taxable ton must be distributed to the 
school districts in which the lands from which taconite was 
mined or quarried were located or within which the concentrate 
was produced.  The distribution must be based on the 
apportionment formula prescribed in subdivision 2. 
     (c)(i) 22 cents per taxable ton, less any amount 
distributed under paragraph (e), shall be distributed to a group 
of school districts comprised of those school districts in which 
the taconite was mined or quarried or the concentrate produced 
or in which there is a qualifying municipality as defined by 
section 273.134 in direct proportion to school district indexes 
as follows:  for each school district, its pupil units 
determined under section 124.17 for the prior school year shall 
be multiplied by the ratio of the average adjusted net tax 
capacity per pupil unit for school districts receiving aid under 
this clause as calculated pursuant to chapter 124A for the 
school year ending prior to distribution to the adjusted net tax 
capacity per pupil unit of the district.  Each district shall 
receive that portion of the distribution which its index bears 
to the sum of the indices for all school districts that receive 
the distributions.  
     (ii) Notwithstanding clause (i), each school district that 
receives a distribution under sections 298.018; 298.23 to 
298.28, exclusive of any amount received under this clause; 
298.34 to 298.39; 298.391 to 298.396; 298.405; or any law 
imposing a tax on severed mineral values that is less than the 
amount of its levy reduction under section 275.125, subdivision 
9, for the second year prior to the year of the distribution 
shall receive a distribution equal to the difference; the amount 
necessary to make this payment shall be derived from 
proportionate reductions in the initial distribution to other 
school districts under clause (i).  
     (d) On July 15, in years prior to 1988, an amount equal to 
the increase derived by increasing the amount determined by 
paragraph (c) in the same proportion as the increase in the 
steel mill products index over the base year of 1977 as provided 
in section 298.24, subdivision 1, clause (a), shall be 
distributed to any school district described in paragraph (c) 
where a levy increase pursuant to section 124A.03, subdivision 
2, is authorized by referendum, according to the following 
formula.  On July 15, 1988, the increase over the amount 
established for 1987 shall be determined as if there had been an 
increase in the tax rate under section 298.24, subdivision 1, 
paragraph (b), according to the increase in the implicit price 
deflator.  On July 15, 1989, and subsequent years, the increase 
over the amount established for the prior year shall be 
determined according to the increase in the implicit price 
deflator as provided in section 298.24, subdivision 1, paragraph 
(a).  Each district shall receive the product of: 
    (i) $150 times the pupil units identified in section 
124.17, subdivision 1, enrolled in the second previous year or 
the 1983-1984 school year, whichever is greater, less the 
product of 0.04231 1.8 percent times the district's taxable 
market value net tax capacity in the second previous year; times 
    (ii) the lesser of: 
    (A) one, or 
    (B) the ratio of the amount certified pursuant to section 
124A.03, subdivision 2, in the previous year, to the product of 
0.04231 1.8 percent times the district's taxable market value 
net tax capacity in the second previous year. 
    If the total amount provided by paragraph (d) is 
insufficient to make the payments herein required then the 
entitlement of $150 per pupil unit shall be reduced uniformly so 
as not to exceed the funds available.  Any amounts received by a 
qualifying school district in any fiscal year pursuant to 
paragraph (d) shall not be applied to reduce general education 
aid which the district receives pursuant to section 124A.23 or 
the permissible levies of the district.  Any amount remaining 
after the payments provided in this paragraph shall be paid to 
the commissioner of iron range resources and rehabilitation who 
shall deposit the same in the taconite environmental protection 
fund and the northeast Minnesota economic protection trust fund 
as provided in subdivision 11. 
    (e) There shall be distributed to any school district the 
amount which the school district was entitled to receive under 
section 298.32 in 1975. 
    Sec. 26.  Minnesota Statutes 1989 Supplement, section 
469.177, subdivision 1a, is amended to read:  
    Subd. 1a.  [ORIGINAL TAX CAPACITY RATE.] At the time of the 
initial certification of the original net tax capacity for a tax 
increment financing district, the county auditor shall certify 
the original tax capacity rate that applies to the district.  
The original tax capacity rate is the sum of all the tax 
capacity rates that apply to a property in the district for the 
taxes payable in the calendar year in which the initial 
certification of.  The tax capacity rate to be certified is the 
rate in effect for the same taxes payable year applicable to the 
tax capacity values certified as the district's original net tax 
capacity is requested under subdivision 1.  If the total tax 
capacity rate applicable to properties in the tax increment 
financing district varies, the tax capacity rate must be 
computed by determining the average total tax capacity rate in 
the district, weighted on the basis of net tax capacity.  The 
resulting tax capacity rate is the original tax capacity rate 
for the life of the district.  
    Sec. 27.  Minnesota Statutes Second 1989 Supplement, 
section 473F.08, subdivision 8a, is amended to read: 
    Subd. 8a.  [FISCAL DISPARITIES ADJUSTMENT.] In any year in 
which the highest class rate for class 3a property changes from 
the rate in the previous year, the following adjustments shall 
be made to the procedures described in sections 473F.06 to 
473F.08. 
    (1) An initial contribution tax capacity shall be 
determined for each municipality based on the previous year's 
class rates. 
    (2) Each jurisdiction's distribution tax capacity shall be 
determined based upon the areawide tax base determined by 
summing the tax capacities computed under clause (1) for all 
municipalities and apportioning the resulting sum pursuant to 
section 473F.07, subdivision 5. 
    (3) Each jurisdiction's distribution levy shall be 
determined by applying the procedures described in subdivision 
3, clause (a), to the distribution tax capacity determined 
pursuant to clause (2). 
    (4) Each municipality's final contribution tax capacity 
shall be determined equal to its initial contribution tax 
capacity multiplied by the ratio of the new highest class rate 
for class 3a property to the previous year's highest class rate 
for class 3a property. 
    (5) For the purposes of computing education aids and any 
other state aids requiring the addition of the fiscal 
disparities distribution tax capacity to the local tax capacity, 
each municipality's final distribution tax capacity shall be 
determined equal to its initial distribution tax capacity 
multiplied by the ratio of the new highest class rate for class 
3a property to the previous year's highest class rate for class 
3a property. 
    (6) The areawide tax capacity rate shall be determined by 
dividing the sum of the amounts determined in clause (3) by the 
sum of the values determined in clause (4). 
    (6) (7) The final contribution tax capacity determined in 
clause (4) shall also be used to determined the portion of each 
commercial/industrial property's tax capacity subject to the 
areawide tax capacity rate pursuant to subdivision 6. 
    Sec. 28.  Minnesota Statutes 1989 Supplement, section 
477A.011, subdivision 15, is amended to read: 
    Subd. 15.  [CITY REVENUE.] "City revenue" equals the sum of 
(i) the city's aid payable under section 477A.013, except for 
aid payable under section 477A.013, subdivision 5, in the year 
prior to that for which aids are being calculated, and (ii) its 
levy for taxes payable in the year prior to that for which aids 
are being calculated. 
    Sec. 29.  Minnesota Statutes 1988, section 477A.011, is 
amended by adding a subdivision to read: 
    Subd. 26.  [LEVY.] "Levy" means the levy as defined in 
section 275.07, subdivision 1, including the fiscal disparities 
distribution levy. 
    Sec. 30.  Minnesota Statutes Second 1989 Supplement, 
section 477A.012, subdivision 3, is amended to read: 
    Subd. 3.  [AID OFFSET FOR COURT COSTS.] (a) There shall be 
deducted from the payment to a county under this section an 
amount representing the cost to the state for assumption of the 
cost of district court administration and operation of the trial 
court information system in the county and, in the case of 
Hennepin and Ramsey counties, of public defense services in 
juvenile and misdemeanor cases in the county.  The amount of the 
deduction shall be computed as provided in this subdivision.  
     (b) By October 15, 1989, the board of public defense shall 
determine and certify to the department of revenue the cost of 
the state-financed public defense services in juvenile and 
misdemeanor cases for Hennepin and Ramsey counties during the 
fiscal year beginning the following July 1.  By October 15, 
1989, the supreme court shall determine and certify to the 
department of revenue for each county, except counties located 
in the eighth judicial district, the pro rata estimated share 
for each county of district court administration and trial court 
information system costs during the fiscal year beginning on the 
following July 1.  
     (c) One-half of the amount computed under paragraph (b) for 
each county shall be deducted from each payment to the county 
under section 477A.015 in 1990 and each subsequent year.  
     (d) If the amount computed under paragraph (b) plus, if 
applicable, the amount deducted under paragraph (e), exceeds the 
amount payable to a county under subdivision 1, the excess shall 
be deducted from the aid payable to the county under section 
273.1398, subdivision 2.  
    (e) By July 15, 1990, the board of public defense and the 
supreme court shall determine and certify to the department of 
revenue the final actual budgeted amounts for the activities 
described in paragraph (b).  If the amount certified under 
paragraph (b) is greater than the amount certified under this 
paragraph, the excess shall be deducted from added to the aid 
payable to the county in 1991 and each subsequent year under 
this section.  If the amount certified under paragraph (b) is 
less than the amount certified under this paragraph, the 
difference shall be added to subtracted from the aid payable to 
the county in 1991 and each subsequent year under this section. 
    Sec. 31.  Minnesota Statutes Second 1989 Supplement, 
section 477A.013, subdivision 3, is amended to read: 
    Subd. 3.  [CITY AID DISTRIBUTION.] In 1989, a city whose 
initial aid is greater than $0 will receive the following aid 
increases in addition to an amount equal to the local government 
aid it received in 1988 under Minnesota Statutes 1987 
Supplement, section 477A.013: 
    (1) for a city whose expenditure/unlimited aid ratio is at 
least 1.5, two percent of city revenue; 
    (2) for a city whose expenditure/unlimited aid ratio is at 
least 1.4 but less than 1.5, 2.5 percent of city revenue; 
    (3) for a city whose expenditure/unlimited aid ratio is at 
least 1.3 but less than 1.4, three percent of city revenue; 
    (4) for a city whose expenditure/unlimited aid ratio is at 
least 1.2 but less than 1.3, four percent of city revenue; 
    (5) for a city whose expenditure/unlimited aid ratio is at 
least 1.1 but less than 1.2, five percent of city revenue; 
    (6) for a city whose expenditure/unlimited aid ratio is at 
least 1.05 but less than 1.1, six percent of city revenue; 
    (7) for a city whose expenditure/unlimited aid ratio is at 
least 1.0 but less than 1.05, seven percent of city revenue; 
    (8) for a city whose expenditure/unlimited aid ratio is at 
least .95 but less than 1.0, 7.5 percent of city revenue; 
      (9) for a city whose expenditure/unlimited aid ratio is at 
least .75 but less than .95, 8.5 percent of city revenue; and 
      (10) for a city whose expenditure/unlimited aid ratio is 
less than .75, nine percent of city revenue.  
     In 1990, a city whose initial aid is greater than $0 will 
receive an amount equal to the aid it received under this 
section in the year prior to that for which aids are being 
calculated plus an aid increase equal to 50 percent of the rates 
listed in clauses (1) to (10) multiplied by city revenue. 
