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Office of the Revisor of Statutes

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

                            CHAPTER 112-H.F.No. 898 
                  An act relating to unemployment insurance; conforming 
                  various provisions to federal requirements; making 
                  technical and housekeeping changes; modifying appeal 
                  procedures; amending Minnesota Statutes 2004, sections 
                  268.03, subdivision 1; 268.035, subdivisions 9, 13, 
                  14, 20, 21, 26; 268.042, subdivision 1; 268.043; 
                  268.044, subdivisions 1, 2, 3; 268.045, subdivision 1; 
                  268.051, subdivisions 1, 4, 6, 7, by adding a 
                  subdivision; 268.052, subdivision 2; 268.053, 
                  subdivision 1; 268.057, subdivision 7; 268.065, 
                  subdivision 2; 268.069, subdivision 1; 268.07, 
                  subdivision 3b; 268.085, subdivisions 1, 2, 3, 5, 12; 
                  268.086, subdivisions 2, 3; 268.095, subdivisions 1, 
                  4, 7, 8, 10, 11; 268.101, subdivisions 1, 2, 3a; 
                  268.103, subdivision 2; 268.105; 268.145, subdivision 
                  1; 268.18, subdivisions 1, 2, 2b; 268.182, subdivision 
                  2; 268.184, subdivisions 1, 2, by adding a 
                  subdivision; proposing coding for new law in Minnesota 
                  Statutes, chapter 268; repealing Minnesota Statutes 
                  2004, sections 268.045, subdivisions 2, 3, 4; 268.086, 
                  subdivision 4; Laws 1997, chapter 66, section 64, 
                  subdivision 1; Minnesota Rules, parts 3310.2926; 
                  3310.5000; 3315.0910, subpart 9; 3315.1020; 3315.1301; 
                  3315.1315, subparts 1, 2, 3; 3315.1650; 3315.2210; 
                  3315.3210; 3315.3220. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                         FEDERAL CONFORMITY PROVISIONS 
           Section 1.  [268.0435] [SINGLE MEMBER LIMITED LIABILITY 
        COMPANIES.] 
           If the only member of a limited liability company is a 
        corporation, and the limited liability company is disregarded 
        for purposes of filing federal corporate income tax, all the 
        workers performing services for the limited liability company 
        must be reported on the corporation's wage detail report under 
        section 268.044.  A corporation that violates this section shall 
        be subject to the penalties under section 268.184, subdivision 
        1a.  Penalties shall be credited to the administration account 
        to be used to ensure integrity in the unemployment insurance 
        program. 
           [EFFECTIVE DATE.] This section is effective for wage detail 
        reports for the calendar quarter starting January 1, 2006. 
           Sec. 2.  Minnesota Statutes 2004, section 268.044, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [WAGE DETAIL REPORT.] (a) Each employer 
        that has employees in covered employment shall submit, under the 
        account provided for in section 268.045 or 268.046, a quarterly 
        wage detail report by electronic transmission, in a format 
        prescribed by the commissioner.  The report shall include for 
        each employee in covered employment, the employee's name, Social 
        Security number, the total wages paid to the employee, and total 
        number of paid hours worked.  For employees exempt from the 
        definition of employee in section 177.23, subdivision 7, clause 
        (6), the employer shall report 40 hours worked for each week any 
        duties were performed by a full-time employee and shall report a 
        reasonable estimate of the hours worked for each week duties 
        were performed by a part-time employee.  In addition, the wage 
        detail report shall include the number of employees employed on 
        the 12th day of each calendar month and, if required by the 
        commissioner, the report shall be broken down by business 
        location and type of employment, if section 268.046, subdivision 
        1, paragraph (b), or subdivision 2, paragraph (b), applies, by 
        separate unit.  If the information required is not submitted in 
        a manner and format prescribed by the commissioner, it shall not 
        be considered a wage detail report.  The report is due and must 
        be received by the commissioner on or before the last day of the 
        month following the end of the calendar quarter.  The 
        commissioner may delay the due date on a specific calendar 
        quarter in the event the department is unable to accept wage 
        detail reports electronically. 
           (b) The employer may report the wages paid to the next 
        lower whole dollar amount. 
           (c) An employer need not include the name of the employee 
        or other required information on the wage detail report if 
        disclosure is specifically exempted from being reported by 
        federal law. 
           (d) A wage detail report must be submitted for each 
        calendar quarter even though no wages were paid, unless the 
        employer has notified the commissioner, under section 268.042, 
        subdivision 1, paragraph (c), of termination of business. 
           Sec. 3.  Minnesota Statutes 2004, section 268.044, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MISSING OR ERRONEOUS INFORMATION.] (a) Any 
        employer who that submits the wage detail report, but fails to 
        include any all employee information or enters erroneous 
        information, shall be subject to an administrative service fee 
        of $25 for each employee for whom the information is partially 
        missing or erroneous.  
           (b) Any employer that submits the wage detail report, but 
        fails to include an employee, shall be subject to an 
        administrative service penalty equal to two percent of the total 
        wages for each employee for whom the information is completely 
        missing. 
           (c) An administrative service fee may be compromised under 
        section 268.067 or penalty under this subdivision shall be 
        canceled if the commissioner determines that the failure or 
        error by the employer was inadvertent occurred because of 
        ignorance or inadvertence. 
           Sec. 4.  Minnesota Statutes 2004, section 268.045, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ACCOUNT FOR EACH EMPLOYER.] The 
        commissioner shall maintain (1) a tax account for each taxpaying 
        employer and (2) a reimbursable account for each nonprofit or 
        government employer that has elected under section 268.052 or 
        268.053 to be liable for reimbursements if that employer has 
        employees in covered employment in the current or the prior 
        calendar year, except as provided in this section 268.046.  The 
        commissioner shall assess the tax account of a taxpaying 
        employer for all the taxes due under section 268.051 and credit 
        the tax account with all taxes paid.  The commissioner shall 
        charge the reimbursable account of a nonprofit or government 
        employer that elects to make reimbursements for any unemployment 
        benefits determined chargeable to the employer under section 
        268.047 and shall credit the reimbursable account with the 
        payments made. 
           Sec. 5.  [268.046] [TAX AND REIMBURSABLE ACCOUNTS ASSIGNED 
        TO EMPLOYEE LEASING COMPANIES, PROFESSIONAL EMPLOYER 
        ORGANIZATIONS, OR SIMILAR PERSON.] 
           Subdivision 1.  [TAX ACCOUNTS ASSIGNED.] (a) Any person 
        that contracts with a taxpaying employer to have that person 
        obtain the taxpaying employer's workforce and provide workers to 
        the taxpaying employer for a fee shall, as of the effective date 
        of the contract, be assigned for the duration of the contract 
        the taxpaying employer's account under section 268.045.  That 
        tax account must be maintained by the person separate and 
        distinct from every other tax account held by the person and 
        identified in a manner prescribed by the commissioner.  The tax 
        account shall, for the duration of the contract, be considered 
        that person's account for all purposes of this chapter.  The 
        workers obtained from the taxpaying employer and any other 
        workers provided by that person to the taxpaying employer must, 
        under section 268.044, be reported on the wage detail report 
        under that tax account, and that person shall pay any taxes due 
        at the tax rate computed for that account under section 268.051, 
        subdivision 2. 
           (b) Any workers of the taxpaying employer who are not 
        covered by the contract under paragraph (a) must be reported by 
        the taxpaying employer as a separate unit on the wage detail 
        report under the tax account assigned under paragraph (a).  
        Taxes and any other amounts due on the wages reported by the 
        taxpaying employer under this paragraph may be paid directly by 
        the taxpaying employer. 
           (c) If the taxpaying employer that contracts with a person 
        under paragraph (a) does not have a tax account at the time of 
        the execution of the contract, an account must be registered for 
        the taxpaying employer under section 268.042, and the new 
        employer tax rate under section 268.051, subdivision 5, must be 
        assigned.  The tax account shall then be assigned to the person 
        as provided for in paragraph (a). 
           (d) A person that contracts with a taxpaying employer under 
        paragraph (a) must, within 30 calendar days of the execution or 
        termination of a contract, notify the commissioner by electronic 
        transmission, in a format prescribed by the commissioner, of 
        that execution or termination.  The taxpaying employer's name, 
        the account number assigned, and any other information required 
        by the commissioner must be provided by that person. 
           (e) Any contract subject to paragraph (a) must specifically 
        inform the taxpaying employer of the assignment of the tax 
        account under this section and the taxpaying employer's 
        obligation under paragraph (b).  If there is a termination of 
        the contract, the tax account shall, as of the date of 
        termination, immediately be assigned to the taxpaying employer.  
           Subd. 2.  [NONPROFIT AND GOVERNMENT REIMBURSABLE ACCOUNTS 
        ASSIGNED.] (a) Any person that contracts with a nonprofit or 
        government employer that is a reimbursing employer to have that 
        person obtain the nonprofit or government employer's workforce 
        and provide workers to the nonprofit or government employer for 
        a fee, shall, as of the effective date of the contract, be 
        assigned for the duration of the contract the nonprofit or 
        government employer's account under section 268.045.  That 
        reimbursable account must be maintained by the person separate 
        and distinct from every other account held by the person and 
        identified in a manner prescribed by the commissioner.  That 
        reimbursable account shall, for the duration of the contract, be 
        considered that person's account for all purposes of this 
        chapter.  The workers obtained from the nonprofit or government 
        employer and any other workers provided by that person to the 
        nonprofit or government employer must, under section 268.044, be 
        reported on the wage detail report under that reimbursable 
        account, and that person shall pay any reimbursements due. 
           (b) Any workers of the nonprofit or government employer who 
        are not covered by the contract under paragraph (a) must be 
        reported by the nonprofit or government employer as a separate 
        unit on the wage detail report under the reimbursable account 
        assigned under paragraph (a).  Reimbursements and any other 
        amounts due on the wages reported by the nonprofit or government 
        employer under this paragraph may be paid directly by the 
        nonprofit or government employer. 
           (c) If the nonprofit or government employer that contracts 
        with a person under paragraph (a) does not have an account at 
        the time of the execution of the contract, an account must be 
        registered for the nonprofit or government employer under 
        section 268.042.  The reimbursable account shall then be 
        assigned to the person as provided for in paragraph (a). 
           (d) A person that contracts with a nonprofit or government 
        employer under paragraph (a) must, within 30 calendar days of 
        the execution or termination of a contract, notify the 
        commissioner of that execution or termination by electronic 
        transmission, in a format prescribed by the commissioner.  The 
        nonprofit or government employer's name, the account number 
        assigned, and any other information required by the commissioner 
        must be provided by that person. 
           (e) Any contract subject to paragraph (a) must specifically 
        inform the nonprofit or government employer of the assignment of 
        the reimbursable account under this section and the nonprofit or 
        government employer's obligation under paragraph (b).  If there 
        is a termination of the contract, the reimbursable account 
        shall, as of the date of termination, immediately be assigned to 
        the nonprofit or government employer.  
           Subd. 3.  [PENALTIES; APPLICATION.] (a) Any person that 
        violates the requirements of this section and any taxpaying 
        employer that violates subdivision 1, paragraph (b), or any 
        nonprofit or government employer that violates subdivision 2, 
        paragraph (b), shall be subject to the penalties under section 
        268.184, subdivision 1a.  Penalties shall be credited to the 
        administration account to be used to ensure integrity in the 
        unemployment insurance program. 
           (b) Section 268.051, subdivision 4, does not apply to 
        contracts under this section.  This section shall not limit or 
        prevent the application of section 268.051, subdivision 4, to 
        any other transactions or acquisitions involving the taxpaying 
        employer.  This section shall not limit or prevent the 
        application of section 268.051, subdivision 4a. 
           (c) An assignment of an account upon the execution of a 
        contract under this section and a termination of a contract with 
        the corresponding assignment of the account shall not be 
        considered a separation from employment of any worker covered by 
        the contract.  Nothing under this subdivision shall cause the 
        person to be liable for any amounts past due under this chapter 
        from the taxpaying employer or the nonprofit or government 
        employer. 
           (d) This section applies to, but is not limited to, persons 
        registered under section 79.255, but does not apply to persons 
        that obtain an exemption from registration under section 79.255, 
        subdivision 9. 
