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Office of the Revisor of Statutes

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

                            CHAPTER 299-S.F.No. 2266 
                  An act relating to taxation; recodifying the tax on 
                  petroleum and special fuels; providing civil and 
                  criminal penalties; appropriating money; proposing 
                  coding for new law as Minnesota Statutes, chapter 
                  296A; repealing Minnesota Statutes 1996, sections 
                  296.01; 296.02, subdivisions 1, 1a, 1b, 1c, 2, 3, 4, 
                  6, and 8; 296.025; 296.0261; 296.035; 296.04; 296.041; 
                  296.06; 296.11; 296.115; 296.12; 296.141, subdivisions 
                  1, 2, 3, 5, 6, and 7; 296.15; 296.151; 296.152; 
                  296.16, subdivisions 1a and 2; 296.165; 296.17, 
                  subdivisions 1, 3, 5, 6, 7, 8, 9, 10, 11, 14, 15, 16, 
                  17, 19, 20, 21, and 22; 296.171, subdivisions 1, 2, 3, 
                  5, 6, 7, 8, 9, and 10; 296.18, subdivisions 2, 3, 4, 
                  5, 6, and 8; 296.19; 296.20; 296.21; 296.23; 296.25; 
                  296.26; 296.27; and 296.421; Minnesota Statutes 1997 
                  Supplement, sections 296.141, subdivision 4; 296.16, 
                  subdivision 1; 296.17, subdivision 18; 296.171, 
                  subdivision 4; and 296.18, subdivision 1. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  [296A.01] [DEFINITIONS.] 
           Subdivision 1.  [TERMS.] Unless the language or context 
        clearly indicates that a different meaning is intended, the 
        terms used in this chapter and sections 239.75 to 239.80 have 
        the meanings given them in this section.  The petroleum product 
        definitions and specifications are intended to match the 
        definitions and specifications in sections 41A.09 and 239.761. 
           Subd. 2.  [AGRICULTURAL ALCOHOL GASOLINE.] "Agricultural 
        alcohol gasoline" means a gasoline-ethanol blend of up to ten 
        percent agriculturally derived fermentation ethanol derived from 
        agricultural products, such as potatoes, cereal, grains, cheese 
        whey, sugar beets, forest products, or other renewable 
        resources, that: 
           (1) meets the specifications in ASTM specification D 
        4806-95b; and 
           (2) is denatured as specified in Code of Federal 
        Regulations, title 27, parts 20 and 21.  
           Subd. 3.  [AIRCRAFT.] "Aircraft" means any contrivance, now 
        or hereafter invented, used or designed for navigation of or 
        flight in the air. 
           Subd. 4.  [ALTERNATIVE FUEL.] "Alternative fuel" means 
        natural gas; liquefied petroleum gas; hydrogen; coal-derived 
        liquefied fuels; electricity; methanol, denatured ethanol, and 
        other alcohols; mixtures containing 85 percent or more, or other 
        percentage as may be set by regulation by Secretary of the 
        United States Department of Energy, by volume of methanol, 
        denatured ethanol, and other alcohols with gasoline or other 
        fuels; fuels other than alcohol that are derived from biological 
        materials; and other fuels that the Secretary of the United 
        States Department of Energy determines by regulation to be an 
        alternative fuel within the meaning of section 301(2) of the 
        National Energy Policy Act of 1992 and intended for use in motor 
        vehicles. 
           Subd. 5.  [ALTERNATIVE FUEL VEHICLE.] "Alternative fuel 
        vehicle" means a dedicated, flexible, or dual-fuel vehicle 
        operated primarily on alternative fuel. 
           Subd. 6.  [ASTM.] "ASTM" means the American Society for 
        Testing and Materials, which is a private organization that 
        utilizes committees of industry representatives and regulators 
        to develop product quality standards and test methods to be used 
        by industries, regulatory agencies, and purchasing agents. 
           Subd. 7.  [AVIATION GASOLINE.] "Aviation gasoline" means 
        any gasoline that is capable of use for the purpose of producing 
        or generating power for propelling internal combustion engine 
        aircraft, that meets the specifications in ASTM specification D 
        910-96, and that either: 
           (1) is invoiced and billed by a producer, manufacturer, 
        refiner, or blender to a distributor or dealer, by a distributor 
        to a dealer or consumer, or by a dealer to consumer, as 
        "aviation gasoline"; or 
           (2) whether or not invoiced and billed as provided in 
        clause (1), is received, sold, stored, or withdrawn from storage 
        by any person, to be used for the purpose of producing or 
        generating power for propelling internal combustion engine 
        aircraft. 
           Subd. 8.  [AVIATION TURBINE FUEL AND JET FUEL.] "Aviation 
        turbine fuel" and "jet fuel" mean blends of hydrocarbons derived 
        from crude petroleum, natural gasoline, and synthetic 
        hydrocarbons, intended for use in aviation turbine engines, and 
        that meet the specifications in ASTM specification D 1655-96c. 
           Subd. 9.  [BULK PURCHASER.] "Bulk purchaser" means any 
        person not principally engaged in buying and selling petroleum 
        products or combustible gases who receives special fuel for 
        storage and subsequent delivery into the supply tank of an 
        aircraft or a licensed motor vehicle operated by the person. 
           Subd. 10.  [CASINGHEAD, ABSORPTION, CONDENSATION, DRIP, OR 
        NATURAL GASOLINE.] "Casinghead gasoline," "absorption gasoline," 
        "condensation gasoline," "drip gasoline," and "natural gasoline" 
        mean a low-octane, high-volatility, liquid hydrocarbon 
        by-product of crude oil extraction and pumping, coal 
        gasification, or shipping of natural gas through a pipeline. 
           Subd. 11.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of revenue. 
           Subd. 12.  [COMPRESSED NATURAL GAS OR CNG.] "Compressed 
        natural gas" or "CNG" means natural gas, primarily methane, 
        condensed under high pressure and stored in specially designed 
        storage tanks at between 2,000 and 3,600 pounds per square 
        inch.  For purposes of this chapter, the energy content of CNG 
        is considered to be 1,000 BTUs per cubic foot. 
           Subd. 13.  [DEALER.] "Dealer" means any person, except a 
        distributor, engaged in the business of buying and selling 
        gasoline and other petroleum products in this state. 
           Subd. 14.  [DIESEL FUEL OIL.] "Diesel fuel oil" means a 
        petroleum distillate or blend of petroleum distillate and 
        residual fuels, intended for use as a motor fuel in internal 
        combustion diesel engines, that meets the specifications in ASTM 
        specification D 975-96a.  Diesel fuel includes number 1 and 
        number 2 fuel oils.  K-1 kerosene is not diesel fuel unless it 
        is blended with diesel fuel for use in motor vehicles. 
           Subd. 15.  [DISTRIBUTOR.] "Distributor" means any person 
        who (1) receives petroleum products in this state for storage 
        and subsequent distribution by tank car or tank truck or both, 
        (2) produces, manufactures, or refines petroleum products in 
        this state, or (3) imports petroleum products into this state 
        via boat, barge, or pipeline for storage and subsequent delivery 
        at or further transportation from boat, barge, or pipe line 
        terminals in this state. 
           Subd. 16.  [DYED FUEL.] "Dyed fuel" means diesel fuel to 
        which indelible dye has been added, either before or upon 
        withdrawal at a terminal or refinery rack, and which may be sold 
        for exempt purposes.  The dye may be either dye required to be 
        added per the EPA or dye that meets other specifications 
        required by the Internal Revenue Service or the commissioner. 
           Subd. 17.  [EPA.] "EPA" means the United States 
        Environmental Protection Agency. 
           Subd. 18.  [ETBE.] "ETBE" means ethyl tertiary butyl ether, 
        or the equivalent term tert-butyl ethyl ether.  ETBE is a 
        hydrocarbon compound approved by the EPA for use as an oxygenate 
        in gasoline.  ETBE is a liquid at normal atmospheric pressure 
        and temperature.  The chemical composition of ETBE is C2H5OC(CH3)
        3. 
           Subd. 19.  [E85.] "E85" means a petroleum product that is a 
        blend of agriculturally derived denatured ethanol and gasoline 
        that typically contains 85 percent ethanol by volume, but at a 
        minimum must contain 60 percent ethanol by volume.  For the 
        purposes of this chapter, the energy content of E85 will be 
        considered to be 82,000 BTUs per gallon.  E85 produced for use 
        as a motor fuel in alternative fuel vehicles as defined in 
        section 296A.01, subdivision 5, must comply with ASTM 
        specification D 5798-96. 
           Subd. 20.  [ETHANOL, DENATURED.] "Ethanol, denatured" means 
        ethanol that is to be blended with gasoline, has been 
        agriculturally derived, and complies with ASTM specification D 
        4806-95b.  This includes the requirement that ethanol may be 
        denatured only as specified in Code of Federal Regulations, 
        title 27, parts 20 and 21. 
           Subd. 21.  [FOR USE IN MOTOR VEHICLES.] "For use in motor 
        vehicles" means for use in producing or generating power for 
        propelling motor vehicles on the public highways of this state 
        or in machinery operated on the public highways of this state 
        for the purpose of constructing, reconstructing, or maintaining 
        those public highways.  For purposes of this subdivision, 
        "public highways" includes bridges. 
           Subd. 22.  [GAS TURBINE FUEL OIL.] "Gas turbine fuel oil" 
        means fuel that contains mixtures of hydrocarbon oils free of 
        inorganic acid and excessive amounts of solid or fibrous foreign 
        matter, intended for use in nonaviation gas turbine engines, and 
        that meets the specifications in ASTM specification D 2880-96a. 
           Subd. 23.  [GASOLINE.] (a) "Gasoline" means: 
           (1) all products commonly or commercially known or sold as 
        gasoline regardless of their classification or uses, except 
        casinghead gasoline, absorption gasoline, condensation gasoline, 
        drip gasoline, or natural gasoline that under the requirements 
        of section 239.761, subdivision 3, must not be blended with 
        gasoline that has been sold, transferred, or otherwise removed 
        from a refinery or terminal; and 
           (2) any liquid prepared, advertised, offered for sale or 
        sold for use as, or commonly and commercially used as, a fuel in 
        spark-ignition, internal combustion engines, and that when 
        tested by the weights and measures division meets the 
        specifications in ASTM specification D 4814-96. 
           (b) Gasoline that is not blended with ethanol must not be 
        contaminated with water or other impurities and must comply with 
        both ASTM specification D 4814-96 and the volatility 
        requirements in Code of Federal Regulations, title 40, part 80. 
           (c) After gasoline is sold, transferred, or otherwise 
        removed from a refinery or terminal, a person responsible for 
        the product: 
           (1) may blend the gasoline with agriculturally derived 
        ethanol, as provided in subdivision 24; 
           (2) must not blend the gasoline with any oxygenate other 
        than denatured, agriculturally derived ethanol; 
           (3) must not blend the gasoline with other petroleum 
        products that are not gasoline or denatured, agriculturally 
        derived ethanol; 
           (4) must not blend the gasoline with products commonly and 
        commercially known as casinghead gasoline, absorption gasoline, 
        condensation gasoline, drip gasoline, or natural gasoline; and 
           (5) may blend the gasoline with a detergent additive, an 
        antiknock additive, or an additive designed to replace 
        tetra-ethyl lead, that is registered by the EPA. 
           Subd. 24.  [GASOLINE BLENDED WITH A NONETHANOL 
        OXYGENATE.] "Gasoline blended with a nonethanol oxygenate" means 
        gasoline blended with ETBE, MTBE, or other alcohol or ether, 
        except denatured ethanol, that is approved as an oxygenate by 
        the EPA, and that complies with ASTM specification D 4814-96. 
        Oxygenates, other than denatured ethanol, must not be blended 
        into gasoline after the gasoline has been sold, transferred, or 
        otherwise removed from a refinery or terminal. 
           Subd. 25.  [GASOLINE BLENDED WITH ETHANOL.] "Gasoline 
        blended with ethanol" means gasoline blended with up to ten 
        percent, by volume, agriculturally derived, denatured ethanol.  
        The blend must comply with the volatility requirements in Code 
        of Federal Regulations, title 40, part 80.  The blend must also 
        comply with ASTM specification D 4814-96, or the gasoline base 
        stock from which a gasoline-ethanol blend was produced must 
        comply with ASTM specification D 4814-96; and the 
        gasoline-ethanol blend must not be blended with casing head 
        gasoline, absorption gasoline, condensation gasoline, drip 
        gasoline, or natural gasoline after the gasoline-ethanol blend 
        has been sold, transferred, or otherwise removed from a refinery 
        or terminal.  The blend need not comply with ASTM specification 
        D 4814-96 if it is subjected to a standard distillation test.  
        For a distillation test, a gasoline-ethanol blend is not 
        required to comply with the temperature specification at the 50 
        percent liquid recovery point, if the gasoline from which the 
        gasoline-ethanol blend was produced complies with all of the 
        distillation specifications. 
           Subd. 26.  [HEATING FUEL OIL.] "Heating fuel oil" means a 
        petroleum distillate, blend of petroleum distillates and 
        residuals, or petroleum residual heating fuel that meets the 
        specifications in ASTM specification D 396-96. 
           Subd. 27.  [HIGHWAY.] "Highway" means the entire width 
        between the boundary lines of every way publicly maintained when 
        part of the way is open for the public. 
           Subd. 28.  [KEROSENE.] "Kerosene" means a refined petroleum 
        distillate consisting of a homogeneous mixture of hydrocarbons 
        essentially free of water, inorganic acidic and basic compounds, 
        and excessive amounts of particulate contaminants and that meets 
        the specifications in ASTM specification D 3699-96a. 