    In 1991 and subsequent years, a city whose initial aid is 
greater than $0 will receive an amount equal to the aid it 
received under this section in the year prior to that for which 
aids are being calculated plus an aid increase equal to 25 
percent of the rates listed in clauses (1) to (10) multiplied by 
city revenue.  
    A city's aid increase under this subdivision is limited to 
the lesser of (1) 20 percent of its levy for taxes payable in 
the year prior to that for which aids are being calculated after 
the adjustments provided in section 273.1398, subdivision 2, or 
(2) its initial aid amount, or (3) 15 percent of the total 
amount received under this section in the previous year, 
provided that no city will receive an increase that is less than 
two percent of its 1989 local government aid for aids payable in 
1990. 
    A city whose initial aid is $0 will receive in 1990 an 
amount equal to 102 percent of the local government aid it 
received in 1989 under Minnesota Statutes 1988, section 
477A.013.  A city whose initial aid is $0 will receive in 1991 
and subsequent years an amount equal to the aid it received in 
the previous year under this section.  For purposes of this 
subdivision, the term "local government aid" includes 
equalization aid for aids payable in 1991 and thereafter. 
    Sec. 32.  Laws 1989, First Special Session chapter 1, 
article 3, section 35, is amended to read: 
    Sec. 35.  [EFFECTIVE DATE.] 
    Section 1 is effective the day following final enactment 
and is intended to confirm and clarify the original intent of 
the legislature in the taxation and equalization of 
state-assessed public utility property.  
    Sections 2 and, 7, and 23 are effective for taxes payable 
in 1991 and thereafter. 
    Sections 3, 5, 8, 11, 12, 23, 26, and 28 are effective for 
taxes payable in 1990 and thereafter. 
    Section 4 is effective January 1, 1989.  
    Sections 6, 9, 21, 29 to 32, and 34 are effective the day 
following final enactment. 
    Section 10 is effective for taxes levied in 1989, payable 
in 1990 and thereafter, provided that cooperatives that 
qualified under Minnesota Statutes, section 273.124, subdivision 
6, on January 2, 1989, shall meet the board membership 
requirements of paragraph (a) by December 1, 1989, and shall 
meet the requirements of section 501(c)(3) or 501(c)(4) status 
under the Internal Revenue Code in the first paragraph and in 
paragraph (e) by January 1, 1990, and that the notice and filing 
requirements of paragraphs (f) and (g) shall apply only to 
leasehold cooperatives created later than 60 days after the date 
of enactment of this act. 
    Sections 13, 19, and 20 are effective January 1, 1991. 
    Section 14, paragraph (i), clauses (1) to (12), are 
effective for aids paid in 1991 and thereafter.  The rest of 
section 14 and sections 15, 17, 18, and 22 are effective for 
aids paid in 1990 and thereafter, except as otherwise provided 
in those sections. 
    Section 16 is effective for aids payable in 1991 and 
thereafter. 
    Sections 24 and 25 are effective for mortgage registration 
and deed taxes collected after November 30, 1990. 
    Section 27 is effective for taconite produced in 1989, 
proceeds distributed in 1990, and thereafter.  
    Section 33 is effective July 1, 1991. 
    Sec. 33.  Laws 1989, First Special Session chapter 1, 
article 9, section 86, is amended to read:  
    Sec. 86.  [EFFECTIVE DATES.] 
    Section 5 is effective for school district referenda held 
after July 15, 1990, for property taxes levied in 1990, payable 
in 1991, and thereafter. 
    Sections 1 to 4, 6 to 8, 10 to 12, 17, 19 to 21, 26 to 30, 
41 to 46, 48, 50 to 52, 51, and 66 to 77 are effective for taxes 
levied in 1990, payable in 1991, and thereafter. 
    The part of section 9 changing the meeting date of the 
state board of equalization is effective for taxes levied in 
1990, payable in 1991, and thereafter.  The rest of section 9 
and sections 13 to 16, 22 to 25, 78, and 82, 84, and 85 are 
effective the day following final enactment. 
    Section 18 is effective for sales after January 1, 1990. 
    Sections 31 to 38 and 40 are effective for taxes levied in 
1990, payable in 1991, and thereafter, except as otherwise 
provided. 
    Sections 39, 47, 49, 52, 54 to 64, 79, and 80 are effective 
for property taxes levied in 1989, payable in 1990, and 
thereafter. 
    Section 53 is effective for property taxes levied in 1989, 
payable in 1990, and thereafter, except that the provision 
requiring certification of aids by September 1, is effective for 
taxes levied in 1990, payable in 1991, and thereafter. 
    Sections 65 and 81 are effective July 1, 1990. 
    Section 83 is effective only for taxes levied in 1989, 
payable in 1990. 
    Sec. 34.  [REPEALER.] 
    Minnesota Statutes 1988, section 272.70, is repealed. 
    Sec. 35.  [EFFECTIVE DATE.] 
    Sections 1, 4, 6, 14 to 16, and 32 to 34 are effective the 
day following final enactment. 
    Sections 2, 5, 8 to 11, 13, 17, 18, 20, and 26 to 28 are 
effective for taxes levied in 1989 and thereafter, payable in 
1990 and thereafter, except as otherwise provided. 
    Section 12 is effective January 1, 1991. 
    Sections 7, 19, 21, and 22 are effective for taxes levied 
in 1990 and thereafter, payable in 1991 and thereafter. 
    Sections 23 and 24 are effective for deed taxes collected 
after November 30, 1990. 
    Section 25 is effective for production year 1989 and 
thereafter, taxes payable in 1990 and thereafter. 
    Sections 29 to 31 are effective for aid paid in 1991 and 
thereafter. 

                               ARTICLE 8 

         PROPERTY TAX PAYMENTS, INTEREST RATES, AND SETTLEMENTS
    Section 1.  Minnesota Statutes Second 1989 Supplement, 
section 276.09, is amended to read: 
    276.09 [SETTLEMENT BETWEEN AUDITOR AND TREASURER.] 
    On the later of May 20 of each year or 26 calendar days 
after the postmark date on the envelopes containing real or 
personal property tax statements, the county treasurer shall 
make full settlement with the county auditor of all receipts 
collected for all purposes, from the date of the last settlement 
up to and including each day mentioned.  The county auditor 
shall, within 30 days after the settlement, send an abstract of 
it to the state auditor in the form prescribed by the state 
auditor.  At the settlement the treasurer shall make complete 
returns of the receipts on the current tax list, showing the 
amount collected on account of the several funds included in the 
list. 
    Settlement of receipts from the later of May 20 or the 
actual settlement date to December 31 of each year must be made 
as provided in section 276.111. 
    For purposes of this section, "receipts" includes all tax 
payments received by the county treasurer on or before the 
settlement date.  
    Sec. 2.  Minnesota Statutes Second 1989 Supplement, section 
276.10, is amended to read: 
    276.10 [APPORTIONMENT AND DISTRIBUTION OF FUNDS.] 
    On the settlement day in May of determined in section 
276.09 for each year, the county auditor and county treasurer 
shall distribute all undistributed funds in the treasury.  The 
funds must be apportioned as provided by law, and credited to 
the state, town, city, school district, special district and 
each county fund.  Within 20 days after the distribution is 
completed, the county auditor shall report to the state auditor 
in the form prescribed by the state auditor.  The county auditor 
shall issue a warrant for the payment of money in the county 
treasury to the credit of the state, town, city, school 
district, or special districts on application of the persons 
entitled to receive the payment.  The county auditor may apply 
the tax capacity rate from the year before the year of 
distribution when apportioning and distributing delinquent tax 
proceeds, if the composition of the previous year's tax capacity 
rate between taxing districts is not significantly 
different than from the tax capacity rate that existed for the 
year of the delinquency.  
    Sec. 3.  Minnesota Statutes Second 1989 Supplement, section 
276.11, subdivision 1, is amended to read: 
    Subdivision 1.  [GENERALLY.] As soon as practical after the 
May settlement day determined in section 276.09, the county 
treasurer shall pay to the state treasurer or the treasurer of a 
town, city, school district, or special district, on the warrant 
of the county auditor, all receipts of taxes levied by the 
taxing district and deliver up all orders and other evidences of 
indebtedness of the taxing district, taking triplicate receipts 
for them.  The treasurer shall file one of the receipts with the 
county auditor, and shall return one by mail on the day of its 
receipt to the clerk of the town, city, school district, or 
special district to which payment was made.  The clerk shall 
keep the receipt in the clerk's office.  Upon written request of 
the taxing district, to the extent practicable, the county 
treasurer shall make partial payments of amounts collected 
periodically in advance of the next settlement and 
distribution.  A statement prepared by the county treasurer must 
accompany each payment.  It must state the years for which taxes 
included in the payment were collected and, for each year, the 
amount of the taxes and any penalties on the tax.  Upon written 
request of a taxing district, except school districts, the 
county treasurer shall pay at least 70 percent of the estimated 
collection within 30 days after the May settlement 
date determined in section 276.09.  Within seven business days 
after the due date, or 28 calendar days after the postmark date 
on the envelopes containing real or personal property tax 
statements, whichever is latest, the county treasurer shall pay 
to the treasurer of the school districts 50 percent of the 
estimated collections arising from taxes levied by and belonging 
to the school district, unless the school district elects to 
receive 50 percent of the estimated collections arising from 
taxes levied by and belonging to the school district after 
making a proportionate reduction to reflect any loss in 
collections as the result of any delay in mailing tax 
statements.  In that case, 50 percent of those adjusted, 
estimated collections shall be paid by the county treasurer to 
the treasurer of the school district within seven business days 
of the due date.  The remaining 50 percent of the estimated 
collections must be paid to the treasurer of the school district 
within the next seven business days of the later of the dates in 
the preceding sentence, unless the school district elects to 
receive the remainder of its estimated collections after a 
proportionate reduction has been made to reflect any loss in 
collections as the result of any delay in mailing tax statements.
In that case, the remaining 50 percent of those adjusted, 
estimated collections shall be paid by the county treasurer to 
the treasurer of the school district within 14 days of the due 
date.  The treasurer shall pay the balance of the amounts 
collected to the state or to a municipal corporation or other 
body within 60 days after the May settlement date determined in 
section 276.09.  After 45 days interest at an annual rate of 
eight percent accrues and must be paid to the taxing district.  
Interest must be paid upon appropriation from the general 
revenue fund of the county.  If not paid, it may be recovered by 
the taxing district, in a civil action. 
    Sec. 4.  Minnesota Statutes 1988, section 276.111, is 
amended to read: 
    276.111 [DISTRIBUTIONS AND FINAL YEAR-END SETTLEMENT.] 
    Within seven business days after October 15, the county 
treasurer shall pay to the school districts 50 percent of the 
estimated collections arising from taxes levied by and belonging 
to the school district from May 20 the settlement day determined 
in section 276.09 to October 20.  The remaining 50 percent of 
the estimated tax collections must be paid to the school 
district within the next seven business days. Within ten 
business days after November 15, the county treasurer shall pay 
to the school district 100 percent of the estimated collections 
arising from taxes levied by and belonging to the school 
districts from October 20 to November 20. 