           [EFFECTIVE DATE.] This section applies to all contracts 
        executed on and after January 1, 2006. 
           Sec. 6.  Minnesota Statutes 2004, section 268.051, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [PAYMENTS.] (a) Unemployment insurance 
        taxes and any additional assessments, fees, or surcharges shall 
        accrue and become payable by each employer for each calendar 
        year on the taxable wages that the employer paid to employees in 
        covered employment, except for:  
           (1) nonprofit organizations that elect to make 
        reimbursements as provided in section 268.053; and 
           (2) the state of Minnesota and political subdivisions that 
        make reimbursements, unless they elect to pay taxes as provided 
        in section 268.052.  
           Except as allowed under section 268.0511, each employer 
        shall pay taxes quarterly, at the employer's assigned tax 
        rate under subdivision 6, on the taxable wages paid to each 
        employee.  The commissioner shall compute the tax due from the 
        wage detail report required under section 268.044 and notify the 
        employer of the tax due.  The taxes and any additional 
        assessments, fees, or surcharges shall be paid to the trust fund 
        and must be received by the department on or before the last day 
        of the month following the end of the calendar quarter. 
           (b) The tax amount computed, if not a whole dollar, shall 
        be rounded down to the next lower whole dollar. 
           (c) If for any reason the wages on the wage detail report 
        under section 268.044 are adjusted for any quarter, the 
        commissioner shall recompute the taxes due for that quarter and 
        assess the employer for any amount due or credit the employer as 
        appropriate. 
           Sec. 7.  Minnesota Statutes 2004, section 268.051, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EXPERIENCE RATING HISTORY TRANSFER.] (a) When: 
           (1) a taxpaying employer acquires all of the organization, 
        trade or business, or substantially all the assets workforce of 
        another taxpaying employer,; and 
           (2) there is 25 percent or more common ownership, directly 
        or indirectly, or there is substantially common management or 
        control between the predecessor and successor, the experience 
        rating history of the predecessor employer shall be transferred 
        as of the date of acquisition to the successor employer for the 
        purpose of computing a tax rate. 
           (b) When a taxpaying employer acquires a distinct severable 
        portion of the organization, trade, business, or assets that is 
        less than substantially all of the employing enterprises of 
        another employer, and there is 25 percent or more common 
        ownership, directly or indirectly, between the predecessor and 
        successor, the successor employer shall acquire that percentage 
        of a predecessor's experience rating equal to that percentage of 
        the predecessor's employment positions it has obtained, and the 
        predecessor employer shall retain that percentage of the 
        experience rating equal to that percentage of the employment 
        positions that it has retained, if the successor files an 
        application by electronic transmission, in a format prescribed 
        by the commissioner, for the transfer of a percentage of the 
        experience rating of the predecessor within 180 calendar days 
        from the date of acquisition, that furnishes sufficient 
        information to substantiate the acquisition and to assign the 
        appropriate percentage of the experience rating. When: 
           (1) a taxpaying employer acquires a portion, but less than 
        all, of the organization, trade or business, or workforce of 
        another taxpaying employer; and 
           (2) there is 25 percent or more common ownership or there 
        is substantially common management or control between the 
        predecessor and successor, the successor employer shall acquire, 
        as of the date of acquisition, the experience rating history 
        attributable to the portion it acquired, and the predecessor 
        employer shall retain the experience rating history attributable 
        to the portion that it has retained.  If the commissioner 
        determines that sufficient information is not available to 
        substantiate that a distinct severable portion was acquired and 
        to assign the appropriate distinct severable portion of the 
        experience rating history, the commissioner shall assign the 
        successor employer that percentage of the predecessor employer's 
        experience rating history equal to that percentage of the 
        employment positions it has obtained, and the predecessor 
        employer shall retain that percentage of the experience rating 
        history equal to the percentage of the employment positions it 
        has retained. 
           (c) The term "common ownership" for purposes of this 
        subdivision includes ownership by a spouse, parent, grandparent, 
        child, grandchild, brother, sister, aunt, uncle, niece, nephew, 
        or first cousin, by birth or by marriage. 
           (d) Each successor employer that is subject to paragraph 
        (a) or (b) must notify the commissioner of the acquisition by 
        electronic transmission, in a format prescribed by the 
        commissioner, within 30 calendar days of the date of 
        acquisition.  Any successor employer that fails to notify the 
        commissioner is subject to the penalties under section 268.184, 
        subdivision 1a, if the successor's experience rating was lower 
        than the predecessor's experience rating at the time of the 
        acquisition.  Penalties shall be credited to the administration 
        account to be used to ensure integrity in the unemployment 
        insurance program. 
           (d) (e) If the successor employer under paragraphs (a) and 
        (b) had an experience rating at the time of the acquisition, the 
        transferred experience rating history of the predecessor shall 
        be combined with the successor's experience rating history, as 
        of the date of acquisition, for purposes of 
        computing recomputing a tax rate. 
           (e) (f) If there has been a transfer of an experience 
        rating history under paragraph (a) or (b), employment with a 
        predecessor employer shall not be considered to have been 
        terminated if similar employment is offered by the successor 
        employer and accepted by the employee. 
           (f) (g) The commissioner, upon the commissioner's own 
        motion or upon application notification of an employer, or upon 
        the commissioner's own motion if the employer fails to provide 
        the required notification, shall determine if an employer is a 
        successor within the meaning of this subdivision and shall send 
        the determination to the employer by mail or electronic 
        transmission.  The determination shall be final unless a protest 
        is filed by the employer within 30 calendar days after sending 
        the determination.  Upon receipt of a protest, the commissioner 
        shall review all available evidence and determine whether an 
        error has been made.  The commissioner shall either affirm or 
        make a redetermination on whether the employer is a successor 
        within the meaning of this subdivision and send the employer, by 
        mail or electronic transmission, the affirmation or 
        redetermination.  The affirmation or redetermination shall be 
        final unless an appeal is filed by the employer within 30 
        calendar days after the sending of the affirmation or 
        redetermination.  Proceedings on the appeal shall be conducted 
        in accordance with section 268.105. 
           (g) The commissioner may, as the result of any 
        determination or decision regarding shall, after determining the 
        issue of succession or nonsuccession, recompute the tax 
        rate under subdivision 6 of all employers affected by the 
        determination or decision for any year, including the year of 
        the acquisition and subsequent years, that is affected by the 
        transfer or nontransfer of part or all of the experience 
        rating.  This paragraph does not apply to rates that have become 
        final before the filing of an application for the transfer of a 
        severable portion of the experience rating under paragraph (b).  
        The commissioner shall send the recomputed tax rate to all 
        affected employers by mail or electronic transmission.  Any 
        affected employer may protest the recomputed tax rate in 
        accordance with the procedures in subdivision 6, paragraph (c). 
           (h) Should an employer not have been in operation long 
        enough to qualify for an experience rating under subdivision 3, 
        paragraph (a), The "experience rating history" for purposes of 
        this subdivision shall consist of and subdivision 4a means those 
        factors set out in subdivision 3, paragraph (b), that normally 
        make up an experience rating, without the 12-month minimum. 
           For purposes of this chapter, an "acquisition" means 
        anything that results in the obtaining by the successor 
        employer, in any way or manner, of the organization, trade or 
        business, or workforce of the predecessor employer. 
           A "distinct severable portion" in paragraph (b) means a 
        location or unit separately identifiable within the employer's 
        wage detail report under section 268.044. 
           (i) If the commissioner finds that a transaction was done, 
        in whole or in part, to avoid an experience rating or the 
        transfer of an experience rating, the commissioner may transfer 
        all or part of the experience rating regardless of the 
        requirements or limitations of paragraphs (a) and (b).  This 
        shall include the transferring of employees from the payroll of 
        an employer with a higher experience rating to the payroll of an 
        employer with a lower experience rating. 
           (j) Regardless of the ownership, management, or control 
        requirements of paragraph (a), if there is an acquisition or 
        merger of a publicly held corporation by or with another 
        publicly held corporation the experience ratings rating 
        histories of the corporations shall be combined as of the date 
        of acquisition or merger for the purpose of computing 
        recomputing a tax rate. 
           Sec. 8.  Minnesota Statutes 2004, section 268.051, is 
        amended by adding a subdivision to read: 
           Subd. 4a.  [ACTIONS THAT AVOID TAXES.] (a) If the 
        commissioner determines that any action was done, in whole or in 
        part, to avoid: 
           (1) an experience rating history; 
           (2) the transfer of an experience rating history; or 
           (3) the assignment of a tax rate for new employers under 
        subdivision 5, paragraph (a) or (b), the commissioner, to insure 
        that the trust fund receives all the taxes that would have been 
        received had the action not occurred, may, effective the date of 
        the action, transfer all or part of an experience rating history 
        and recompute the tax rate, or assign the appropriate new 
        employer tax rate. 
           (b) This subdivision shall apply to any action between 
        persons regardless of whether there is any commonality of 
        ownership, management, or control between the persons.  The 
        authority granted to the commissioner under this subdivision is 
        in addition to any other authority granted to the commissioner. 
           Sec. 9.  Minnesota Statutes 2004, section 268.051, 
        subdivision 6, is amended to read: 
           Subd. 6.  [NOTICE OF TAX RATE.] (a) On or before each 
        December 15, the commissioner shall notify each employer by mail 
        or electronic transmission of the employer's tax rate, along 
        with any additional assessments, fees, or surcharges, for the 
        following calendar year.  The notice shall contain the base tax 
        rate and the factors used in determining the employer's 
        experience rating.  Unless a protest of the tax rate is made, 
        the computed tax rate shall be final, except for fraud or 
        recomputation required under subdivision 4 or 4a, and shall be 
        the rate at which taxes shall be paid.  A recomputed tax rate 
        under subdivision 4 or 4a shall be the rate applicable for the 
        quarter that includes the date of acquisition and any quarter 
        thereafter during the calendar year in which the acquisition 
        occurred.  The tax rate shall not be subject to collateral 
        attack by way of claim for a credit adjustment or refund, or 
        otherwise.  
           (b) If the legislature, subsequent to the sending of the 
        tax rate, changes any of the factors used to determine the rate, 
        the earlier notice shall be void. a new tax rate based on the 
        new factors shall be computed and sent to the employer.  
           (c) A review of an employer's tax rate may be obtained by 
        the employer filing a protest within 30 calendar days from the 
        date the tax rate notice was sent to the employer.  Upon receipt 
        of the protest, the commissioner shall review the tax rate to 
        determine whether or not there has been any error in computation 
        or assignment of the tax rate.  The commissioner shall either 
        affirm or make a redetermination of the rate and a notice of the 
        affirmation or redetermination shall be sent to the employer by 
        mail or electronic transmission.  The affirmation or 
        redetermination shall be final unless the employer files an 
        appeal within 30 calendar days after the date the affirmation or 
        redetermination was sent.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105.  
           (d) The commissioner may at any time upon the 
        commissioner's own motion correct any error in the computation 
        or the assignment of an employer's tax rate.  
           Sec. 10.  Minnesota Statutes 2004, section 268.065, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE LEASING FIRMS COMPANY, PROFESSIONAL 
        EMPLOYER ORGANIZATION, OR SIMILAR PERSON.] (a) A person whose 
        work force consists of 50 percent or more of workers provided by 
        an employee leasing firms company, professional employer 
        organization, or similar person for a fee, is jointly and 
        severally liable for the unpaid amounts that are due under this 
        chapter or section 116L.20 on the wages paid on the contract 
        with the employee leasing firm company, professional employer 
        organization, or similar person.  "Employee leasing firm" means 
        an employer that provides its employees to other persons without 
        severing its employer-employee relationship with the worker for 
        the services performed for the lessee. 
           (b) This subdivision applies to, but is not limited to, 
        persons registered under section 79.255, but does not apply to 
        agreements with persons that obtain an exemption from 
        registration under section 79.255, subdivision 9. 
           Sec. 11.  Minnesota Statutes 2004, section 268.184, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ADMINISTRATIVE PENALTIES.] (a) If the 
        commissioner finds that any employer or any employee, officer, 
        or agent of any employer, is in collusion with any applicant for 
        the purpose of assisting the applicant to receive unemployment 
        benefits fraudulently, the employer shall be penalized $500 or 
        the amount of unemployment benefits determined to be overpaid, 
        whichever is greater. 