           Subd. 29.  [LICENSED MOTOR VEHICLE.] "Licensed motor 
        vehicle" means (1) any vehicle subject to a motor vehicle 
        registration in which the power is produced with any fuel in an 
        internal combustion engine, and (2) any motor vehicle not 
        subject to a motor vehicle registration on which is mounted a 
        corn shelling, feed grinding, well drilling, or sawing machine. 
           Subd. 30.  [LIQUEFIED NATURAL GAS OR LNG.] "Liquefied 
        natural gas" or "LNG" means natural gas, primarily methane, 
        which has been condensed through a cryogenic cooling process and 
        is stored in special pressurized and insulated storage tanks.  
        For purposes of this chapter, the energy content of LNG will be 
        considered to be 69,000 BTUs per gallon. 
           Subd. 31.  [LIQUEFIED PETROLEUM GAS, LPG, OR 
        PROPANE.] "Liquefied petroleum gas," "LPG," or "propane" means a 
        product made of short hydrocarbon chains and containing 
        primarily propane and butane that is stored in specialized tanks 
        at moderate pressure.  For purposes of this chapter, the energy 
        content of LPG or propane will be considered to be 86,000 BTUs 
        per gallon. 
           Subd. 32.  [MARINE GASOLINE.] "Marine gasoline" means 
        gasoline used in producing and generating power for propelling 
        motorboats used on the waters of this state. 
           Subd. 33.  [MOTOR FUEL.] "Motor fuel" means a liquid, 
        regardless of its composition or properties, used to propel a 
        motor vehicle. 
           Subd. 34.  [MTBE.] "MTBE" means methyl tertiary butyl 
        ether, or the equivalent term tert-butyl methyl ether.  MTBE is 
        a hydrocarbon compound approved by the United States 
        Environmental Protection Agency for use as an oxygenate in 
        gasoline.  MTBE is a liquid at normal atmospheric pressure and 
        temperature.  The chemical composition of MTBE is (CH3)3COCH3. 
           Subd. 35.  [M85.] "M85" means a petroleum product that is a 
        liquid fuel blend of methanol and gasoline that contains at 
        least 85 percent methanol by volume.  For the purposes of this 
        chapter, the energy content of M85 will be considered to be 
        65,000 BTUs per gallon.  M85 produced for use as a motor fuel in 
        alternative fuel vehicles, as defined in subdivision 5, must 
        comply with ASTM specification D 5797-96. 
           Subd. 36.  [MOTOR VEHICLE GASOLINE EXCISE TAX.] "Motor 
        vehicle gasoline excise tax" means the tax imposed on gasoline 
        used in producing and generating power for propelling motor 
        vehicles used on the public highways of this state. 
           Subd. 37.  [MOTOR VEHICLES USED ON PUBLIC HIGHWAYS OF THIS 
        STATE.] "Motor vehicles used on public highways of this state" 
        means every vehicle operated upon the highways of this state the 
        power for the operation of which is produced or generated in an 
        internal combustion engine, but does not include tractors used 
        solely for agricultural purposes. 
           Subd. 38.  [MOTORBOAT.] "Motorboat" means any contrivance 
        used or designed for navigation on water other than a seaplane, 
        propelled in any respect by machinery, including detachable 
        motors. 
           Subd. 39.  [PASSENGER SNOWMOBILE.] "Passenger snowmobile" 
        means a self-propelled vehicle designed for travel on snow or 
        ice, steered by skis or runners, with an enclosed passenger 
        section that provides seating for not less than four nor more 
        than 12 passengers. 
           Subd. 40.  [PERSON.] "Person" means any individual, firm, 
        trust, estate, partnership, association, cooperative 
        association, joint stock company or corporation, public or 
        private, or any representative appointed by order of any court; 
        or an officer or employee of a corporation, or a member or 
        employee of a partnership, who as such officer, employee, or 
        member is under a duty to perform any act prescribed by this 
        chapter. 
           Subd. 41.  [PETROLEUM DISTILLATE.] "Petroleum distillate" 
        means a hydrocarbon or group of hydrocarbon compounds that have 
        been extracted from petroleum crude oil by a distillation 
        process involving evaporation by heating, and subsequent 
        condensation by cooling. 
           Subd. 42.  [PETROLEUM PRODUCTS.] "Petroleum products" means 
        all of the products defined in subdivisions 2, 7, 8, 10, 14, 16, 
        19, 20, 22 to 26, 28, 32, and 35. 
           Subd. 43.  [PETROLEUM RESIDUAL.] "Petroleum residual" means 
        a heavy hydrocarbon or group of heavy hydrocarbon compounds that 
        do not evaporate during a distillation process. 
           Subd. 44.  [RECEIVED.] (a) Except as otherwise provided in 
        this subdivision, petroleum products brought into this state 
        shall be deemed to be "received" in this state at the time and 
        place they are unloaded in this state.  When so unloaded such 
        products shall be deemed to be received in this state by the 
        person who is the owner immediately after such unloading; 
        provided, however, that if such owner is not licensed as a 
        distributor in this state and if such products were shipped or 
        delivered into this state by a person who is licensed as a 
        distributor, then such products shall be deemed to be received 
        in this state by the licensed distributor by whom the same were 
        so shipped or delivered.  
           (b) Petroleum products produced, manufactured, or refined, 
        at a refinery in this state and stored there, or brought into 
        the state by boat or barge or like form of transportation and 
        delivered at a marine terminal in this state and stored there, 
        or brought into the state by pipeline and delivered at a 
        pipeline terminal in this state and stored there, shall not be 
        considered received until they are withdrawn from such refinery 
        or terminal for sale or use in this state or for delivery or 
        shipment to points within this state.  
           (c) When withdrawn such products shall be deemed received 
        by the person who was the owner immediately prior to withdrawal; 
        unless (1) such products are withdrawn for shipment or delivery 
        to another licensed distributor, in which case the licensed 
        distributor to whom such shipment or delivery is made shall be 
        deemed to have received such products in this state, or (2) such 
        products are withdrawn for shipment or delivery to a person not 
        licensed as a distributor, under one or more sale or exchange 
        agreements by or between persons one or more of whom is a 
        licensed distributor, in which case the last purchaser or 
        exchangee under such agreement or agreements, who is licensed as 
        a distributor, shall be deemed to have received such products in 
        this state. 
           (d) Petroleum products produced in this state in any manner 
        other than as covered in this subdivision shall be considered 
        received by the producer at the time and place produced. 
           Subd. 45.  [REFINERY OR TERMINAL.] "Refinery" or "terminal" 
        means any petroleum refinery, pipeline terminal, river terminal, 
        storage facility, or other point of origin where petroleum 
        products are manufactured, or imported by rail, truck, barge, or 
        pipe; and held, stored, transferred, offered for distribution, 
        distributed, offered for sale, or sold.  For the purpose of 
        restricting petroleum product blending, this definition includes 
        all refineries and terminals within and outside of Minnesota.  
        For the purpose of assessing fees, this definition does not 
        include a licensed distributor's bulk storage facility that is 
        used to store petroleum products for which the petroleum 
        inspection fee charged under chapter 239 is either not due or 
        has been paid. 
           Subd. 46.  [SPECIAL FUEL.] "Special fuel" means: 
           (1) all combustible gases and liquid petroleum products or 
        substitutes including undyed diesel fuel, except gasoline, 
        gasoline blended with ethanol, and agricultural alcohol gasoline 
        which are delivered into the supply tank of a licensed motor 
        vehicle or into storage tanks maintained by an owner or operator 
        of a licensed motor vehicle as a source of supply for such 
        vehicle; 
           (2) all combustible gases and liquid petroleum products or 
        substitutes, except gasoline, gasoline blended with ethanol, and 
        agricultural alcohol gasoline, when delivered to a licensed 
        special fuel dealer or to the retail service station storage of 
        a distributor who has elected to pay the special fuel excise tax 
        as provided in this chapter; 
           (3) all combustible gases and liquid petroleum products or 
        substitutes, except gasoline, which are used as aviation fuel; 
        or 
           (4) dyed fuel that is being used illegally in a licensed 
        motor vehicle. 
           Subd. 47.  [SPECIAL FUEL DEALER.] "Special fuel dealer" 
        means any person engaged in the business of selling and 
        delivering special fuel into the supply tank of an aircraft or a 
        licensed motor vehicle. 
           Subd. 48.  [USE IN LICENSED MOTOR VEHICLES.] "Use in 
        licensed motor vehicles" means use in producing or generating 
        power for propelling licensed motor vehicles on the public 
        highways of this state. 
           Subd. 49.  [WATERS OF THIS STATE.] "Waters of this state" 
        means any waters capable of substantial beneficial public use 
        and any waters to which the public has access, which are within 
        the territorial limits of this state including boundary waters. 
           Subd. 50.  [WET ALCOHOL.] "Wet alcohol" means 
        agriculturally derived fermentation ethyl alcohol having a 
        purity of at least 50 percent but less than 99 percent. 
           Sec. 2.  [296A.02] [ADMINISTRATION.] 
           Subdivision 1.  [ENFORCEMENT RESPONSIBILITY.] The 
        commissioner of revenue shall enforce and administer the 
        provisions of this chapter with the assistance of the 
        commissioners of public safety, public service, and 
        transportation. 
           Subd. 2.  [POWERS OF COMMISSIONER OF REVENUE.] The 
        commissioner, or duly authorized agents, may conduct 
        investigations, inquiries, and hearings under this chapter.  In 
        connection with such investigations, inquiries, and hearings, 
        the commissioner and the duly authorized agents have all the 
        powers conferred upon the commissioner and the commissioner's 
        examiners by section 270.06, and the provisions of that section 
        apply to all such investigations, inquiries, and hearings. 
           Subd. 3.  [RULES; ADMINISTRATION AND ENFORCEMENT.] The 
        commissioner may adopt rules relating to the administration and 
        enforcement of laws regulating the sale, distribution, and use 
        of petroleum products and special fuel. The rules shall be 
        reasonable and consistent with the law. 
           Subd. 4.  [APPLICATION TO FOREIGN OR INTERSTATE 
        COMMERCE.] No provision of this chapter shall apply to, or be 
        construed to apply to, foreign or interstate commerce, except 
        insofar as the same may be permitted under the constitution and 
        the laws of the United States. 
           Sec. 3.  [296A.03] [DISTRIBUTOR'S LICENSE.] 
           Subdivision 1.  [GENERAL RULE.] No person shall produce, 
        manufacture, or refine petroleum products in this state, or 
        receive, distribute, sell, or use in this state petroleum 
        products which have not been received in this state by a 
        licensed distributor, or in any manner act as a distributor as 
        defined in section 296A.01 without having been licensed by the 
        commissioner as a distributor. 
           Subd. 2.  [QUALIFICATIONS.] (a) A distributor's license 
        shall be issued to any responsible person who applies and 
        qualifies as a distributor. 
           (b) Upon application to the commissioner, the commissioner 
        must issue a distributor's license to any person who: 
           (1) receives petroleum products in this state for bulk 
        storage and subsequent distribution by tank truck; 
           (2) produces, manufactures, or refines petroleum products 
        in this state; 
           (3) holds an unrevoked license as a distributor as of July 
        1, 1994; 
           (4) imports petroleum products into this state via boat, 
        barge, or pipeline for storage and subsequent delivery at or 
        further transportation from boat, barge, or pipeline terminals 
        in this state; or 
           (5) holds a license and performs a function under the motor 
        fuel tax law of an adjoining state equivalent to that of a 
        distributor under this chapter, 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. 
           Subd. 3.  [LICENSE FEE.] An application for a distributor's 
        license must be accompanied by an initial fee of $25.  Once 
        licensed, a distributor must remit a $25 fee annually to 
        maintain the license. 
           Subd. 4.  [LICENSING PERIOD; EXPIRATION.] Each license 
        period shall be for one year ending each June 30. 
           Subd. 5.  [FORM OF APPLICATION; BOND.] (a) A written 
        application shall be made in the form and manner prescribed by 
        the commissioner. 
           (b) The commissioner shall also 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.  The bond shall 
        cover all places of business within the state where petroleum 
        products are received by the licensee.  The applicant or 
        licensee shall designate and maintain an agent in this state 
        upon whom service may be made for all purposes of this section. 
           (c) An initial applicant for a distributor's license shall 
        furnish a bond in a minimum sum of $3,000 for the first year. 
           (d) 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. 
           (e) A licensee who desires to be exempt from depositing 
        securities or furnishing such bond shall furnish to the 
        commissioner an itemized financial statement showing the assets 
        and the liabilities of the applicant.  If it appears to the 
        commissioner, from the financial statement or otherwise, that 
        the applicant is financially responsible, then the commissioner 
        may exempt the applicant from depositing such securities or 
        furnishing such bond until the commissioner otherwise orders. 
           (f) When the surety upon any bond issued under the 
        provisions of this chapter have fulfilled the conditions of such 
        bond and compensated the state for any loss occasioned by any 
        act or omission of any licensee under this chapter, such surety 
        shall be subrogated to all the rights of the state in connection 
        with the transaction where such loss occurred. 
           Subd. 6.  [SURRENDER OF LICENSE.] When the licensee shall 
        voluntarily or involuntarily sell, dispose of, or discontinue 
        business during the term of a license, the licensee shall 
        immediately notify the commissioner in writing and shall within 
        ten days surrender the license at the commissioner's office in 
        St. Paul, Minnesota. 
           Sec. 4.  [296A.04] [SPECIAL FUEL DEALER'S LICENSE.] 