    Within ten business days after November 15, the county 
treasurer shall pay to each taxing district, except any school 
district, 100 percent of the estimated collections arising from 
taxes levied by and belonging to each taxing district from May 
20 the settlement day determined in section 276.09 to November 
20. 
    On or before January 5, the county treasurer shall make 
full settlement with the county auditor of all receipts 
collected from May 20 the settlement day determined in section 
276.09 to December 31.  After subtracting any tax distributions 
that have been made to the taxing districts in October and 
November, the treasurer shall pay to each of the taxing 
districts on or before January 25, the balance of the tax 
amounts collected on behalf of each taxing district.  Interest 
accrues at an annual rate of eight percent and must be paid to 
the taxing district if this final settlement amount is not paid 
by January 25.  Interest must be paid upon appropriation from 
the general revenue fund of the county.  If not paid, it may be 
recovered by the taxing district in a civil action. 
    Sec. 5.  Minnesota Statutes Second 1989 Supplement, section 
277.01, subdivision 1, is amended to read: 
    Subdivision 1.  Except as provided in this subdivision, all 
unpaid personal property taxes shall be deemed delinquent on May 
16 next after they become due or 21 days after the postmark date 
on the envelope containing the property tax statement, whichever 
is later, and thereupon a penalty of eight percent shall attach 
and be charged upon all such taxes.  In the case of unpaid 
personal property taxes due and owing under section 272.01, 
subdivision 2, or section 273.19, the first half shall become 
delinquent if not paid before May 16 or 21 days after the 
postmark date on the envelope containing the property tax 
statement, whichever is later, and thereupon a penalty of eight 
percent shall attach on the unpaid first half; and the second 
half shall become delinquent if not paid before October 16, and 
thereupon a penalty of eight percent shall attach on the unpaid 
second half.  This section shall not apply to Class 2a property. 
    A county may provide by resolution that in the case of a 
property owner that has multiple personal property tax 
statements with the aggregate taxes exceeding $50, payments may 
be made in installments as provided in this subdivision. 
    The county treasurer may accept payments of more or less 
than the exact amount of a tax installment due.  If the accepted 
payment is less than the amount due, payments must be applied 
first to the penalty accrued for the year the payment is made.  
Acceptance of partial payment of tax does not constitute a 
waiver of the minimum payment required as a condition for filing 
an appeal under section 277.011 or any other law, nor does it 
affect the order of payment of delinquent taxes under section 
280.39. 
    Sec. 6.  Minnesota Statutes Second 1989 Supplement, section 
277.02, is amended to read: 
    277.02 [DELINQUENT LIST FILED IN COURT.] 
    By June 15 Within 30 days of the due date under section 
277.01, subdivision 1, of each year, the county treasurer shall 
make a list of all personal property taxes remaining delinquent 
May 16, and by November 15 of each year the county treasurer 
shall make a list of all personal property taxable under section 
272.01, subdivision 2, or section 273.19 remaining delinquent 
October 16.  The county treasurer shall immediately certify to 
and file the same each list with the court administrator of the 
district court of the county, and.  Upon such filing, the list 
shall be prima facie evidence that all of the provisions of law 
in relation to the assessment and levy of such taxes have been 
complied with.  
    Sec. 7.  Minnesota Statutes Second 1989 Supplement, section 
277.05, is amended to read: 
    277.05 [SHERIFF TO FILE LIST OF UNCOLLECTED TAXES.] 
    If the sheriff is unable, for want of goods and chattels 
whereon to levy, to collect by a distress, or otherwise, the 
taxes, or any part thereof, assessed upon the personal property 
of any persons, the sheriff shall file with the court 
administrator of the district court, on July 15 following, a 
list of such the taxes, 30 days after the date in section 
277.02.  The list shall be filed with an affidavit of the 
sheriff, or of the deputy sheriff entrusted with the collection 
thereof, stating that the affiant has made diligent search and 
inquiry for goods and chattels from which to collect such taxes, 
and is unable to collect the same.  The list of such taxes as 
they apply to manufactured homes shall be filed on December 
1 and the list of such taxes as they apply to property taxable 
under section 272.01, subdivision 2, or section 273.19 shall be 
filed on December 15.  The sheriff shall note on the margin of 
such list the place to which any delinquent taxpayer may have 
removed, with the date of removal, if known.  At the time of 
filing the list the sheriff shall also return all the warrants 
with endorsements thereon showing the doings of the sheriff or 
deputy in the premises, and the court administrator shall file 
and preserve the same.  On or before September tenth 
thereafter Within ten days after the list has been filed by the 
sheriff, the court administrator shall deliver such the list and 
affidavit to the county treasurer, who shall, by comparison of 
such list with the tax duplicates in the treasurer's office, 
ascertain whether or not all personal property taxes reported by 
the treasurer to the court administrator as delinquent, except 
those included in such list, have been paid into the treasurer's 
office, and shall attach to the list a certificate stating 
whether or not all taxes reported by the treasurer to the court 
administrator as delinquent and not included in the list have 
been received, and stating the items of such taxes, if any, as 
have been received.  The court administrator shall deliver such 
list and affidavit as they apply to manufactured homes on or 
before December 10 and as they apply to property taxable under 
section 272.01, subdivision 2, or section 273.19 on or before 
December 24.  The treasurer shall deliver such list and 
affidavit, with the certificate attached, to the county board at 
its first session thereafter, which shall cancel such taxes as 
it is satisfied cannot be collected.  A copy of the tax list so 
revised, and also a separate list of the taxes so canceled, 
shall be included in the records of the proceedings of the 
board, and published in full, as a part of the proceedings.  
    Sec. 8.  Minnesota Statutes Second 1989 Supplement, section 
277.06, is amended to read: 
    277.06 [CITATION TO DELINQUENTS; DEFAULT JUDGMENT.] 
    On September 5, or within ten days after the adjournment of 
the county board, whichever occurs first, the county auditor 
shall file a copy of such revised list with the court 
administrator of the district court.  The county auditor shall 
file a copy of the revised list as it applies to manufactured 
homes on January 20 and a copy of the revised list as it applies 
to property taxable under section 272.01, subdivision 2, or 
section 273.19 on February 15.  Within ten days after the list 
has been filed, the court administrator shall issue a citation 
to each delinquent named in the list, stating the amount of tax 
and penalty, and requiring such delinquent to appear on a day to 
be set by the district court in the county, appointed to be held 
at a time not less than 30 days after the issuance of such 
citation, and show cause, if any there be, why the delinquent 
should not pay the tax and penalty.  The citation shall be 
delivered for service to the sheriff of the county where such 
person may at the time reside or be.  If such person, after 
service of the citation, fails to pay such tax, penalty, and 
costs to the sheriff before the first day of the term, or on 
such day to show cause as aforesaid, the court shall direct 
judgment against the person for the amount of such tax, penalty, 
and costs.  When unable to serve the citation, the sheriff shall 
return the same to the court administrator, with a return 
thereto to that effect, and thereupon, or if the court decides 
that the service of such citation made or attempted to be made, 
or the issuance thereof by the court administrator, was illegal, 
the court administrator shall issue another like citation, 
requiring such delinquent to appear on the first day of the next 
general term to be held in the county, and show cause as 
aforesaid, and if the delinquent fails to pay or to show cause, 
the court shall direct judgment as aforesaid.  Whenever the 
sheriff has been unable to serve any such citation theretofore 
issued in any year or years, or whenever the court decides that 
the service of any such citation theretofore made or attempted 
to be made, or the issuance thereof by the court administrator, 
was illegal, the court administrator shall issue another like 
citation requiring such delinquent to appear, as in the case 
last provided, and with like effect; provided, that all 
citations other than the first shall be issued only on the 
request of the county attorney. 
    Sec. 9.  Minnesota Statutes 1988, section 277.15, is 
amended to read: 
    277.15 [INTEREST.] 
    When a judgment has heretofore been entered and docketed, 
or shall hereafter be entered and docketed, for the recovery of 
taxes, except in the case of real estate tax judgments provided 
for in section 279.19, the same shall bear interest until paid 
at the rate of six percent per annum until January 1, 1981, and 
at the rate determined under section 549.09 thereafter until 
January 1, 1991.  Thereafter interest will be payable at the 
rate provided in section 279.03, subdivision 1a. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
279.01, subdivision 1, is amended to read: 
    Subdivision 1.  Except as provided in subdivision 3, on May 
16, of each year, with respect to property actually occupied and 
used as a homestead by the owner of the property, or 21 days 
after the postmark date on the envelope containing the property 
tax statement, whichever is later, a penalty of three percent 
shall accrue and thereafter be charged upon all unpaid taxes on 
real estate on the current lists in the hands of the county 
treasurer, and a penalty of.  The penalty shall be at a rate of 
three percent on homestead property and seven percent on 
nonhomestead property, except that.  This penalty shall not 
accrue until June 1 of each year, or 21 days after the postmark 
date on the envelope containing the property tax statements, 
whichever is later, on commercial use real property used for 
seasonal residential recreational purposes and classified as 
class 1c or 4c, and on other commercial use real property 
classified as class 3a, provided that over 60 percent of the 
gross income earned by the enterprise on the class 3a property 
is earned during the months of May, June, July, and August.  Any 
property owner of such class 3a property who pays the first half 
of the tax due on the property after May 15 and before June 1, 
or 21 days after the postmark date on the envelope containing 
the property tax statement, whichever is later, shall attach an 
affidavit to the payment attesting to compliance with the income 
provision of this subdivision.  Thereafter, for both homestead 
and nonhomestead property, on the first day of each month, up to 
and including October 1 following, an additional penalty of one 
percent for each month shall accrue and be charged on all such 
unpaid taxes provided that if the due date was extended beyond 
May 15 as the result of any delay in mailing property tax 
statements no additional penalty shall accrue if the tax is paid 
by the extended due date.  If the tax is not paid by the 
extended due date, then all penalties that would have accrued if 
the due date had been May 15 shall be charged.  When the taxes 
against any tract or lot exceed $50, one-half thereof may be 
paid prior to May 16 or 21 days after the postmark date on the 
envelope containing the property tax statement, whichever is 
later; and, if so paid, no penalty shall attach; the remaining 
one-half shall be paid at any time prior to October 16 
following, without penalty; but, if not so paid, then a penalty 
of four percent shall accrue thereon for homestead property and 
a penalty of four percent on nonhomestead property.  Thereafter, 
for homestead property, on the first day of November and 
December following, an additional penalty of two percent for 
each month shall accrue and be charged on all such unpaid taxes. 
Thereafter, for nonhomestead property, on the first day of 
November and December following, an additional penalty of four 
percent for each month shall accrue and be charged on all such 
unpaid taxes.  If one-half of such taxes shall not be paid prior 
to May 16 or 21 days after the postmark date on the envelope 
containing the property tax statement, whichever is later, the 
same may be paid at any time prior to October 16, with accrued 
penalties to the date of payment added, and thereupon no penalty 
shall attach to the remaining one-half until October 16 
following.  
