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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 54-S.F.No. 1060 
                  An act relating to employment; modifying provisions 
                  relating to reemployment insurance; amending Minnesota 
                  Statutes 1994, sections 268.04, subdivision 10; 
                  268.06, subdivisions 3a, 18, 19, 20, and 22; 268.08, 
                  subdivision 6, and by adding a subdivision; 268.10, 
                  subdivision 2; 268.12, subdivision 12; 268.16, 
                  subdivisions 3a, 6, and by adding a subdivision; 
                  268.161, subdivisions 8 and 9; 268.162, subdivision 2; 
                  268.163, subdivision 3; 268.164, subdivision 3; 
                  268.18, subdivisions 1, 2, 3, and 6; 270A.09, 
                  subdivision 1a; 352.01, subdivision 2b; 352.22, 
                  subdivision 10; and 574.26, subdivision 1; proposing 
                  coding for new law in Minnesota Statutes, chapter 268; 
                  repealing Minnesota Statutes 1994, sections 268.10, 
                  subdivisions 3, 4, 5, 6, 7, 8, 9, and 10; and 268.12, 
                  subdivisions 9, 10, and 13. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 1994, section 268.04, 
        subdivision 10, is amended to read: 
           Subd. 10.  [EMPLOYER.] "Employer" means:  (1) Any employing 
        unit which, for some portion of a day, in each of 20 different 
        weeks, whether or not such weeks are or were consecutive, and 
        whether or not all of such weeks of employment are or were 
        within the state within either the current or preceding calendar 
        year, has or had in employment one or more individuals 
        (irrespective of whether the same individual or individuals were 
        employed in each such day) or in any calendar quarter in either 
        the current or preceding calendar year paid $1,500 or more for 
        services in employment, after December 31, 1995, has one or more 
        individuals performing services in employment for which there 
        were wages paid, within either the current or preceding calendar 
        year, except as provided in clause (18) (17) of this 
        subdivision; 
           (2) Any employing unit (whether or not an employing unit at 
        the time of acquisition) which acquired the organization, trade, 
        or business, or substantially all of the assets thereof, of 
        another employing unit which at the time of such acquisition was 
        an employer subject to this law; or which acquired a part of the 
        organization, trade, or business of another employing unit which 
        at the time of such acquisition was an employer subject to this 
        law; 
           (3) For purposes of clause (1), employment shall include 
        service which would constitute employment but for the fact that 
        such service is deemed to be performed entirely within another 
        state pursuant to an election under an arrangement entered into 
        (in accordance with section 268.13, subdivision 1) by the 
        commissioner and an agency charged with the administration of 
        any other state or federal unemployment compensation law; 
           (4) For purposes of clause (1), if any week includes both 
        December 31 and January 1, the days of that week up to January 1 
        shall be deemed one calendar week and the days beginning January 
        1 another such week; 
           (5) Any employing unit which acquired the organization, 
        trade, or business, or substantially all the assets thereof, of 
        another employing unit, and which, if treated as a single unit 
        with such other employing unit, would be an employer under 
        clause (1); 
           (6) (5) Any employing unit which, together with one or more 
        other employing units, is owned or controlled (by legally 
        enforceable means or otherwise) directly or indirectly by the 
        same interests, or which owns or controls one or more other 
        employing units (by legally enforceable means or otherwise) and 
        which, if treated as a single unit with such other employing 
        units or interests or both, would be an employer under clause 
        (1), except as provided in clause (18) (17); 
           (7) (6) Any joint venture composed of one or more employers 
        as otherwise defined herein; 
           (8) (7) Any nonresident employing unit which employs within 
        this state one or more employees for one or more weeks; 
           (9) (8) Any employing unit for which service in employment, 
        as defined in subdivision 12, clause (9), is performed; 
           (10) (9) Any employing unit which, having become an 
        employer under the preceding clauses or 
        clause (14), (15), or (16) or (17), has not, under section 
        268.11, ceased to be an employer subject to these sections; 
           (11) (10) For the effective period of its election pursuant 
        to section 268.11, subdivision 3, any other employing unit which 
        has elected to become subject to sections 268.03 to 268.231; 
           (12) (11) Notwithstanding any inconsistent provisions of 
        sections 268.03 to 268.231, any employing unit not an employer 
        by reason of any other clause of this subdivision for which 
        service is performed with respect to which such employing unit 
        is liable for any federal tax against which credit may be taken 
        for contributions required to be paid into a state unemployment 
        compensation fund or which, as a condition for the approval of 
        this law for full tax credit against the tax imposed by the 
        federal unemployment tax act, is required pursuant to such act, 
        to be an "employer" under the law; 
           (13) (12) Except as provided in clause (12) (11), and 
        notwithstanding any other provisions of sections 268.03 to 
        268.231, no employing unit shall be initially determined a 
        subject employer on the basis of covered employment performed 
        more than four years prior to the year in which such 
        determination is made, unless the commissioner finds that the 
        records of such employment experience were fraudulently 
        concealed or withheld for the purpose of escaping liability 
        under said sections; 
           (14) (13) Any employing unit for which service in 
        employment, as defined in subdivision 12, clause (7), is 
        performed; 
           (15) (14) Any employing unit for which service in 
        employment as defined in subdivision 12, clause (8) is 
        performed; 
           (16) (15) Any employing unit for which agricultural labor 
        as defined in subdivision 12, clause (13) is performed; 
           (17) (16) Any employing unit for which domestic service in 
        employment as defined in subdivision 12, clause (14) is 
        performed; 
           (18) (17) (a) In determining whether or not an employing 
        unit for which domestic service and other than domestic service 
        is performed is an employer under clause (1) or (6) (5), the 
        wages earned or the employment of an employee performing 
        domestic service shall not be taken into account. 
           (b) In determining whether or not an employing unit for 
        which agricultural labor and other than agricultural labor is 
        performed is an employer under clause (1), (9) (8) or (17) (16), 
        the wages earned or the employment of an employee performing 
        service in agricultural labor after December 31, 1977 shall not 
        be taken into account.  If an employing unit is an employer of 
        agricultural labor the determination of whether it is an 
        "employer" shall be governed by clause (1). 
           Sec. 2.  [268.041] [DETERMINATIONS OF COVERAGE.] 
           An official, designated by the commissioner, upon the 
        commissioner's own motion or upon application of an employing 
        unit, shall determine if an employing unit is an employer within 
        the meaning of this chapter or as to whether services performed 
        for it constitute employment within the meaning of this chapter, 
        or whether the remuneration for services constitutes wages as 
        defined in section 268.04, subdivision 25, and shall notify the 
        employing unit of the determination.  The determination shall be 
        final unless the employing unit, within 30 days after the 
        mailing of notice of the determination to the employing unit's 
        last known address, files a written appeal from it.  Proceedings 
        on the appeal shall be conducted in accordance with section 
        268.105. 
           Sec. 3.  Minnesota Statutes 1994, section 268.06, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [RATE FOR NEW EMPLOYERS.] Notwithstanding the 
        provisions of subdivision 2, each employer, who becomes subject 
        to this law, shall pay contributions at a rate: 
           (a) Not exceeding 5-4/10 percent, that is the higher of (1) 
        one percent and (2) the state's five-year benefit cost rate for 
        the 60 consecutive month period immediately preceding July 1 of 
        each year for each employer, except employers in the 
        construction industry.  For purposes of this clause, the state's 
        five-year benefit cost rate shall be computed annually and shall 
        be derived by dividing the total dollar amount of benefits paid 
        to claimants under this law during the 60 consecutive calendar 
        months immediately preceding July 1 of each year by the total 
        dollar amount of wages subject to contributions under this law 
        during the same period.  The rate so determined shall be 
        applicable for the calendar year next succeeding each 
        computation date.  
           (b) Each employer in the construction industry who becomes 
        subject to this chapter shall pay contributions at a rate, not 
        exceeding the maximum contribution rate for all employers as 
        provided under subdivision 8, that is the higher of (1) one 
        percent, or (2) the state's five-year benefit cost rate for 
        construction employers for the 60 consecutive month period 
        immediately preceding July 1 of each year.  For purposes of this 
        clause, the state's five-year benefit cost rate shall be 
        computed annually and shall be derived by dividing the total 
        dollar amount of benefits paid to claimants of construction 
        employers during the 60 consecutive calendar months immediately 
        preceding July 1 of each year by the total dollar amount of 
        wages of construction employers subject to contributions during 
        the same period.  The rate so determined shall be applicable for 
        the calendar year next succeeding each computation date.  