           (b) If the commissioner finds that any employer or any 
        employee, officer, or agent of an employer has made (1) a false 
        statement or representation knowing it to be false, including 
        reporting employees on a wage detail report under section 
        268.044 knowing the employees actually are employed by a 
        different employer, or (2) has made a false statement or 
        representation without a good faith belief as to correctness of 
        the statement or representation, or (3) who knowingly fails to 
        disclose a material fact, to prevent or reduce the payment of 
        unemployment benefits to any applicant or to reduce or avoid any 
        payment required from an employer under this chapter or section 
        116L.20, the employer shall be penalized $500, or 50 percent of 
        the reduced unemployment benefits or payment required, whichever 
        is greater. 
           (c) If the commissioner finds that an employer failed or 
        refused to honor a subpoena issued under section 268.105, 
        subdivision 4, or section 268.188, the employer shall be 
        penalized $500 and any costs of enforcing the subpoena, 
        including attorney fees. 
           (d) Penalties under this section subdivision shall be in 
        addition to any other penalties and subject to the same 
        collection procedures that apply to past due taxes.  Penalties 
        shall be paid to the department within 30 calendar days of 
        assessment and credited to the contingent account. 
           (e) The assessment of the penalty shall be final unless the 
        employer files an appeal within 30 calendar days after the 
        sending of notice of the penalty to the employer by mail or 
        electronic transmission.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105. 
           Sec. 12.  Minnesota Statutes 2004, section 268.184, is 
        amended by adding a subdivision to read: 
           Subd. 1a.  [NOTIFICATION AND MISREPORTING PENALTIES.] (a) 
        If the commissioner finds that any employer or agent of an 
        employer failed to meet the notification requirements of section 
        268.051, subdivision 4, the employer shall be assessed a penalty 
        of $5,000 or two percent of the first full quarterly payroll 
        acquired, whichever is higher.  Payroll is wages paid as defined 
        in section 268.035, subdivision 30.  The penalty under this 
        paragraph shall be canceled if the commissioner determines that 
        the failure occurred because of ignorance or inadvertence. 
           (b) If the commissioner finds that any individual advised 
        an employer to violate the employer's notification requirements 
        under section 268.051, subdivision 4, the individual, and that 
        individual's employer, shall each be assessed the penalty in 
        paragraph (a). 
           (c) If the commissioner finds that any person or agent of a 
        person violated the reporting requirements of section 268.0435 
        or 268.046, the person shall be assessed a penalty of $5,000 or 
        two percent of the quarterly payroll reported in violation of 
        section 268.0435 or 268.046, whichever is higher.  Payroll is 
        wages paid as defined in section 268.035, subdivision 30. 
           (d) Penalties under this subdivision shall be in addition 
        to any other penalties and subject to the same collection 
        procedures that apply to past due amounts from an employer.  
        Penalties must be paid within 30 calendar days after sending of 
        the notice of penalty. 
           (e) The assessment of a penalty shall be final unless the 
        person assessed files an appeal within 30 calendar days after 
        sending of the notice of the penalty by mail or electronic 
        transmission.  Proceedings on the appeal shall be conducted in 
        accordance with section 268.105. 
           Sec. 13.  Minnesota Statutes 2004, section 268.184, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CRIMINAL PENALTIES.] Any employer or any officer 
        or agent of an employer or any other individual who: 
           (1) makes a false statement or representation knowing it to 
        be false, or who; 
           (2) knowingly fails to disclose a material fact, including 
        notification required under section 268.051, subdivision 4; or 
           (3) knowingly advises or assists an employer in violating 
        clause (1) or (2), to avoid or reduce any payment required from 
        an employer under this chapter or section 116L.20, or to prevent 
        or reduce the payment of unemployment benefits to any applicant, 
        is guilty of a gross misdemeanor unless the underpayment exceeds 
        $500, in that case the individual is guilty of a felony.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005, 
        and applies to crimes committed on or after that date. 
           Sec. 14.  [MANDATORY FEDERAL IMPLEMENTATION REQUIREMENT.] 
           The commissioner must implement systems and processes to 
        detect, investigate, and enforce section 268.051, subdivisions 4 
        and 4a. 
           Sec. 15.  [RELATION TO FEDERAL LAW.] 
           This article is enacted to meet the requirements of the 
        Federal SUTA Dumping Prevention Act of 2004, Public Law 108-295, 
        amending United States Code, title 42, section 503, and shall be 
        construed, interpreted, and applied consistent with the 
        requirements of that federal law, including its definitions. 
           Sec. 16.  [REPEALER.] 
           (a) Minnesota Rules, parts 3315.1020, 3315.3210, and 
        3315.3220, are repealed. 
           (b) Minnesota Statutes 2004, section 268.045, subdivisions 
        2, 3, and 4, are repealed. 
           Sec. 17.  [EFFECTIVE DATE.] 
           Except for the sections that include a separate effective 
        date, this article is effective July 1, 2005. 

                                   ARTICLE 2 
                            HOUSEKEEPING PROVISIONS 
           Section 1.  Minnesota Statutes 2004, section 268.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [STATEMENT.] The public purpose of sections 
        268.029 to 268.23 this chapter is:  Economic insecurity due to 
        involuntary unemployment of workers in Minnesota is a subject of 
        general concern that requires appropriate action by the 
        legislature.  The public good will be promoted by providing 
        workers who are unemployed through no fault of their own a 
        temporary partial wage replacement to assist the unemployed 
        worker to become reemployed.  This program will be known as the 
        "Minnesota unemployment insurance program." 
           Sec. 2.  Minnesota Statutes 2004, section 268.035, 
        subdivision 9, is amended to read: 
           Subd. 9.  [CONSTRUCTION/INDEPENDENT CONTRACTOR.] A worker 
        doing commercial or residential building construction or 
        improvement, in the public or private sector, performing 
        services in the course of the trade, business, profession, or 
        occupation of the employer, shall be considered an employee and 
        not an "independent contractor" unless the worker meets all the 
        following conditions: 
           (1) maintains a separate business with the independent 
        contractor's own office, equipment, materials, and other 
        facilities; 
           (2) holds or has applied for a federal employer 
        identification number or has filed business or self-employment 
        income tax returns with the federal Internal Revenue Service 
        based on that work or service in the previous year; 
           (3) operates under contracts to perform specific services 
        or work for specific amounts of money under which the 
        independent contractor controls the means of performing the 
        services or work; 
           (4) incurs the main expenses related to the service or work 
        that the independent contractor performs under contract; 
           (5) is responsible for the satisfactory completion of work 
        or services that the independent contractor contracts to perform 
        and is liable for a failure to complete the work or service; 
           (6) receives compensation for work or service performed 
        under a contract on a commission or per job or competitive bid 
        basis and not on any other basis; 
           (7) may realize a profit or suffer a loss under contracts 
        to perform work or service; 
           (8) has continuing or recurring business liabilities or 
        obligations; and 
           (9) the success or failure of the independent contractor's 
        business depends on the relationship of business receipts to 
        expenditures. 
           Sec. 3.  Minnesota Statutes 2004, section 268.035, 
        subdivision 13, is amended to read: 
           Subd. 13.  [EMPLOYEE.] "Employee" means: 
           (1) every individual, who is performing, or has performed 
        services for an employer in employment; or 
           (2) each individual employed to perform or assist in 
        performing the work of any agent or employee of the employer 
        shall be considered to be an employee of that employer whether 
        the individual was hired or paid directly by that employer or by 
        the agent or employee, provided the employer had actual or 
        constructive knowledge of the work. 
           Sec. 4.  Minnesota Statutes 2004, section 268.035, 
        subdivision 14, is amended to read: 
           Subd. 14.  [EMPLOYER.] "Employer" means any of the 
        following person which has had one or more employees during the 
        current or the prior calendar year: 
           (1) any individual or type of organization, resident or 
        nonresident, for profit or nonprofit, religious, charitable, or 
        educational, including any partnership, limited liability 
        company, trust, estate, or corporation, domestic or foreign, or 
        the receiver, trustee in bankruptcy, trustee or successor of any 
        of the foregoing, or the legal representative of a deceased 
        person; 
           (2) any government entity, state or federal, foreign or 
        domestic, Indian tribe, including any subdivision thereof and 
        any instrumentality thereof owned wholly or in part; 
           (3) including any organization or person that has elected, 
        under section 268.042, to be subject to the Minnesota 
        Unemployment Insurance Law; and 
           (4) a joint venture composed of one or more employers;. 
           (5) any nonprofit organization or government agency 
        providing or authorizing the hiring of homeworkers, personal 
        care attendants, or other individuals performing similar 
        services in a private home is the employer of the homeworker, 
        attendant, or similar worker whether the organization or agency 
        pays the employee directly or provides funds to the recipient of 
        the services to pay for the services.  This clause does not 
        apply to the state of Minnesota or any county that provides 
        federal, state, or local funds to a child care provider either 
        directly or indirectly through a parent who is a child care 
        assistance recipient; or 
           (6) each individual employed to perform or assist in 
        performing the work of any agent or employee shall be considered 
        to be employed by that employer whether the individual was hired 
        or paid directly by that employer or by the agent or employee, 
        provided the employer had actual or constructive knowledge of 
        the work. 
           An employee leasing company, professional employer 
        organization, or similar person, that has been assigned a tax or 
        reimbursable account under section 268.046 is an employer for 
        purposes of this chapter. 
           Sec. 5.  Minnesota Statutes 2004, section 268.035, 
        subdivision 20, is amended to read: 
           Subd. 20.  [NONCOVERED EMPLOYMENT.] "Noncovered employment" 
        means: 
           (1) employment for the United States government or an 
        instrumentality thereof, including military service; 
           (2) employment for a state, other than Minnesota, or a 
        political subdivision or instrumentality thereof; 
           (3) employment for a foreign government; 
           (4) employment for an instrumentality wholly owned by a 
        foreign government, if the employment is of a character similar 
        to that performed in foreign countries by employees of the 
        United States government or an instrumentality thereof and the 
        United States Secretary of State has certified that the foreign 
        government grants an equivalent exemption to similar employment 
        performed in the foreign country by employees of the United 
        States government and instrumentalities thereof; 
           (5) employment covered under United States Code, title 45, 
        section 351, the Railroad Unemployment Insurance Act; 
           (6) employment covered by a reciprocal arrangement between 
        the commissioner and another state or the federal government 
        which provides that all employment performed by an individual 
        for an employer during the period covered by the reciprocal 
        arrangement is considered performed entirely within another 
        state; 
           (7) employment for a church or convention or association of 
        churches, or an organization operated primarily for religious 
        purposes that is operated, supervised, controlled, or 
        principally supported by a church or convention or association 
        of churches described in United States Code, title 26, section 
        501(c)(3) of the federal Internal Revenue Code and exempt from 
        income tax under section 501(a); 
           (8) employment of a duly ordained or licensed minister of a 
        church in the exercise of a ministry or by a member of a 
        religious order in the exercise of duties required by the order, 
        for Minnesota or a political subdivision or an organization 
        described in United States Code, title 26, section 501(c)(3) of 
        the federal Internal Revenue Code and exempt from income tax 
        under section 501(a); 
           (9) employment of an individual receiving rehabilitation of 
        "sheltered" work in a facility conducted for the purpose of 
        carrying out a program of rehabilitation for individuals whose 
        earning capacity is impaired by age or physical or mental 
        deficiency or injury or a program providing "sheltered" work for 
        individuals who because of an impaired physical or mental 
        capacity cannot be readily absorbed in the competitive labor 
        market.  This clause applies only to services performed for 
        Minnesota or a political subdivision or an organization 
        described in United States Code, title 26, section 501(c)(3) of 
        the federal Internal Revenue Code and exempt from income tax 
        under section 501(a) in a facility certified by the 
        Rehabilitation Services Branch of the department or in a day 
        training or habilitation program licensed by the Department of 
        Human Services; 
           (10) employment of an individual receiving work relief or 
        work training as part of an unemployment work relief or work 
        training program assisted or financed in whole or in part by any 
        federal agency or an agency of a state or political subdivision 
        thereof.  This clause applies only to employment for Minnesota 
        or a political subdivision or an organization described in 
        United States Code, title 26, section 501(c)(3) of the federal 
        Internal Revenue Code and exempt from income tax under section 
        501(a).  This clause shall not apply to programs that require 
        unemployment benefit coverage for the participants; 
           (11) employment for Minnesota or a political subdivision as 
        an elected official, a member of a legislative body, or a member 
        of the judiciary; 
           (12) employment as a member of the Minnesota National Guard 
        or Air National Guard; 
           (13) employment for Minnesota, a political subdivision, or 
        instrumentality thereof, as an employee serving only on a 
        temporary basis in case of fire, flood, tornado, or similar 
        emergency; 
           (14) employment as an election official or election worker 
        for Minnesota or a political subdivision, but only if the 
        compensation for that employment was less than $1,000 in a 
        calendar year; 
           (15) employment for Minnesota that is a major policy making 
        or advisory position in the unclassified service, including 
        those positions established pursuant to section 43A.08, 
        subdivision 1a; 
           (16) employment for a political subdivision of Minnesota 
        that is a nontenured major policy making or advisory position; 
           (17) domestic employment in a private household, local 
        college club, or local chapter of a college fraternity or 
        sorority performed for a person, only if the wages paid in any 
        calendar quarter in either the current or preceding calendar 
        year to all individuals in domestic employment totaled less than 
        $1,000. 