    A county may provide by resolution that in the case of a 
property owner that has multiple tracts or parcels with 
aggregate taxes exceeding $50, payments may be made in 
installments as provided in this subdivision. 
    The county treasurer may accept payments of more or less 
than the exact amount of a tax installment due.  If the accepted 
payment is less than the amount due, payments must be applied 
first to the penalty accrued for the year the payment is made.  
Acceptance of partial payment of tax does not constitute a 
waiver of the minimum payment required as a condition for filing 
an appeal under section 278.03 or any other law, nor does it 
affect the order of payment of delinquent taxes under section 
280.39. 
    Sec. 11.  Minnesota Statutes 1988, section 279.03, is 
amended by adding a subdivision to read: 
    Subd. 1a.  [RATE AFTER DECEMBER 31, 1990.] Interest on 
delinquent property taxes, penalties, and costs unpaid on or 
after January 1, 1991, shall be payable at the per annum rate 
determined in section 270.75, subdivision 5.  If the rate so 
determined is less than ten percent, the rate of interest shall 
be ten percent.  The maximum per annum rate shall be 14 percent 
if the rate specified under section 270.75, subdivision 5, 
exceeds 14 percent.  The rate shall be subject to change on 
January 1 of each year.  
    Sec. 12.  Minnesota Statutes 1988, section 279.03, 
subdivision 2, is amended to read: 
    Subd. 2.  [COMPOSITE JUDGMENT.] Amounts included in 
composite judgment, as judgments authorized by section 279.37, 
subdivision 1, and confessed on or after July 1, 1982, are 
subject to interest at the rate determined pursuant to section 
549.09.  Amounts confessed under this authority after December 
31, 1990, are subject to interest at the rate calculated under 
subdivision 1a.  During each calendar year, interest shall 
accrue on the unpaid balance of the composite judgment from the 
time it is confessed until it is paid.  The rate of interest is 
subject to change each year in the same manner that section 
549.09 provides or subdivision 1a, whichever is applicable, for 
rate changes on judgments.  Interest on the unpaid contract 
balance on judgments confessed before July 1, 1982, is payable 
at the rate applicable to the judgment at the time that it was 
confessed.  
    Sec. 13.  Minnesota Statutes 1988, section 279.37, 
subdivision 1a, is amended to read: 
    Subd. 1a.  The delinquent taxes upon a parcel of property 
which was classified class 4c pursuant to section 273.13, 
subdivision 9, or for taxes assessed in 1986 and thereafter, 
classified class 3a, for the previous year's assessment and had 
a total market value of less than $100,000 for that same 
assessment shall be eligible to be composed into a confession of 
judgment.  Property qualifying under this subdivision shall be 
subject to the same provisions as provided in this section 
except as herein provided. 
    (a) The down payment shall include all special assessments 
due in the current tax year, all delinquent special assessments, 
and 20 percent of the ad valorem tax, penalties, and interest 
accrued against the parcel.  The balance remaining shall be 
payable in four equal annual installments; and 
    (b) The amounts entered in judgment shall bear interest at 
the rate provided in section 270.75, subdivision 5 279.03, 
subdivision 1a, commencing with the date the judgment is 
entered.  The interest rate is subject to change each year on 
the unpaid balance in the manner provided in section 270.75, 
subdivision 5, except that the interest change will be 
implemented on January 1 of each year 279.03, subdivision 1a.  
    Sec. 14.  Minnesota Statutes 1988, section 282.01, 
subdivision 4, is amended to read: 
    Subd. 4.  [CONDUCT OF SALE.] The sale shall be conducted by 
the county auditor at the county seat of the county in which the 
parcels lie, provided that, in St. Louis and Koochiching 
counties, the sale may be conducted in any county facility 
within the county, and the parcels shall be sold for cash only 
and at not less than the appraised value, unless the county 
board of the county shall have adopted a resolution providing 
for their sale on terms, in which event the resolution shall 
control with respect thereto.  When the sale is made on terms 
other than for cash only a payment of at least ten percent of 
the purchase price must be made at the time of purchase, 
thereupon the balance shall be paid in no more than ten equal 
annual installments.  No standing timber or timber products 
shall be removed from these lands until an amount equal to the 
appraised value of all standing timber or timber products on the 
lands at the time of purchase has been paid by the purchaser; 
provided, that in case any parcel of land bearing standing 
timber or timber products is sold at public auction for more 
than the appraised value, the amount bid in excess of the 
appraised value shall be allocated between the land and the 
timber in proportion to the respective appraised values thereof, 
and no standing timber or timber products shall be removed from 
the land until the amount of the excess bid allocated to timber 
or timber products has been paid in addition to the appraised 
value thereof.  The purchaser is entitled to immediate 
possession, subject to the provisions of any existing valid 
lease made in behalf of the state. 
    For sales occurring on or after July 1, 1982, the unpaid 
balance of the purchase price is subject to interest at the rate 
determined pursuant to section 549.09.  The unpaid balance of 
the purchase price for sales occurring after December 31, 1990, 
is subject to interest at the rate determined in section 279.03, 
subdivision 1a.  The interest rate is subject to change each 
year on the unpaid balance in the manner provided for rate 
changes in section 549.09 for rate changes on judgments or 
section 279.03, subdivision 1a, whichever, is applicable.  
Interest on the unpaid contract balance on sales occurring 
before July 1, 1982, is payable at the rate applicable to the 
sale at the time that the sale occurred.  
    Sec. 15.  Minnesota Statutes 1988, section 282.09, 
subdivision 1, is amended to read: 
    Subdivision 1.  [MONEYS PLACED IN FUND.] The county auditor 
and county treasurer shall place all moneys received through the 
operation of sections 282.01 to 282.13 in a fund to be known as 
the forfeited tax sale fund and all disbursements and costs 
shall be charged against that fund, when allowed by the county 
board.  Members of the county board may be paid a per diem 
pursuant to section 375.055, subdivision 1, and reimbursed for 
their necessary expenses, and may receive mileage as now or 
hereafter fixed by law.  Compensation of a land commissioner and 
assistants, if a land commissioner is appointed, shall be in 
such the amount as shall be determined by the county board.  The 
county auditor shall receive 50 cents for each certificate of 
sale, each contract for deed and each lease executed by the 
auditor, and, in counties where no land commissioner is 
appointed such, additional annual compensation, not exceeding 
$300, as shall be fixed by the county board.  Compensation of 
any other clerical help that may be needed by the county auditor 
or land commissioner shall be in such the amount as shall be 
determined by the county board.  All compensation provided for 
herein shall be in addition to other compensation allowed by 
law.  Fees so charged in addition to the fee imposed in section 
282.014 shall be included in the annual settlement by the county 
auditor as hereinafter provided.  On or before February 1 in 
each year, the commissioner of revenue shall certify to the 
commissioner of finance, by counties, the total number of state 
deeds issued and reissued during the preceding calendar year for 
which such fees are charged and the total amount thereof.  When 
disbursements are made from the fund for repairs, refundments, 
expenses of actions to quiet title, or any other purpose which 
particularly affects specific parcels of forfeited lands, the 
amount of such disbursements shall be charged to the account of 
the taxing districts interested in such parcels.  The county 
auditor shall make an annual settlement of the net proceeds 
received from sales and rentals by the operation of sections 
282.01 to 282.13, at on the regular March settlement day 
determined in section 276.09, for the preceding calendar year. 
    Sec. 16.  Minnesota Statutes 1988, section 282.261, 
subdivision 2, is amended to read: 
    Subd. 2.  [INTEREST RATE.] The unpaid balance on any 
repurchase contract approved by the county board on or after 
July 1, 1982, is subject to interest at the rate determined 
pursuant to section 549.09.  Repurchase contracts approved after 
December 31, 1990, are subject to interest at the rate 
determined in section 279.03, subdivision 1a.  The interest rate 
is subject to change each year on the unpaid balance in the 
manner provided for rate changes in section 549.09 for rate 
changes on judgments or section 279.03, subdivision 1a, 
whichever is applicable.  Interest on the unpaid contract 
balance on repurchases approved before July 1, 1982, is payable 
at the rate applicable to the repurchase contract at the time 
that it was approved.  
    Sec. 17.  [1990 TAX PAYMENTS.] 
    The amendment of Minnesota Statutes Second 1989 Supplement, 
section 277.01, subdivision 1, in section 5 does not require 
sending of revised tax statements for taxes payable in 1990 by 
the county auditor, but payments of taxes by the dates provided 
in that section shall be accepted as timely paid.  
    Sec. 18.  [EFFECTIVE DATE.] 
    Sections 1 to 8, 10, and 14 are effective for taxes levied 
in 1989, payable in 1990, and thereafter. 
    Sections 9, 11 to 13, 15, and 16 are effective January 1, 
1991. 
     Section 17 is effective the day following final enactment. 

                                ARTICLE 9
 PROPERTY TAX SYSTEM CONVERSIONS
    Section 1.  Minnesota Statutes 1989 Supplement, section 
38.18, is amended to read: 
    38.18 [COUNTY FAIRGROUNDS, IMPROVEMENT AIDED.] 
    Any town, statutory city, or school district in this state, 
now or hereafter having a net tax capacity market value of all 
its taxable property, exclusive of money and credits, of more 
than $25,000,000 $105,000,000, and having a county fair located 
within its corporate limits, is hereby authorized to aid in 
defraying part of the expense of improving any such fairground, 
by appropriating and paying over to the treasurer of the county 
owning the fairground such sum of money, not exceeding $10,000, 
for each of the political subdivisions, as the governing body of 
the town, statutory city, or school district may, by resolution, 
determine to be for the best interest of the political 
subdivision, the sums so appropriated to be used solely for the 
purpose of aiding in the improvement of the fairground in such 
manner as the county board of the county shall determine to be 
for the best interest of the county.  