           For purposes of this subdivision an employer is in the 
        construction industry if assigned an industrial classification 
        within division C of the Standard Industrial Classification 
        Manual issued by the United States Office of Management and 
        Budget as determined by the tax branch of the department, except 
        as excluded by rules adopted by the commissioner. 
           Sec. 4.  Minnesota Statutes 1994, section 268.06, 
        subdivision 18, is amended to read: 
           Subd. 18.  [NOTICE TO EMPLOYER.] The commissioner shall 
        mail to the last known address of each employer a quarterly 
        notice of the benefits which have been charged to the employer's 
        account, as determined by the department.  Unless reviewed in 
        the manner hereinafter provided, charges set forth in such 
        notice, or as modified by a redetermination, a decision of a 
        referee reemployment insurance judge, or the commissioner, shall 
        be final and shall be used in determining the contribution rates 
        for all years in which the charges occur within the employer's 
        experience period and shall not be subject to collateral attack 
        by way of review of a rate determination, application for 
        adjustment or refund, or otherwise. 
           Sec. 5.  Minnesota Statutes 1994, section 268.06, 
        subdivision 19, is amended to read: 
           Subd. 19.  [NOTICE OF RATE.] The commissioner shall mail to 
        the last known address of each employer notice of the employer's 
        contribution rate as determined for any calendar year pursuant 
        to this section.  Such notice shall contain the contribution 
        rate, factors used in determining the individual employer's 
        experience rating, and such other information as the 
        commissioner may prescribe.  Unless changed by the procedure 
        provided in this subdivision, the assigned rate as initially 
        determined or as changed by a redetermination by the tax branch 
        of this department, a decision of a referee reemployment 
        insurance judge, or the commissioner shall be final except for 
        fraud and shall be the rate upon which contributions shall be 
        computed for the calendar year for which such rate was assigned, 
        and shall not be subject to collateral attack for any errors, 
        clerical or otherwise, whether by way of claim for adjustment or 
        refund, or otherwise.  If the legislature changes any of the 
        factors used to determine the contribution rate of any employer 
        for any year subsequent to the original mailing of such notice 
        for the year, the earlier notice shall be void.  The notice 
        based on the new factors shall be deemed to be the only notice 
        of rate of contributions for that year and shall be subject to 
        the same finality, redetermination, and review procedures as 
        provided above.  
           Sec. 6.  Minnesota Statutes 1994, section 268.06, 
        subdivision 20, is amended to read: 
           Subd. 20.  [PROTEST, REVIEW, REDETERMINATION, APPEAL.] A 
        review of the charges made to an employer's account as set forth 
        in the notice of charges referred to in subdivision 18 and a 
        review of an employer's contribution rate as set forth in the 
        notice of the employer's rate for any calendar year as provided 
        in subdivision 19, may be had by the employer by filing with the 
        commissioner a written protest setting forth reasons therefor 
        within 30 days from the date of the mailing of the notice of 
        charges or contribution rate to the employer.  The date shall 
        appear on the notice.  Upon receipt of the protest, the 
        commissioner shall refer the matter to an official designated by 
        the commissioner to review the charges appearing on the notice 
        appealed from or the computations of the protesting employer's 
        rate, as the case may be, to determine whether or not there has 
        been any clerical error or error in computation in either case.  
        The official shall either affirm or make a redetermination 
        rectifying the charges or rate as the case may be, and a notice 
        of the affirmation or redetermination shall immediately be 
        mailed to the employer.  If the employer is not satisfied with 
        the affirmation or redetermination, the employer may appeal by 
        filing a written notice with the department within ten days 
        after the date of mailing appearing upon the 
        redetermination.  Upon the receipt of the appeal, the 
        commissioner shall refer the matter to a referee for a hearing 
        and after opportunity for a fair hearing, the referee shall 
        affirm, modify, or set aside the original determination with its 
        affirmation or the redetermination, as appears just and proper.  
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105.  The commissioner may at any time upon the 
        commissioner's own motion correct any clerical error of the 
        department resulting in charges against an employer's account or 
        any error in the computation or the assignment of an employer's 
        contribution rate.  The referee may order the consolidation of 
        two or more appeals whenever, in the referee's judgment, 
        consolidation will not be prejudicial to any interested party.  
        At any hearing a written report of any employee of the 
        department which has been authenticated shall be admissible in 
        evidence.  Appeals from the decision of the referee shall be 
        provided by section 268.10, subdivision 5.  
           Sec. 7.  Minnesota Statutes 1994, section 268.06, 
        subdivision 22, is amended to read: 
           Subd. 22.  [EMPLOYMENT EXPERIENCE RECORD TRANSFER.] (a) 
        When an employing unit succeeds to or acquires the organization, 
        trade or business or substantially all the assets of another 
        employing unit which at the time of the acquisition was an 
        employer subject to this law, and continues such organization, 
        trade or business, the experience rating record of the 
        predecessor employer shall be transferred as of the date of 
        acquisition to the successor employer for the purpose of rate 
        determination. 
           (b) When an employing unit succeeds to or acquires a 
        distinct severable portion of the organization, trade, business, 
        or assets which is less than substantially all of the employing 
        enterprises of another employing unit, the successor employing 
        unit shall acquire the experience rating record attributable to 
        the portion to which it has succeeded, and the predecessor 
        employing unit shall retain the experience rating record 
        attributable to the portion which it has retained, if (1) the 
        successor continues the organization, trade, or business of the 
        portion acquired, (2) the successor makes a written request to 
        file an application for the transfer of the experience rating 
        record for the severable portion acquired from the predecessor 
        (3) and within 90 days from the date the application is mailed 
        to the last known address of the successor the successor and 
        predecessor employing units jointly sign and file a properly 
        completed, written application as prescribed by the commissioner 
        that furnishes the commissioner with sufficient information to 
        substantiate the severable portion and to assign the appropriate 
        total and taxable wages and benefit charges to the successor for 
        experience rating purposes.  Previously assigned contribution 
        rates that have become final in accordance with subdivision 19 
        prior to the filing of the written request to file an 
        application shall not be affected by the transfer. 
           (c) Employment with a predecessor employer shall not be 
        deemed to have been terminated if similar employment is offered 
        by the successor employer and accepted by the employee. 
           (d) An official, designated by the commissioner, upon the 
        official's own motion or upon application of an employing unit 
        shall determine if an employing unit is a successor within the 
        meaning of this subdivision and shall mail notice of such 
        determination to the last known address of the employing unit.  
        The determination shall be final unless a written appeal is 
        filed by the employing unit within 30 days after mailing of the 
        notice of determination.  Proceedings on the appeal shall 
        be conducted in accordance with section 268.12, subdivision 13 
        268.105.  
           (e) Notwithstanding subdivision 19, the commissioner may, 
        as the result of any determination or decision regarding 
        succession or nonsuccession, recompute the rate of all employers 
        affected by the determination or decision for any year, 
        including the year of the acquisition or succession and 
        subsequent years, that is affected by the transfer or 
        nontransfer of part or all of the experience rating record under 
        this subdivision.  This paragraph does not apply to rates that 
        have become final in accordance with subdivision 19 prior to the 
        filing of a written request to file an application for the 
        transfer of a severable portion of the experience rating record 
        as provided in paragraph (b). 
           Sec. 8.  Minnesota Statutes 1994, section 268.08, is 
        amended by adding a subdivision to read: 
           Subd. 5a.  [SELF-EMPLOYMENT.] (a) An individual who is 
        determined to be likely to exhaust regular reemployment 
        insurance benefits and is enrolled in a dislocated worker 
        program shall be considered in approved training for purposes of 
        this chapter for each week the individual is engaged on a 
        full-time basis in activities, including training, relating to 
        the establishment of a business and becoming self-employed.  An 
        individual who meets the requirements of this subdivision shall 
        be considered unemployed for purposes of this chapter.  Income 
        earned from the self-employment activity shall not be considered 
        for purposes of section 268.07, subdivision 2, paragraph (g).  