           "Domestic employment" includes all service in the operation 
        and maintenance of a private household, for a local college 
        club, or local chapter of a college fraternity or sorority as 
        distinguished from service as an employee in the pursuit of an 
        employer's trade or business; 
           (18) employment of an individual by a son, daughter, or 
        spouse, and employment of a child under the age of 18 by the 
        child's father or mother; 
           (19) employment of an inmate of a custodial or penal 
        institution; 
           (20) employment for a school, college, or university by a 
        student who is enrolled and is regularly attending classes at 
        the school, college, or university; 
           (21) employment of an individual who is enrolled as a 
        student in a full-time program at a nonprofit or public 
        educational institution that maintains a regular faculty and 
        curriculum and has a regularly organized body of students in 
        attendance at the place where its educational activities are 
        carried on, taken for credit at the institution, that combines 
        academic instruction with work experience, if the employment is 
        an integral part of the program, and the institution has so 
        certified to the employer, except that this clause shall not 
        apply to employment in a program established for or on behalf of 
        an employer or group of employers; 
           (22) employment of university, college, or professional 
        school students in an internship or other training program with 
        the city of St. Paul or the city of Minneapolis pursuant to Laws 
        1990, chapter 570, article 6, section 3; 
           (23) employment for a hospital by a patient of the 
        hospital.  "Hospital" means an institution that has been 
        licensed by the Department of Health as a hospital; 
           (24) employment as a student nurse for a hospital or a 
        nurses' training school by an individual who is enrolled and is 
        regularly attending classes in an accredited nurses' training 
        school; 
           (25) employment as an intern for a hospital by an 
        individual who has completed a four-year course in an accredited 
        medical school; 
           (26) employment as an insurance salesperson, by other than 
        a corporate officer, if all the compensation for wages from the 
        employment is solely by way of commission.  The word "insurance" 
        shall include an annuity and an optional annuity; 
           (27) employment as an officer of a township mutual 
        insurance company or farmer's mutual insurance company operating 
        pursuant to chapter 67A; 
           (28) employment of a corporate officer, if the officer owns 
        25 percent or more of the employer corporation, and employment 
        of a member of a limited liability company, if the member owns 
        25 percent or more of the employer limited liability company; 
           (29) employment as a real estate salesperson, by other than 
        a corporate officer, if all the compensation for wages from the 
        employment is solely by way of commission; 
           (30) employment as a direct seller as defined in United 
        States Code, title 26, section 3508; 
           (31) employment of an individual under the age of 18 in the 
        delivery or distribution of newspapers or shopping news, not 
        including delivery or distribution to any point for subsequent 
        delivery or distribution; 
           (32) casual employment performed for an individual, other 
        than domestic employment under clause (17), that does not 
        promote or advance that employer's trade or business; 
           (33) employment in "agricultural employment" unless 
        considered "covered agricultural employment" under subdivision 
        11; or 
           (34) if employment during one-half or more of any pay 
        period was covered employment, all the employment for the pay 
        period shall be considered covered employment; but if during 
        more than one-half of any pay period the employment was 
        noncovered employment, then all of the employment for the pay 
        period shall be considered noncovered employment.  "Pay period" 
        means a period of not more than a calendar month for which a 
        payment or compensation is ordinarily made to the employee by 
        the employer. 
           Sec. 6.  Minnesota Statutes 2004, section 268.035, 
        subdivision 21, is amended to read: 
           Subd. 21.  [PERSON.] "Person" means: 
           (1) an individual, trust or estate, a partnership or a 
        corporation or any type of organization or entity, resident or 
        nonresident, for profit or nonprofit, religious, charitable or 
        educational, including any receiver or trustee in a bankruptcy, 
        successor of any of the foregoing, or legal representative of a 
        deceased individual; and 
           (2) any government entity, state or federal, foreign or 
        domestic, or Indian tribe, including any subdivision or 
        instrumentality thereof owned wholly or in part. 
           Sec. 7.  Minnesota Statutes 2004, section 268.035, 
        subdivision 26, is amended to read: 
           Subd. 26.  [UNEMPLOYED.] An applicant shall be considered 
        "unemployed":  (1) in any week that the applicant performs no 
        service in employment, covered employment, noncovered 
        employment, self-employment, or volunteer work, and with respect 
        to which the applicant has no earnings; or (2) in any week of 
        less than 32 hours of service in employment, covered employment, 
        noncovered employment, self-employment, or volunteer work if the 
        ; and (2) any earnings with respect to that week are less than 
        the applicant's weekly unemployment benefit amount.  
           Sec. 8.  Minnesota Statutes 2004, section 268.042, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EMPLOYER REGISTRATION.] (a) Each employer 
        shall, upon or before the submission of its first wage detail 
        report under section 268.044, register with the commissioner for 
        a tax account or a reimbursable account, by electronic 
        transmission in a format prescribed by the commissioner.  The 
        employer must provide all required information for registration. 
           (b) Except as provided in subdivision 3, any organization 
        or person that is or becomes an employer subject to the 
        Minnesota Unemployment Insurance Law within any calendar year 
        shall be considered to be subject to this chapter the entire 
        calendar year.  
           (c) Upon the termination of business, an employer that has 
        been assigned a tax account or reimbursable account shall notify 
        the commissioner by electronic transmission, in a format 
        prescribed by the commissioner, that the employer no longer has 
        employees and does not intend or expect to pay wages to any 
        employees in the next calendar year and into the foreseeable 
        future.  Upon such notification, the commissioner shall not 
        require the employer to file wage detail reports under section 
        268.044, subdivision 1, paragraph (d), commencing the calendar 
        quarter after the notice of termination was received by the 
        commissioner. 
           Sec. 9.  Minnesota Statutes 2004, section 268.043, is 
        amended to read: 
           268.043 [DETERMINATIONS OF COVERAGE.] 
           (a) The commissioner, upon the commissioner's own motion or 
        upon application of an organization or a person, shall determine 
        if that organization or person is an employer or whether 
        services performed for it constitute employment and covered 
        employment, or whether the compensation for services constitutes 
        wages, and shall notify the organization or person of the 
        determination.  The determination shall be final unless the 
        organization or person, within 30 calendar days after sending of 
        the determination by mail or electronic transmission, files a 
        protest.  Upon receipt of a protest, the commissioner shall 
        review all available evidence and determine whether an error has 
        been made.  The commissioner shall send to the organization or 
        person, by mail or electronic transmission, an affirmation or 
        redetermination.  The affirmation or redetermination shall be 
        final unless, within 30 calendar days after sending of the 
        affirmation or redetermination to the organization or person by 
        mail or electronic transmission, an appeal is filed.  
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           (b) No organization or person shall be initially determined 
        an employer, or that services performed for it were in 
        employment or covered employment, for periods more than four 
        years prior to the year in which the determination is made, 
        unless the commissioner finds that there was fraudulent action 
        to avoid liability under this chapter. 
           Sec. 10.  Minnesota Statutes 2004, section 268.044, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FAILURE TO TIMELY FILE REPORT; LATE FEES.] (a) 
        Any employer that fails to submit the quarterly wage detail 
        report when due shall pay a late fee of $10 per employee, 
        computed based upon the highest of: 
           (1) the number of employees reported on the last wage 
        detail report submitted; 
           (2) the number of employees reported in the corresponding 
        quarter of the prior calendar year; or 
           (3) if no wage detail report has ever been submitted, the 
        number of employees listed at the time of employer registration. 
           The late fee shall be waived if the wage detail report is 
        received within 30 calendar days after a demand for the report 
        is sent to the employer by mail or electronic transmission.  A 
        late fee assessed an employer may not be waived more than once 
        twice each 12 months.  The amount of the late fee assessed shall 
        not be less than $50 $250.  
           (b) If the wage detail report is not received in a manner 
        and format prescribed by the commissioner within 30 calendar 
        days after demand is sent under paragraph (a), the late fee 
        assessed under paragraph (a) shall double and a renewed demand 
        notice and notice of the increased late fee shall be sent to the 
        employer by mail or electronic transmission. 
           (c) Late fees due under this subdivision may be compromised 
        under section 268.067 where good cause for late submission is 
        found by the commissioner.  
           Sec. 11.  Minnesota Statutes 2004, section 268.051, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TAX RATE BUYDOWN.] (a) Any taxpaying employer 
        who has been assigned a tax rate based upon an experience 
        rating, and has no amounts past due under this chapter, may, 
        upon the voluntary payment of an amount equivalent to any 
        portion or all of the unemployment benefits used in computing 
        the experience rating plus a surcharge of 25 percent, obtain a 
        cancellation of unemployment benefits used equal to the payment 
        made, less the surcharge.  Upon the payment, the commissioner 
        shall compute a new experience rating for the employer, and 
        compute a new tax rate.  
           (b) Voluntary payments may be made only by electronic 
        payment and must be received within 120 calendar days from the 
        beginning of the calendar year for which the tax rate is 
        effective. 
           Sec. 12.  Minnesota Statutes 2004, section 268.052, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ELECTION BY STATE OR POLITICAL SUBDIVISION TO BE 
        A TAXPAYING EMPLOYER.] (a) The state or political 
        subdivision excluding a school district may elect to be a 
        taxpaying employer for any calendar year if a notice of election 
        is filed within 30 calendar days following January 1 of that 
        calendar year.  Upon election, the state or political 
        subdivision shall be assigned the new employer tax rate under 
        section 268.051, subdivision 5, for the calendar year of the 
        election and until it qualifies for an experience rating under 
        section 268.051, subdivision 3. 
           (b) An election shall be for a minimum period of two 
        calendar years following the effective date of the election and 
        continue unless a notice terminating the election is filed not 
        later than 30 calendar days before the beginning of the calendar 
        year.  The termination shall be effective at the beginning of 
        the next calendar year.  Upon election, the commissioner shall 
        establish a reimbursable account for the state or political 
        subdivision.  A termination of election shall be allowed only if 
        the state or political subdivision has, since the beginning of 
        the experience rating period under section 268.051, subdivision 
        3, paid taxes and made voluntary payments under section 268.051, 
        subdivision 7, equal to or more than 125 percent of the 
        unemployment benefits used in computing the experience rating.  
        In addition, any unemployment benefits paid after the experience 
        rating period shall be transferred to the new reimbursable 
        account of the state or political subdivision.  If the amount of 
        taxes and voluntary payments paid since the beginning of the 
        experience rating period exceeds 125 percent of the amount of 
        unemployment benefits paid during the experience rating period, 
        that amount in excess shall be applied against any unemployment 
        benefits paid after the experience rating period. 
           (c) The method of payments to the trust fund under 
        subdivisions 3 and 4 shall apply to all taxes paid by or due 
        from the state or political subdivision that elects to be 
        taxpaying employers under this subdivision. 
           (d) A notice of election or a notice terminating election 
        shall be filed by electronic transmission in a format prescribed 
        by the commissioner.  