    Sec. 2.  Minnesota Statutes 1989 Supplement, section 50.14, 
subdivision 4, is amended to read: 
    Subd. 4.  Class three shall be:  
    (a) The bonds, certificates of indebtedness, or other 
interest bearing obligations, payable out of a levy of ad 
valorem taxes, of any county, city, town, or any school 
district, drainage district, or other district, or of any board 
of any municipality, or of any public authority, created 
pursuant to law for public purposes in Minnesota, without regard 
to any debt limits other than those in section 475.53; 
    (b) The bonds, certificates of indebtedness or other 
interest bearing obligations, payable out of a levy of ad 
valorem taxes, of any county, city, town, or school, drainage or 
other district, or public authority, created pursuant to law for 
public purposes in any state of the United States other than 
Minnesota, provided that the total bonded indebtedness of the 
county, municipality, district or authority, after deducting the 
amount of all sinking funds and of all revenue bonds or 
certificates (including among revenue bonds and certificates 
those which pledge the full faith and credit of the issuer, if 
the net revenues applicable to the payment of the bonds or 
certificates during the three fiscal years immediately preceding 
the date of purchase exceeded by at least five percent the 
amount required to pay principal and interest on those bonds or 
certificates during that period), shall not exceed ten percent 
of its net tax capacity assessed value; and provided further 
that if the county, municipality, district or authority is of 
any state other than Iowa, Wisconsin, North Dakota, or South 
Dakota, it contains at least 3,500 inhabitants; 
              (c) The bonds, certificates or other interest bearing 
obligations, payable out of special revenues, of any county, 
city, town, or school, drainage, or other district, or public 
authority, created pursuant to law for public purposes in any 
state of the United States, provided that:  
              (aa) If the county, municipality, district or authority is
of any state other than Minnesota, it contains at least 3,500 
inhabitants; 
              (bb) The obligations were issued to finance the purpose of
construction of or addition to a public enterprise furnishing 
water, sewer, lighting, power, gas, or road facilities, from 
which revenue is to be derived; 
              (cc) The governing body or other legally constituted 
authority has covenanted or is required by law to establish and 
maintain rates to yield sufficient revenue for the payment of 
operating expenses, maintenance expenses, and principal and 
interest on the revenue obligations and to pledge that revenue 
irrevocably for those purposes; 
              (dd) At the date of investment the public enterprise has 
been in operation for at least three years; and 
              (ee) During the preceding three fiscal years its annual 
net earnings, after payment of operating expenses and 
maintenance expenses, have been on the average at least 1-1/4 
times the average annual interest, principal and sinking fund 
requirements on the revenue obligations during the period from 
the end of its most recent fiscal year to the final maturity of 
the obligations; and 
    (d) The bonds or other interest bearing obligations, 
payable from revenues other than ad valorem taxes as 
contemplated in clause (a), validly issued by any state or 
insular possession of the United States, or by any agency, 
instrumentality, municipality, or governmental or public 
subdivision, district, corporation, commission, board, council, 
or authority of whatsoever kind, created for public purposes by 
or pursuant to the laws of any state, provided that the bonds or 
other interest bearing obligations are at the time of purchase 
rated among the highest three quality categories, not applicable 
to bonds or other interest bearing obligations in default as to 
principal, used by a nationally recognized rating agency for 
rating the quality of similar bonds or other interest bearing 
obligations, and are not rated lower by any other such agency.  
    Sec. 3.  Minnesota Statutes 1989 Supplement, section 
110.70, is amended to read: 
    110.70 [APPLICATION.] 
    Nothing in sections 110.55 to 110.69 shall amend, alter, 
supersede, or otherwise change the provisions set forth in 
section 110.13.  The provisions of sections 110.55 to 110.69 
shall in no manner apply to public waters of an area of more 
than 10,000 acres, situated wholly or partially within counties 
now or hereafter having a population of more than 450,000 and a 
net tax capacity market value of more 
than $450,000,000 $1,860,000,000, including money and credits, 
and in which is situated a city of the first class within a 
distance of 20 miles from the body of public water; and, as to 
such public waters, nothing contained in sections 110.55 to 
110.69 shall be construed to authorize the diversion of any 
water from any stream, river, or lake located in any county 
adjoining or abutting in part upon the county wherein a major 
portion of such public waters is located. 
    Sec. 4.  Minnesota Statutes 1989 Supplement, section 
118.12, is amended to read: 
    118.12 [INVESTMENT OF TOWN FUNDS.] 
    When the town board of any town in this state, by a 
unanimous resolution, deem it advisable, such town board may 
invest such amount of funds in such town treasury as will not, 
in the opinion of such board, be needed by such town during the 
fiscal year, in any of the bonds of any county, city, town, 
school district, drainage or other district created pursuant to 
law for public purposes in Minnesota, Iowa, Wisconsin, and North 
and South Dakota, or in bonds of the United States of America, 
or in the bonds of any city, county, town, school district, 
drainage or other district created pursuant to law for public 
purposes in the United States, containing at least 3,500 
inhabitants, provided that the total bonded indebtedness of any 
such municipality or district shall not exceed ten percent of 
its net tax capacity assessed value, if not located in 
Minnesota, or 2.5 percent of its taxable market value, if 
located in Minnesota. 
    Sec. 5.  Minnesota Statutes 1989 Supplement, section 
163.04, subdivision 3, is amended to read: 
    Subd. 3.  [EXPENDITURES ON BRIDGES WITHIN CERTAIN CITIES.] 
When the council of any statutory city or city of the third or 
fourth class may determine that it is necessary to build or 
improve any bridge or bridges, including approaches thereto, and 
any dam or retaining works connected therewith, upon or forming 
a part of streets or highways either wholly or partly within its 
limits, the county board shall appropriate one-half of the money 
as may be necessary therefor from the county road and bridge 
fund, not exceeding during any year one-half the amount of taxes 
paid into the county road and bridge fund during the preceding 
year, on property within the corporate limits of the city.  The 
appropriation shall be made upon the petition of the council, 
which petition shall be filed by the council with the county 
board prior to the fixing by the board of the annual county tax 
levy.  The county board shall determine the plans and 
specifications, shall let all necessary contracts, shall have 
charge of construction, and upon its request, warrants in 
payment thereof shall be issued by the county auditor, from time 
to time, as the construction work proceeds.  Any unpaid balance 
may be paid or advanced by the city.  On petition of the 
council, the appropriations of the county board, during not to 
exceed three successive years, may be made to apply on the 
construction of the same items and to repay any money advanced 
by the city in the construction thereof.  None of the provisions 
of this section shall be construed to be mandatory as applied to 
any city whose net tax capacity market value exceeds $500 $2,100 
per capita of its population.  
    Sec. 6.  Minnesota Statutes 1989 Supplement, section 
163.06, subdivision 6, is amended to read: 
    Subd. 6.  [EXPENDITURE IN CERTAIN COUNTIES.] In any county 
having not less than 95 nor more than 105 full and fractional 
townships, and having a net tax capacity market value of not 
less than $3,000,000 $12,000,000 nor more than 
$5,000,000 $21,000,000, exclusive of money and credits, the 
county board, by resolution, may expend the funds provided in 
subdivision 4 in any organized or unorganized township or 
portion thereof in such county.  
    Sec. 7.  Minnesota Statutes 1989 Supplement, section 
165.10, subdivision 1, is amended to read: 
    Subdivision 1.  [CERTAIN COUNTIES MAY ISSUE AND SELL.] The 
county board of any county having no outstanding road and bridge 
bonds may issue and sell county road bonds in an amount not 
exceeding one-half of one 0.12089 percent of the net tax 
capacity market value of the taxable property within the county 
exclusive of money and credits, for the purpose of constructing, 
reconstructing, improving, or maintaining any bridge or bridges 
on any highway under its jurisdiction, without submitting the 
matter to a vote of the electors of the county.  
    Sec. 8.  Minnesota Statutes 1989 Supplement, section 
365.025, subdivision 4, is amended to read: 
    Subd. 4.  [BIG BUYS MAJOR PURCHASES:  NOTICE, PETITION, 
ELECTION.] Before buying anything under subdivision 2 that costs 
more than one 0.24177 percent of the net tax capacity market 
value of the town, the town must follow this subdivision.  
    The town must publish in its official newspaper the board's 
resolution to pay for the property over time.  Then a petition 
for an election on the contract may be filed with the clerk.  
The petition must be filed within ten days after the resolution 
is published.  To require the election the petition must be 
signed by a number of voters equal to ten percent of the voters 
at the last regular town election.  The contract then must be 
approved by a majority of those voting on the question.  The 
question may be voted on at a regular or special election. 
    Sec. 9.  Minnesota Statutes 1989 Supplement, section 
368.01, subdivision 23, is amended to read: 
    Subd. 23.  [FINANCING PURCHASE OF CERTAIN EQUIPMENT.] The 
town board of supervisors may issue certificates of indebtedness 
within existing debt limits for the purpose of purchasing fire 
or police equipment or ambulance equipment or street 
construction or maintenance equipment.  Such certificates shall 
be payable in not more than five years and shall be issued on 
such terms and in such manner as the board may determine.  If 
the amount of the certificates to be issued to finance any such 
purchase exceeds one 0.24177 percent of the net tax 
capacity market value of the town, excluding money and credits, 
they shall not be issued for at least ten days after publication 
in the official newspaper of a town board resolution determining 
to issue them; and if before the end of that time, a petition 
asking for an election on the proposition signed by voters equal 
to ten percent of the number of voters at the last regular town 
election is filed with the clerk, such certificates shall not be 
issued until the proposition of their issuance has been approved 
by a majority of the votes cast on the question at a regular or 
special election.  A tax levy shall be made for the payment of 
the principal and interest on such certificates as in the case 
of bonds.  
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
368.44, is amended to read: 
    368.44 [DISSOLUTION OF CERTAIN TOWNS; GROUNDS.] 
    When the voters residing within a duly organized town in 
any county in this state having more than 85 congressional 
townships of land and having a net tax capacity market value of 
not less than $5,000,000 $21,000,000 nor more than 
$12,000,000 $50,000,000 have failed to elect any town officials 
for more than three years continuously, or the town has failed 
and omitted to exercise any of the powers and functions of a 
town, as provided by law, which facts, or any of them, may be 
found and determined by the resolution of the county board of 
the county in which the town is located, according to the 
official records in the office of the auditor of the county, the 
county board by resolution duly adopted may declare any such 
town, naming it, duly dissolved and no longer entitled to 
exercise any of the powers or functions of a town.  
    Sec. 11.  Minnesota Statutes 1989 Supplement, section 
368.47, is amended to read: 
    368.47 [TOWNS MAY BE DISSOLVED.] 
    When the voters residing within a town in this state have 
failed to elect any town officials for more than ten years 
continuously, or the town has failed and omitted for a period of 
ten years to exercise any of the powers and functions of a town, 
as provided by law, or when the net tax capacity market value of 
any town drops to less than $40,000 $165,000, or when the tax 
delinquency of any such town, exclusive of taxes that are 
delinquent or unpaid by reason of taxes being contested in 
proceedings for the enforcement of taxes, amounts to 50 12 
percent of its net tax capacity market value, or where the state 
or federal government has acquired title to 50 percent of the 
real estate of such town, which facts, or any of them, may be 
found and determined by the resolution of the county board of 
the county in which the town is located, according to the 
official records in the office of the county auditor, the county 
board by resolution may declare any such town, naming it, duly 
dissolved and no longer entitled to exercise any of the powers 
or functions of a town.  In counties having a population 
according to the 1930 federal census of not more than 16,000 nor 
less than 15,000 and having not more than 77 nor less than 75 
full or fractional congressional townships, and in counties 
having a population according to the 1930 federal census of not 
more than 28,000 nor less than 27,000 and having not more than 
91 nor less than 90 full or fractional congressional townships, 
and in counties having a population according to the 1930 
federal census of not more than 210,000 nor less than 200,000 
and having not more than 202 nor less than 200 full or 
fractional congressional townships, before any such dissolution 
shall become effective the voters of the town shall express 
their approval or disapproval of such dissolution.  The clerk of 
the town shall, upon a petition signed by a majority of the 
registered voters of the town, filed with the clerk at least 60 
days before any regular or special town election thereof, give 
notice at the same time and in the same manner of such election 
that the question of dissolution of such town will be submitted 
for determination at such election.  At such election when so 
petitioned for the question shall be voted upon by a separate 
ballot, the terms of which shall be either "for dissolution" or 
"against dissolution," which ballot shall be deposited in a 
separate ballot box to be provided and the result of such voting 
shall be duly canvassed, certified, and returned in the same 
manner and at the same time as other facts and returns of the 
election.  If a majority of the votes cast at the election shall 
be for dissolution, such town shall be dissolved; and, if a 
majority of the votes cast at the election shall be against 
dissolution, the town shall not be dissolved.  