        Under no circumstances shall more than five percent of the 
        number of individuals receiving regular reemployment insurance 
        benefits be actively enrolled in this program at any time.  This 
        subdivision shall not apply to persons claiming state or federal 
        extended or additional benefits. 
           (b) This subdivision shall apply to weeks beginning after 
        the date of enactment or weeks beginning after approval of this 
        subdivision by the United States Department of Labor whichever 
        date is later.  This subdivision shall have no force or effect 
        for any purpose as of the end of the week preceding the date 
        when federal law no longer authorizes the provisions of this 
        subdivision, unless such date is a Saturday in which case this 
        subdivision shall have no force and effect for any purpose as of 
        that date. 
           Sec. 9.  Minnesota Statutes 1994, section 268.08, 
        subdivision 6, is amended to read: 
           Subd. 6.  [SERVICES PERFORMED FOR STATE, MUNICIPALITIES, OR 
        CHARITABLE CORPORATION.] Benefits based on service in employment 
        defined in section 268.04, subdivision 12, clauses (7), (8) and 
        (9), are payable in the same amount, on the same terms and 
        subject to the same conditions as benefits payable on the basis 
        of other service subject to this chapter; except that: 
           (a) Benefits based upon service performed in an 
        instructional, research, or principal administrative capacity 
        for an educational institution, or any other educational service 
        agency as defined in section 3304(a)(6)(A)(IV) of the Federal 
        Unemployment Tax Act, shall not be paid for any week of 
        unemployment commencing during the period between two successive 
        academic years or terms, or during a similar period between two 
        regular but not successive terms, or during a period of paid 
        sabbatical leave provided for in the individual's contract, to 
        any individual if the individual performs the services in the 
        first of the academic years or terms and if there is a contract 
        or a reasonable assurance that the individual will perform 
        services in any such capacity for an educational institution in 
        the second of the academic years or terms; 
           (b) With respect to service performed in any capacity other 
        than those capacities described in clause (a) of this 
        subdivision, including instructional assistants, for an 
        educational institution, benefits shall not be paid on the basis 
        of these services to any individual for any week which commences 
        during a period between two successive academic years or terms 
        if the individual performs the services in the first of the 
        academic years or terms and there is a reasonable assurance that 
        the individual will perform the services in the second of the 
        academic years or terms.  An individual who has an agreement for 
        a definite period of employment between academic years or terms 
        shall be eligible for any weeks within that period the 
        educational institution fails to provide employment.  If 
        benefits are denied to any individual under this clause and the 
        individual was not offered an opportunity to perform the 
        services in the second of the academic years or term, the 
        individual shall be entitled to a retroactive payment of 
        benefits for each week in which the individual filed a timely 
        claim for benefits, but the claim was denied solely because of 
        this clause; 
           (c) With respect to services described in clause (a) or 
        (b), benefits payable on the basis of the services shall not be 
        paid to any individual for any week which commences during an 
        established and customary vacation period or holiday recess if 
        the individual performs the services in the period immediately 
        before the vacation period or holiday recess, and there is a 
        reasonable assurance that the individual will perform the 
        services in the period immediately following the vacation period 
        or holiday recess; 
           (d) With respect to services described in clause (a) or 
        (b), benefits shall not be payable on the basis of services in 
        any capacity specified in clauses (a), (b), and (c) to any 
        individual who performed those services in an educational 
        institution while in the employ of an educational service 
        agency.  For purposes of this clause, "educational service 
        agency" means a governmental agency or governmental entity which 
        is established and operated exclusively for the purpose of 
        providing services to one or more educational institutions; and 
           (e) With respect to services to state and local government, 
        or nonprofit organizations covered by section 501(c)(3) of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1992, if services are provided to or on behalf of an educational 
        institution, benefits must be denied under the same 
        circumstances as described in clauses (a) to (d). 
           Sec. 10.  Minnesota Statutes 1994, section 268.10, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXAMINATION OF CLAIMS; DETERMINATION; APPEAL.] 
        (1) An official, designated by the commissioner, shall promptly 
        examine each claim for benefits filed to establish a benefit 
        year pursuant to this section, and, on the basis of the facts 
        found, shall determine whether or not such claims are valid, and 
        if valid, the weekly benefit amount payable, the maximum benefit 
        amount payable during the benefit year, and the date the benefit 
        year terminates, and this determination shall be known as the 
        determination of validity.  Notice of the determination of 
        validity or any redetermination as provided for in clause (4) 
        shall be promptly given the claimant and all other interested 
        parties.  If within the time specified for the filing of a 
        protest as provided in subdivision 1, the employer makes an 
        allegation of disqualification or raises an issue of the 
        chargeability to the employer's account of benefits that may be 
        paid on such claim, if the claim is valid, the issue thereby 
        raised shall be promptly determined by said official and a 
        notification of the determination delivered or mailed to the 
        claimant and the employer.  If an initial determination or a 
        referee's reemployment insurance judge's decision or the 
        commissioner's decision awards benefits, the benefits shall be 
        paid promptly regardless of the pendency of any appeal period or 
        any appeal or other proceeding which may thereafter be taken.  
        Except as provided in clause (6), if a referee's reemployment 
        insurance judge's decision modifies or reverses an initial 
        determination awarding benefits, or if a commissioner's decision 
        modifies or reverses an appeal a reemployment insurance judge's 
        decision awarding benefits, any benefits paid under the award of 
        such initial determination or referee's reemployment insurance 
        judge's decision shall be deemed erroneous payments. 
           (2) At any time within 24 months from the date of the 
        filing of a valid claim for benefits by an individual, an 
        official of the department or any interested party or parties 
        raises an issue of claimant's eligibility for benefits for any 
        week or weeks in accordance with the requirements of the 
        provisions of sections 268.03 to 268.231 or any official of the 
        department or any interested party or parties or benefit year 
        employer raises an issue of disqualification in accordance with 
        the rules of the commissioner, a determination shall be made 
        thereon and a written notice thereof shall be given to the 
        claimant and such other interested party or parties or benefit 
        year employer.  A determination issued under this clause which 
        denies benefits for weeks for which the claimant has previously 
        been paid benefits is an overpayment of those benefits subject 
        to section 268.18.  
           (3) A determination issued pursuant to clauses (1) and (2) 
        shall be final unless an a written appeal therefrom is filed by 
        a claimant or employer within 15 days after the mailing of the 
        notice of the determination to the last known address or 
        personal delivery of the notice.  Every notice of determination 
        shall contain a prominent statement indicating in clear language 
        the method of appealing the determination, the time within which 
        such an appeal must be made, and the consequences of not 
        appealing the determination.  A timely An interested party may 
        appeal from a determination of validity in which issued pursuant 
        to clause (1) on the issue is of whether an employing unit is an 
        employer within the meaning of this chapter or whether services 
        performed for an employer constitute employment within the 
        meaning of this chapter shall be subject to the provisions of 
        section 268.12, subdivision 13.  Proceedings on the appeal shall 
        be conducted in accordance with section 268.105. 
           (4) At any time within 24 months from the date of the 
        filing of a valid claim for benefits by an individual, the 
        commissioner on the commissioner's own motion may reconsider a 
        determination of validity made thereon and make a 
        redetermination thereof on finding that an error in computation 
        or identity or the crediting of wage credits has occurred in 
        connection therewith or if the determination was made as a 
        result of a nondisclosure or misrepresentation of a material 
        fact.  A determination or redetermination issued under this 
        clause which denies benefits for weeks for which the claimant 
        has previously been paid benefits is an overpayment of those 
        benefits subject to section 268.18.  
           (5) However, the commissioner may refer any disputed claims 
        directly to a referee reemployment insurance judge for hearing 
        and determination decision in accordance with the procedure 
        outlined in subdivision 3 section 268.105 and the effect and 
        status of such determination decision in such a case shall be 
        the same as though the matter had been determined upon an appeal 
        to the tribunal from an initial determination. 
           (6) If a referee's reemployment insurance judge's decision 
        affirms an initial determination awarding benefits or the 
        commissioner affirms a referee's reemployment insurance judges's 
        decision awarding benefits, the decision, if finally reversed, 
        shall result in a disqualification only for weeks following the 
        week in which the decision reversing the award of benefits was 
        issued and benefits paid for that week and previous weeks shall 
        neither be deemed overpaid nor shall they be considered in 
        determining any individual employer's future contribution rate 
        under section 268.06. 