           Sec. 13.  Minnesota Statutes 2004, section 268.053, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELECTION.] (a) Any nonprofit organization 
        that has employees in covered employment shall pay taxes on a 
        quarterly basis pursuant to section 268.051 unless it elects to 
        make reimbursements to the trust fund the amount of unemployment 
        benefits charged to its reimbursable account under section 
        268.047. 
           The organization may elect to make reimbursements for a 
        period of not less than two calendar years beginning with the 
        date that the organization was determined to be an employer with 
        covered employment by filing a notice of election not later than 
        30 calendar days after the date of the determination. 
           (b) Any nonprofit organization that makes an election will 
        continue to be liable for reimbursements until it files a notice 
        terminating its election not later than 30 calendar days before 
        the beginning of the calendar year the termination is to be 
        effective.  
           (c) A nonprofit organization that has been making 
        reimbursements that files a notice of termination of election 
        shall be assigned the new employer tax rate under section 
        268.051, subdivision 5, for the calendar year of the termination 
        of election and until it qualifies for an experience rating 
        under section 268.051, subdivision 3. 
           (d) Any nonprofit organization that has been paying taxes 
        may elect to make reimbursements by filing no less than 30 
        calendar days before January 1 of any calendar year a notice of 
        election.  Upon election, the commissioner shall establish a 
        reimbursable account for the nonprofit organization.  An 
        election shall be allowed only if the nonprofit organization 
        has, since the beginning of the experience rating period under 
        section 268.051, subdivision 3, paid taxes and made voluntary 
        payments under section 268.051, subdivision 7, equal to or more 
        than 125 percent of the unemployment benefits used in computing 
        the experience rating.  In addition, any unemployment benefits 
        paid after the experience rating period shall be transferred to 
        the new reimbursable account of the nonprofit organization.  If 
        the amount of taxes and voluntary payments paid since the 
        beginning of the experience rating period exceeds 125 percent of 
        the amount of unemployment benefits paid during the experience 
        rating period, that amount in excess shall be applied against 
        any unemployment benefits paid after the experience rating 
        period.  The election shall not be terminable by the 
        organization for that and the next calendar year. 
           (e) The commissioner may for good cause extend the period 
        that a notice of election, or a notice of termination, must be 
        filed and may permit an election to be retroactive. 
           (f) A notice of election or notice terminating election 
        shall be filed by electronic transmission in a format prescribed 
        by the commissioner. 
           Sec. 14.  Minnesota Statutes 2004, section 268.057, 
        subdivision 7, is amended to read: 
           Subd. 7.  [CREDIT ADJUSTMENTS, REFUNDS.] (a) If an employer 
        makes an application for a credit adjustment of any amount paid 
        under this chapter or section 116L.20 within four years of 
        the year date that the payment was made due, in a manner and 
        format prescribed by the commissioner, and the commissioner 
        determines that the payment or any portion was erroneous, the 
        commissioner shall make an adjustment and issue a credit without 
        interest.  If a credit cannot be used, the commissioner shall 
        refund, without interest, the amount erroneously paid.  The 
        commissioner, on the commissioner's own motion, may make a 
        credit adjustment or refund under this subdivision. 
           Any refund returned to the commissioner shall be considered 
        unclaimed property under chapter 345. 
           (b) If a credit adjustment or refund is denied in whole or 
        in part, a notice of denial shall be sent to the employer by 
        mail or electronic transmission.  Within 30 calendar days after 
        sending of the notice of denial, the employer may protest. 
           Upon receipt of a timely protest, the commissioner shall 
        review the denial and either affirm the denial or redetermine 
        the credit adjustment or refund.  The affirmation of denial or 
        redetermination of the credit adjustment or refund, sent by mail 
        or electronic transmission, shall be final unless an employer 
        files an appeal within 30 calendar days after sending.  
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           Sec. 15.  Minnesota Statutes 2004, section 268.069, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [REQUIREMENTS.] The commissioner shall pay 
        unemployment benefits from the trust fund to an applicant who 
        has met each of the following requirements: 
           (1) the applicant has filed an application for unemployment 
        benefits and established a benefit account in accordance with 
        section 268.07; 
           (2) the applicant is not subject to a disqualification from 
        unemployment benefits under section 268.095 because of a quit or 
        discharge; 
           (3) the applicant has met all of the ongoing weekly 
        eligibility requirements under sections 268.085 and 268.086; 
           (4) the applicant does not have an outstanding overpayment 
        of unemployment benefits, including any penalties or interest, 
        under section 268.18; and 
           (5) the applicant is not subject to a denial of ineligible 
        for unemployment benefits under section 268.182 because of a 
        false representation or concealment of facts. 
           Sec. 16.  Minnesota Statutes 2004, section 268.07, 
        subdivision 3b, is amended to read: 
           Subd. 3b.  [LIMITATIONS.] (a) A benefit account shall be 
        established effective the Sunday of the calendar week that the 
        application for unemployment benefits was filed.  Upon specific 
        request of an applicant, an application for unemployment 
        benefits may be backdated one calendar week prior to the Sunday 
        of the week the application was actually filed.  An application 
        shall be backdated only if the applicant was unemployed 
        throughout the period of the backdating.  If an individual 
        attempted to file an application for unemployment benefits, but 
        was prevented from filing an application by the department, the 
        benefit account shall be effective the Sunday of the calendar 
        week the individual first attempted to file an application. 
           (b) A benefit account, once established, may later be 
        withdrawn only if: 
           (1) a new application for unemployment benefits is filed 
        and a new benefit account is established at the time of the 
        withdrawal; and 
           (2) the applicant has not served a waiting week under 
        section 268.085, subdivision 1, clause (3) (5).  
           A determination or amended determination pursuant to 
        section 268.101, that was issued before the withdrawal of the 
        benefit account, shall remain in effect and shall not be voided 
        by the withdrawal of the benefit account.  A determination of 
        disqualification requiring subsequent earnings to satisfy the 
        disqualification under section 268.095, subdivision 10, shall 
        apply to the weekly unemployment benefit amount on the new 
        benefit account. 
           (c) An application for unemployment benefits shall not be 
        allowed prior to the Sunday following the expiration of the 
        benefit year on a prior benefit account.  Except as allowed 
        under paragraph (b), a applicant may establish only one benefit 
        account each 52 calendar weeks. 
           (d) All unemployment benefits shall be available from the 
        trust fund only for weeks occurring during the applicant's 
        benefit year. 
           Sec. 17.  Minnesota Statutes 2004, section 268.085, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY CONDITIONS.] An applicant 
        shall be eligible to receive unemployment benefits for any week 
        if: 
           (1) the applicant has an active benefit account and has 
        filed a continued biweekly request for unemployment benefits for 
        that week pursuant to section 268.086; 
           (2) the week for which unemployment benefits are requested 
        is in the applicant's benefit year; 
           (3) the applicant was unemployed as defined in section 
        268.035, subdivision 26; 
           (2) (4) the applicant was able to work and was available 
        for suitable employment, and was actively seeking suitable 
        employment.  The applicant's weekly unemployment benefit amount 
        shall be reduced one-fifth for each day the applicant is unable 
        to work or is unavailable for suitable employment.  If the 
        computation of the reduced unemployment benefits is not a whole 
        dollar, it shall be rounded down to the next lower whole dollar. 
           This clause shall not apply to an applicant who is in 
        reemployment assistance training, or each day the applicant is 
        on jury duty or serving as an election judge; 
           (3) (5) the applicant has served a waiting period of one 
        week that the applicant is otherwise entitled to some amount of 
        unemployment benefits.  This clause shall not apply if the 
        applicant would have been entitled to federal disaster 
        unemployment assistance because of a disaster in Minnesota, but 
        for the applicant's establishment of a benefit account under 
        section 268.07; and 
           (4) (6) the applicant has been participating in 
        reemployment assistance services, such as job search and resume 
        writing classes, if the applicant has been determined in need of 
        reemployment assistance services by the commissioner, unless 
        there is good cause for the applicant's failure to participate. 
           Sec. 18.  Minnesota Statutes 2004, section 268.085, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOT ELIGIBLE.] An applicant shall not be 
        eligible to receive unemployment benefits for any week: 
           (1) that occurs before the effective date of a benefit 
        account; 
           (2) that occurs in a period when the applicant is a student 
        in attendance at, or on vacation from a secondary school 
        including the period between academic years or terms; 
           (3) that the applicant is incarcerated or performing court 
        ordered community service.  The applicant's weekly unemployment 
        benefit amount shall be reduced by one-fifth for each day the 
        applicant is incarcerated or performing court ordered community 
        service.  If the computation of the reduced unemployment 
        benefits is not a whole dollar, it shall be rounded down to the 
        next lower whole dollar; 
           (4) that the applicant fails or refuses to provide 
        information on an issue of eligibility required under section 
        268.101, subdivision 1, paragraph (a), or an issue of 
        disqualification required under section 268.101, subdivision 1, 
        paragraph (d); 
           (5) that the applicant is performing services 32 hours or 
        more, in employment, covered employment, noncovered employment, 
        volunteer work, or self-employment regardless of the amount of 
        any earnings; or 
           (6) with respect to which the applicant is receiving, has 
        received, or has filed an application for unemployment benefits 
        under any federal law or the law of any other state.  If the 
        appropriate agency finally determines that the applicant is not 
        entitled to the unemployment benefits, this clause shall not 
        apply. 
           Sec. 19.  Minnesota Statutes 2004, section 268.085, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENTS THAT DELAY UNEMPLOYMENT BENEFITS.] (a) 
        An applicant shall not be eligible to receive unemployment 
        benefits for any week with respect to which the applicant is 
        receiving, has received, or has filed for payment, equal to or 
        in excess of the applicant's weekly unemployment benefit amount, 
        in the form of: 
           (1) vacation pay paid upon temporary, indefinite, or 
        seasonal separation.  This clause shall not apply to vacation 
        pay paid upon a permanent separation from employment; 
           (2) severance pay, bonus pay, vacation pay, sick pay, and 
        any other money payments, except earnings under subdivision 5, 
        and back pay under subdivision 6, paid by an employer because 
        of, upon, or after separation from employment, but only if the 
        money payment is considered wages at the time of payment under 
        section 268.035, subdivision 29, or United States Code, title 
        26, section 3121, clause (2), of the Federal Insurance 
        Contribution Act.  This clause shall apply to all the weeks of 
        payment and shall be applied to the period immediately following 
        the last day of employment.  The number of weeks of payment 
        shall be determined as follows:; 
           (i) if the payments are made periodically, the total of the 
        payments to be received shall be divided by the applicant's last 
        level of regular weekly pay from the employer; or 
           (ii) if the payment is made in a lump sum, that sum shall 
        be divided by the applicant's last level of regular weekly pay 
        from the employer.  This clause shall not apply to vacation pay 
        paid by an employer upon permanent separation from employment; 
           (2) (3) pension, retirement, or annuity payments from any 
        plan contributed to by a base period employer including the 
        United States government, except Social Security benefits which 
        are provided for in subdivision 4.  The base period employer 
        contributed to the plan if the contribution is excluded from the 
        definition of wages under section 268.035, subdivision 29, 
        clause (1), or United States Code, title 26, section 3121, 
        clause (2), of the Federal Insurance Contribution Act. 
           If the applicant receives a lump sum pension payment, that 
        sum shall be divided by the applicant's last level of regular 
        weekly pay to determine the number of weeks of payment.  The 
        number of weeks of payment shall be applied to the period 
        immediately following the last day of employment.  An applicant 
        shall not be considered to have received the lump sum payment if 
        the applicant immediately deposits that payment in a qualified 
        pension plan or account; or 
           (3) (4) holiday pay. 
           (b) This subdivision shall apply to all the weeks of 
        payment and shall be applied to the period immediately following 
        the last day of employment.  The number of weeks of payment 
        shall be determined as follows: 
           (1) if the payments are made periodically, the total of the 
        payments to be received shall be divided by the applicant's last 
        level of regular weekly pay from the employer; or 
           (2) if the payment is made in a lump sum, that sum shall be 
        divided by the applicant's last level of regular weekly pay from 
        the employer. 
           (b) (c) If the payment is less than the applicant's weekly 
        unemployment benefit amount, unemployment benefits shall be 
        reduced by the amount of the payment.  If the computation of 
        reduced unemployment benefits is not a whole dollar, it shall be 
        rounded down to the next lower whole dollar. 