           Subdivision 1.  [REQUIREMENTS; APPLICATION AND FEE.] No 
        person, except a licensed distributor, shall engage in the 
        business of selling or delivering special fuel, upon which no 
        tax has been imposed, as a special fuel dealer without having 
        applied for and secured from the commissioner a special fuel 
        dealer's license.  The application shall be made in a form and 
        manner prescribed by the commissioner and shall be accompanied 
        by the payment of a $25 license fee.  A special fuel dealer's 
        license shall be issued to any responsible person qualifying as 
        a special fuel dealer who makes proper application.  The license 
        shall be displayed in a conspicuous manner in the place of 
        business and shall expire annually on November 30. 
           Subd. 2.  [BONDS.] The provisions of section 296A.03, 
        subdivision 5, paragraphs (b), (d), (e), and (f), relating to 
        bonds apply to special fuel dealers. 
           Subd. 3.  [SALES TICKETS.] A sales ticket shall be issued 
        for each delivery of special fuel to a special fuel dealer or 
        bulk purchaser.  A sales ticket shall also be issued for each 
        delivery into the supply tank of an aircraft or a licensed motor 
        vehicle, if so requested by the purchaser.  The person who 
        delivers the special fuel shall issue the sales ticket and shall 
        show on the ticket the name and address of the purchaser, date 
        of sale, number of gallons, price per gallon, amount of tax, and 
        total amount of sale. 
           Subd. 4.  [ACCUMULATING METERS.] Every special fuel dealer 
        shall make all withdrawals of special fuel, except liquefied 
        petroleum gas, through an accumulating meter in working order, 
        which shall be provided by such dealer.  Whenever a licensed 
        special fuel dealer fails to comply with the provisions of this 
        subdivision or any rules of the commissioner pertinent thereto, 
        the license issued to such dealer under subdivision 1 may be 
        revoked by the commissioner. 
           Subd. 5.  [SURRENDER OF LICENSE.] A special fuel dealer who 
        discontinues, sells, or disposes of the business in any manner, 
        at any time, shall surrender the special fuel dealer's license 
        at the commissioner's office in St. Paul, Minnesota. 
           Sec. 5.  [296A.05] [BULK PURCHASER'S LICENSE.] 
           Subdivision 1.  [REQUIREMENTS; APPLICATION AND FEE.] No 
        person shall receive special fuel, upon which no tax has been 
        imposed, as a bulk purchaser without having applied for and 
        secured from the commissioner a bulk purchaser's license.  The 
        application shall be made in a form and manner prescribed by the 
        commissioner and shall be accompanied by the payment of a $25 
        license fee.  A bulk purchaser's license shall be issued to any 
        responsible person qualifying as a bulk purchaser who makes 
        proper application.  The license shall be displayed in a 
        conspicuous manner in the place of business and shall expire 
        annually on November 30. 
           Subd. 2.  [BONDS.] The provisions of section 296A.03, 
        subdivision 5, paragraphs (b), (d), (e), and (f), relating to 
        bonds apply to bulk purchasers. 
           Subd. 3.  [SURRENDER OF LICENSE.] A bulk purchaser who 
        discontinues, sells, or disposes of the business in any manner, 
        at any time, shall surrender the bulk purchaser's license at the 
        commissioner's office in St. Paul, Minnesota. 
           Sec. 6.  [296A.06] [REVOCATION OF LICENSES, PERMITS, AND 
        CERTIFICATES.] 
           If any person fails to comply with this chapter or the 
        rules adopted under this chapter, without reasonable cause, the 
        commissioner may give the person 30 days' notice in writing, 
        specifying the violations, and stating that based upon such 
        violations the commissioner intends to revoke the person's 
        license, permit, or certificate.  The notice shall also advise 
        the person of the person's right to contest the revocation under 
        this section and the general procedures for a contested case 
        hearing under chapter 14.  The notice may be served personally 
        or by mail in the manner prescribed for service of an order of 
        assessment.  A license, permit, or certificate is revoked when 
        the commissioner serves a notice of revocation upon the person 
        after 30 days have passed following the date of the notice of 
        intent to revoke without the person requesting a hearing.  If a 
        hearing is timely requested and held, the license, permit, or 
        certificate is revoked after the commissioner serves an order of 
        revocation under section 14.62, subdivision 1. 
           Sec. 7.  [296A.07] [GASOLINE TAX.] 
           Subdivision 1.  [TAX IMPOSED.] There is imposed an excise 
        tax on gasoline, gasoline blended with ethanol, and agricultural 
        alcohol gasoline used in producing and generating power for 
        propelling motor vehicles used on the public highways of this 
        state.  The tax is imposed on the first licensed distributor who 
        received the product in Minnesota.  For purposes of this 
        section, gasoline is defined in section 296A.01, subdivisions 
        10, 18, 20, 23, 24, 25, 32, and 34.  The tax is payable at the 
        time and in the form and manner prescribed by the commissioner.  
        The tax is payable at the rates specified in subdivision 3, 
        subject to the exceptions and reductions specified in section 
        296A.17. 
           Subd. 2.  [TAX IMPOSED FOR MARINE USE.] Subject to the 
        provisions of section 296A.16, subdivision 2, there is imposed 
        an excise tax, at the same rate per gallon as the gasoline 
        excise tax, on all marine gasoline received, sold, stored, or 
        withdrawn from storage in this state.  This tax is payable at 
        the times, in the manner, and by persons specified in this 
        chapter. 
           Subd. 3.  [RATE OF TAX.] The gasoline excise tax is imposed 
        at the following rates: 
           (1) E85 is taxed at the rate of 14.2 cents per gallon; 
           (2) M85 is taxed at the rate of 11.4 cents per gallon; and 
           (3) all other gasoline is taxed at the rate of 20 cents per 
        gallon. 
           Subd. 4.  [TRANSIT SYSTEMS EXEMPT.] The provisions of 
        subdivision 1 do not apply to gasoline purchased by a transit 
        system or transit provider receiving financial assistance or 
        reimbursement under section 174.24, 256B.0625, subdivision 17, 
        or 473.384. 
           Sec. 8.  [296A.08] [SPECIAL FUEL TAX.] 
           Subdivision 1.  [TAX IMPOSED.] There is imposed an excise 
        tax on all special fuel at the rates specified in subdivision 
        2.  For purposes of this section, "owner or operator" means the 
        operation of licensed motor vehicles, whether loaded or empty, 
        whether for compensation or not for compensation, and whether 
        owned by or leased to the motor carrier who operates them or 
        causes them to operated. 
           (a) For undyed diesel fuel and undyed kerosene, the tax is 
        imposed on the first licensed distributor who received the 
        product in Minnesota. 
           (b) For dyed fuel being used illegally in a licensed motor 
        vehicle, the tax is imposed on the owner or operator of the 
        motor vehicle. 
           (c) For dyed fuel used in a motor vehicle but subject to a 
        federal exemption, although no federal tax may be imposed, the 
        owner or operator of the vehicle is liable for the state tax. 
           (d) For other fuels, including jet fuel, propane, and 
        compressed natural gas, the tax is imposed on the distributor, 
        special fuel dealer, or bulk purchaser. 
           (e) Any person delivering special fuel on which the excise 
        tax has not previously been paid, into the supply tank of an 
        aircraft or a licensed motor vehicle shall report such delivery 
        and shall pay, or collect and pay the excise tax on the special 
        fuel so delivered to the commissioner. 
           Subd. 2.  [RATE OF TAX.] The special fuel excise tax is 
        imposed at the following rates: 
           (1) Liquefied petroleum gas or propane is taxed at the rate 
        of 15 cents per gallon. 
           (2) Liquefied natural gas is taxed at the rate of 12 cents 
        per gallon. 
           (3) Compressed natural gas is taxed at the rate of $1.739 
        per thousand cubic feet; or 20 cents per gasoline equivalent, as 
        defined by the National Conference on Weights and Measures, 
        which is 5.66 pounds of natural gas. 
           (4) All other special fuel is taxed at the same rate as the 
        gasoline excise tax as specified in section 296A.07, subdivision 
        2.  The tax is payable in the form and manner prescribed by the 
        commissioner. 
           Subd. 3.  [TRANSIT SYSTEMS EXEMPT.] The provisions of 
        subdivisions 1 and 2 do not apply to special fuel or alternative 
        fuels purchased by a transit system or transit provider 
        receiving financial assistance or reimbursement under section 
        174.24, 256B.0625, subdivision 17, or 473.384.  
           Subd. 4.  [TAX IMPOSED ON USE.] If it is determined by the 
        commissioner from an examination of any records pertaining to 
        the operation of any licensed motor vehicle which uses special 
        fuel, that the special fuel tax on the special fuel used in this 
        state has not been paid to this state, or to any other state if 
        purchased in such other state, there is hereby imposed an excise 
        tax at the same rate per gallon as the gasoline tax, on all such 
        special fuel.  All assessments of tax made under this 
        subdivision shall be paid by the user to the commissioner upon 
        demand.  For purposes of this subdivision, "special fuel" means 
        any fuel other than gasoline used in a licensed motor vehicle in 
        this state. 
           Subd. 5.  [INTENDED USE.] All special fuel except that used 
        for aviation fuel shall be deemed to be intended for use in a 
        licensed motor vehicle in this state at the time of sale or 
        delivery. 
           Subd. 6.  [LIABILITY FOR FAILURE TO KEEP ADEQUATE RECORDS.] 
        If adequate records are not kept, or if the sales are not 
        adequately accounted for, then all sales of combustible gases 
        and liquid petroleum products, except gasoline, are deemed to be 
        sales of special fuel.  In such cases, there is imposed an 
        excise tax of the same rate per gallon as the gasoline excise 
        tax on all such products, and the vendor is liable for the tax. 
           Sec. 9.  [296A.09] [AVIATION TAX.] 
           Subdivision 1.  [GASOLINE TAX IMPOSED.] Subject to any 
        refunds or credits there is imposed an excise tax, at the rate 
        of five cents per gallon on all aviation gasoline received, 
        sold, stored, or withdrawn from storage in this state.  Aviation 
        gasoline is defined in section 296A.01, subdivision 7. 
           Subd. 2.  [SPECIAL FUEL TAX IMPOSED.] There is imposed an 
        excise tax of the same rate per gallon as the aviation gasoline 
        on all jet fuel or special fuel received, sold, stored, or 
        withdrawn from storage in this state, for use as substitutes for 
        aviation gasoline and not otherwise taxed as gasoline.  Jet fuel 
        is defined in section 296A.01, subdivision 8. 
           Subd. 3.  [EXCEPTION TO TAX FOR AVIATION USE.] The 
        provisions of subdivisions 1 and 2 do not apply to aviation 
        gasoline or special fuel purchased and placed in the fuel tanks 
        of an aircraft outside the state, even though the gasoline may 
        be consumed within this state. 
           Subd. 4.  [MANNER OF PAYMENT.] These taxes are payable in 
        the form and manner prescribed by the commissioner. 
           Subd. 5.  [TAX NOT ON CONSUMPTION.] The taxes imposed by 
        subdivisions 1 and 2 are expressly declared not to be a tax upon 
        consumption of aviation gasoline or special fuel by an aircraft. 
           Sec. 10.  [296A.10] [LIABILITY FOR UNPAID TAX.] 
           Subdivision 1.  [UNREPORTED FUEL.] It is the duty of every 
        distributor, dealer, and person who sells or uses gasoline 
        manufactured, produced, received, or stored by the distributor, 
        dealer, or person, and of every person using gasoline in motor 
        vehicles or special fuel in licensed motor vehicles to know 
        whether the tax has been paid on the fuel.  If the tax has not 
        been reported or if the tax has not been paid, it is that 
        person's duty to report to the commissioner the quantity of the 
        gasoline or special fuel sold or used and to pay the tax as 
        provided in this chapter.  All provisions of this chapter 
        relating to the calculation, collections, and payment of the tax 
        shall be applicable to any such person, dealer, or distributor. 
           Subd. 2.  [UNREPORTED AVIATION GASOLINE.] The provisions of 
        subdivision 1 do not apply to aviation gasoline.  It is the duty 
        of every distributor, dealer, and person who receives, sells, 
        stores, or withdraws from storage in this state aviation 
        gasoline manufactured, produced, received, or stored by the 
        distributor, dealer, or person to know whether the tax has been 
        paid on the aviation gasoline.  If the fuel has not been 
        reported, or if the tax has not been paid to the commissioner, 
        it is that person's duty to report to the commissioner the 
        quantity of such gasoline so received, sold, stored, or 
        withdrawn from storage.  That person is also liable for the 
        payment of the tax.  All provisions of this chapter relating to 
        the calculation, collections, and payment of the tax apply to 
        any such person, dealer, or distributor. 
           Sec. 11.  [296A.11] [SELLER MAY COLLECT TAX.] 
           A person who directly or indirectly pays a gasoline or 
        special fuel tax as provided in this chapter and who does not in 
        fact use the gasoline or special fuel in motor vehicles in this 
        state or receive, store, or withdraw it from storage to be used 
        personally for the purpose of producing or generating power for 
        propelling aircraft, but sells or otherwise disposes of the 
        same, except as provided in section 296A.16, subdivision 3, is 
        hereby authorized to collect, from the person to whom the 
        gasoline or special fuel is so sold or disposed of, the tax so 
        paid, and is hereby required, upon request, to make, sign, and 
        deliver to such person an invoice of such sale or disposition.  
        The sums collected must be held as a special fund in trust for 
        the state of Minnesota. 
           Sec. 12.  [296A.12] [GASOLINE AND SPECIAL FUEL TAX IN LIEU 
        OF OTHER TAXES.] 