           Sec. 11.  [268.105] [APPEAL; HEARING.] 
           Subdivision 1.  [HEARING.] Upon appeal the department shall 
        set a time and place for a de novo hearing and give the 
        interested parties written notice of it, by mail, not less than 
        ten days prior to the time of the hearing.  The commissioner 
        shall by rule adopt a procedure by which reemployment insurance 
        judges hear and decide appeals, subject to further appeal to the 
        commissioner.  The rules need not conform to common law or 
        statutory rules of evidence and other technical rules of 
        procedure.  The written report of any employee of the department 
        of economic security, except a determination, made in the 
        regular course of the performance of the employee's duties, 
        shall be competent evidence of the facts contained in it.  After 
        the conclusion of the hearing, upon the evidence presented, the 
        reemployment insurance judge shall mail findings of fact and 
        decision to all interested parties.  The reemployment insurance 
        judge's decision is final unless a further appeal is filed 
        pursuant to subdivision 3. 
           Subd. 2.  [REEMPLOYMENT INSURANCE JUDGES.] The commissioner 
        shall designate one or more impartial reemployment insurance 
        judges to conduct hearings on appeals.  The commissioner or 
        authorized representative may personally hear or transfer to 
        another reemployment insurance judge any proceedings pending 
        before a reemployment insurance judge.  Any proceedings removed 
        to the commissioner or authorized representative shall be heard 
        in accordance with subdivision 1. 
           Subd. 3.  [COMMISSIONER REVIEW.] Within 30 days after 
        mailing of the reemployment insurance judge's decision, an 
        interested party may appeal in writing and obtain a review by 
        the commissioner or an authorized representative.  The 
        commissioner within the same period of time may on the 
        commissioner's own motion order a review of a decision.  Upon 
        review, the commissioner or authorized representative shall, on 
        the basis of the evidence submitted at the hearing before the 
        reemployment insurance judge, make findings of fact and 
        decision, or remand the matter back to the reemployment 
        insurance judge for the taking of additional evidence and new 
        findings and decision based on all the evidence.  The 
        commissioner may disregard the findings of fact of the 
        reemployment insurance judge and examine the evidence and make 
        any findings of fact as the evidence may, in the judgment of the 
        commissioner require, and make any decision as the facts found 
        by the commissioner require.  The commissioner shall mail to all 
        interested parties the findings of fact and decision.  The 
        decision of the commissioner is final unless judicial review is 
        sought as provided by subdivision 7. 
           Subd. 4.  [TESTIMONIAL POWERS.] In the discharge of the 
        duties imposed by this section, the reemployment insurance 
        judge, the commissioner, or authorized representative, may 
        administer oaths and affirmations, take depositions, certify to 
        official acts, and issue subpoenas to compel the attendance of 
        witnesses and the production of books, papers, correspondence, 
        memoranda, and other records deemed necessary as evidence in 
        connection with the subject matter of the hearing.  The 
        subpoenas shall be enforceable through the district court in the 
        district in which the subpoena is issued.  Witnesses, other than 
        an interested party or officers and employees of an interested 
        party, subpoenaed pursuant to this section shall be allowed fees 
        the same as witness fees in a civil action in district court.  
        These fees shall be deemed a part of the expense of 
        administering sections 268.03 to 268.231. 
           Subd. 5.  [USE OF INFORMATION.] All testimony at any 
        hearing conducted pursuant to subdivision 1 shall be recorded, 
        but shall be transcribed only if the disputed claim is appealed 
        further and is requested by a party, or as directed by the 
        commissioner or an authorized representative.  Testimony 
        obtained under subdivision 1, may not be used or considered in 
        any civil, administrative, or contractual proceeding, except by 
        a local, state, or federal human rights group with enforcement 
        powers, unless the proceeding is initiated by the department.  
        No findings of fact or decision issued by a reemployment 
        insurance judge or the commissioner or authorized representative 
        may be held conclusive or binding or used as evidence in any 
        separate or subsequent action in any other forum, except 
        proceedings provided for under chapter 268, regardless of 
        whether the action involves the same or related parties or 
        involves the same facts. 
           Subd. 6.  [REPRESENTATION; FEES.] In any proceeding under 
        these sections, a party may be represented by any agent.  Except 
        for services provided by an attorney-at-law, a claimant for 
        benefits shall not be charged fees of any kind in a proceeding 
        before a reemployment insurance judge, the commissioner or 
        authorized representative, or by any court or any of its 
        officers. 
           Subd. 7.  [COURT OF APPEALS; ATTORNEY FOR 
        COMMISSIONER.] The court of appeals may, by writ of certiorari 
        to the commissioner, review any decision of the commissioner 
        provided a petition for the writ is filed and served upon the 
        commissioner and the adverse party within 30 days of the mailing 
        of the commissioner's decision.  Any interested party, except a 
        claimant for benefits, upon the service of the writ shall 
        furnish a cost bond to the commissioner in accordance with rule 
        107 of the rules of civil appellate procedure.  The commissioner 
        shall be deemed to be a party to any judicial action involving 
        any decision and shall be represented by any qualified attorney 
        who is a regular salaried employee of the department of economic 
        security and has been designated by the commissioner for that 
        purpose or, at the commissioner's request, by the attorney 
        general. 
           Sec. 12.  Minnesota Statutes 1994, section 268.12, 
        subdivision 12, is amended to read: 
           Subd. 12.  [INFORMATION.] Except as hereinafter otherwise 
        provided, data gathered from any employing unit or individual 
        pursuant to the administration of sections 268.03 to 268.231, 
        and from any determination as to the benefit rights of any 
        individual are private data on individuals or nonpublic data not 
        on individuals as defined in section 13.02, subdivisions 9 and 
        12, and may not be disclosed except pursuant to this subdivision 
        or a court order.  These data may be disseminated to and used by 
        the following agencies without the consent of the subject of the 
        data:  
           (a) state and federal agencies specifically authorized 
        access to the data by state or federal law; 
           (b) any agency of this or any other state; or any federal 
        agency charged with the administration of an employment security 
        law or the maintenance of a system of public employment offices; 
           (c) local human rights groups within the state which have 
        enforcement powers; 
           (d) the department of revenue shall have access to 
        department of economic security private data on individuals and 
        nonpublic data not on individuals only to the extent necessary 
        for enforcement of Minnesota tax laws; 
           (e) public and private agencies responsible for 
        administering publicly financed assistance programs for the 
        purpose of monitoring the eligibility of the program's 
        recipients; 
           (f) the department of labor and industry on an 
        interchangeable basis with the department of economic security 
        subject to the following limitations and notwithstanding any law 
        to the contrary:  
           (1) the department of economic security shall have access 
        to private data on individuals and nonpublic data not on 
        individuals for uses consistent with the administration of its 
        duties under sections 268.03 to 268.231; and 
           (2) the department of labor and industry shall have access 
        to private data on individuals and nonpublic data not on 
        individuals for uses consistent with the administration of its 
        duties under state law; 
           (g) the department of trade and economic development may 
        have access to private data on individual employing units and 
        nonpublic data not on individual employing units for its 
        internal use only; when received by the department of trade and 
        economic development, the data remain private data on 
        individuals or nonpublic data; 
           (h) local and state welfare agencies for monitoring the 
        eligibility of the data subject for assistance programs, or for 
        any employment or training program administered by those 
        agencies, whether alone, in combination with another welfare 
        agency, or in conjunction with the department of economic 
        security; 
           (i) local, state, and federal law enforcement agencies for 
        the sole purpose of ascertaining the last known address and 
        employment location of the data subject, provided the data 
        subject is the subject of a criminal investigation; and 
           (j) the department of health may have access to private 
        data on individuals and nonpublic data not on individuals solely 
        for the purposes of epidemiologic investigations.  
           Data on individuals and employing units which are 
        collected, maintained, or used by the department in an 
        investigation pursuant to section 268.18, subdivision 3, are 
        confidential as to data on individuals and protected nonpublic 
        data not on individuals as defined in section 13.02, 
        subdivisions 3 and 13, and shall not be disclosed except 
        pursuant to statute or court order or to a party named in a 
        criminal proceeding, administrative or judicial, for preparation 
        of a defense.  