           Sec. 20.  Minnesota Statutes 2004, section 268.085, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DEDUCTIBLE EARNINGS.] (a) If the applicant has 
        earnings with respect to any week, from employment, covered 
        employment, noncovered employment, self-employment, or volunteer 
        work, equal to or in excess of the applicant's weekly 
        unemployment benefit amount, the applicant shall be ineligible 
        for unemployment benefits for that week. 
           (b) If the applicant has earnings, with respect to any 
        week, that is less than the applicant's weekly unemployment 
        benefit amount, from employment, covered employment, noncovered 
        employment, self-employment, or volunteer work, that amount over 
        the following shall be deducted from the weekly unemployment 
        benefit amount: 
           (1) 25 percent of earnings or $50, whichever is higher; and 
           (2) $200 for earnings from service in the National Guard or 
        a United States military reserve unit. 
           The resulting unemployment benefit, if not a whole dollar, 
        shall be rounded down to the next lower whole dollar. 
           (c) No deduction shall be made from an applicant's weekly 
        unemployment benefit amount for earnings from direct service as 
        a volunteer firefighter or volunteer ambulance service 
        personnel.  This exception to paragraphs (a) and (b) does not 
        apply to on-call or standby pay provided to a volunteer 
        firefighter or volunteer ambulance service personnel.  No 
        deduction shall be made for jury duty pay or for pay as an 
        election judge.  
           (d) The applicant may report deductible earnings on 
        continued biweekly requests for unemployment benefits at the 
        next lower whole dollar amount. 
           (e) Deductible earnings shall not include any money 
        considered a deductible payment under subdivision 3, but shall 
        include all other money considered wages and any other money 
        considered earned income under state and federal law for income 
        tax purposes. 
           Sec. 21.  Minnesota Statutes 2004, section 268.085, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ALIENS.] (a) An alien shall be ineligible for 
        unemployment benefits for any week the alien is not authorized 
        to work in the United States under federal law.  Information 
        from the Bureau of Citizenship and Immigration and 
        Naturalization Service Services shall be considered conclusive, 
        absent specific evidence that the information was erroneous.  
        Pursuant to the existing agreement between the United States and 
        Canada, this paragraph shall not apply to an applicant who is a 
        Canadian citizen and has returned to and is living in Canada 
        each week unemployment benefits are requested. 
           (b) Unemployment benefits shall not be paid on the basis of 
        wage credits earned by an alien unless the alien (1) was 
        lawfully admitted for permanent residence at the time of the 
        employment, (2) was lawfully present for the purposes of the 
        employment, or (3) was permanently residing in the United States 
        under color of law at the time of the employment. 
           (c) Any information required of applicants applying for 
        unemployment benefits to determine eligibility because of their 
        alien status shall be required from all applicants. 
           Sec. 22.  Minnesota Statutes 2004, section 268.086, 
        subdivision 2, is amended to read: 
           Subd. 2.  [CONTINUED BIWEEKLY REQUEST FOR UNEMPLOYMENT 
        BENEFITS DEFINED.] A continued biweekly request for unemployment 
        benefits is a certification by an applicant, done on a biweekly 
        basis, that the applicant is unemployed and meets the ongoing 
        eligibility requirements for unemployment benefits under section 
        268.085 for a specific week or two-week period.  A continued 
        biweekly request shall include information on possible issues of 
        eligibility and disqualification in accordance with section 
        268.101, subdivision 1, paragraph (c). 
           Sec. 23.  Minnesota Statutes 2004, section 268.086, 
        subdivision 3, is amended to read: 
           Subd. 3.  [METHODS FOR FILING CONTINUED BIWEEKLY REQUESTS 
        FOR UNEMPLOYMENT BENEFITS.] (a) The commissioner shall designate 
        to each applicant one of the following methods for filing a 
        continued biweekly request: 
           (1) by telephone under subdivision 4; 
           (2) by electronic transmission under subdivision 5; 
           (3) (2) by mail under subdivision 6; or 
           (4) (3) by in-person interview under subdivision 7. 
           (b) The method designated by the commissioner shall be the 
        only method allowed for filing a continued biweekly request by 
        that applicant.  An applicant may ask that one of the other 
        allowed methods be designated and the commissioner shall 
        consider inconvenience to the applicant as well as 
        administrative capacity in determining whether to allow an 
        applicant to change the designated method for filing a continued 
        biweekly request for unemployment benefits. 
           Sec. 24.  Minnesota Statutes 2004, section 268.095, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [QUIT.] An applicant who quit employment 
        shall be disqualified from all unemployment benefits according 
        to subdivision 10 except when: 
           (1) the applicant quit the employment because of a good 
        reason caused by the employer as defined in subdivision 3; 
           (2) the applicant quit the employment to accept other 
        covered employment that provided substantially better terms and 
        conditions of employment, but the applicant did not work long 
        enough at the second employment to have sufficient subsequent 
        earnings to satisfy the disqualification that would otherwise be 
        imposed under subdivision 10 for quitting the first employment; 
           (3) the applicant quit the employment within 30 calendar 
        days of beginning the employment because the employment was 
        unsuitable for the applicant; 
           (4) the employment was unsuitable for the applicant and the 
        applicant quit to enter reemployment assistance training; 
           (5) the employment was part time and the applicant also had 
        full-time employment in the base period, from which full-time 
        employment the applicant separated because of nondisqualifying 
        reasons, and the wage credits from the full-time employment are 
        sufficient to meet the minimum requirements to establish a 
        benefit account under section 268.07; 
           (6) the applicant quit because the employer notified the 
        applicant that the applicant was going to be laid off due to 
        lack of work within 30 calendar days.  An applicant who quit 
        employment within 30 calendar days of a notified date of layoff 
        due to lack of work shall be disqualified from unemployment 
        benefits through the end of the week that includes the scheduled 
        date of layoff; 
           (7) the applicant quit the employment because the 
        applicant's serious illness or injury made it medically 
        necessary that the applicant quit, provided that the applicant 
        inform the employer of the serious illness or injury and request 
        accommodation and no reasonable accommodation is made available. 
           If the applicant's serious illness is chemical dependency, 
        this exception shall not apply if the applicant was previously 
        diagnosed as chemically dependent or had treatment for chemical 
        dependency, and since that diagnosis or treatment has failed to 
        make consistent efforts to control the chemical dependency; or 
           (8) domestic abuse of the applicant or the applicant's 
        minor child, necessitated the applicant's quitting the 
        employment.  Domestic abuse shall be shown by one or more of the 
        following: 
           (i) a court order for protection or other documentation of 
        equitable relief issued by a court; 
           (ii) a police record documenting the domestic abuse; 
           (iii) documentation that the perpetrator of the domestic 
        abuse has been convicted of the offense of domestic abuse; 
           (iv) medical documentation of domestic abuse; or 
           (v) written statement that the applicant or the applicant's 
        minor child is a victim of domestic abuse, provided by a social 
        worker, member of the clergy, shelter worker, attorney at law, 
        or other professional who has assisted the applicant in dealing 
        with the domestic abuse. 
           Domestic abuse for purposes of this clause shall be defined 
        under section 518B.01. 
           Sec. 25.  Minnesota Statutes 2004, section 268.095, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DISCHARGE.] An applicant who was discharged from 
        employment by an employer shall not be disqualified from any all 
        unemployment benefits except when according to subdivision 10 
        only if: 
           (1) the applicant was discharged because of employment 
        misconduct as defined in subdivision 6; or 
           (2) the applicant was discharged because of aggravated 
        employment misconduct as defined in subdivision 6a.  
           Sec. 26.  Minnesota Statutes 2004, section 268.095, 
        subdivision 7, is amended to read: 
           Subd. 7.  [ACT OR OMISSIONS AFTER SEPARATION.] Except as 
        provided for under subdivision 8, An applicant shall not be 
        disqualified from unemployment benefits under this section for 
        any acts or omissions occurring after the applicant's separation 
        from employment with the employer.  A layoff due to lack of work 
        is considered a separation from employment.  
           Sec. 27.  Minnesota Statutes 2004, section 268.095, 
        subdivision 8, is amended to read: 
           Subd. 8.  [OFFERS OF SUITABLE EMPLOYMENT.] (a) An applicant 
        shall be disqualified from ineligible for all unemployment 
        benefits for eight calendar weeks if the applicant, without good 
        cause: 
           (1) failed to apply for available, suitable employment of 
        which the applicant was advised by the commissioner or an 
        employer; 
           (2) failed to accept suitable employment when offered; or 
           (3) avoided an offer of suitable employment. 
           (b) "Good cause" is a reason that would cause a reasonable 
        individual who wants suitable employment to fail to apply for, 
        accept, or avoid suitable employment.  Good cause includes: 
           (1) the applicant is employed in other suitable employment; 
           (2) the applicant is in reemployment assistance training; 
           (3) the applicant formerly worked for the employer and the 
        loss of employment occurred prior to the commencement of a labor 
        dispute, was permanent or for an indefinite period, and the 
        applicant failed to apply for or accept the employment because a 
        labor dispute was in progress at the establishment; or 
           (4) the applicant formerly worked for the employer and quit 
        that employment because of a good reason caused by the employer. 
           (c) This subdivision only applies to offers of suitable 
        employment with a new or a former employer and does not apply to 
        any type of job transfers, position reassignments, or changes in 
        job duties or responsibilities during the course of employment 
        with an employer. 
           (d) The period of ineligibility under this section shall 
        begin the Sunday of the week the applicant failed to apply for, 
        accept, or avoided suitable employment without good cause.  
           (e) This section shall apply to offers of suitable 
        employment that occur prior to the effective date of the benefit 
        account and that occur during the benefit year. 
           (f) This section shall only apply to offers of suitable 
        employment that are considered covered employment under section 
        268.035, subdivision 12. 
           Sec. 28.  Minnesota Statutes 2004, section 268.095, 
        subdivision 10, is amended to read: 
           Subd. 10.  [DISQUALIFICATION DURATION.] (a) A 
        disqualification from the payment of all unemployment benefits 
        under subdivisions 1, and 4, and 8 shall be for the duration of 
        the applicant's unemployment and until the end of the calendar 
        week that the applicant had total earnings in subsequent covered 
        employment of eight times the applicant's weekly unemployment 
        benefit amount. 
           (b) Any disqualification imposed under subdivisions 1 and 4 
        shall begin on the Sunday of the week that the applicant became 
        separated from employment.  Any disqualification imposed under 
        subdivision 8 shall begin on the Sunday of the week the 
        applicant failed to apply for, accept, or avoided employment. 
           (c) In addition to paragraph (a), if the applicant was 
        discharged from employment because of aggravated employment 
        misconduct, wage credits from that employment shall be canceled. 
           Sec. 29.  Minnesota Statutes 2004, section 268.095, 
        subdivision 11, is amended to read: 
           Subd. 11.  [APPLICATION.] (a) This section shall apply to 
        all covered employment, full time or part time, temporary or of 
        limited duration, permanent or of indefinite duration, that 
        occurred in Minnesota during the base period, the period between 
        the end of the base period and the effective date of the benefit 
        account, or the benefit year, except as provided for in 
        subdivision 1, clause (5).  Subdivision 8 shall only apply to 
        offers of suitable employment made during the applicant's 
        benefit year. 
           (b) Paragraph (a) shall also apply to employment covered 
        under an unemployment insurance program of any other state or 
        established by an act of Congress. 
           Sec. 30.  Minnesota Statutes 2004, section 268.101, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTIFICATION.] (a) In an application for 
        unemployment benefits, each applicant shall report the name and 
        the reason for no longer working for the applicant's most recent 
        employer, as well as the names of all employers and the reasons 
        for no longer working for all employers during the six calendar 
        months prior to the date of the application.  If the reason 
        reported for no longer working for any of those employers is 
        other than a layoff due to lack of work, that shall raise an 
        issue of disqualification that the department shall 
        determine.  An applicant shall report any offers of employment 
        refused during the eight calendar weeks prior to the date of the 
        application for unemployment benefits and the name of the 
        employer that made the offer.  An applicant's failure to report 
        the name of an employer, or giving an incorrect reason for no 
        longer working for an employer, or failing to disclose an offer 
        of employment that was refused, shall be considered a violation 
        of section 268.182, paragraph (b) subdivision 2.  