           Gasoline and special fuel excise taxes shall be in lieu of 
        all other taxes imposed upon the business of selling or dealing 
        in gasoline or special fuel, whether imposed by the state or by 
        any of its political subdivisions, but are in addition to all ad 
        valorem taxes now imposed by law.  Nothing in this chapter is 
        construed as prohibiting the governing body of any city of this 
        state from licensing and regulating such business where its 
        authority is conferred by state law or city charter. 
           Sec. 13.  [296A.13] [PERSONAL LIABILITY FOR TAX.] 
           Liability for payment of taxes under this chapter includes 
        a responsible person or entity described in the personal 
        liability provisions of section 270.101. 
           Sec. 14.  [296A.14] [TAX AS PERSONAL DEBT OF FIDUCIARY.] 
           The tax imposed by this chapter, 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 
        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. 
           Sec. 15.  [296A.15] [PAYMENT OF TAX.] 
           Subdivision 1.  [MONTHLY GASOLINE REPORTS; SHRINKAGE 
        ALLOWANCE.] (a) Except as provided in paragraph (e), on or 
        before the 23rd day of each month, every person who is required 
        to pay a gasoline tax shall file with the commissioner a report, 
        in the form and manner prescribed by the commissioner, showing 
        the number of gallons of petroleum products received by the 
        reporter during the preceding calendar month, and other 
        information the commissioner may require.  A written report is 
        deemed to have been filed as required in this subdivision if 
        postmarked on or before the 23rd day of the month in which the 
        tax is payable. 
           (b) The number of gallons of gasoline must be reported in 
        United States standard liquid gallons, 231 cubic inches, except 
        that the commissioner may upon written application and for cause 
        shown permit the distributor to report the number of gallons of 
        gasoline as corrected to a temperature of 60-degrees 
        Fahrenheit.  If the application is granted, all gasoline covered 
        in the application and allowed by the commissioner must continue 
        to be reported by the distributor on the adjusted basis for a 
        period of one from the date of the granting of the application.  
        The number of gallons of petroleum products other than gasoline 
        must be reported as originally invoiced.  Each report must show 
        separately the number of gallons of aviation gasoline received 
        by the reporter during each calendar month. 
           (c) Each report must also include the amount of gasoline 
        tax on gasoline received by the reporter during the preceding 
        month.  In computing the tax a deduction of three percent of the 
        quantity of gasoline received by a distributor shall be made for 
        evaporation and loss.  At the time of reporting, the reporter 
        shall submit satisfactory evidence that one-third of the three 
        percent deduction has been credited or paid to dealers on 
        quantities sold to them. 
           (d) Each report shall contain a confession of judgment for 
        the amount of the tax shown due to the extent not timely paid. 
           (e) Under certain circumstances and with the approval of 
        the commissioner, taxpayers may be allowed to file reports 
        annually. 
           Subd. 2.  [PETROLEUM TANK RELEASE CLEANUP FEE.] Persons 
        required to pay a petroleum tank release cleanup fee under 
        section 115C.08, subdivision 3, must file a report with the 
        commissioner of revenue.  Each report must include the amount of 
        fees due on petroleum products.  Reports must be filed in the 
        form and manner prescribed by the commissioner.  A written 
        report is considered filed as required if postmarked on or 
        before the 23rd day of the month in which the fee is payable. 
           Subd. 3.  [MONTHLY SPECIAL FUEL REPORTS; SHRINKAGE 
        ALLOWANCE.] On or before the 23rd day of each month, 
        distributors, special fuel dealers, and bulk purchasers shall 
        file a report in the form and manner prescribed by the 
        commissioner.  Reports shall contain information as follows: 
           (a) Distributors of undyed diesel fuel and undyed kerosene 
        must file a monthly tax return with the department listing all 
        purchases or receipts of undyed diesel fuel and undyed 
        kerosene.  Distributors may be allowed to take a credit or 
        credits under section 296A.16, subdivision 1. 
           (b) Distributors and dealers of special fuel other than 
        undyed diesel fuel or undyed kerosene shall report the total 
        number of gallons delivered to them during the preceding 
        calendar month and shall pay the special fuel excise tax due to 
        the commissioner.  The invoice must show the true and correct 
        name and address of the purchaser, and the purchaser's 
        signature.  The report shall contain other information as the 
        commissioner may require. 
           (c) Distributors and dealers of special fuel other than 
        undyed diesel fuel or undyed kerosene must pay the special fuel 
        excise tax on all special fuel delivered or sold into the supply 
        tank of an aircraft or licensed motor vehicle and shall file a 
        report with the commissioner.  The report shall show the total 
        number of gallons delivered or sold into the supply tank of an 
        aircraft or licensed motor vehicle during the preceding calendar 
        month and the special fuel excise tax due shall be paid to the 
        commissioner.  Any person delivering special fuel on which the 
        excise tax has not previously been paid into the supply tank of 
        an aircraft or a licensed motor vehicle shall report such 
        delivery and shall pay or collect and pay to the commissioner 
        the excise tax on the special fuel so delivered. 
           (d) Distributors and special fuel dealers may, subject to 
        the approval of the commissioner, elect to pay to the 
        commissioner the special fuel excise tax on all special fuel 
        delivered or sold into the supply tank of an aircraft or 
        licensed motor vehicle.  Under this option, an invoice must be 
        issued at the time of each delivery showing the name and address 
        of the purchaser, date of sale, number of gallons, price per 
        gallon, and total amount of sale.  A separate sales ticket book 
        shall be maintained for special fuel sales.  The tax is also 
        imposed on all special fuel held in storage on the effective 
        date of this election. 
           (e) Bulk purchasers shall report and pay the special fuel 
        excise tax on all special fuel, including alternative fuels, 
        except undyed diesel fuel or undyed kerosene purchased by them 
        for storage during the preceding calendar month.  In such cases 
        as the commissioner may permit, credit for the excise tax due or 
        previously paid on special fuel not used in aircraft or licensed 
        motor vehicles may be allowed in computing tax liability.  The 
        report shall contain other information as the commissioner may 
        require. 
           (f) In computing the special fuel excise tax due, a 
        deduction of one percent of the quantity of special fuel on 
        which tax is due shall be made for evaporation and loss. 
           (g) Each report shall contain a confession of judgment for 
        the amount of the tax shown due to the extent not timely paid. 
           Subd. 4.  [FAILURE TO USE OR SELL FOR INTENDED PURPOSE; 
        REPORTS REQUIRED.] (a) Any person who buys aviation gasoline or 
        special fuel for aircraft use and who has paid the excise taxes 
        due directly or indirectly through the amount of the tax being 
        included in the price, or otherwise, and uses said gasoline or 
        special fuel in motor vehicles or knowingly sells it to any 
        person for use in motor vehicles shall, on or before the 23rd 
        day of the month following that in which such gasoline or 
        special fuel was so used or sold, report the fact of the use or 
        sale to the commissioner in the form and manner prescribed by 
        the commissioner. 
           (b) Any person who buys gasoline other than aviation 
        gasoline and who has 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 
        knowingly sells such gasoline to any person to be used for the 
        purpose of producing or generating power for propelling 
        aircraft, or who receives, stores, or withdraws from storage 
        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 
        the sale, storage, or withdrawal from storage to the 
        commissioner in the form and manner prescribed by the 
        commissioner. 
           Subd. 5.  [ON FARM BULK STORAGE OF GASOLINE OR SPECIAL 
        FUEL; ETHANOL FOR PERSONAL USE.] Notwithstanding the provisions 
        of this chapter, a farmer who uses gasoline or any special fuel 
        on which a tax has not been paid shall report and pay the tax on 
        all gasoline or special fuel delivered into the supply tank of a 
        licensed motor vehicle during the preceding calendar year.  The 
        tax must be reported and paid in the form and manner prescribed 
        by the commissioner together with any refund claim filed by the 
        taxpayer under section 296A.16.  If no refund claim is filed, 
        the tax must be reported and paid annually by March 15 or more 
        frequently, as the commissioner may prescribe.  Any producer 
        qualifying under this subdivision is exempt from the licensing 
        requirements in section 296A.03, subdivision 1. 
           Subd. 6.  [INSPECTION FEES.] Persons required to pay an 
        inspection fee under section 239.101 must file a report with the 
        commissioner of revenue.  Each report must include the amount of 
        inspection fees due on petroleum products.  Reports must be 
        filed in the form and manner prescribed by the commissioner.  A 
        written report is considered filed as required if postmarked on 
        or before the 23rd day of the month in which the fee is payable. 
           Subd. 7.  [ELECTRONIC FUNDS TRANSFER REQUIRED.] All 
        remittances must be made by means of electronic funds transfer 
        as defined in section 336.4A-104, paragraph (a).  The funds 
        transfer payment date, as defined in section 336.4A-401, must be 
        on or before the date the remittance is due.  If the date the 
        remittance is due is not a funds transfer business day, as 
        defined in section 336.4A-105, paragraph (a), clause (4), the 
        payment date must be on or before the funds transfer business 
        day next following the date the remittance is due.  
           Subd. 8.  [ELECTRONICALLY FILED RETURNS OR REPORTS; 
        SIGNATURES.] The commissioner may require that returns or 
        reports be filed electronically.  For purposes of this chapter, 
        the name of the taxpayer, the name of the taxpayer's authorized 
        agent, or the taxpayer's identification number constitutes a 
        signature when transmitted as part of the information on returns 
        or reports filed by electronic means by the taxpayer or at the 
        taxpayer's direction.  "Electronic means" includes, but is not 
        limited to, the use of a touch-tone telephone to transmit return 
        or report information in a manner prescribed by the commissioner.
           Sec. 16.  [296A.16] [REFUNDS OR CREDITS.] 
           Subdivision 1.  [CREDIT OR REFUND OF GASOLINE OR SPECIAL 
        FUEL TAX PAID.] The commissioner shall allow the distributor 
        credit or refund of the tax paid on gasoline and special fuel: 
           (1) exported or sold for export from the state, other than 
        in the supply tank of a motor vehicle or of an aircraft; 
           (2) sold to the United States government to be used 
        exclusively in performing its governmental functions and 
        activities or to any "cost plus a fixed fee" contractor employed 
        by the United States government on any national defense project; 
           (3) if the fuel is placed in a tank used exclusively for 
        residential heating; 
           (4) destroyed by accident while in the possession of the 
        distributor; 
           (5) in error; 
           (6) in the case of gasoline only, sold for storage in an 
        on-farm bulk storage tank, if the tax was not collected on the 
        sale; and 
           (7) in such other cases as the commissioner may permit, 
        consistent with the provisions of this chapter and other laws 
        relating to the gasoline and special fuel excise taxes. 
           Subd. 2.  [FUEL USED IN OTHER VEHICLES; REFUND.] Any person 
        who shall buy and use gasoline for a qualifying purpose other 
        than use in motor vehicles, snowmobiles except as provided in 
        clause (2), or motorboats, or special fuel for a qualifying 
        purpose other than use in licensed motor vehicles, and who shall 
        have paid the tax directly or indirectly through the amount of 
        the tax being included in the price of the gasoline or special 
        fuel, or otherwise, shall be reimbursed and repaid the amount of 
        the tax paid upon filing with the commissioner a claim in the 
        form and manner prescribed by the commissioner, and containing 
        the information the commissioner shall require.  By signing any 
        such claim which is false or fraudulent, the applicant shall be 
        subject to the penalties provided in this chapter for knowingly 
        making a false claim.  The claim shall set forth the total 
        amount of the gasoline so purchased and used by the applicant 
        other than in motor vehicles, or special fuel purchased and used 
        by the applicant other than in licensed motor vehicles, 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 the payments, shall 
        approve the claim and transmit it to the commissioner of 
        finance.  The words "gasoline" or "special fuel" as used in this 
        subdivision do not include aviation gasoline or special fuel for 
        aircraft.  Gasoline or special fuel bought and used for a 
        "qualifying purpose" means: 
           (1) Gasoline or special fuel used in carrying on a trade or 
        business, used on a farm situated in Minnesota, and used for a 
        farming purpose.  "Farm" and "farming purpose" have the meanings 
        given them in section 6420(c)(2), (3), and (4) of the Internal 
        Revenue Code of 1986, as amended through December 31, 1997. 
           (2) Gasoline or special fuel used for off-highway business 
        use. "Off-highway business use" means any use off the public 
        highway by a person in that person's trade, business, or 
        activity for the production of income.  Off-highway business use 
        includes 
           (i) use of a passenger snowmobile off the public highways 
        as part of the operations of a resort as defined in section 
        157.15, subdivision 11; and 
           (ii) use of gasoline or special fuel to operate a power 
        takeoff unit on a vehicle, but not including fuel consumed 
        during idling time.  
        Off-highway business use does not include use as a fuel in a 
        motor vehicle which, at the time of use, is registered or is 
        required to be registered for highway use under the laws of any 
        state or foreign country. 
           (3) Gasoline or special fuel placed in the fuel tanks of 
        new motor vehicles, manufactured in Minnesota, and shipped by 
        interstate carrier to destinations in other states or foreign 
        countries.  
           By July 1, 1998, the commissioner shall adopt rules that 
        determine the rates and percentages necessary to develop 
        formulas for calculating the refund under clause (2), item (ii). 
           Subd. 3.  [DESTRUCTION BY ACCIDENT; REFUND TO DEALER.] 
        Notwithstanding the provisions of subdivision 1, the 
        commissioner shall allow a dealer a refund of: 
           (1) the tax paid by the distributor on gasoline, undyed 
        diesel fuel, or undyed kerosene destroyed by accident while in 
        the possession of the dealer; or 
           (2) the tax paid by a distributor or special fuels dealer 
        on other special fuels destroyed by accident while in the 
        possession of the dealer. 