           Tape recordings and transcripts of recordings of 
        proceedings before a referee of the department conducted in 
        accordance with section 268.105 and exhibits offered by parties 
        other than the department and received into evidence at those 
        proceedings are private data on individuals and nonpublic data 
        not on individuals and shall be disclosed only pursuant to the 
        administration of section 268.10, subdivisions 3 to 8 268.105, 
        or pursuant to a court order.  
           Aggregate data about employers compiled from individual job 
        orders placed with the department of economic security are 
        private data on individuals and nonpublic data not on 
        individuals as defined in section 13.02, subdivisions 9 and 12, 
        if the commissioner determines that divulging the data would 
        result in disclosure of the identity of the employer.  The 
        general aptitude test battery and the nonverbal aptitude test 
        battery as administered by the department are also classified as 
        private data on individuals or nonpublic data.  
           Data on individuals collected, maintained, or created 
        because an individual applies for benefits or services provided 
        by the energy assistance and weatherization programs 
        administered by the department of economic security is private 
        data on individuals and shall not be disseminated except 
        pursuant to section 13.05, subdivisions 3 and 4.  
           Data gathered by the department pursuant to the 
        administration of sections 268.03 to 268.231 shall not be made 
        the subject or the basis for any suit in any civil proceedings, 
        administrative or judicial, unless the action is initiated by 
        the department.  
           Testimony obtained under subdivision 13 and section 268.10, 
        subdivision 3, may not be used or considered in any civil, 
        administrative, or contractual proceeding, except by a local, 
        state, or federal human rights group with enforcement powers, 
        unless the proceeding is initiated by the department. 
           Sec. 13.  Minnesota Statutes 1994, section 268.16, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [COSTS.] Any employing unit which fails to make 
        and submit reports or pay any contributions or reimbursement 
        when due is liable to the department for any recording fees, 
        sheriff fees, costs incurred by referral to any public or 
        private agency outside the department, or litigation costs 
        incurred in the collection of the amounts due or obtaining the 
        reports.  
           If any check or money order, in payment of any amount due 
        under this chapter, is not honored when presented for payment, 
        the employing unit will be assessed a fee of $20 which is in 
        addition to any other fees provided by this chapter.  The fee 
        shall be assessed regardless of the amount of the check or money 
        order or the reason for nonpayment with the exception of 
        processing errors made by a financial institution. 
           Costs due under this subdivision shall be paid to the 
        department and credited to the administration fund. 
           Sec. 14.  Minnesota Statutes 1994, section 268.16, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ADJUSTMENTS, REFUNDS.] If an employer makes an 
        application for an adjustment of any amount paid as 
        contributions or interest thereon, to be applied against 
        subsequent contribution payments, or for a refund thereof 
        because such adjustment cannot be made, and the payment was made 
        within four years prior to the year in which the application is 
        made, and if the commissioner shall determine that payment of 
        such contributions or interest or any portion thereof was 
        erroneous, the commissioner shall allow such employer to make an 
        adjustment thereof, without interest, in connection with 
        subsequent contribution payments by the employer, or if such 
        adjustment cannot be made, the commissioner shall refund from 
        the fund to which such payment has been credited, without 
        interest, the amount erroneously paid.  For like cause and 
        within the same period, adjustment or refund may be so made on 
        the commissioner's own initiative. 
           In the event that any application for adjustment or refund 
        is denied in whole or in part, a written notice of such denial 
        shall be mailed to the applicant.  Within 30 days after the 
        mailing of such notice of denial to the applicant's last known 
        address, the applicant may request, in writing, that the 
        commissioner grant a hearing for the purpose of reconsidering 
        the facts submitted and to consider any additional information.  
        Proceedings on the appeal shall be had conducted in accordance 
        with section 268.12, subdivision 13 268.105. 
           Sec. 15.  Minnesota Statutes 1994, section 268.16, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [PRIOR DECISIONS.] In the event a final decision 
        on an appeal under section 268.105 determines the amount of 
        contributions due under sections 268.03 to 268.231, then, if the 
        amount, together with interest and penalties, is not paid within 
        30 days after the decision, the provisions of section 268.161 
        apply.  The commissioner shall proceed thereunder, substituting 
        a certified copy of the final decision in place of the 
        contribution report.  A final decision on an appeal under 
        section 268.105 is conclusive for all the purposes of sections 
        268.03 to 268.231 except as otherwise provided, and, together 
        with the records therein made, shall be admissible in any 
        subsequent judicial proceeding involving liability for 
        contributions. 
           Sec. 16.  Minnesota Statutes 1994, section 268.161, 
        subdivision 8, is amended to read: 
           Subd. 8.  [LEVY.] (a) If any contribution or reimbursement 
        payable to the department is not paid when due, the amount may 
        be collected by the commissioner, a duly authorized 
        representative, or by the sheriff of any county to whom the 
        commissioner has issued a warrant, who may levy upon all 
        property and rights of property of the person liable for the 
        contribution or reimbursement, (except that which is exempt from 
        execution pursuant to section 550.37), or property on which 
        there is a lien provided by subdivision 1.  The terms 
        "contribution or reimbursement" shall include any penalty, 
        interest, and costs.  The term "levy" includes the power of 
        distraint and seizure by any means.  Before a levy is made or 
        warrant issued, notice and demand for payment of the amount due 
        shall be given to the person liable for the contribution or 
        reimbursement at least ten days prior to the levy or issuing of 
        a warrant.  
           (b) Upon the commissioner issuing a warrant, the sheriff 
        shall proceed within 60 days to levy upon the rights to property 
        of the employer within the employer's county, except the 
        homestead and household goods of the employer and property of 
        the employer not liable to attachment, garnishment, or sale on 
        any final process issued from any court under the provisions of 
        section 550.37, and shall sell so much thereof as is required to 
        satisfy the contribution, reimbursement, interest, and 
        penalties, together with the commissioner's costs.  The sales 
        shall, as to their manner, be governed by the law applicable to 
        sales of like property on execution issued against property upon 
        a judgment of a court of record.  The proceeds of the sales, 
        less the sheriff's costs, shall be turned over to the 
        commissioner, who shall retain a part thereof as is required to 
        satisfy the contribution, reimbursement, interest, penalties, 
        and costs, and pay over any balance to the employer.  
           (c) If the commissioner has reason to believe that 
        collection of the contribution or reimbursement is in jeopardy, 
        notice and demand for immediate payment of the amount may be 
        made by the commissioner.  If the contribution or reimbursement 
        is not paid, the commissioner may proceed to collect by levy or 
        issue a warrant without regard to the ten-day period provided 
        herein.  
           (d) In making the execution of the levy and in collecting 
        the contribution or reimbursement due, the commissioner shall 
        have all of the powers provided in chapter 550 and in any other 
        law for purposes of effecting an execution against property in 
        this state.  The sale of property levied upon and the time and 
        manner of redemption therefrom shall be as provided in chapter 
        550.  The seal of the court, subscribed by the court 
        administrator, as provided in section 550.04, shall not be 
        required.  The levy for collection of contributions or 
        reimbursements may be made whether or not the commissioner has 
        commenced a legal action for collection of the amount. 
           (e) Where a jeopardy assessment or any other assessment has 
        been made by the commissioner, the property seized for 
        collection of the contribution or reimbursement shall not be 
        sold until any determination of liability, rate, or benefit 
        charges has become final.  No sale shall be made unless the 
        contribution or reimbursement remain unpaid for a period of more 
        than 30 days after the determination becomes final.  Seized 
        property may be sold at any time if:  
           (1) the employer consents in writing to the sale; or 
           (2) the commissioner determines that the property is 
        perishable or may become greatly reduced in price or value by 
        keeping, or that the property cannot be kept without great 
        expense.  
           (f) Where a levy has been made to collect contributions or 
        reimbursements pursuant to this subdivision and the property 
        seized is properly included in a formal proceeding commenced 
        under sections 524.3-401 to 524.3-505 and maintained under full 
        supervision of the court, the property shall not be sold until 
        the probate proceedings are completed or until the court so 
        orders.  