           In an application, the applicant shall also provide all 
        information necessary to determine the applicant's eligibility 
        for unemployment benefits under section 268.085.  If the 
        applicant fails or refuses to provide information necessary to 
        determine the applicant's eligibility for unemployment benefits 
        under section 268.085, the applicant shall be ineligible for 
        unemployment benefits under section 268.085, subdivision 2, 
        until the applicant provides this required information. 
           (b) Upon establishment of a benefit account, the 
        commissioner shall notify, by mail or electronic transmission, 
        all employers the applicant was required to report on the 
        application and all base period employers and determined 
        successors to those employers under section 268.051, subdivision 
        4 in order to provide the employer an opportunity to raise, in a 
        manner prescribed by the commissioner, any issue of 
        disqualification or any issue of eligibility.  An employer shall 
        be informed of the effect that failure to raise an issue of 
        disqualification within ten calendar days after sending of the 
        notice, as provided for under subdivision 2, paragraph (b), may 
        have on the employer under section 268.047.  
           (c) Each applicant shall report any employment, loss of 
        employment, and offers of employment received refused, during 
        those weeks the applicant filed continued biweekly requests for 
        unemployment benefits pursuant to section 268.086.  Each 
        applicant who stops filing continued biweekly requests during 
        the benefit year and later begins filing continued biweekly 
        requests during that same benefit year shall report the name of 
        any employer the applicant worked for during the period between 
        the filing of continued biweekly requests and the reason the 
        applicant stopped working for the employer.  The applicant shall 
        report any offers of employment refused during the period 
        between the filing of continued biweekly requests for 
        unemployment benefits.  Those employers from which the applicant 
        has reported a loss of employment or an offer of employment 
        pursuant to this paragraph shall be notified by mail or 
        electronic transmission and provided an opportunity to raise, in 
        a manner prescribed by the commissioner, any issue of 
        disqualification or any issue of eligibility.  An employer shall 
        be informed of the effect that failure to raise an issue may 
        have on the employer under section 268.047.  
           (d) The purpose for requiring the applicant to report the 
        name of employers and the reason for no longer working for those 
        employers, or offers of employment refused, under paragraphs (a) 
        and (c) is for the commissioner to obtain information from an 
        applicant raising all issues that may have the potential of 
        disqualifying the applicant from unemployment benefits under 
        section 268.095, or the applicant being ineligible for 
        unemployment benefits under section 268.085, subdivision 13c.  
        If the reason given by the applicant for no longer working for 
        an employer is other than a layoff due to lack of work, that 
        shall raise an issue of disqualification and the applicant shall 
        be required, as part of the determination process under 
        subdivision 2, paragraph (a), to state all the facts about the 
        cause for no longer working for the employer, if known.  If the 
        applicant fails or refuses to provide this any required 
        information, the applicant shall be ineligible for unemployment 
        benefits under section 268.085, subdivision 2, until the 
        applicant provides this required information. 
           Sec. 31.  Minnesota Statutes 2004, section 268.101, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISQUALIFICATION DETERMINATION.] (a) The 
        commissioner shall determine any issue of disqualification 
        raised by information required from an applicant under 
        subdivision 1, paragraph (a) or (c), and send to the applicant 
        and employer, by mail or electronic transmission, a 
        determination of disqualification or a determination of 
        nondisqualification, as is appropriate.  The determination shall 
        state the effect on the employer under section 268.047.  A 
        determination shall be made pursuant to this paragraph even if a 
        notified employer has not raised the issue of disqualification. 
           (b) The commissioner shall determine any issue of 
        disqualification raised by an employer and send to the applicant 
        and that employer, by mail or electronic transmission, a 
        determination of disqualification or a determination of 
        nondisqualification as is appropriate.  The determination shall 
        state the effect on the employer under section 268.047.  
           If a base period employer: 
           (1) was not the applicant's most recent employer prior to 
        the application for unemployment benefits; 
           (2) did not employ the applicant during the six calendar 
        months prior to the application for unemployment benefits; and 
           (3) did not raise an issue of disqualification within ten 
        calendar days of notification under subdivision 1, paragraph 
        (b); 
        then any exception under section 268.047, subdivisions 2 and 3, 
        shall begin the Sunday two weeks following the week that the 
        issue of disqualification was raised by the employer. 
           (c) If any time within 24 months from the establishment of 
        a benefit account the commissioner finds that an applicant 
        failed to report any employment, or loss of employment, or 
        offers of employment that were was required to be provided by 
        the applicant under this section, the commissioner shall 
        determine any issue of disqualification on that loss of 
        employment or offer of employment and send to the applicant and 
        involved employer, by mail or electronic transmission, a 
        determination of disqualification or a determination of 
        nondisqualification, as is appropriate.  The determination shall 
        state the effect on the employer under section 268.047. 
           This paragraph shall not prevent the imposition of any 
        penalty under section 268.18, subdivision 2, or 268.182. 
           (d) An issue of disqualification shall be determined based 
        upon that information required of an applicant, any information 
        that may be obtained from an applicant or employer, and 
        information from any other source, without regard to any common 
        law burden of proof.  
           (e) A determination of disqualification or a determination 
        of nondisqualification shall be final unless an appeal is filed 
        by the applicant or notified employer within 30 calendar days 
        after sending.  The determination shall contain a prominent 
        statement indicating the consequences of not appealing. 
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           (f) An issue of disqualification for purposes of this 
        section shall include any reason for no longer working for an 
        employer other than a layoff due to lack of work, any question 
        of a disqualification from unemployment benefits under section 
        268.095, any question of an exception to disqualification under 
        section 268.095, any question of effect on an employer under 
        section 268.047, and any question of an otherwise imposed 
        disqualification that an applicant has satisfied under section 
        268.095, subdivision 10.  
           (g) Regardless of the requirements of this subdivision, the 
        commissioner is not required to send to an applicant a 
        determination where the applicant has satisfied any otherwise 
        potential disqualification under section 268.095, subdivision 10.
           Sec. 32.  Minnesota Statutes 2004, section 268.101, 
        subdivision 3a, is amended to read: 
           Subd. 3a.  [DIRECT HEARING.] Regardless of any provision of 
        the Minnesota Unemployment Insurance Law, the commissioner or an 
        unemployment law judge or a senior unemployment review judge 
        may, prior to a determination being made under this chapter, 
        refer any issue of disqualification, any issue of eligibility, 
        or any other issue under this chapter, directly for hearing in 
        accordance with section 268.105, subdivision 1.  The status of 
        the issue shall be the same as if a determination had been made 
        and an appeal filed. 
           Sec. 33.  Minnesota Statutes 2004, section 268.103, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPLICANT'S APPEAL BY MAIL.] (a) The 
        commissioner must allow an applicant to file an appeal to be 
        filed by mail even if an appeal by electronic transmission is 
        allowed. 
           (b) A written statement delivered or mailed to the 
        department that could reasonably be interpreted to mean that an 
        involved applicant or employer is in disagreement with a 
        specific determination or decision shall be considered an 
        appeal.  No specific words need be used for the written 
        statement to be considered an appeal. 
           Sec. 34.  Minnesota Statutes 2004, section 268.105, is 
        amended to read: 
           268.105 [APPEALS.] 
           Subdivision 1.  [EVIDENTIARY HEARING BY AN UNEMPLOYMENT LAW 
        JUDGE.] (a) Upon a timely appeal having been filed, the 
        department shall send, by mail or electronic transmission, a 
        notice of appeal to all involved parties that an appeal has been 
        filed, that a de novo due process evidentiary hearing will be 
        scheduled, and that the parties have certain rights and 
        responsibilities regarding the hearing.  The department shall 
        set a time and place for a de novo due process evidentiary 
        hearing and send notice to any involved applicant and any 
        involved employer, by mail or electronic transmission, not less 
        than ten calendar days prior to the date of the hearing. 
           (b) The evidentiary hearing shall be conducted by an 
        unemployment law judge without regard to any common law burden 
        of proof as an evidence gathering inquiry and not an adversarial 
        proceeding.  The unemployment law judge shall ensure that all 
        relevant facts are clearly and fully developed.  The department 
        shall adopt rules on evidentiary hearings.  The rules need not 
        conform to common law or statutory rules of evidence and other 
        technical rules of procedure.  The department shall have 
        discretion regarding the method by which the evidentiary hearing 
        is conducted.  A report of any employee of the department, 
        except a determination, made in the regular course of the 
        employee's duties, shall be competent evidence of the facts 
        contained in it. 
           (c) After the conclusion of the hearing, upon the evidence 
        obtained, the unemployment law judge shall make findings of fact 
        and decision and send those, by mail or electronic transmission, 
        to all involved parties.  When the credibility of an involved 
        party or witness testifying in an evidentiary hearing has a 
        significant effect on the outcome of a decision, the 
        unemployment law judge must set out the reason for crediting or 
        discrediting that testimony.  The unemployment law judge's 
        decision is the final department decision unless a further 
        appeal request for reconsideration is filed pursuant to 
        subdivision 2. 
           (d) Only employees of the department who are attorneys 
        shall serve as unemployment law judges.  A senior unemployment 
        review judge The commissioner may personally hear or transfer to 
        another unemployment law judge any proceedings pending before an 
        unemployment law judge.  Any proceedings removed to a senior 
        unemployment review judge shall be heard in accordance with this 
        subdivision. 
           Subd. 2.  [DE NOVO REVIEW BY A SENIOR UNEMPLOYMENT REVIEW 
        JUDGE.] (a) Except as provided under subdivision 2a, any 
        involved applicant or involved employer may appeal a decision of 
        an unemployment law judge and obtain a de novo review by a 
        senior unemployment review judge by filing with a senior 
        unemployment review judge an appeal within 30 calendar days 
        after the sending of the unemployment law judge's decision.  A 
        senior unemployment review judge within the same period of time 
        may, on a senior unemployment review judge's own motion, order a 
        de novo review of any decision of an unemployment law judge.  
           (b) A senior unemployment review judge shall be an attorney 
        who is an employee of the department.  
           (c) Upon de novo review, a senior unemployment review judge 
        shall, on the basis of that evidence submitted at the 
        evidentiary hearing under subdivision 1, make findings of fact 
        and decision, or remand the matter back to an unemployment law 
        judge for the taking of additional evidence and the making of 
        new findings and decision based on all the evidence.  A senior 
        unemployment review judge shall, independent of the findings of 
        fact and decision of the unemployment law judge, examine the 
        evidence and make those findings of fact as the evidence, in the 
        judgment of the senior unemployment review judge require, and 
        make that decision as the facts found by the senior unemployment 
        review judge require.  
           (d) A senior unemployment review judge may conduct a de 
        novo review without argument by any involved party, or a senior 
        unemployment review judge may allow written argument.  A senior 
        unemployment review judge shall not, except for purposes of 
        deciding whether to remand a matter to an unemployment law judge 
        for a further evidentiary hearing, consider any evidence that 
        was not submitted at the hearing before the unemployment law 
        judge.  
           (e) The senior unemployment review judge shall send, by 
        mail or electronic transmission, to any involved party the 
        senior unemployment review judge's findings of fact and 
        decision.  The decision of the senior unemployment review judge 
        is the final decision of the department.  Unless judicial review 
        is sought under subdivision 7, the decision of the senior 
        unemployment review judge shall become final 30 calendar days 
        after sending. 
           Subd. 2a.  [ORDERS BY A SENIOR UNEMPLOYMENT REVIEW JUDGE.] 
        (a) If an applicant or employer files an appeal in a matter 
        where an unemployment law judge affirmed a determination issued 
        under section 268.101, and there is no dispute regarding the 
        determinative facts, a senior unemployment review judge shall 
        have the discretion to decline to conduct a de novo review.  If 
        de novo review is declined, the senior unemployment review judge 
        shall issue an order adopting the unemployment law judge's 
        findings of fact and decision. 
           (b) If an involved party fails, without good cause, to 
        appear and participate at the evidentiary hearing conducted by 
        an unemployment law judge under subdivision 1, and that party 
        files an appeal, a senior unemployment review judge shall have 
        the discretion to decline to conduct a de novo review.  If de 
        novo review is declined, the senior unemployment review judge 
        shall issue an order dismissing the appeal. 