    When a town is dissolved under the provisions of sections 
368.47 to 368.49 the county shall acquire title to any telephone 
company or any other business being conducted by such town and 
such business shall be operated by the board of county 
commissioners until such time as a sale thereof can be made; 
provided that the subscribers or patrons of such businesses 
shall have the first opportunity of purchase.  If such dissolved 
town has any outstanding indebtedness chargeable to such 
business, the auditor of the county wherein such dissolved town 
is located shall levy a tax against the property situated in the 
dissolved town for the purpose of paying the indebtedness as it 
becomes due.  
    Sec. 12.  Minnesota Statutes 1989 Supplement, section 
370.01, is amended to read: 
    370.01 [CHANGE OF BOUNDARIES; CREATION OF NEW COUNTIES.] 
    The boundaries of counties may be changed by taking 
territory from a county and attaching it to an adjoining county, 
and new counties may be established out of territory of one or 
more existing counties.  A new county shall contain at least 400 
square miles, have at least 2,000 inhabitants, and have a net 
tax capacity market value of at least $4,000,000 $17,000,000.  
An existing county shall not be reduced in area below 400 square 
miles, have less than 2,000 inhabitants, or have a net tax 
capacity market value of less than $4,000,000 $17,000,000.  
    In existing counties having an area of more than 3,500 and 
less than 6,000 square miles, boundaries may be changed and new 
counties established having a net tax capacity market value of 
at least $2,500,000 $10,000,000.  
    No change in the boundaries of any county having an area of 
more than 2,500 square miles, whether by the creation of a new 
county, or otherwise, shall detach from the existing county any 
territory within 12 miles of the county seat.  
    Sec. 13.  Minnesota Statutes Second 1989 Supplement, 
section 373.40, subdivision 1, is amended to read: 
    Subdivision 1.  [DEFINITIONS.] For purposes of this 
section, the following terms have the meanings given. 
    (a) "Bonds" means an obligation as defined under section 
475.51. 
    (b) "Capital improvement" means acquisition or betterment 
of public lands, buildings, or other improvements within the 
county for the purpose of a county courthouse, administrative 
building, health or social service facility, correctional 
facility, jail, law enforcement center, hospital, morgue, 
library, park, and roads and bridges.  An improvement must have 
an expected useful life of five years or more to qualify. 
"Capital improvement" does not include light rail transit or any 
activity related to it or a recreation or sports facility 
building (such as, but not limited to, a gymnasium, ice arena, 
racquet sports facility, swimming pool, exercise room or health 
spa), unless the building is part of an outdoor park facility 
and is incidental to the primary purpose of outdoor recreation. 
    (c) "Commissioner" means the commissioner of trade and 
economic development. 
    (d) "Metropolitan county" means a county located in the 
seven-county metropolitan area as defined in section 473.121 or 
a county with a population of 90,000 or more. 
    (e) "Population" means the population established by the 
most recent of the following (determined as of the date the 
resolution authorizing the bonds was adopted): 
    (1) the federal decennial census, 
    (2) a special census conducted under contract by the United 
States Bureau of the Census, or 
    (3) a population estimate made either by the metropolitan 
council or by the state demographer under section 116K.04, 
subdivision 4, clause (10). 
    (f) "Tax capacity" means total taxable tax capacity market 
value, but does not include captured tax capacity market value. 
    Sec. 14.  Minnesota Statutes 1989 Supplement, section 
385.31, is amended to read: 
    385.31 [PAYMENT OF COUNTY ORDERS OR WARRANTS.] 
    When any order or warrant drawn on the treasurer is 
presented for payment, if there is money in the treasury for 
that purpose, the county treasurer shall redeem the same, and 
write across the entire face thereof the word "redeemed," the 
date of the redemption, and the treasurer's official signature.  
If there is not sufficient funds in the proper accounts to pay 
such orders they shall be numbered and registered in their order 
of presentation, and proper endorsement thereof shall be made on 
such orders and they shall be entitled to payment in like 
order.  Such orders shall bear interest at not to exceed the 
rate of six percent per annum from such date of presentment.  
The treasurer, as soon as there is sufficient money in the 
treasury, shall appropriate and set apart a sum sufficient for 
the payment of the orders so presented and registered, and, if 
entitled to interest, issue to the original holder a notice that 
interest will cease in 30 days from the date of such notice; 
and, if orders thus entitled to priority of payment are not then 
presented, the next in order of registry may be paid until such 
orders are presented.  No interest shall be paid on any order, 
except upon a warrant drawn by the county auditor for that 
purpose, giving the number and the date of the order on account 
of which the interest warrant is drawn.  In any county in this 
state now or hereafter having a net tax capacity market value of 
all taxable property, exclusive of money and credits, of not 
less than $250,000,000 $1,033,000,000, the county treasurer, in 
order to save payment of interest on county warrants drawn upon 
a fund in which there shall be temporarily insufficient money in 
the treasury to redeem the same, may borrow temporarily from any 
other fund in the county treasury in which there is a sufficient 
balance to care for the needs of such fund and allow a temporary 
loan or transfer to any other fund, and may pay such warrants 
out of such funds.  Any such money so transferred and used in 
redeeming such county warrants shall be returned to the fund 
from which drawn as soon as money shall come in to the credit of 
such fund on which any such warrant was drawn and paid as 
aforesaid.  Any county operating on a cash basis may use a 
combined form of warrant or order and check, which, when signed 
by the chair of the county board and by the auditor, is an order 
or warrant for the payment of the claim, and, when countersigned 
by the county treasurer, is a check for the payment of the 
amount thereof.  
    Sec. 15.  Minnesota Statutes 1989 Supplement, section 
386.34, is amended to read: 
    386.34 [DEPUTIES, SALARIES.] 
    The county board of each county having a population of less 
than 75,000, may by written order to be filed in the office of 
the county auditor allow one deputy county recorder in such 
county compensation for services as such deputy, to be fixed by 
the board and specified in said order.  In each county 
containing less than 15 full and fractional congressional 
townships, and having more than 16,000 and less than 19,000 
inhabitants according to the 1940 federal census, and having a 
net tax capacity market value of less 
than $7,000,000 $29,000,000, exclusive of moneys and credits, 
the county board may by written order to be filed in the office 
of the county auditor allow one deputy county recorder in such 
county compensation for services as such deputy not exceeding 
$1,800 per year. 
    Sec. 16.  Minnesota Statutes 1989 Supplement, section 
412.081, subdivision 1, is amended to read: 
    Subdivision 1.  [ELECTION, ASSESSMENT DISTRICTS.] Any 
statutory city hereafter organized shall be constituted an 
election and assessment district separate from the town in which 
it lies immediately upon incorporation, except that if the 
incorporation occurs between March 15 and July 1 the town 
assessor shall assess the property in the city that year and the 
city assessor shall not assume duties until the following year.  
Where the town assessor makes the assessment, the city shall pay 
such proportion of the cost of the assessment as its net tax 
capacity bears to the assessed valuation net tax capacity of the 
town, including the city.  
    Sec. 17.  Minnesota Statutes 1989 Supplement, section 
412.221, subdivision 2, is amended to read: 
    Subd. 2.  [CONTRACTS.] The council shall have power to make 
such contracts as may be deemed necessary or desirable to make 
effective any power possessed by the council.  The city may 
purchase personal property through a conditional sales contract 
and real property through a contract for deed under which 
contracts the seller is confined to the remedy of recovery of 
the property in case of nonpayment of all or part of the 
purchase price, which shall be payable over a period of not to 
exceed five years.  When the contract price of property to be 
purchased by contract for deed or conditional sales contract 
exceeds one 0.24177 percent of the net tax capacity market value 
of the city, the city may not enter into such a contract for at 
least ten days after publication in the official newspaper of a 
council resolution determining to purchase property by such a 
contract; and, if before the end of that time a petition asking 
for an election on the proposition signed by voters equal to ten 
percent of the number of voters at the last regular city 
election is filed with the clerk, the city may not enter into 
such a contract until the proposition has been approved by a 
majority of the votes cast on the question at a regular or 
special election.  
    Sec. 18.  Minnesota Statutes 1989 Supplement, section 
430.102, subdivision 2, is amended to read: 
    Subd. 2.  [COUNCIL APPROVAL; SPECIAL TAX LEVY LIMITATION.] 
The council shall receive and consider the estimate required in 
subdivision 1 and the items of cost after notice and hearing 
before it or its appropriate committee as it considers necessary 
or expedient, and shall approve the estimate, with necessary 
amendments.  The amounts of each item of cost estimated are then 
appropriated to operate, maintain, and improve the pedestrian 
mall during the next fiscal year.  The amount of the special tax 
to be charged under subdivision 1, clause (3), must not, 
however, exceed 50 cents per $100 0.12089 percent of net tax 
capacity market value of taxable property in the district.  The 
council shall make any necessary adjustment in costs of 
operating and maintaining the district to keep the amount of the 
tax within this limitation.  
    Sec. 19.  Minnesota Statutes 1989 Supplement, section 
465.04, is amended to read: 
    465.04 [ACCEPTANCE OF GIFTS.] 
    Cities of the second, third, or fourth class, having at any 
time a net tax capacity market value of not more 
than $10,000,000 $41,000,000, exclusive of money and credits, as 
officially equalized by the commissioner of revenue, either 
under home rule charter or under the laws of this state, in 
addition to all other powers possessed by them, hereby are 
authorized and empowered to receive and accept gifts and 
donations for the use and benefit of such cities and the 
inhabitants thereof upon terms and conditions to be approved by 
the governing bodies of such cities; and such cities are 
authorized to comply with and perform such terms and conditions, 
which may include payment to the donor or donors of interest on 
the value of the gift at not exceeding five percent per annum 
payable annually or semiannually, during the remainder of the 
natural life or lives of such donor or donors. 
    Sec. 20.  Minnesota Statutes 1989 Supplement, section 
471.24, is amended to read: 
    471.24 [STATUTORY CITIES AND TOWNS MAY JOIN IN MAINTAINING 
CEMETERIES.] 