           (g) The property seized shall be returned by the 
        commissioner if the owner gives a surety bond equal to the 
        appraised value of the owner's interest in the property, as 
        determined by the commissioner, or deposits with the 
        commissioner security in a form and amount as the commissioner 
        deems necessary to insure payment of the liability, but not more 
        than twice the liability. 
           (h) Notwithstanding any other law to the contrary, if a 
        levy or sale pursuant to this section would irreparably injure 
        rights in property which the court determines to be superior to 
        rights of the state in the property, the district court may 
        grant an injunction to prohibit the enforcement of the levy or 
        to prohibit the sale. 
           (i) Any person who fails or refuses to surrender without 
        reasonable cause any property or rights to property subject to 
        levy upon demand by the commissioner shall be personally liable 
        to the department in an amount equal to the value of the 
        property or rights not so surrendered, but not exceeding the 
        amount of contribution or reimbursement for the collection of 
        which the levy has been made.  Any amount recovered under this 
        subdivision shall be credited against the contribution or 
        reimbursement liability for the collection of which the levy was 
        made.  The term "person" includes an officer or employee of a 
        corporation or a member or employee of a partnership who, as an 
        officer, employee, or member is under a duty to surrender the 
        property or rights to property or to discharge the obligation.  
           (j) Any action taken by the commissioner pursuant to this 
        subdivision shall not constitute an election by the department 
        to pursue a remedy to the exclusion of any other remedy.  
           (k) After the commissioner has seized the property of any 
        person, that person may, upon giving 48 hours notice to the 
        commissioner and to the court, bring a claim for equitable 
        relief before the district court for the release of the property 
        to the employer upon terms and conditions as the court may deem 
        equitable. 
           (l) Any person in possession of (or obligated with respect 
        to) property or rights to property subject to levy upon which a 
        levy has been made who, upon demand by the commissioner, 
        surrenders the property or rights to property or who pays a 
        liability under this subdivision shall be discharged from any 
        obligation or liability to the person liable for the payment of 
        the delinquent contribution or reimbursement with respect to the 
        property or rights to property so surrendered or paid.  
           (m) Notwithstanding any other provisions of law to the 
        contrary, the notice of any levy authorized by this section may 
        be served by certified or registered mail or by delivery by an 
        employee or agent of the department of economic security. 
           (n) It shall be lawful for the commissioner to release the 
        levy upon all or part of the property or rights to property 
        levied upon if the commissioner determines that the release will 
        facilitate the collection of the liability, but the release 
        shall not operate to prevent any subsequent levy.  If the 
        commissioner determines that property has been wrongfully levied 
        upon, it shall be lawful for the commissioner to return:  
           (1) the specific property levied upon, at any time; or 
           (2) an amount of money equal to the amount of money levied 
        upon, at any time before the expiration of nine months from the 
        date of levy. 
           (o) Notwithstanding section 52.12, a levy by the 
        commissioner made pursuant to the provisions of this section 
        upon an employer's funds on deposit in a financial institution 
        located in this state, shall have priority over any unexercised 
        right of setoff of the financial institution to apply the levied 
        funds toward the balance of an outstanding loan or loans owed by 
        the employer to the financial institution.  A claim by the 
        financial institution that it exercised its right to setoff 
        prior to the levy by the commissioner must be substantiated by 
        evidence of the date of the setoff, and shall be verified by the 
        sworn statement of a responsible corporate officer of the 
        financial institution.  Furthermore, for purposes of determining 
        the priority of any levy made under this section, the levy shall 
        be treated as if it were an execution made pursuant to chapter 
        550.  
           Sec. 17.  Minnesota Statutes 1994, section 268.161, 
        subdivision 9, is amended to read: 
           Subd. 9.  [PERSONAL LIABILITY.] Any officer, director, or 
        employee of a corporation or any manager, governor, member, or 
        employee of a limited liability company which is an employer 
        under sections 268.03 to 268.231, who 
           (1) either individually or jointly with others, have or 
        should have had control of, supervision over, or responsibility 
        for the filing of the tax reports or the making of payments 
        under this chapter, and 
           (2) willfully fails to file the reports or to make payments 
        as required, shall be personally liable for contributions or 
        reimbursement, including interest, penalties, and costs in the 
        event the corporation does not pay to the department those 
        amounts for which the employer is liable. 
           For purposes of this subdivision, "willfulness" means that 
        the facts demonstrate that the responsible party used or allowed 
        the use of corporate or company assets to pay other creditors 
        knowing that the payments required under this chapter were 
        unpaid.  An evil motive or intent to defraud is not necessary to 
        satisfy the willfulness requirement.  Any personal 
        representative of the estate of a decedent or fiduciary who 
        voluntarily distributes the assets filed therein without 
        reserving a sufficient amount to pay the contributions, 
        interest, and penalties due pursuant to this chapter shall be 
        personally liable for the deficiency. 
           The personal liability of any person as provided herein 
        shall survive dissolution, reorganization, receivership, or 
        assignment for the benefit of creditors.  For the purposes of 
        this subdivision, all wages paid by the corporation shall be 
        considered earned from the person determined to be personally 
        liable. 
           An official designated by the commissioner shall make an 
        initial determination as to the personal liability under this 
        section.  The determination shall be final unless the person 
        found to be personally liable shall within 30 days after mailing 
        of notice of determination to the person's last known address 
        file a written appeal protest.  Upon receipt of the protest, the 
        official shall reexamine the personal liability determination 
        and either affirm or redetermine the assessment of personal 
        liability and a notice of the affirmation or redetermination 
        shall be mailed to the person's last known address.  The 
        affirmation or redetermination shall become final unless a 
        written appeal is filed within ten days of the date of mailing.  
        Proceedings on the appeal shall be conducted in the same manner 
        as an appeal of an employer's contribution rate or benefits 
        charged to an employer's account under section 268.06, 
        subdivision 20 accordance with section 268.105.  
           Sec. 18.  Minnesota Statutes 1994, section 268.162, 
        subdivision 2, is amended to read: 
           Subd. 2.  [REASONABLE VALUE.] An official, designated by 
        the commissioner, upon the official's own motion or upon 
        application of the potential successor, shall determine the 
        reasonable value of the organization, trade, or business or 
        assets acquired by the successor based on available 
        information.  The determination shall be final unless the 
        successor, within 30 days after the mailing of notice of the 
        determination to the successor's last known address, files a 
        written appeal from it.  Any appeals of a determination under 
        this subdivision shall be conducted in the same manner as an 
        appeal under section 268.12, subdivision 13.  Proceedings on the 
        appeal shall be conducted in accordance with section 268.105. 
           Sec. 19.  Minnesota Statutes 1994, section 268.163, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DETERMINATION OF LIABILITY.] An official 
        designated by the commissioner shall make an initial 
        determination as to the liability under this section.  The 
        determination shall be final unless the contractor or person 
        found to be liable files a written appeal within 30 days after 
        mailing of notice of determination to the person's last known 
        address.  Proceedings on the appeal shall be conducted in the 
        same manner as an appeal from a determination of employer 
        liability under section 268.12, subdivision 13 accordance with 
        section 268.105. 
           Sec. 20.  Minnesota Statutes 1994, section 268.164, 
        subdivision 3, is amended to read: 
           Subd. 3.  [NOTICE AND RIGHT TO HEARING.] At least 30 days 
        before the commissioner notifies a licensing authority pursuant 
        to subdivision 1, a notice and demand for payment of the amount 
        due shall be given to the applicant.  If the applicant disputes 
        the amount due, the applicant must request a hearing in writing 
        within 30 days after the mailing of the notice and demand for 
        payment to the applicant's last known address.  Proceedings on 
        the appeal of the amount due shall be conducted in the same 
        manner as an appeal from a determination of employer liability 
        under section 268.12, subdivision 13 accordance with section 
        268.105. 
           Sec. 21.  Minnesota Statutes 1994, section 268.18, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ERRONEOUS PAYMENTS.] (a) Any claimant for 
        benefits who, by reason of the claimant's own mistake or through 
        the error of any individual engaged in the administration of 
        sections 268.03 to 268.231 or because of a determination or 
        redetermination issued pursuant to section 268.10, subdivision 
        2, has received any sum as benefits to which the claimant was 
        not entitled under these sections, shall promptly return those 
        benefits in cash to the nearest office of the Minnesota 
        department of economic security.  If the claimant fails to 
        return the benefits, the department of economic security shall, 
        as soon as it discovers the erroneous payment, determine the 
        amount due and notify the individual to return it. 