           Subd. 4.  [REFRIGERATOR UNITS; REFUNDS.] Notwithstanding 
        the provisions of subdivision 1, the commissioner shall allow a 
        special fuel dealer a refund of the tax paid on fuel sold 
        directly into a supply tank of a refrigeration unit with a 
        separate engine and used exclusively by that refrigeration unit. 
        A claim for refund may be filed as provided in this section. 
           Subd. 5.  [QUALIFYING SERVICE STATIONS CREDIT.] 
        Notwithstanding any other provision of law to the contrary, the 
        tax imposed on gasoline, undyed diesel fuel, or undyed kerosene 
        delivered to a qualified service station may not exceed, or must 
        be reduced to, a rate not more than three cents per gallon above 
        the state tax rate imposed on such products sold by a service 
        station in a contiguous state located within the distance 
        indicated in this subdivision.  A distributor shall be allowed a 
        credit or refund for the amount of reduction computed in 
        accordance with this subdivision.  For purposes of this 
        subdivision, a "qualifying service station" means a service 
        station located within 7.5 miles, measured by the shortest route 
        by public road, from a service station selling like product in 
        the contiguous state. 
           Subd. 6.  [SALES TO GOVERNMENTS AND SCHOOLS; CREDIT.] Until 
        October 1, 1999, a distributor shall be allowed a credit on each 
        gallon of fuel grade alcohol blended with gasoline to produce 
        agricultural alcohol gasoline which is sold to the state, local 
        units of government, or for use in the transportation of pupils 
        to and from school-related events in vehicles owned by or under 
        contract to a school district.  The amount of the credit for 
        every gallon is: 
           (1) until October 1, 1997, 60 cents; 
           (2) until October 1, 1998, 40 cents; and 
           (3) until October 1, 1999, 20 cents. 
           Subd. 7.  [CIVIL PENALTY FOR FILING FALSE CLAIM.] A person 
        who violates section 296A.23, subdivision 1, shall forfeit the 
        full amount of the claim.  In addition, a person who is 
        convicted under section 296A.23 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. 
           Subd. 8.  [APPROPRIATION.] There is appropriated to the 
        persons entitled to refund or credit under this section, from 
        the fund or account in the state treasury to which the money was 
        credited, an amount sufficient to make the credit or refund. 
           Sec. 17.  [296A.17] [AVIATION REFUNDS.] 
           Subdivision 1.  [AVIATION REFUND REQUIREMENTS.] Any person 
        claiming to be entitled to any refund or credit provided for in 
        subdivision 3 shall receive the refund or credit upon filing 
        with the commissioner a claim in such form and manner prescribed 
        by the commissioner.  The claim shall set forth, among other 
        things, the total number of gallons of aviation gasoline or 
        special fuel for aircraft use upon which the claimant has 
        directly or indirectly paid the excise tax provided for in this 
        chapter, during the calendar year, which has been received, 
        stored, or withdrawn from storage by the claimant in this state 
        and not sold or otherwise disposed of to others.  All claims for 
        refunds under this subdivision shall be made on or before April 
        30 following the end of the calendar year for which the refund 
        is claimed. 
           Subd. 2.  [CLAIMS FOR REFUND; AVIATION TAX.] (a) Any person 
        who buys aviation gasoline or special fuel for aircraft use and 
        who has paid the excise taxes directly or indirectly through the 
        amount of the tax being included in the price, or otherwise, who 
        does 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 claim in the form and manner prescribed by the 
        commissioner.  The claim shall state the total amount of the 
        aviation gasoline or special fuel for aircraft use purchased and 
        used by the applicant, and shall state when and for what purpose 
        it was used.  On being satisfied that the claimant is entitled 
        to payment, the commissioner shall approve the claim and 
        transmit it to the commissioner of finance.  The postmark on the 
        envelope in which a written claim is mailed determines the date 
        of filing. 
           (b) If a claim contains an error in preparation 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. 
           (c) An applicant who files a claim that is false or 
        fraudulent, is subject to the penalties provided in section 
        296A.23 for knowingly and willfully making a false claim. 
           Subd. 3.  [REFUNDS ON GRADUATED BASIS.] Any person who has 
        directly or indirectly paid the excise tax on aviation gasoline 
        or special fuel for aircraft use provided for by this chapter, 
        shall, as to all such aviation gasoline and special fuel 
        received, stored, or withdrawn from storage by the person in 
        this state in any calendar year and not sold or otherwise 
        disposed of to others, or intended for sale or other disposition 
        to others, on which such tax has been so paid, be entitled to 
        the following graduated reductions in such tax for that calendar 
        year, to be obtained by means of the following refunds: 
           (1) on each gallon of such aviation gasoline or special 
        fuel up to 50,000 gallons, all but five cents per gallon; 
           (2) on each gallon of such aviation gasoline or special 
        fuel above 50,000 gallons and not more than 150,000 gallons, all 
        but two cents per gallon; 
           (3) on each gallon of such aviation gasoline or special 
        fuel above 150,000 gallons and not more than 200,000 gallons, 
        all but one cent per gallon; 
           (4) on each gallon of such aviation gasoline or special 
        fuel above 200,000, all but one-half cent per gallon. 
           Subd. 4.  [AVIATION GASOLINE TAX REFUND CLAIM; CIVIL 
        PENALTY.] If any distributor or other person, with intent to 
        unlawfully secure any refund provided for in subdivision 3, 
        shall knowingly file a false or fraudulent claim, there is 
        imposed upon the person a penalty in an amount equal to 50 
        percent of the amount of the refund unlawfully secured, in 
        addition to that amount.  The penalty imposed by this 
        subdivision shall be collected as part of the tax. 
           Subd. 5.  [APPROPRIATION.] There is appropriated to the 
        persons entitled to refund under this section, from the fund or 
        account in the state treasury to which the money was credited, 
        an amount sufficient to make the credit or refund.  All money in 
        excess of the amount the commissioner certifies is reasonably 
        required for the refunds must be transferred by the commissioner 
        of finance to the state airports fund. 
           Sec. 18.  [296A.18] [APPORTIONMENT OF TAX; DEPOSIT OF 
        PROCEEDS.] 
           Subdivision 1.  [INTENT; GASOLINE USE.] All gasoline 
        received in this state and all gasoline produced in or brought 
        into this state except aviation gasoline and marine gasoline 
        shall be determined to be intended for use in motor vehicles in 
        this state.  
           Subd. 2.  [MOTORBOATS.] Approximately 1-1/2 percent of all 
        gasoline received in this state and 1-1/2 percent of all 
        gasoline produced or brought into this state, except gasoline 
        used for aviation purposes, is being used as fuel for the 
        operation of motorboats on the waters of this state and of the 
        total revenue derived from the imposition of the gasoline fuel 
        tax for uses other than for aviation purposes, 1-1/2 percent of 
        such revenues is the amount of tax on fuel used in motorboats 
        operated on the waters of this state.  The amount of unrefunded 
        tax paid on gasoline used for motor boat purposes as computed in 
        this chapter shall be paid into the state treasury and credited 
        to a water recreation account in the special revenue fund for 
        acquisition, development, maintenance, and rehabilitation of 
        sites for public access and boating facilities on public waters; 
        lake and river improvement; state park development; and boat and 
        water safety. 
           Subd. 3.  [SNOWMOBILES.] Approximately one percent in 
        fiscal years 1998 and 1999, and three-fourths of one percent 
        thereafter, of all gasoline received in and produced or brought 
        into this state, except gasoline used for aviation purposes, is 
        being used as fuel for the operation of snowmobiles in this 
        state, and of the total revenue derived from the imposition of 
        the gasoline fuel tax for uses other than for aviation purposes, 
        one percent in fiscal years 1998 and 1999, and three-fourths of 
        one percent thereafter, of such revenues is the amount of tax on 
        fuel used in snowmobiles operated in this state. 
           Subd. 4.  [ALL-TERRAIN VEHICLES.] Approximately 0.15 of one 
        percent of all gasoline received in or produced or brought into 
        this state, except gasoline used for aviation purposes, is being 
        used for the operation of all-terrain vehicles in this state, 
        and of the total revenue derived from the imposition of the 
        gasoline fuel tax, 0.15 of one percent is the amount of tax on 
        fuel used in all-terrain vehicles operated in this state. 
           Subd. 5.  [OFF-HIGHWAY MOTORCYCLES.] Approximately 0.046 of 
        one percent of all gasoline received or produced in or brought 
        into this state, except gasoline used for aviation purposes, is 
        being used for the operation of off-highway motorcycles in this 
        state, and of the total revenue derived from the imposition of 
        the gasoline fuel tax for uses other than for aviation purposes, 
        0.046 of one percent is the amount of tax on fuel used in 
        off-highway motorcycles operated in this state. 
           Subd. 6.  [OFF-ROAD VEHICLES.] Approximately 0.164 of one 
        percent of all gasoline received or produced in or brought into 
        this state, except gasoline used for aviation purposes, is being 
        used for the off-road operation of off-road vehicles, as defined 
        in section 84.797, in this state, and of the total revenue 
        derived from the imposition of the gasoline fuel tax for uses 
        other than aviation purposes, 0.164 of one percent is the amount 
        of tax on fuel used for off-road operation of off-road vehicles 
        in this state. 
           Subd. 7.  [FOREST ROADS.] Approximately 0.116 percent of 
        the total annual unrefunded revenue from the gasoline fuel tax 
        on all gasoline and special fuel received in, produced, or 
        brought into this state, except gasoline and special fuel used 
        for aviation purposes, is derived from the operation of motor 
        vehicles on state forest roads and county forest access roads.  
        This revenue is appropriated from the highway user tax 
        distribution fund and must be transferred and credited in equal 
        installments on July 1 and January 1 to the state forest road 
        account established in section 89.70.  Of this amount, 0.0605 
        percent is annually derived from motor vehicles operated on 
        state forest roads and 0.0555 percent is annually derived from 
        motor vehicles operated on county forest access roads in this 
        state.  An amount equal to 0.0555 percent of the unrefunded 
        revenue must be annually transferred to counties for the 
        management and maintenance of county forest roads. 
           Subd. 8.  [AVIATION FUEL TAX FUND.] The revenues derived 
        from the excise taxes on aviation gasoline and on special fuel 
        received, sold, stored, or withdrawn from storage as substitutes 
        for aviation gasoline, shall be paid into the state treasury and 
        credited to the aviation fuel tax fund.  There is hereby 
        appropriated such sums as are needed to carry out the provisions 
        of this subdivision. 
           Subd. 9.  [COMPUTATION OF UNREFUNDED TAX.] The amount of 
        unrefunded tax shall be a sum equal to 1-1/2 percent of all 
        revenues derived from the excise taxes on gasoline, except on 
        gasoline used for aviation purposes, together with interest 
        thereon and penalties for delinquency in payment, paid or 
        collected pursuant to the provisions of this chapter.  The 
        amount of such tax shall be computed for each six-month period 
        and shall be paid into the state treasury on November 1 and June 
        1 following each six-month period. 
           Sec. 19.  [296A.19] [REQUIRED RECORDS.] 
           Subdivision 1.  [RETAINING RECORDS.] All distributors, 
        dealers, special fuel dealers, bulk purchasers, and all users of 
        special fuel shall keep a true and accurate record of all 
        purchases, transfers, sales, and use of petroleum products and 
        special fuel, including copies of all sales tickets issued, in a 
        form and manner approved by the commissioner, and shall retain 
        all such records for 3-1/2 years. 
           Subd. 2.  [MAKING ACCESSIBLE.] The books and records of all 
        carriers of petroleum products, distributors, dealers, and 
        persons selling or using special fuel shall be made accessible 
        to the commissioner or an authorized representative. 
           Subd. 3.  [RECORDS EXAMINED.] The commissioner shall make 
        periodic examinations of all records kept by distributors, 
        special fuel dealers, bulk purchasers, or other persons selling 
        or using gasoline or special fuel. 
           Sec. 20.  [296A.20] [EXAMINATIONS AND AUDITS.] 
           Subdivision 1.  [EXAMINATION OF TAXPAYER.] To determine the 
        accuracy of a return or a report, or for the purpose of 
        collection, or in fixing liability or verifying information 
        under state tax law, 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.] When conducting an 
        investigation or an audit of a taxpayer, or for the purpose of 
        collection, or in fixing liability or verifying information 
        under state tax law, the commissioner or the commissioner's 
        agent 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, and other data for 
        inspection and copying; 
           (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 
        4 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 investigated may be served only 
        if: 
           (1) the subpoena relates to the investigation of a 
        particular person or an ascertainable group or class of persons; 
           (2) there is reasonable basis for believing that the person 
        or group or class of persons may fail or may have failed to 
        comply with the 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 all 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.] Disobedience of subpoenas issued under this section 
        shall be punished 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. 
           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 costs 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. 21.  [296A.21] [STATUTE OF LIMITATIONS.] 
           Subdivision 1.  [GENERAL RULE.] The commissioner shall make 
        determinations, corrections, and assessments with respect to 
        taxes and fees under this chapter, including interest, additions 
        to taxes, and assessable penalties.  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.  [COLLECTIONS.] No action shall be brought for the 
        collection of delinquent taxes and inspection fees under section 
        270.68 unless commenced within five years after the date of 
        assessment of the taxes and fees. 
           Subd. 3.  [FALSE OR FRAUDULENT REPORT.] In the case of a 
        false or fraudulent report with intent to evade tax or 
        inspection fee or of a failure to file a report, the taxes or 
        fees may be assessed at any time, and a proceeding in court for 
        their collection must be begun within five years after the 
        assessment. 