    Where a statutory city or town owns and maintains an 
established cemetery or burial ground, either within or without 
the municipal limits, the statutory city or town may, by mutual 
agreement with contiguous statutory cities and towns, each 
having a net tax capacity market value of not less 
than $500,000 $2,000,000, join together in the maintenance of 
such public cemetery or burial ground for the use of the 
inhabitants of each of such municipalities; and each such 
municipality is hereby authorized, by action of its council or 
governing body, to levy a tax or make an appropriation for the 
support and maintenance of such cemetery or burial ground; 
provided, the amount thus levied or appropriated by each 
municipality shall not exceed a total of $10,000 in any one year.
    Sec. 21.  Minnesota Statutes 1989 Supplement, section 
471.73, is amended to read: 
    471.73 [ACCEPTANCE OF PROVISIONS.] 
    In the case of any city within the class specified in 
471.72 having a net tax capacity market value, as defined in 
section 471.72, in excess of $9,000,000 $37,000,000; and in the 
case of any statutory city within such class having a net tax 
capacity market value, as defined in section 471.72, of less 
than $1,100,000 $5,000,000; and in the case of any statutory 
city within such class which is governed by Laws 1933, chapter 
211, or Laws 1937, chapter 356; and in the case of any statutory 
city within such class which is governed by Laws 1929, chapter 
208, and has a net tax capacity market value of less than 
$20,000,000 $83,000,000; and in the case of any school district 
within such class having a net tax capacity market value, as 
defined in section 471.72, of more than $13,000,000 $54,000,000; 
and in the case of all towns within said class; sections 471.71 
to 471.83 apply only if the governing body of the city or 
statutory city, the board of the school district, or the town 
board of the town shall have adopted a resolution determining to 
issue bonds under the provisions of sections 471.71 to 471.83 or 
to go upon a cash basis in accordance with the provisions 
thereof.  
    Sec. 22.  Minnesota Statutes 1989 Supplement, section 
475.58, subdivision 2, is amended to read: 
    Subd. 2.  [FUNDING, REFUNDING.] Any city, town or school 
district whose outstanding gross debt, including all items 
referred to in section 475.51, subdivision 4, exceed in amount 
6-2/3 1.62 percent of its net tax capacity market value may 
issue bonds under this subdivision for the purpose of funding or 
refunding such indebtedness or any part thereof.  A list of the 
items of indebtedness to be funded or refunded shall be made by 
the recording officer and treasurer and filed in the office of 
the recording officer.  The initial resolution of the governing 
body shall refer to this subdivision as authority for the issue, 
state the amount of bonds to be issued and refer to the list of 
indebtedness to be funded or refunded.  This resolution shall be 
published once each week for two successive weeks in a legal 
newspaper published in the municipality or if there be no such 
newspaper, in a legal newspaper published in the county seat.  
Such bonds may be issued without the submission of the question 
of their issue to the electors unless within ten days after the 
second publication of the resolution a petition requesting such 
election signed by ten or more voters who are taxpayers of the 
municipality, shall be filed with the recording officer.  In 
event such petition is filed, no bonds shall be issued hereunder 
unless authorized by a majority of the electors voting on the 
question. 
    Sec. 23.  Minnesota Statutes 1989 Supplement, section 
475.73, subdivision 1, is amended to read: 
    Subdivision 1.  Obligations sold under the provisions of 
section 475.60 may be purchased by the state board of investment 
if the obligations meet the requirements of section 11A.24, 
subdivision 2, upon the approval of the attorney general as to 
form and execution of the application therefor, and under rules 
as the board may specify, and the state board shall have 
authority to purchase the same to an amount not exceeding 15 
3.63 percent of the net tax capacity market value of the taxable 
property of the municipality, according to the last preceding 
assessment.  The obligations shall not run for a shorter period 
than one year, nor for a longer period than 30 years and shall 
bear interest at a rate to be fixed by the state board but not 
less than two percent per annum.  Forthwith upon the delivery to 
the state of Minnesota of any obligations issued by virtue 
thereof, the commissioner of finance shall certify to the 
respective auditors of the various counties wherein are situated 
the municipalities issuing the same, the number, denomination, 
amount, rate of interest and date of maturity of each obligation.
    Sec. 24.  Minnesota Statutes 1989 Supplement, section 
505.173, subdivision 1, is amended to read: 
    Subdivision 1.  [CERTAIN DEFECTS.] In all cases where the 
plats, or what purports to be plats, of any portion of the lands 
contained within any additions to or subdivisions of any town or 
city, situated in any county having less than 15 full and 
fractional congressional townships, having less than 15,000 
inhabitants according to the 1940 federal census, and having an 
net tax capacity assessed value of more than $7,500,000 and less 
than $8,500,000, exclusive of money and credits which have been 
executed and filed in an office of any county recorder previous 
to January 1, 1915, (1) fail to identify or correctly describe 
the land to be so platted or to show correctly upon their face 
the tract of land intended or purported to be platted thereby, 
or (2) are defective by reason of the plat and the description 
of the land purported to be so platted thereby being 
inconsistent or incorrect, or (3) there exists a defect in the 
execution of said plats on the part of the grantors thereof, the 
governing board or council of the municipality containing land 
so platted or purported to be so platted may authorize, within 
two years from April 21, 1951, referring by the record book and 
page of such plat or plats in the office of the county recorder 
to the plat or plats to be corrected, the making of one or more 
plats which shall correctly show on the face thereof and by 
description of the land intended to be platted, which plat or 
plats may vary from the original plats in description as to lots 
and blocks to suit the best purpose and secure the best 
results.  Such plat or plats, in a declaration thereon, shall 
recite such resolution and shall identify each separate tract of 
land described therein with such tract of land in the purported 
plat or plats intended to be corrected thereby, and shall be 
certified by the proper officers of the municipality as to 
authorization and by an engineer or surveyor as to correctness, 
and the signatures of such persons shall be acknowledged in like 
manner as a deed.  
    Sec. 25.  [EFFECTIVE DATE.] 
    Section 22 is effective for bonds issued after the date of 
enactment of this act.  The remainder of this article is 
effective the day following final enactment of this act. 

                               ARTICLE 10 

                              MISCELLANEOUS
    Section 1.  Minnesota Statutes 1989 Supplement, section 
270.73, subdivision 1, is amended to read: 
    Subdivision 1.  [POSTING, NOTICE.] Pursuant to the 
authority to disclose under section 270B.12, subdivision 4, the 
commissioner shall, by the 15th of each month, submit to the 
commissioner of public safety a list of all taxpayers who are 
required to withhold or collect the tax imposed by section 
290.92 or 297A.02 or a local option tax administered and 
collected by the commissioner of revenue and who are 30 days or 
more delinquent in either filing a tax return or paying the tax. 
    The commissioner of revenue is under no obligation to list 
a taxpayer whose business is inactive.  At least ten days before 
notifying the commissioner of public safety, the commissioner of 
revenue shall notify the taxpayer of the intended action. 
    The commissioner of public safety shall post the list in 
the same manner as provided in section 340A.318, subdivision 3.  
The list will prominently show the date of posting.  If a 
taxpayer previously listed cures the delinquency by filing all 
returns and paying all taxes, the commissioner shall notify the 
commissioner of public safety within two business days that the 
delinquency was cured. 
    Sec. 2.  Minnesota Statutes 1988, section 270A.03, 
subdivision 2, is amended to read: 
    Subd. 2.  "Claimant agency" means any state agency, as 
defined by section 14.02, subdivision 2, the regents of the 
University of Minnesota, any district court of the state, any 
county, any statutory or home rule charter city presenting a 
claim for a municipal hospital, a hospital district, any public 
agency responsible for child support enforcement, and any public 
agency responsible for the collection of court-ordered 
restitution. 
    Sec. 3.  Minnesota Statutes 1988, section 270A.03, 
subdivision 5, is amended to read: 
    Subd. 5.  "Debt" means a legal obligation of a natural 
person to pay a fixed and certain amount of money, which equals 
or exceeds $25 and which is due and payable to a claimant 
agency.  The term includes criminal fines imposed under section 
609.10 and restitution.  A debt may arise under a contractual or 
statutory obligation, a court order, or other legal obligation, 
but need not have been reduced to judgment.  
    A debt does not include (1) any legal obligation of a 
current recipient of assistance which is based on overpayment of 
an assistance grant, or (2). 
    A debt does not include any legal obligation to pay a 
claimant agency for medical care, including hospitalization if 
the income of the debtor would have qualified for a low income 
credit equal to tax liability pursuant to Minnesota Statutes 
1984, section 290.06, subdivision 3d, clause (1), at the time 
when the medical care was rendered, provided that, for purposes 
of this subdivision, does not exceed the following amount: 
    (1) for an unmarried debtor, an income of $6,400 or less; 
    (2) for a debtor with one dependent, an income of $8,200 or 
less; 
    (3) for a debtor with two dependents, an income of $9,700 
or less; 
    (4) for a debtor with three dependents, an income of 
$11,000 or less; 
    (5) for a debtor with four dependents, an income of $11,600 
or less; and 
    (6) for a debtor with five or more dependents, an income of 
$12,100 or less.  
    The income amounts in that section this subdivision shall 
be adjusted for inflation for debts incurred in calendar 
years 1987 1991 and thereafter.  The dollar amount of each 
income level that applied to debts incurred in the prior year 
shall be increased in the same manner as provided in section 
290.06, subdivision 2d, for the expansion of the tax rate 
brackets. 
    Sec. 4.  Minnesota Statutes 1988, section 270A.03, 
subdivision 7, is amended to read: 
    Subd. 7.  "Refund" means an individual income tax refund, 
pursuant to chapter 290, or a property tax credit or refund, 
pursuant to chapter 290A.  
    For purposes of this chapter, lottery prizes, as set forth 
in section 349A.08, subdivision 8, shall be treated as refunds. 
    Sec. 5.  Minnesota Statutes 1988, section 270A.04, 
subdivision 2, is amended to read: 
    Subd. 2.  Any debt owed to a claimant agency shall be 
submitted by the agency for collection under the procedure 
established by sections 270A.01 to 270A.12 unless (a) an 
alternative means of collection is pending and believed to be 
adequate the debtor is complying with the terms of alternative 
means of collection, (b) the collection attempt would result in 
a loss of federal funds, or (c) the agency is unable to supply 
the department with the necessary identifying information 
required by subdivision 3 or rules promulgated by the 
commissioner, or (d) the debt is barred by section 541.05. 
    Sec. 6.  Minnesota Statutes 1988, section 270A.08, 
subdivision 2, is amended to read: 
    Subd. 2.  (a) This written notice shall clearly and with 
specificity set forth the basis for the claim to the refund 
including the name of the benefit program involved if the debt 
arises from a public assistance grant and the dates on which the 
debt was incurred and, further, shall advise the debtor of the 
claimant agency's intention to request setoff of the refund 
against the debt.  
    (b) The notice will also advise the debtor that any debt 
incurred more than six years from the date of the notice to the 
commissioner under section 270A.07 must not be setoff against a 
refund and will advise the debtor of the right to contest the 
validity of the claim at a hearing.  The debtor must assert this 
right by written request to the claimant agency, which request 
the agency must receive within 45 days of the mailing date of 
the original notice or of the corrected notice, as required by 
subdivision 1.  If the debtor has not received the notice, the 
45 days shall not commence until the debtor has received actual 
notice.  The debtor shall have the burden of showing no notice 
and shall be entitled to a hearing on the issue of notice as 
well as on the merits. 