           (b) Unless the claimant files a written appeal with the 
        department of economic security within 15 days after the mailing 
        of the notice of determination to the claimant's last known 
        address or personal delivery of the notice, the determination 
        shall become final.  If the claimant files an appeal with the 
        department in writing within the time above the matter shall be 
        set for hearing before a referee of the department and heard as 
        other benefit matters are heard in accordance with section 
        268.10 with the same rights of review as outlined for benefit 
        cases in that section.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105. 
           (c) The commissioner of the department of economic security 
        is authorized to deduct from any future benefits payable to the 
        claimant under these sections in either the current or any 
        subsequent benefit year an amount equivalent to the overpayment 
        determined, except that no single deduction shall exceed 50 
        percent of the amount of the payment from which the deduction is 
        made, or the overpayment may be collected the same as 
        contributions or reimbursements under section 268.161.  If a 
        claimant has been overpaid benefits under the law of another 
        state due to error and that state certifies to the department 
        the facts involved and that the individual is liable under its 
        law to repay the benefits and requests the department to recover 
        the overpayment, the commissioner is authorized to deduct from 
        future benefits payable to the claimant in either the current or 
        any subsequent benefit year an amount equivalent to the amount 
        of overpayment determined by that state, except that no single 
        deduction shall exceed 50 percent of the amount of the payment 
        from which the deduction is made.  Benefits paid for weeks more 
        than three years prior to the discovery of error are not 
        erroneous payments. 
           (d) Notwithstanding paragraph (a), the commissioner shall 
        waive recovery of an overpayment if a referee reemployment 
        insurance judge or the commissioner's representative determines 
        the overpayment resulted from an administrative failure to 
        identify that a claimant's wage credits were not earned in 
        covered employment. 
           Sec. 22.  Minnesota Statutes 1994, section 268.18, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FRAUD.] Any claimant who files a claim for or 
        receives benefits by knowingly and willfully misrepresenting or 
        misstating any material fact or by knowingly and willfully 
        failing to disclose any material fact which would make the 
        claimant ineligible for benefits under sections 268.03 to 
        268.231 is guilty of fraud.  After the discovery of facts by the 
        commissioner indicating fraud in claiming or obtaining benefits 
        under sections 268.03 to 268.231, the commissioner is hereby 
        authorized to make a determination that the claimant was 
        ineligible for each week with reference to which benefits were 
        claimed or obtained by fraud for the amount as was in excess of 
        what the claimant would have been entitled to had the claimant 
        not made the fraudulent statements or failed to disclose any 
        material facts.  The commissioner also may disqualify an 
        individual from benefits for one to 52 weeks in which the 
        claimant is otherwise eligible for benefits following the week 
        in which the fraud was determined.  A disqualification imposed 
        for fraud shall not be removed by subsequent insured work or the 
        expiration of a benefit year but shall not apply to any week 
        more than 104 weeks after the week in which the fraud was 
        determined.  The claimant shall promptly repay in cash to the 
        department of economic security any benefits fraudulently 
        obtained.  Unless the claimant files a written appeal with the 
        department of economic security within 15 days after the mailing 
        of the notice of determination to the claimant's last known 
        address or personal delivery of the notice, the determination 
        shall become final.  If the claimant appeals from the 
        determination within the time above specified the matter shall 
        be referred to a referee for a hearing as in other benefit cases 
        and thereafter the procedure for review shall be the same as set 
        forth in section 268.10.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105.  The commissioner 
        is hereby authorized to deduct from future benefits payable to 
        the claimant in either the current or any subsequent benefit 
        year an amount equivalent to the amount of overpayment 
        determined disregarding the 50 percent limitation provided for 
        in subdivision 1 or the overpayment may be collected the same as 
        contributions or reimbursements under section 268.161.  If a 
        claimant has been overpaid benefits under the law of another 
        state due to fraud and that state certifies to the department 
        the facts involved and that the individual is liable to repay 
        the benefits and requests the department to recover the 
        overpayment, the commissioner is authorized to deduct from 
        future benefits payable to the claimant in either the current or 
        any subsequent benefit year an amount equivalent to the amount 
        of overpayment determined by that state disregarding the 50 
        percent limitation provided for in subdivision 1.  A 
        determination of fraud may be made at any time.  
           Sec. 23.  Minnesota Statutes 1994, section 268.18, 
        subdivision 3, is amended to read: 
           Subd. 3.  [FALSE REPRESENTATIONS; CONCEALMENT OF FACTS; 
        PENALTY.] (a) Whoever obtains, or attempts to obtain, or aids or 
        abets any person to obtain by means of a willfully false 
        statement or representation, by intentional concealment of a 
        material fact, or by impersonation or other fraudulent device, 
        benefits to which the person is not entitled or benefits greater 
        than that to which the person is entitled under this chapter, or 
        under the employment security law of any state or of the federal 
        government or of a foreign government, either personally or for 
        any other person, shall be guilty of theft and shall be 
        sentenced pursuant to section 609.52, subdivision 3, clauses 
        (2), (3)(a) and, (c), and (d), (4), and (5).  The amount of the 
        benefits incorrectly paid shall be the difference between the 
        amount of benefits actually received and the amount which the 
        person would have been entitled under state and federal law had 
        the department been informed of all material facts. 
           (b) Any employing unit or any officer or agent of an 
        employing unit or any other person who makes a false statement 
        or representation knowing it to be false, or who knowingly fails 
        to disclose a material fact, to prevent or reduce the payment of 
        benefits to any individual entitled thereto, or to avoid 
        becoming or remaining a subject employer or to avoid or reduce 
        any contribution or other payment required from an employing 
        unit under this chapter or under the employment security law of 
        any state or of the federal government, or who willfully fails 
        or refuses to make any such contributions or other payment at 
        the time required shall be guilty of a gross misdemeanor unless 
        the benefit underpayment, contribution, or other payment 
        involved exceeds $250, in which event the person is guilty of a 
        felony.  
           (c) Any person who willfully fails to produce or permit the 
        inspection or copying of books, papers, records, or memoranda as 
        required or when requested under section 268.12, subdivision 8, 
        or to furnish any required reports other than contribution 
        reports shall be guilty of a gross misdemeanor. 
           Sec. 24.  Minnesota Statutes 1994, section 268.18, 
        subdivision 6, is amended to read: 
           Subd. 6.  [EMPLOYER MISCONDUCT; PENALTY.] If the 
        commissioner finds that any employing unit or any employee, 
        officer, or agent of any employing unit, is in collusion with 
        any employee for the purpose of assisting the claimant to 
        receive benefits illegally, the employing unit shall be 
        penalized $500 or an amount equal to the amount of benefits 
        determined to be overpaid, whichever is greater. 
           If the commissioner finds that any part of any employer's 
        contribution deficiency is due to fraud with intent to avoid 
        payment of contributions to the fund, 50 percent of the total 
        amount of the deficiency or $500, whichever is greater, shall be 
        assessed as a penalty against the employer and collected in 
        addition to the deficiency.  
           Penalties assessed under this section shall be in addition 
        to any other penalties provided for by sections 268.03 to 
        268.231 and be subject to the same collection procedures that 
        apply to past due contributions under this chapter.  Penalties 
        under this section shall be paid to the department and credited 
        to the contingent fund. 
           The assessment of the penalty shall be final unless the 
        employer files a written appeal with the department within 15 
        days after the notice of determination to the employer's last 
        known address.  If the employer shall appeal from the 
        determination within the time above specified, the matter shall 
        be referred for a hearing as set forth in section 
        268.10.  Proceedings on the appeal shall be conducted in 
        accordance with section 268.105. 
           Sec. 25.  Minnesota Statutes 1994, section 270A.09, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [ECONOMIC SECURITY CLAIMS.] Notwithstanding 
        subdivision 1, any debtor contesting a setoff claim by the 
        department of economic security shall have a hearing conducted 
        in the same manner as an appeal under section 268.12, 
        subdivision 13 268.105. 