           Subd. 4.  [TIME LIMIT FOR GASOLINE, SPECIAL FUEL, OR 
        AVIATION GASOLINE REFUND.] No repayment shall be made unless the 
        claim and invoice shall be filed with the commissioner within 
        one year from the date of purchase.  The postmark on the 
        envelope in which a written claim is mailed shall determine its 
        date of filing. 
           Subd. 5.  [SUSPENSION OF TIME; BANKRUPTCY.] The period of 
        time during which a tax or fee must be assessed under this 
        chapter or collection proceedings commenced under subdivision 2 
        or 3 is suspended during the period from the date of filing of a 
        petition in bankruptcy until 30 days after the commissioner of 
        revenue receives notice that the bankruptcy proceedings have 
        been closed or dismissed or the automatic stay has been 
        terminated or has expired.  The suspension of the statute of 
        limitations under this subdivision applies to the person against 
        whom the petition in bankruptcy is filed and all other persons 
        who may also be wholly or partially liable for the tax under 
        this chapter. 
           Sec. 22.  [296A.22] [NONPAYMENT OF TAX; CIVIL PENALTIES.] 
           Subdivision 1.  [PENALTY FOR FAILURE TO PAY TAX, GENERAL 
        RULE.] Upon the failure of any person to pay any tax or fee when 
        due, a penalty of one percent per day for the first ten days of 
        delinquency shall accrue, and thereafter the tax, fees, and 
        penalty shall bear interest at the rate specified in section 
        270.75. 
           Subd. 2.  [COLLECTION AUTHORITY.] Upon such a failure to 
        pay any tax or fees within the time provided by this chapter, 
        all taxes and fees imposed by this chapter shall become 
        immediately due and payable, and may be collected as provided in 
        chapter 270. 
           Subd. 3.  [OPERATING WITHOUT A LICENSE.] If any person 
        operates as a distributor, special fuel dealer, bulk purchaser, 
        or motor carrier without first securing the license required 
        under this chapter, any tax or fee imposed by this chapter shall 
        become immediately due and payable.  A penalty of 25 percent is 
        imposed upon the tax and fee due.  The tax, fees, and penalty 
        shall bear interest at the rate specified in section 270.75. 
           Subd. 4.  [UNLAWFUL USE OF DYED FUEL.] (a) If any dyed fuel 
        is sold or held for sale by a person for any use which the 
        person knows or has reason to know is not a nontaxable use of 
        the fuel; or if any dyed fuel is held for use or used in a 
        licensed motor vehicle or for any other use by a person for a 
        use other than a nontaxable use and the person knew, or had 
        reason to know, that the fuel was so dyed; or if a person 
        willfully alters, or attempts to alter, the strength or 
        composition of any dye or marking in any dyed fuel, then the 
        person shall pay a penalty in addition to the tax, if any. 
           (b) Except as provided in paragraph (c), the amount of 
        penalty under paragraph (a) for each act is the greater of 
        $1,000, or $10 for each gallon of dyed fuel involved. 
           (c) With regard to a multiple violation under paragraph 
        (a), the penalty shall be applied by increasing the amount in 
        paragraph (b) by the product of (1) such amount, and (2) the 
        number of prior penalties, if any, imposed by this section on 
        the person, or a related person, or any predecessor of the 
        person or related person. 
           (d) If a penalty is imposed under this subdivision on a 
        business entity, each officer, employee, or agent of the entity 
        who willfully participated in any act giving rise to the penalty 
        is jointly and severally liable with the entity for the penalty. 
           Subd. 5.  [RECEIVER APPOINTED.] In the event a suit is 
        instituted as provided in subdivision 2, the court shall, upon 
        application, appoint a receiver of the property and business of 
        the delinquent defendant for the purpose of impounding the same 
        as security for any judgment which has been or may be recovered. 
           Subd. 6.  [SALE PROHIBITED UNDER CERTAIN CONDITIONS.] No 
        petroleum product shall be unloaded or sold by any person or 
        distributor whose tax and inspection fees are the basis for 
        collection action under subdivision 2. 
           Subd. 7.  [PAYMENT OF PENALTIES.] The penalties imposed by 
        this section are collected and paid in the same manner as taxes. 
           Subd. 8.  [PENALTIES ARE ADDITIONAL.] The civil penalties 
        imposed by this section are in addition to the criminal 
        penalties imposed by this chapter. 
           Sec. 23.  [296A.23] [CRIMINAL PENALTIES.] 
           Subdivision 1.  [PROVIDING FALSE INFORMATION.] A person 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 this chapter, is guilty of a gross misdemeanor. 
           Subd. 2.  [WILLFUL EVASION.] A person who willfully 
        attempts in any manner to evade or defeat any tax imposed by 
        this chapter, including, but not limited to, making and 
        subscribing any false statement in any report, record, claim, or 
        sales ticket required by this chapter; or making a false claim 
        for a refund under section 296A.16, subdivision 2, is guilty of 
        a felony. 
           Subd. 3.  [OPERATION OF VEHICLE WITHOUT PAYMENT OF TAX.] A 
        person who operates, or causes 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 assumed by another person licensed under this 
        chapter, is guilty of a misdemeanor. 
           Subd. 4.  [USE OF UNTAXED FUEL IN MOTOR VEHICLE.] A person 
        who uses gasoline, which has been delivered into an on-farm bulk 
        storage tank, and on which no tax has been paid as provided in 
        section 296A.15, subdivision 5, and who uses this gasoline for 
        propelling a motor vehicle on the public highways of this state 
        is guilty of a misdemeanor. 
           Subd. 5.  [STATE EMPLOYEES; PROHIBITION AGAINST ENGAGING IN 
        BUSINESS AS DISTRIBUTOR.] An officer or employee of the state of 
        Minnesota charged with the enforcement of a provision of this 
        chapter who is employed by or who engages in business as a 
        distributor or dealer in petroleum products is guilty of a 
        misdemeanor. 
           Subd. 6.  [FIDUCIARY RELATIONSHIP ESTABLISHED.] A person 
        other than the commissioner who is authorized to collect excise 
        taxes on behalf of the state of Minnesota, establishes a 
        fiduciary relationship, and whoever violates that relationship 
        is guilty of a violation of this chapter, and of section 609.54, 
        and may be punished accordingly. 
           Subd. 7.  [FAILURE TO OBTAIN PROPER PERMIT.] A minimum fine 
        of $200 shall be imposed on a person who fails to obtain a 
        license or trip permit required under section 296A.27, 
        subdivisions 6 and 12. 
           Subd. 8.  [CERTAIN BLENDING OF GASOLINE PROHIBITED.] The 
        blending of gasoline on which the tax has been paid or the 
        liability accrued, with any substance on which the tax has not 
        been paid or the liability thereafter accrued, is prohibited. 
           This section does not preclude the addition of any of the 
        various inhibitors which in total do not exceed one-half of one 
        percent by volume of the product treated, nor the addition to 
        fuel for two-cycle gasoline engines of a lubricant not exceeding 
        five percent by volume or the product treated; nor does this 
        subdivision preclude the addition of fuel oil to gasoline for 
        the purpose of generating power for the propulsion of farm 
        tractors. 
           Subd. 9.  [OTHER VIOLATIONS.] Any violation of this 
        chapter, unless otherwise specified, is a gross misdemeanor. 
           Subd. 10.  [PROSECUTION OF VIOLATIONS.] 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. 
           Subd. 11.  [ACTIONS FOR RECOVERY; NO BAR TO CRIMINAL 
        PROSECUTIONS.] No action or suit for recovery of one penalty 
        shall be a bar to or affect the recovery of any other penalty or 
        be a bar to any criminal prosecution against any licensee or any 
        other person under the provisions of this chapter. 
           Subd. 12.  [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. 
           Sec. 24.  [296A.24] [CONTRABAND.] 
           Subdivision 1.  [SEIZURE.] The commissioner or authorized 
        agents may seize gasoline or special fuel being transported for 
        delivery in violation of section 296A.03, subdivision 1, and any 
        vehicle or other method of conveyance used for transporting the 
        gasoline or special fuel.  Any untaxed motor vehicle fuel that 
        is received by a person other than a licensee is subject to 
        seizure along with the vehicle or other means of transportation 
        used to transport the motor vehicle fuel.  Any motor vehicle 
        fuel, along with the transporting vehicle, brought into the 
        state of Minnesota by a transporter for use, distribution, 
        storage, or sale that is not supported by a manifest, bill of 
        lading, or invoice, reflecting the licensed distributor 
        responsible for the tax and/or fees is subject to seizure by the 
        Minnesota department of revenue.  Property seized under this 
        subdivision is subject to forfeiture as provided in subdivisions 
        2 and 3. 
           Subd. 2.  [DISPOSITION OF SEIZED PROPERTY.] (a) Within ten 
        days after the seizure of gasoline or special fuel, the person 
        making the seizure shall deliver an inventory of the property 
        seized to the person from whom the seizure was made, if known, 
        and file a copy with the office of the commissioner.  Within ten 
        days after the date of service of the inventory, the person from 
        whom the property was seized or any person claiming an interest 
        in the property may file with the commissioner a demand for a 
        judicial determination of whether the property was lawfully 
        subject to seizure and forfeiture.  The commissioner, within 60 
        days of demand for a judicial determination, shall begin an 
        action in the district court of the county where the seizure was 
        made to determine the issue of forfeiture. 
           (b) The action must be brought in the name of the state and 
        prosecuted by the county attorney or by the attorney general.  
        The court shall hear the action without a jury and shall try and 
        determine the issues of fact and law involved. 
           (c) When a judgment of forfeiture is entered, the 
        commissioner may, unless the judgment is stayed pending an 
        appeal, either: 
           (1) cause the forfeited property to be destroyed; or 
           (2) cause it to be sold at public auction as provided by 
        law.  Proceeds of a sale, after deducting the expense of keeping 
        the gasoline or special fuel and costs of the sale, must be paid 
        into the state treasury.  The commissioner shall reimburse 
        designees for costs incurred. 
           (d) If a demand for judicial determination is made and no 
        action is commenced as provided in this subdivision, the 
        property must be released by the commissioner and redelivered to 
        the person entitled to it.  If no demand is made, the property 
        seized must be considered forfeited to the state by operation of 
        law and may be disposed of by the commissioner as provided where 
        there has been a judgment of forfeiture.  When the commissioner 
        is satisfied that a person from whom property is seized under 
        this chapter was acting in good faith and without intent to 
        evade the tax, the commissioner shall release the property 
        seized, without further legal proceedings. 
           Subd. 3.  [DISPOSAL.] (a) The commissioner or authorized 
        designees shall file with the court a separate complaint against 
        the vehicle or conveyance, describing it and charging its use in 
        the specified violation, and specifying substantially the time 
        and place of the unlawful use.  A copy of the complaint must be 
        served on the defendant or person in charge of the vehicle or 
        conveyance at the time of seizure, if any.  The court shall 
        issue an order directed to any person known or believed to have 
        a right or title to, interest in, or lien on the vehicle or 
        conveyance and to persons unknown claiming a right, title, 
        interest, or lien: 
           (1) describing the vehicle or conveyance and stating that 
        it was seized and that a complaint against it, charging the 
        specified violation, has been filed with the court; 
           (2) requiring the persons to file with the court 
        administrator of the court their answer to the complaint, 
        setting forth any claim they may have to a right or title to, 
        interest in, or lien on the vehicle or conveyance, within 30 
        days after the service of the order; and 
           (3) notifying them in substance that if they fail to file 
        their answer within that time, the vehicle or conveyance will be 
        ordered sold by the commissioner. 
           (b) The court shall cause the order to be served on: 
           (1) the registered owner; 
           (2) any person who has duly filed a conditional sales 
        contract, mortgage, or other lien instrument covering the 
        property unless it has been released or satisfied; 
           (3) any other person known or believed to have a right, 
        title, interest in, or lien upon, the vehicle or conveyance as 
        in the case of a summons in a civil action; and 
           (4) on unknown persons by publication, as provided for 
        service of summons in a civil action. 
           (c) If no answer is filed within the time prescribed, the 
        court shall, on affidavit by the court administrator of the 
        court setting forth that fact, order the vehicle or conveyance 
        forfeited and direct that it be sold by the commissioner or the 
        commissioner's agents.  The proceeds of the sale, after 
        deducting the expense of keeping the vehicle or conveyance and 
        costs of the sale, including any costs incurred under paragraph 
        (f), must be paid into the state treasury.  The commissioner 
        shall reimburse designees for costs incurred. 
           (d) If an answer is filed within the time provided, the 
        court shall fix a time for hearing at least ten days but no more 
        than 30 days after the time for filing the answer expires.  At 
        the hearing, the matter must be heard and determined by the 
        court, without a jury, as in other civil actions.  If the court 
        finds that the vehicle or conveyance, or any part of it, was 
        used in a violation as specified in the complaint, it shall 
        order the vehicle or conveyance forfeited and direct that it be 
        sold, as provided in this section, unless the owner shows to the 
        satisfaction of the court that the vehicle was being used 
        without the owner's consent or that, when giving the consent, 
        the owner had no notice or knowledge or reason to believe that 
        the vehicle or conveyance was intended to be used in a 
        violation.  After deducting the expense of keeping the vehicle 
        or conveyance and costs of the sale, the officer making the sale 
        shall pay, according to their priority, all liens established at 
        the hearing as being bona fide and existing without the lienor 
        having any notice or knowledge at the time the lien was created 
        that the vehicle or conveyance was being used or was intended to 
        be used in connection with any violation, and shall pay the 
        balance of the proceeds into the state treasury.  The 
        commissioner shall reimburse designees for costs incurred.  A 
        sale under this section frees the conveyance sold from all liens.