    Sec. 7.  Minnesota Statutes 1989 Supplement, section 
270B.07, is amended by adding a subdivision to read: 
    Subd. 5.  [INQUIRIES RELATED TO APPLICATIONS FOR LIQUOR 
LICENSES.] The commissioner may disclose and certify to a 
requesting county or municipality whether or not an applicant 
for a license to be issued under section 340A.403 or sections 
340A.404 to 340A.406 is liable for state or local taxes or 
assessments that were not paid when they became due.  The 
commissioner shall not disclose or certify that the license 
applicant is liable for unpaid state or local taxes or 
assessments if an administrative or court action which questions 
the amount or validity of the unpaid taxes or assessments has 
been commenced, or if the appeal period to contest the taxes or 
assessments has not yet expired. 
    Sec. 8.  Minnesota Statutes Second 1989 Supplement, section 
349.212, subdivision 4, is amended to read: 
    Subd. 4.  [PULL-TAB AND TIPBOARD TAX.] (a) There is imposed 
a tax on the sale of each deal of pull-tabs and tipboards sold 
by a licensed distributor.  The rate of the tax is two percent 
of the ideal gross of the pull-tab or tipboard deal.  The sales 
tax imposed by chapter 297A on the sale of the pull-tabs and 
tipboards by the licensed distributor is imposed on the retail 
sales price less the tax imposed by this subdivision.  The 
retail sale of pull-tabs or tipboards by the organization is 
exempt from taxes imposed by chapter 297A if the tax imposed by 
this subdivision has been paid and is exempt from all local 
taxes and license fees except a fee authorized under section 
349.16, subdivision 4. 
    (b) The liability for the tax imposed by this section is 
incurred when the pull-tabs and tipboards are delivered by the 
distributor to the customer, to a common or contract carrier for 
delivery to the customer, or when received by the customer's 
authorized representative at the distributor's place of 
business, regardless of the distributor's method of accounting 
or the terms of the sale. 
    The tax imposed by this subdivision is imposed on all sales 
of pull-tabs and tipboards, except the following:  
    (1) sales to the governing body of an Indian tribal 
organization for use on an Indian reservation; 
    (2) sales to distributors licensed under this chapter; 
    (3) sales to distributors licensed under the laws of 
another state or of a Province of Canada, as long as all 
statutory and regulatory requirements are met in the other state 
or province; and 
     (4) sales of promotional tickets as defined in section 
349.12.  
     (c) Pull-tabs and tipboards sold to an organization that 
sells pull-tabs and tipboards under the exemption from licensing 
in section 349.214, subdivision 2, paragraph (b), are exempt 
from the tax imposed by this subdivision.  A distributor must 
require an organization conducting exempt gambling to show proof 
of its exempt status before making a tax-exempt sale of 
pull-tabs or tipboards to such an organization.  A distributor 
shall identify, on all reports submitted to the commissioner, 
all sales of pull-tabs and tipboards that are exempt from tax 
under this subdivision.  
    Sec. 9.  Minnesota Statutes 1988, section 349.212, is 
amended by adding a subdivision to read: 
    Subd. 7.  [UNTAXED PULL-TABS AND TIPBOARDS.] In addition to 
penalties or criminal sanctions imposed by this chapter, any 
person, organization, or business entity possessing a pull-tab 
or tipboard upon which the tax imposed by subdivision 4 has not 
been paid is liable for a tax of six percent of the ideal gross 
of each pull-tab or tipboard.  The tax on a partial deal shall 
be assessed as if it were a full deal. 
    The tax shall be assessed by the commissioner.  An 
assessment shall be considered a jeopardy assessment or jeopardy 
collection as provided in section 270.70.  The commissioner 
shall assess the tax based on personal knowledge or information 
available to the commissioner.  The commissioner shall mail to 
the taxpayer at the taxpayer's last known address, or serve in 
person, a written notice of the amount of tax, demand its 
immediate payment, and, if payment is not immediately made, 
collect the tax by any method described in chapter 270, except 
that the commissioner need not await the expiration of the times 
specified in chapter 270.  The tax assessed by the commissioner 
is presumed to be valid and correctly determined and assessed.  
The burden is upon the taxpayer to show its incorrectness or 
invalidity. 
    Sec. 10.  Minnesota Statutes 1989 Supplement, section 
383.06, is amended to read: 
    383.06 [PAYMENT OF WARRANTS; ACCOUNTS; HOW KEPT; 
CERTIFICATES OF INDEBTEDNESS TO RETIRE OUTSTANDING WARRANTS.] 
    The county treasurer shall pay warrants only from the fund 
from which they are legally payable.  Payments under any special 
contract shall be kept separate under the name of such contract, 
and under the general title of the fund from which such payment 
may be legally made.  The treasurer need not keep a specific 
appropriations account separately, but shall keep a general 
appropriations account.  
    In any county having a net tax capacity of not less than 
$150,000,000, exclusive of money and credits, The county board 
may, by resolution, issue and sell as many certificates of 
indebtedness as may be needed in anticipation of the collection 
of taxes levied for any fund named in the tax levy for the 
purpose of raising money for such fund, but the certificates 
outstanding for any such separate funds shall not at any time 
exceed 50 percent of the amount of taxes previously levied for 
such fund remaining uncollected, and no certificate shall be 
issued to become due and payable later than December 31 of the 
year succeeding the year in which the tax levy was made, and the 
certificates shall not be sold for less than par and accrued 
interest and shall not bear a greater rate of interest than six 
percent per annum.  No such certificates shall be issued prior 
to the beginning of the fiscal year for which the taxes so 
anticipated were intended, except that when taxes shall have 
been levied for the purpose of paying a deficit in any such fund 
carried over from any previous year or years certificates of 
indebtedness in anticipation of collection of the taxes levied 
for such deficit may be issued at any time after such levy shall 
have been finally made and certified to the county auditor.  
Each certificate shall state upon its face for which fund the 
proceeds thereof shall be used, the total amount of certificates 
so issued, and the whole amount embraced in the levy for that 
particular purpose.  They shall be numbered consecutively, be in 
denominations of $100 or a multiple thereof, may have interest 
coupons attached, shall be otherwise of such form and terms, and 
may be made payable at such place, as will best aid in their 
negotiation, and the proceeds of the tax assessed and collected 
on account of the fund and the full faith and credit of the 
county shall be irrevocably pledged for the redemption and 
payment of the certificates so issued.  Such certificates shall 
be payable primarily from the moneys derived from the levy for 
the years against which such certificates were issued, but shall 
constitute unlimited general obligations of the county.  Moneys 
derived from the sale of such certificates shall be credited to 
the fund or funds the taxes for which are so anticipated. 
    Sec. 11.  Minnesota Statutes 1988, section 524.3-301, is 
amended to read: 
    524.3-301 [INFORMAL PROBATE OR APPOINTMENT PROCEEDINGS; 
APPLICATION; CONTENTS.] 
    An informal probate proceeding is an informal proceeding 
for the probate of decedent's will with or without an 
application for informal appointment.  An informal appointment 
proceeding is an informal proceeding for appointment of a 
personal representative in testate or intestate estates.  These 
proceedings may be combined in a single proceeding.  
Applications for informal probate or informal appointment shall 
be directed to the registrar, and verified by the applicant, in 
accordance with section 524.1-310, to be accurate and complete 
to the best of applicant's knowledge and belief as to the 
following information: 
    (1) Every application for informal probate of a will or for 
informal appointment of a personal representative, other than a 
special or successor representative, shall contain the following:
    (i) a statement of the interest of the applicant; 
    (ii) the name, social security number, birthdate, and date 
of death of the decedent, and the county and state of the 
decedent's domicile at the time of death, and the names and 
addresses of the spouse, children, heirs, and devisees and the 
ages of any who are minors so far as known or ascertainable with 
reasonable diligence by the applicant; 
    (iii) if the decedent was not domiciled in the state at the 
time of death, a statement showing venue; 
    (iv) a statement identifying and indicating the address of 
any personal representative of the decedent appointed in this 
state or elsewhere whose appointment has not been terminated; 
    (v) a statement indicating whether the applicant has 
received a demand for notice, or is aware of any demand for 
notice of any probate or appointment proceeding concerning the 
decedent that may have been filed in this state or elsewhere. 
    (2) An application for informal probate of a will shall 
state the following in addition to the statements required by 
(1): 
    (i) that the original of the decedent's last will is in the 
possession of the court, or accompanies the application, or that 
an authenticated copy of a will probated in another jurisdiction 
accompanies the application; 
    (ii) that the applicant, to the best of the applicant's 
knowledge, believes the will to have been validly executed; 
    (iii) that after the exercise of reasonable diligence, the 
applicant is unaware of any instrument revoking the will, and 
that the applicant believes that the instrument which is the 
subject of the application is the decedent's last will; 
    (iv) that the time limit for informal probate as provided 
in this article has not expired either because three years or 
less have passed since the decedent's death, or, if more than 
three years from death have passed, that circumstances as 
described by section 524.3-108 authorizing tardy probate have 
occurred. 
    (3) An application for informal appointment of a personal 
representative to administer an estate under a will shall 
describe the will by date of execution and state the time and 
place of probate or the pending application or petition for 
probate.  The application for appointment shall adopt the 
statements in the application or petition for probate and state 
the name, address and priority for appointment of the person 
whose appointment is sought. 
    (4) An application for informal appointment of an 
administrator in intestacy shall state in addition to the 
statements required by (1): 
    (i) that after the exercise of reasonable diligence, the 
applicant is unaware of any unrevoked testamentary instrument 
relating to property having a situs in this state under section 
524.1-301, or, a statement why any such instrument of which the 
applicant may be aware is not being probated; 
    (ii) the priority of the person whose appointment is sought 
and the names of any other persons having a prior or equal right 
to the appointment under section 524.3-203. 
    (5) An application for appointment of a personal 
representative to succeed a personal representative appointed 
under a different testacy status shall refer to the order in the 
most recent testacy proceeding, state the name and address of 
the person whose appointment is sought and of the person whose 
appointment will be terminated if the application is granted, 
and describe the priority of the applicant. 
    (6) An application for appointment of a personal 
representative to succeed a personal representative who has 
tendered a resignation as provided in section 524.3-610(c), or 
whose appointment has been terminated by death or removal, shall 
adopt the statements in the application or petition which led to 
the appointment of the person being succeeded except as 
specifically changed or corrected, state the name and address of 
the person who seeks appointment as successor, and describe the 
priority of the applicant. 
    Sec. 12.  [REPEALER.] 
    Minnesota Statutes 1988, sections 290.612; and 297A.431, 
are repealed. 
    Sec. 13.  [EFFECTIVE DATE.] 
    Sections 1 to 12 are effective the day following final 
enactment. 
    Presented to the governor April 24, 1990 
    Signed by the governor April 24, 1990, 9:15 p.m.