           Sec. 26.  Minnesota Statutes 1994, section 352.01, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [EXCLUDED EMPLOYEES.] "State employee" does not 
        include: 
           (1) elective state officers; 
           (2) students employed by the University of Minnesota, the 
        state universities, and community colleges unless approved for 
        coverage by the board of regents, the state university board, or 
        the state board for community colleges, as the case may be; 
           (3) employees who are eligible for membership in the state 
        teachers retirement association except employees of the 
        department of education who have chosen or may choose to be 
        covered by the Minnesota state retirement system instead of the 
        teachers retirement association; 
           (4) employees of the University of Minnesota who are 
        excluded from coverage by action of the board of regents; 
           (5) officers and enlisted personnel in the national guard 
        and the naval militia who are assigned to permanent peacetime 
        duty and who under federal law are or are required to be members 
        of a federal retirement system; 
           (6) election officers; 
           (7) persons engaged in public work for the state but 
        employed by contractors when the performance of the contract is 
        authorized by the legislature or other competent authority; 
           (8) officers and employees of the senate and house of 
        representatives or a legislative committee or commission who are 
        temporarily employed; 
           (9) receivers, jurors, notaries public, and court employees 
        who are not in the judicial branch as defined in section 43A.02, 
        subdivision 25, except referees and adjusters employed by the 
        department of labor and industry; 
           (10) patient and inmate help in state charitable, penal, 
        and correctional institutions including the Minnesota veterans 
        home; 
           (11) persons employed for professional services where the 
        service is incidental to regular professional duties and whose 
        compensation is paid on a per diem basis; 
           (12) employees of the Sibley House Association; 
           (13) the members of any state board or commission who serve 
        the state intermittently and are paid on a per diem basis; the 
        secretary, secretary-treasurer, and treasurer of those boards if 
        their compensation is $5,000 or less per year, or, if they are 
        legally prohibited from serving more than three years; and the 
        board of managers of the state agricultural society and its 
        treasurer unless the treasurer is also its full-time secretary; 
           (14) state troopers; 
           (15) temporary employees of the Minnesota state fair 
        employed on or after July 1 for a period not to extend beyond 
        October 15 of that year; and persons employed at any time by the 
        state fair administration for special events held on the 
        fairgrounds; 
           (16) emergency employees in the classified service; except 
        that if an emergency employee, within the same pay period, 
        becomes a provisional or probationary employee on other than a 
        temporary basis, the employee shall be considered a "state 
        employee" retroactively to the beginning of the pay period; 
           (17) persons described in section 352B.01, subdivision 2, 
        clauses (2) to (5); 
           (18) temporary employees in the classified service, 
        temporary employees in the unclassified service appointed for a 
        definite period of not more than six months and employed less 
        than six months in any one-year period and seasonal help in the 
        classified service employed by the department of revenue; 
           (19) trainee employees, except those listed in subdivision 
        2a, clause (10); 
           (20) persons whose compensation is paid on a fee basis; 
           (21) state employees who in any year have credit for 12 
        months service as teachers in the public schools of the state 
        and as teachers are members of the teachers retirement 
        association or a retirement system in St. Paul, Minneapolis, or 
        Duluth; 
           (22) employees of the adjutant general employed on an 
        unlimited intermittent or temporary basis in the classified and 
        unclassified service for the support of army and air national 
        guard training facilities; 
           (23) chaplains and nuns who are excluded from coverage 
        under the federal Old Age, Survivors, Disability, and Health 
        Insurance Program for the performance of service as specified in 
        United States Code, title 42, section 410(a)(8)(A), as amended, 
        if no irrevocable election of coverage has been made under 
        section 3121(r) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1992; 
           (24) examination monitors employed by departments, 
        agencies, commissions, and boards to conduct examinations 
        required by law; 
           (25) members of appeal tribunals, exclusive of the chair, 
        to which reference is made in section 268.10, subdivision 4; 
           (26) persons appointed to serve as members of fact-finding 
        commissions or adjustment panels, arbitrators, or labor referees 
        under chapter 179; 
           (27) (26) temporary employees employed for limited periods 
        under any state or federal program for training or 
        rehabilitation including persons employed for limited periods 
        from areas of economic distress except skilled and supervisory 
        personnel and persons having civil service status covered by the 
        system; 
           (28) (27) full-time students employed by the Minnesota 
        historical society intermittently during part of the year and 
        full-time during the summer months; 
           (29) (28) temporary employees, appointed for not more than 
        six months, of the metropolitan council and of any of its 
        statutory boards, if the board members are appointed by the 
        metropolitan council; 
           (30) (29) persons employed in positions designated by the 
        department of employee relations as student workers; 
           (31) (30) members of trades employed by the successor to 
        the metropolitan waste control commission with trade union 
        pension plan coverage under a collective bargaining agreement 
        first employed after June 1, 1977; 
           (32) (31) persons employed in subsidized on-the-job 
        training, work experience, or public service employment as 
        enrollees under the federal Comprehensive Employment and 
        Training Act after March 30, 1978, unless the person has as of 
        the later of March 30, 1978, or the date of employment 
        sufficient service credit in the retirement system to meet the 
        minimum vesting requirements for a deferred annuity, or the 
        employer agrees in writing on forms prescribed by the director 
        to make the required employer contributions, including any 
        employer additional contributions, on account of that person 
        from revenue sources other than funds provided under the federal 
        Comprehensive Employment and Training Act, or the person agrees 
        in writing on forms prescribed by the director to make the 
        required employer contribution in addition to the required 
        employee contribution; 
           (33) (32) off-duty peace officers while employed by the 
        metropolitan council; 
           (34) (33) persons who are employed as full-time police 
        officers by the metropolitan council and as police officers are 
        members of the public employees police and fire fund; 
           (35) (34) persons who are employed as full-time 
        firefighters by the department of military affairs and as 
        firefighters are members of the public employees police and fire 
        fund; 
           (36) (35) foreign citizens with a work permit of less than 
        three years, or an H-1b/JV visa valid for less than three years 
        of employment, unless notice of extension is supplied which 
        allows them to work for three or more years as of the date the 
        extension is granted, in which case they are eligible for 
        coverage from the date extended; and 
           (37) (36) persons who are employed by the higher education 
        board and who elect to remain members of the public employees 
        retirement association or the Minneapolis employees retirement 
        fund, whichever applies, under section 136C.75. 
           Sec. 27.  Minnesota Statutes 1994, section 352.22, 
        subdivision 10, is amended to read: 
           Subd. 10.  [OTHER REFUNDS.] Former employees covered by the 
        system are entitled to apply for refunds if they are or become 
        members of the state patrol retirement fund, the state teacher's 
        retirement association, or employees of the University of 
        Minnesota excluded from coverage under the system by action of 
        the board of regents; or labor service employees, excluded from 
        coverage under section 352.01, subdivision 2b, clause (26) (25); 
        or employees of the adjutant general who under federal law 
        effectually elect membership in a federal retirement system; or 
        officers or employees of the senate or house of representatives, 
        excluded from coverage under section 352.01, subdivision 2b, 
        clause (8).  The refunds must include accumulated contributions 
        plus interest as provided in subdivision 2.  These employees may 
        apply 30 days or more after their coverage ceases, even if they 
        continue in state service but in positions not covered by this 
        chapter. 
           Sec. 28.  Minnesota Statutes 1994, section 574.26, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CITATION.] (a) Sections 574.26 to 574.32 
        are the "public contractors' performance and payment bond act," 
        within those sections referred to as "the act." 
           (b) For the purposes of the act:  
           (1) "public body" means the state, municipal corporation, 
        school district, or other public board or body; and 
           (2) "labor and materials" means work, skill, tools, 
        machinery, materials, insurance premiums, equipment or supplies, 
        or taxes incurred under section 290.92 or, chapter 297A or 268; 
        and 
           (3) "contract" means a contract with a public body for the 
        doing of public work. 
           Sec. 29.  [REPEALER.] 
           Minnesota Statutes 1994, section 268.10, subdivisions 3, 4, 
        5, 6, 7, 8, 9, and 10; 268.12, subdivisions 9, 10, and 13, are 
        repealed. 
           Sec. 30.  [EFFECTIVE DATE.] 
           Section 1 is effective January 1, 1996.  Sections 2 to 29 
        are effective the day following final enactment. 
           Presented to the governor April 17, 1995 
           Signed by the governor April 18, 1995, 12:18 p.m.