           (e) At any time after seizure and before the hearing, the 
        vehicle or conveyance must be returned to the owner or person 
        having a legal right to its possession on execution by that 
        person of a valid bond to the state of Minnesota, with corporate 
        surety, of at least $100, but not more than double the value of 
        the vehicle or conveyance seized, to be approved by the court in 
        which the case is triable, or a judge of that court.  The bond 
        must guarantee compliance with the order and judgment of the 
        court, and, if ordered by the court, payment of the full value 
        of the vehicle or conveyance at the time of seizure. 
           (f) If the seized vehicle or conveyance is owned or 
        operated by a for-hire common or contract motor carrier, and was 
        being used without knowledge of the violation, the commissioner 
        shall return the vehicle or conveyance to its owner or operator 
        as soon as possible without need for court order, and shall 
        provide to such owner or operator reasonable compensation for 
        the time during which the vehicle or conveyance is held under 
        seizure. 
           Sec. 25.  [296A.25] [ADMINISTRATIVE REVIEW.] 
           Subdivision 1.  [TAXPAYER RIGHT TO RECONSIDERATION.] A 
        taxpayer may obtain reconsideration by the commissioner of an 
        order assessing tax, a denial of a request for abatement of 
        penalty, or a denial of a claim for refund by filing an 
        administrative appeal under subdivision 3.  A taxpayer cannot 
        obtain reconsideration under this section if the action taken by 
        the commissioner is the outcome of an administrative appeal. 
           Subd. 2.  [NOTICE DATE.] For purposes of this section, the 
        term "notice date" means the date of the order adjusting the tax 
        or order denying a request for abatement, or, in the case of a 
        denied refund, the date of the notice of denial. 
           Subd. 3.  [TIME AND CONTENT FOR ADMINISTRATIVE APPEAL.] 
        Within 60 days after the notice date, the taxpayer must file a 
        written appeal with the commissioner.  The appeal need not be in 
        any particular form, but must contain the following information: 
           (1) the name and address of the taxpayer; 
           (2) if a corporation, the state of incorporation of the 
        taxpayer, and the principal place of business of the 
        corporation; 
           (3) the Minnesota identification number or social security 
        number of the taxpayer; 
           (4) the type of tax involved; 
           (5) the date; 
           (6) the tax years or periods involved and the amount of tax 
        involved for each year or period; 
           (7) the findings in the notice that the taxpayer disputes; 
           (8) a summary statement that the taxpayer relies on for 
        each exception; and 
           (9) the taxpayer's signature or signature of the taxpayer's 
        duly authorized agent. 
           Subd. 4.  [EXTENSIONS.] When requested in writing and 
        within the time allowed for filing an administrative appeal, the 
        commissioner may extend the time for filing an appeal for a 
        period of not more than 30 days from the expiration of the 60 
        days from the notice date. 
           Subd. 5.  [DETERMINATION OF APPEAL.] On the basis of 
        applicable law and available information, the commissioner shall 
        determine the validity, if any, in whole or part of the appeal 
        and notify the taxpayer of the decision.  This notice must be in 
        writing and contain the basis for the determination. 
           Subd. 6.  [AGREEMENT DETERMINING TAX LIABILITY.] When it 
        appears to be in the best interests of the state, the 
        commissioner may settle any taxes, penalties, or interest that 
        the commissioner has under consideration by virtue of an appeal 
        filed under this section.  An agreement must be in writing and 
        signed by the commissioner and the taxpayer, or the taxpayer's 
        representative authorized by the taxpayer to enter into an 
        agreement.  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. 
           Subd. 7.  [APPEAL OF AN ADMINISTRATIVE DETERMINATION.] 
        Following the determination of an appeal and notwithstanding any 
        period of limitations for making assessments or other 
        determinations to the contrary, the commissioner must issue an 
        order reflecting that disposition.  If the statute of 
        limitations for making assessments or other determinations would 
        have expired before the issuance of this order, except for this 
        section, the order is limited to issues or matters contained in 
        the appealed determination.  The order is appealable to the 
        Minnesota tax court under section 271.06.  
           Subd. 8.  [APPEAL WHERE NO DETERMINATION.] If the 
        commissioner does not make a determination within six months of 
        the filing of an administrative appeal, the taxpayer may elect 
        to appeal to tax court. 
           Subd. 9.  [INAPPLICABILITY OF ADMINISTRATIVE PROCEDURE 
        ACT.] An appeal under this section is not a contested case 
        governed by chapter 14. 
           Sec. 26.  [296A.26] [JUDICIAL REVIEW; APPEAL TO TAX COURT.] 
           In lieu of an administrative appeal under this chapter, any 
        person aggrieved by an order of the commissioner fixing a tax, 
        penalty, or interest under this chapter may, within 60 days from 
        the date of the notice of the order, appeal to the tax court in 
        the manner provided under section 271.06. 
           Sec. 27.  [296A.27] [ROAD TAX; MOTOR CARRIERS; 
        RECIPROCITY.] 
           Subdivision 1.  [DEFINITIONS.] As used in this section 
           (a) "Commercial motor vehicle" means a motor vehicle used, 
        designed, or maintained for transportation of persons or 
        property that: 
           (1) has two axles and a gross vehicle weight or registered 
        gross vehicle weight exceeding 26,000 pounds; 
           (2) has three or more axles regardless of weight; or 
           (3) is used in combination, when the weight of such 
        combination exceeds 26,000 pounds gross vehicle or registered 
        gross vehicle weight. "Commercial motor vehicle" does not 
        include recreational vehicles. 
           (b) "Highway" means the lines of every way publicly 
        maintained when part of the highway is open for the public to 
        travel on. 
           (c) "Motor carrier" means a person who operates or causes 
        to be operated a commercial motor vehicle on a highway in this 
        state. 
           (d) "Motor fuel" means a liquid, regardless of its 
        composition or properties, used to propel a motor vehicle. 
           (e) "Operation" means operation of commercial motor 
        vehicles whether loaded or empty, whether for compensation or 
        not for compensation, and whether owned by or leased to the 
        motor carrier who operates them or causes them to be operated. 
           Subd. 2.  [REFUNDS ON FUEL USED IN OTHER STATES.] Every 
        person regularly or habitually operating motor vehicles upon the 
        public highways of any other state or states and using in said 
        motor vehicles gasoline or special fuel purchased or obtained in 
        this state, shall be allowed a credit or refund equal to the tax 
        on said gasoline or special fuel paid or special fuel actually 
        used in the other state or states.  No credit or refund shall be 
        allowed under this subdivision for taxes paid to any state which 
        imposes a tax upon gasoline or special fuel purchased or 
        obtained in this state and used on the highways of such other 
        state, and which does not allow a similar credit or refund for 
        the tax paid to this state on gasoline or special fuel purchased 
        or acquired in such other state and used on the highways of this 
        state.  Every person claiming a credit or refund under this 
        subdivision shall file a claim in the form and manner prescribed 
        by the commissioner or take the credit on a subsequent tax 
        return within one year of the last day of the month following 
        the end of the quarter when the overpayment occurred. 
           Subd. 3.  [RECIPROCAL AGREEMENTS.] The commissioner of 
        public safety or the commissioner of revenue may enter into 
        reciprocal agreements with the appropriate officials of any 
        other state under which either commissioner may waive all or any 
        part of the requirements imposed by this section upon those who 
        use in Minnesota gasoline or other motor vehicle fuel upon which 
        the tax has been paid to such other state, provided that the 
        officials of such other state grant equivalent privileges with 
        respect to gasoline or other motor vehicle fuel used in such 
        other state but upon which the tax has been paid to the state of 
        Minnesota.  The commissioner of public safety or the 
        commissioner of revenue may enter into reciprocal agreements 
        with the appropriate officials of other states, exempting 
        vehicles licensed in such other states from the license and use 
        tax provisions contained in this section, which otherwise would 
        apply to vehicles licensed by such other state, provided that 
        such other state grant equivalent privileges with respect to 
        vehicles licensed by the state of Minnesota. 
           Subd. 4.  [ROAD TAX IMPOSED.] (a) Every motor carrier shall 
        pay a road tax calculated on the amount of motor fuel consumed 
        in the motor carrier's operations on highways within this 
        state.  The tax shall be at the same rate as the tax applicable 
        to the purchase of the same motor fuel within this state. 
           (b) The amount of motor fuel consumed in the operations of 
        any motor carrier on highways within this state shall be 
        determined by dividing the miles traveled within the state of 
        Minnesota by the average miles per gallon.  The average miles 
        per gallon shall be determined by dividing the miles traveled 
        within and without the state by the total motor fuel consumed 
        within and without the state. 
           Subd. 5.  [EXEMPTIONS.] Nothing in this section shall apply 
        to: 
           (1) any commercial motor vehicle or vehicles operated by 
        this state, any subdivision thereof, the United States, or any 
        agency of two or more states or of states and the United States 
        in which this state participates; 
           (2) any school bus as defined by the laws of this state 
        operated by, for, or on behalf of a state or any subdivision 
        thereof; or 
           (3) any motor vehicle bearing Minnesota base license plates.
           Subd. 6.  [MOTOR CARRIER LICENSE.] (a) No motor carrier may 
        operate a commercial motor vehicle upon the highways of this 
        state unless and until issued a license under this section or 
        until the motor carrier has obtained a trip permit or temporary 
        authorization as provided in this section. 
           (b) A license shall be issued to any responsible person 
        qualifying as a motor carrier who makes application therefor and 
        who pays to the commissioner, at the time thereof, a license fee 
        of $30.  The license is valid for a period of up to two years or 
        until revoked by the commissioner or until surrendered by the 
        motor carrier.  All outstanding licenses will expire on March 31 
        of each even-numbered year and may be renewed upon application 
        to the commissioner and payment of the $30 fee.  The license, 
        photocopy, or electrostatic copy of it, shall be carried in the 
        cab of every commercial motor vehicle while it is being operated 
        in Minnesota by a licensed motor carrier. 
           Subd. 7.  [REVOCATION OF MOTOR CARRIER LICENSES.] 
        Notwithstanding the provisions of section 296A.06, if a motor 
        carrier fails to file three consecutive road tax reports, the 
        commissioner, by certified mail sent to the address on the last 
        report, shall notify the motor carrier of the commissioner's 
        intention to revoke the license and of the motor carrier's right 
        to request a hearing under section 296A.06.  If no request for a 
        hearing is received within 30 days of the notice, the license 
        may be revoked by the commissioner.  
           Subd. 8.  [MOTOR CARRIER REPORTS.] Every motor carrier 
        subject to the road tax shall, on or before the last day of 
        April, July, October, and January, file with the commissioner in 
        the form and manner prescribed by the commissioner, reports of 
        operations during the previous three months, and such other 
        reports as the commissioner may deem necessary.  The 
        commissioner may exempt from the quarterly reporting 
        requirements of this section those motor carriers whose mileage 
        is all or substantially all and those motor carriers whose 
        mileage is minimal within this state, or states with which 
        Minnesota has reciprocity, and require in such instances an 
        annual report reflecting the operations of the carrier during 
        the previous year along with payment of any taxes due.  Each 
        report shall contain a confession of judgment for the amount of 
        the tax shown due thereon to the extent not timely paid.  
           Subd. 9.  [MOTOR CARRIER RECORDS.] (a) Every motor carrier 
        shall keep such records as may be necessary for the 
        administration of this section and for the reporting and 
        justification of the amount of tax liability pursuant hereto.  
        The records shall be kept in such form as the commissioner 
        reasonably may prescribe.  All such records shall be safely 
        preserved for a period of three years in such manner as to 
        ensure their security and availability for inspection by the 
        commissioner.  Upon application in writing stating the reasons 
        therefor, the commissioner may consent to the destruction of 
        such records at an earlier time if the commissioner has 
        completed an audit of the records in question. 
           (b) The commissioner or authorized agents or 
        representatives shall have the right at any reasonable time to 
        inspect the books and records of any motor carrier subject to 
        the tax imposed by this chapter. 
           Subd. 10.  [EVIDENCE.] In the absence of records showing 
        the number of miles actually operated per gallon of motor fuel, 
        it shall be presumed that one gallon of motor fuel was consumed 
        for every four miles traveled. 
           Subd. 11.  [LEASED COMMERCIAL MOTOR VEHICLES.] (a) Except 
        as otherwise provided in this section, every commercial motor 
        vehicle leased to a motor carrier shall be subject to the 
        provisions of this section and rules in force pursuant hereto, 
        to the same extent and in the same manner as commercial motor 
        vehicles owned by such carrier. 
           (b) A lessor of commercial motor vehicles may be deemed a 
        motor carrier with respect to such vehicles leased to others by 
        the lessor and motor fuel consumed thereby, if the lessor 
        supplies or pays for the motor fuel consumed by such vehicles or 
        makes rental or other charges calculated to include the cost of 
        such fuel.  Any lessee motor carrier may exclude the leased 
        commercial motor vehicles from reports and liabilities under 
        this section, but only if the commercial motor vehicles in 
        question have been leased from a lessor who is a motor carrier 
        under this section. 
           (c) The provisions of paragraphs (a) and (b) of this 
        subdivision shall govern the primary liability under this 
        section of lessors and lessees of commercial motor vehicles.  If 
        a lessor or lessee primarily liable fails, in whole or in part, 
        to discharge liability, such failing party and the other lessor 
        or lessee party to the transaction shall be jointly and 
        severally responsible and liable for compliance with the 
        provisions of this section and for the payment of any tax due, 
        provided that the aggregate of any taxes collected by this state 
        shall not exceed the total amount or amounts of taxes due on 
        account of the transactions in question and such costs and 
        penalties, if any, as may be imposed. 
           Subd. 12.  [MOTOR CARRIER TRIP PERMITS; TEMPORARY 
        AUTHORIZATIONS.] (a) A motor carrier may obtain a trip permit 
        which authorizes an unlicensed motor carrier to operate a 
        commercial motor vehicle in Minnesota for a period of five 
        consecutive days beginning and ending on the dates specified on 
        the face of the permit.  The fee for the permit is $25.  Fees 
        for trip permits are in lieu of the road tax otherwise 
        assessable against the motor carrier on account of the 
        commercial motor vehicle operating therewith, and no reports of 
        mileage are required with respect to the vehicle.  The above 
        permit shall be issued in lieu of license if in the course of 
        operations a motor carrier operates on Minnesota highways no 
        more than three times in any one calendar year.  
           (b) Whenever the commissioner is satisfied that unforeseen 
        or uncertain circumstances have arisen which requires a motor 
        carrier to operate in this state a commercial motor vehicle for 
        which neither a trip permit under paragraph (a) nor a license 
        under this section has yet been obtained, and if the 
        commissioner is satisfied that prohibition of that operation 
        would cause undue hardship, the commissioner may provide the 
        motor carrier with temporary authorization for the operation of 
        the vehicle.  A motor carrier receiving temporary authorization 
        under this subdivision shall perfect the same either by 
        obtaining a trip permit or a license, as the case may be, for 
        the vehicle at the earliest practicable time. 
           Subd. 13.  [COOPERATIVE AUDITS.] The commissioner may make 
        arrangements with the commissioner of transportation and may 
        enter into agreements with the appropriate authorities of other 
        states having statutes similar to this act for the cooperative 
        audit of motor carriers' reports and returns.  In performing any 
        such audit, or part thereof, the officers and employees of the 
        other state or states shall be deemed authorized agents of this 
        state for such purpose, and such audits, or parts thereof, shall 
        have the same effect as similar audits, or parts thereof, when 
        made by the commissioner. 
           Subd. 14.  [ACTIONS TO AVOID TAX.] If the commissioner 
        ascertains that a person designs quickly to depart from this 
        state, or to remove therefrom the person's property, or any 
        property used by the person in operations subject to this 
        section, or to discontinue business, or to do any other act 
        tending to prejudice or render wholly or partly ineffectual 
        proceedings to assess or collect the tax, whereby it becomes 
        important that such proceedings be brought without delay, the 
        commissioner may immediately make an assessment of tax estimated 
        to be due, whether or not any report is then due by law, and may 
        proceed under such assessment to collect the tax, or compel 
        security for the same, and thereupon shall cause notice of such 
        finding to be given to such motor carrier, together with a 
        demand for an immediate payment of such tax.  The commissioner 
        or agents is also authorized to impound motor vehicles of 
        persons in violation of this section.  Such vehicle shall be 
        released either upon payment of all taxes, penalties and 
        interest that may be due, or depositing a bond or security to 
        assure the payment of said taxes, penalties and interest. 
           Subd. 15.  [ENFORCEMENT POWERS.] (a) The commissioner is 
        authorized and directed to enforce the provisions of this 
        section.  In addition, the commissioner of public safety is 
        authorized and directed to use the Minnesota state patrol to 
        assist in the enforcement of the provisions of this section and 
        the commissioner of transportation is authorized and directed to 
        enforce the provisions of subdivisions 6 and 12 as provided in 
        section 221.221. 
           (b) The officers of the Minnesota state patrol shall in 
        addition to all other powers granted to them by Minnesota 
        Statutes have the power of making arrests, service of process, 
        and appearing in court in all matters and things relating to 
        this section and the administration and enforcement thereof. 
           Subd. 16.  [RULES.] The commissioner may, from time to 
        time, issue, amend, and revise such rules as may be necessary 
        for the effective enforcement of this section. 
           Subd. 17.  [COMMISSIONER MAY WAIVE REQUIREMENTS.] The 
        commissioner is empowered to suspend the enforcement of this 
        section if the cost of administration thereof exceeds the tax 
        revenue produced therefrom. 
           Sec. 28.  [296A.28] [FUEL TAX COMPACTS.] 
           Subdivision 1.  [AUTHORITY.] The commissioner of public 
        safety has the powers granted to the commissioner of revenue 
        under section 296A.27.  The commissioner of public safety may 
        enter into an agreement or arrangement with the duly authorized 
        representative of another state or make an independent 
        declaration, granting to owners of vehicles properly registered 
        or licensed in another state, benefits, privileges, and 
        exemptions from paying, wholly or partially, fuel taxes, fees, 
        or other charges imposed for operating the vehicles under the 
        laws of Minnesota.  The agreement, arrangement, or declaration 
        may impose terms and conditions consistent with Minnesota laws. 
           Subd. 2.  [RECIPROCAL PRIVILEGES AND TREATMENT.] An 
        agreement or arrangement must be in writing and provide that 
        when a vehicle properly licensed for fuel in the state of 
        Minnesota is operated on highways of the other state, it must 
        receive exemptions, benefits, and privileges of a similar kind 
        or to a similar degree as are extended to a vehicle properly 
        licensed for fuel in that state, when operated in the state of 
        Minnesota.  A declaration must be in writing and must 
        contemplate and provide for mutual benefits, reciprocal 
        privileges, or equitable treatment of the owner of a vehicle 
        registered for fuel in Minnesota and the other state.  In the 
        judgment of the commissioner of public safety, an agreement, 
        arrangement, or declaration must be in the best interest of 
        Minnesota and its citizens and must be fair and equitable 
        regarding the benefits that the agreement brings to the economy 
        of Minnesota. 
           Subd. 3.  [COMPLIANCE WITH MINNESOTA LAWS.] Agreements, 
        arrangements, and declarations made under authority of this 
        section must contain a provision specifying that no fuel 
        license, or exemption issued or accruing under the license, 
        excuses the operator or owner of a vehicle from compliance with 
        Minnesota laws. 
           Subd. 4.  [EXCHANGES OF INFORMATION.] The commissioner of 
        public safety may make arrangements or agreements with the 
        commissioner of transportation and other states to exchange 
        information for audit and enforcement activities in connection 
        with fuel tax licensing.  The filing of fuel tax returns under 
        this section is subject to the rights, terms, and conditions 
        granted or contained in the applicable agreement or arrangement 
        made by the commissioner under the authority of this section. 
           Subd. 5.  [BASE STATE FUEL COMPACT.] The commissioner of 
        public safety may ratify and effectuate the international fuel 
        tax agreement or other fuel tax agreement.  The commissioner's 
        authority includes, but is not limited to, collecting fuel taxes 
        due, issuing fuel licenses, issuing refunds, conducting audits, 
        assessing penalties and interest, issuing fuel trip permits, 
        issuing decals, and suspending or denying licensing. 
           Subd. 6.  [MINNESOTA-BASED INTERSTATE CARRIERS.] 
        Notwithstanding the exemption contained in section 296A.27, 
        subdivision 5, as the commissioner of public safety enters into 
        interstate fuel tax compacts requiring base state licensing and 
        filing and eliminating filing in the nonresident compact states, 
        the Minnesota-based motor vehicles registered under section 
        168.187 will be required to license under the fuel tax compact 
        in Minnesota.  
           Subd. 7.  [DELINQUENT FILING OR PAYMENT.] If a fleet owner 
        licensed under this section is delinquent in either filing or 
        paying the international fuel tax agreement reports for more 
        than 30 days, or paying the international registration plan 
        billing under section 168.187 for more than 30 days, the fleet 
        owner, after ten days' written notice, is subject to suspension 
        of the apportioned license plates and the international fuel tax 
        agreement license. 
           Subd. 8.  [TRANSFERRING FUNDS TO PAY DELINQUENT FEES.] If a 
        fleet owner licensed under this section is delinquent in either 
        filing or paying the international fuel tax agreement reports 
        for more than 30 days, or paying the international registration 
        plan billing under section 168.187 for more than 30 days, the 
        commissioner may authorize any credit in either the 
        international fuel tax agreement account or the international 
        registration plan account to be used to offset the liability in 
        either the international registration plan account or the 
        international fuel tax agreement account.  
           Subd. 9.  [FUEL COMPACT FEES.] License fees paid to the 
        commissioner of public safety under the international fuel tax 
        agreement must be deposited in the highway user tax distribution 
        fund.  The commissioner shall charge the fuel license fee of $30 
        established under section 296A.27, subdivision 6, in annual 
        installments of $15, and an annual application filing fee of $13 
        for quarterly reporting of fuel tax. 
           Subd. 10.  [FUEL DECAL FEES.] The commissioner of public 
        safety may issue and require the display of a decal or other 
        identification to show compliance with subdivision 5.  The 
        commissioner may charge a fee to cover the cost of issuing the 
        decal or other identification.  Decal fees paid to the 
        commissioner under this subdivision must be deposited in the 
        highway user tax distribution fund. 
           Sec. 29.  [PURPOSE.] 
           It is the intent of the legislature to simplify Minnesota's 
        petroleum tax laws by consolidating and recodifying the tax 
        administration and compliance provisions now contained 
        throughout Minnesota Statutes, chapter 296.  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. 30.  [INSTRUCTIONS TO REVISOR.] 
           In each section of Minnesota Statutes referred to in column 
        A, the revisor of statutes shall delete the reference in column 
        B and insert the reference in column C. 
             Column A             Column B            Column C 
         16A.6701, subd. 1        296.06              296A.03 
         16A.6701, subd. 1        296.12              296A.04
         16A.6701, subd. 1        296.17              296A.27
         41A.09, subd. 7          296.01              296A.01 
         84.794, subd. 1          296.16              296A.18 
         84.803, subd. 1          296.16              296A.18 
         84.83, subd. 2           296.16              296A.18 
         84.927, subd. 1          296.16              296A.18 
         89.70                    296.421, subd. 8    296A.18, subd. 7
         89.72                    296.421, subd. 8    296A.18, subd. 7
         115C.02, subd. 10        296.01              296A.01 
         115C.08, subd. 3         296.01, 1st ref.    296A.01 
         115C.08, subd. 3         296.141             296A.15 
         115C.08, subd. 3         296.01, 2nd ref.    296A.01 
         115C.08, subd. 3         296.15              296A.22 
         124.83, subd. 2          296.01              296A.01 
         124A.22, subd. 11        296.01              296A.01 
         168.187, subd. 26        296.171             296A.28 
         221.221, subd. 2         296.17, subds.      296A.27, subds. 6
                                  10 and 17           and 12
         221.221, subd. 2         chapter 296         chapter 296A
         239.011, subd. 2         chapter 296         chapter 296A
         239.05, subd. 8b         296.06              296A.03 
         239.05, subd. 8e         296.01, subd. 8     296A.01, subd. 23 
         239.05, subd. 12b        296.01, subds. 2,   296A.01, subds. 2,
                                  7, 8, 10, 13, 14,   7, 8, 10, 14, 16, 
                                  and 17 to 22        19, 20, 22 to 26,
                                                      28, 32, and 35 
         239.101, subd. 3         chapter 296         chapter 296A
         239.761, subd. 2         296.01              296A.01 
         239.785, subd. 3         296.15              296A.22 
         239.785, subd. 3         296.25              296A.23 
         239.785, subd. 4         chapter 296         chapter 296A 
         270.101, subd. 1         chapter 296         chapter 296A 
         282.322                  chapter 296         chapter 296A 
         297A.25, subd. 7         chapter 296         chapter 296A 
         297A.25, subd. 7         296.01, subd. 27a   296A.01, subd. 39
         297A.25, subd. 7         296.18, subd. 1,    296A.16, subd. 2, 
                                  clause (2)          clause (2)
         325E.35, subd. 9         296.01              296A.01 
         353A.01, subd. 2         chapter 296         chapter 296A 
         458A.30                  chapter 296         chapter 296A 
         514.950, subd. 10        296.01              296A.01 
           Sec. 31.  [REPEALER.] 
           Minnesota Statutes 1996, sections 296.01; 296.02, 
        subdivisions 1, 1a, 1b, 1c, 2, 3, 4, 6, and 8; 296.025; 
        296.0261; 296.035; 296.04; 296.041; 296.06; 296.11; 296.115; 
        296.12; 296.141, subdivisions 1, 2, 3, 5, 6, and 7; 296.15; 
        296.151; 296.152; 296.16, subdivisions 1a and 2; 296.165; 
        296.17, subdivisions 1, 3, 5, 6, 7, 8, 9, 10, 11, 14, 15, 16, 
        17, 19, 20, 21, and 22; 296.171, subdivisions 1, 2, 3, 5, 6, 7, 
        8, 9, and 10; 296.18, subdivisions 2, 3, 4, 5, 6, and 8; 296.19; 
        296.20; 296.21; 296.23; 296.25; 296.26; 296.27; and 296.421; 
        Minnesota Statutes 1997 Supplement, sections 296.141, 
        subdivision 4; 296.16, subdivision 1; 296.17, subdivision 18; 
        296.171, subdivision 4; and 296.18, subdivision 1, are repealed. 
           Sec. 32.  [EFFECTIVE DATE.] 
           Sections 1, 2, 13, 14, 18, and 27 to 29 are effective the 
        day following final enactment.  Sections 3 to 12, 15 to 17, 19, 
        21, 22, 25, and 26 are effective for returns, reports, refunds, 
        taxes, or other payments first becoming due on or after July 1, 
        1998.  Section 20 is effective for audits or investigations 
        initiated on or after July 1, 1998.  Section 23 is effective for 
        crimes committed on or after July 1, 1998.  Sections 24 and 31 
        are effective July 1, 1998. 
           Presented to the governor March 17, 1998 
           Signed by the governor March 18, 1998, 4:34 p.m.