           Submission of a written statement shall not constitute an 
        appearance and participation at an evidentiary hearing for 
        purposes of this paragraph. 
           All involved parties must be notified of this paragraph 
        with the notice of appeal and notice of hearing provided for 
        under subdivision 1.  The senior unemployment review judge shall 
        allow for the submission of a written argument on the issue of 
        good cause before dismissing an appeal under this paragraph.  
           "Good cause" for purposes of this paragraph is a compelling 
        reason that would have prevented a reasonable person acting with 
        due diligence from appearing and participating at the 
        evidentiary hearing. 
           (c) The senior unemployment review judge shall send to any 
        involved party the order issued under this subdivision.  The 
        order may be sent by mail or electronic transmission.  Unless 
        judicial review is sought under subdivision 7, the order of a 
        senior unemployment review judge becomes final 30 calendar days 
        after sending. [REQUEST FOR RECONSIDERATION.] (a) Any involved 
        applicant, involved employer, or the commissioner may, within 30 
        calendar days of the sending of the unemployment law judge's 
        decision under subdivision 1, file a request for reconsideration 
        asking the unemployment law judge to reconsider that decision.  
        Section 268.103 shall apply to a request for reconsideration.  
        If a request for reconsideration is timely filed, the 
        unemployment law judge shall issue an order: 
           (1) modifying the findings of fact and decision issued 
        under subdivision 1; 
           (2) setting aside the findings of fact and decision issued 
        under subdivision 1 and directing that an additional evidentiary 
        hearing be conducted under subdivision 1; or 
           (3) affirming the findings of fact and decision issued 
        under subdivision 1. 
           (b) Upon a timely request for reconsideration having been 
        filed, the department shall send a notice, by mail or electronic 
        transmission, to all involved parties that a request for 
        reconsideration has been filed.  The notice shall inform the 
        involved parties: 
           (1) of the opportunity to provide comment on the request 
        for reconsideration, and the right under subdivision 5 to obtain 
        a copy of any recorded testimony and exhibits offered or 
        received into evidence at the evidentiary hearing; 
           (2) that providing specific comments as to a perceived 
        factual or legal error in the decision, or a perceived error in 
        procedure during the evidentiary hearing, will assist the 
        unemployment law judge in deciding the request for 
        reconsideration; 
           (3) of the right to obtain any comments and submissions 
        provided by the other involved party regarding the request for 
        reconsideration; and 
           (4) of the provisions of paragraph (c) regarding additional 
        evidence. 
        This paragraph shall not apply if paragraph (d) is applicable. 
           (c) In deciding a request for reconsideration, the 
        unemployment law judge shall not, except for purposes of 
        determining whether to order an additional evidentiary hearing, 
        consider any evidence that was not submitted at the evidentiary 
        hearing conducted under subdivision 1. 
           The unemployment law judge must order an additional 
        evidentiary hearing if an involved party shows that evidence 
        which was not submitted at the evidentiary hearing:  (1) would 
        likely change the outcome of the decision and there was good 
        cause for not having previously submitted that evidence; or (2) 
        would show that the evidence that was submitted at the 
        evidentiary hearing was likely false and that the likely false 
        evidence had an effect on the outcome of the decision. 
           (d) If the involved applicant or involved employer who 
        filed the request for reconsideration failed to participate in 
        the evidentiary hearing conducted under subdivision 1, an order 
        setting aside the findings of fact and decision and directing 
        that an additional evidentiary hearing be conducted must be 
        issued if the party who failed to participate had good cause for 
        failing to do so.  In the notice of the request for 
        reconsideration, the party who failed to participate shall be 
        informed of the requirement, and provided the opportunity, to 
        show good cause for failing to participate.  If the unemployment 
        law judge determines that good cause for failure to participate 
        has not been shown, the unemployment law judge must state that 
        in the order issued under paragraph (a). 
           Submission of a written statement at the evidentiary 
        hearing under subdivision 1 shall not constitute participation 
        for purposes of this paragraph. 
           All involved parties must be informed of this paragraph 
        with the notice of appeal and notice of hearing provided for in 
        subdivision 1. 
           "Good cause" for purposes of this paragraph is a reason 
        that would have prevented a reasonable person acting with due 
        diligence from participating at the evidentiary hearing. 
           (e) A request for reconsideration shall be decided by the 
        unemployment law judge who issued the findings of fact and 
        decision under subdivision 1 unless that unemployment law 
        judge:  (1) is no longer employed by the department; (2) is on 
        an extended or indefinite leave; (3) has been disqualified from 
        the proceedings on the judge's own motion; or (4) has been 
        removed from the proceedings as provided for under subdivision 1 
        or applicable rule. 
           (f) The unemployment law judge shall send to any involved 
        applicant or involved employer, by mail or electronic 
        transmission, the order issued under this subdivision.  An order 
        modifying the previously issued findings of fact and decision or 
        an order affirming the previously issued findings of fact and 
        decision shall be the final department decision on the matter 
        and shall be final and binding on the involved applicant and 
        involved employer unless judicial review is sought under 
        subdivision 7. 
           Subd. 3.  [WITHDRAWAL OF APPEAL.] (a) Any appeal that is 
        pending before an unemployment law judge or a senior 
        unemployment review judge may be withdrawn by the appealing 
        person, or an authorized representative of that person, upon 
        filing of a notice of withdrawal. 
           (b) The appeal shall, by order, be dismissed if a notice of 
        withdrawal is filed, unless an unemployment law judge or a 
        senior unemployment review judge, by order, directs that further 
        adjudication is required for a proper result. 
           (c) A notice of withdrawal may be filed by mail or by 
        electronic transmission. 
           Subd. 3a.  [DECISIONS.] (a) If an unemployment law judge's 
        decision or a senior unemployment review judge's decision or 
        order allows unemployment benefits to an applicant, the 
        unemployment benefits shall be paid regardless of any appeal 
        period request for reconsideration or any appeal to the 
        Minnesota Court of Appeals having been filed. 
           (b) If an unemployment law judge's decision or order 
        modifies or reverses a determination, or prior decision of the 
        unemployment law judge, allowing unemployment benefits to an 
        applicant, any benefits paid pursuant to the determination, or 
        prior decision of the unemployment law judge, is considered an 
        overpayment of those unemployment benefits under section 268.18, 
        subdivision 1. 
           (c) If a senior unemployment review judge's decision 
        modifies or reverses an unemployment law judge's decision 
        allowing unemployment benefits to an applicant, any unemployment 
        benefits paid pursuant to the unemployment law judge's decision 
        is considered an overpayment of those unemployment benefits 
        under section 268.18, subdivision 1. 
           (d) If a senior unemployment review judge affirms an 
        unemployment law judge's decision on an issue of 
        disqualification that order under subdivision 2 allows 
        unemployment benefits to an applicant under section 268.095 
        because of a quit or discharge and the senior unemployment 
        review law judge's decision or order is reversed by the 
        Minnesota Court of Appeals or the Supreme Court of 
        Minnesota, any unemployment benefits paid the applicant shall 
        not be disqualified from considered an overpayment of those 
        unemployment benefits under section 268.095 268.18, 
        subdivision 10 1.  
           (e) (d) If a senior an unemployment review law judge, 
        pursuant to subdivision 2, remands a matter to an unemployment 
        law judge for orders the taking of additional evidence, 
        the prior unemployment law judge's prior decision shall continue 
        to be enforced until new findings of fact and decision are made 
        by an the unemployment law judge. 
           Subd. 4.  [TESTIMONIAL POWERS.] An unemployment law 
        judge and a senior unemployment review judge may administer 
        oaths and affirmations, take depositions, and issue subpoenas to 
        compel the attendance of witnesses and the production of 
        documents and other personal property considered necessary as 
        evidence in connection with the subject matter of an evidentiary 
        hearing.  The subpoenas shall be enforceable through the 
        district court in the district that the subpoena is issued.  
        Witnesses subpoenaed, other than an involved applicant or 
        involved employer or officers and employees of an involved 
        employer, shall be paid by the department the same witness fees 
        as in a civil action in district court.  
           Subd. 5.  [USE OF EVIDENCE; DATA PRIVACY.] (a) All 
        testimony at any evidentiary hearing conducted pursuant to 
        subdivision 1 shall be recorded.  A copy of any recorded 
        testimony and exhibits offered or received into evidence at the 
        hearing shall, upon request, or upon directive of a senior 
        unemployment review judge, be furnished to a party at no cost 
        during the time period for filing an appeal to a senior 
        unemployment review judge a request for reconsideration or while 
        such an appeal a request for reconsideration is pending.  If 
        requested, the department shall make available a device for 
        listening to the recording if an appeal is pending before a 
        senior unemployment review judge under subdivision 2. 
           (b) Regardless of any provision of law to the contrary, if 
        recorded testimony and exhibits received into evidence at the 
        evidentiary hearing are not requested during the time period for 
        filing an appeal to a senior unemployment review judge a request 
        for reconsideration, or while such an appeal a request for 
        reconsideration is pending, that testimony and other evidence 
        shall later be made available to an involved party only pursuant 
        to a district court order.  A subpoena shall not be considered a 
        district court order. 
           (c) Testimony obtained under subdivision 1, may not be used 
        or considered for any purpose, including impeachment, in any 
        civil, administrative, or contractual proceeding, except by a 
        local, state, or federal human rights agency with enforcement 
        powers, unless the proceeding is initiated by the department. 
           Subd. 5a.  [NO COLLATERAL ESTOPPEL.] No findings of fact or 
        decision or order issued by an unemployment law judge or a 
        senior unemployment review judge may be held conclusive or 
        binding or used as evidence in any separate or subsequent action 
        in any other forum, be it contractual, administrative, or 
        judicial, except proceedings provided for under this chapter, 
        regardless of whether the action involves the same or related 
        parties or involves the same facts. 
           Subd. 6.  [REPRESENTATION; FEES.] (a) In any proceeding 
        under subdivision 1, or 2, or 2a, an applicant or involved 
        employer may be represented by any agent.  
           (b) Except for services provided by an attorney-at-law, an 
        applicant shall not be charged fees, costs, or disbursements of 
        any kind in a proceeding before an unemployment law judge, a 
        senior unemployment review judge, the Minnesota Court of 
        Appeals, or the Supreme Court of Minnesota. 
           Subd. 7.  [JUDICIAL REVIEW.] (a) The Minnesota Court of 
        Appeals shall, by writ of certiorari to the department, review 
        the senior unemployment review law judge's decision under 
        subdivision 2 or order under subdivision 2a, provided a petition 
        for the writ is filed with the court and a copy is served upon 
        the senior unemployment review law judge or the commissioner and 
        any other involved party within 30 calendar days of the sending 
        of the senior unemployment review law judge's decision under 
        subdivision 2 or order under subdivision 2a 2.  
           (b) Any employer petitioning for a writ of certiorari shall 
        pay to the court the required filing fee and upon the service of 
        the writ shall furnish a cost bond to the department in 
        accordance with the Rules of Civil Appellate Procedure.  If the 
        employer requests a written transcript of the testimony received 
        at the evidentiary hearing conducted pursuant to subdivision 1, 
        the employer shall pay to the department the cost of preparing 
        the transcript.  That money shall be credited to the 
        administration account. 
           (c) Upon issuance by the Minnesota Court of Appeals of a 
        writ of certiorari as a result of an applicant's petition, the 
        department shall furnish to the applicant at no cost a written 
        transcript of any testimony received at the evidentiary hearing 
        conducted pursuant to subdivision 1, and, if requested, a copy 
        of all exhibits entered into evidence.  No filing fee or cost 
        bond shall be required of an applicant petitioning the Minnesota 
        Court of Appeals for a writ of certiorari.  
           (d) The Minnesota Court of Appeals may affirm the decision 
        of the unemployment law judge or remand the case for further 
        proceedings; or it may reverse or modify the decision if the 
        substantial rights of the petitioner may have been prejudiced 
        because the findings, inferences, conclusion, or decision are: 
           (1) in violation of constitutional provisions; 
           (2) in excess of the statutory authority or jurisdiction of 
        the department; 
           (3) made upon unlawful procedure; 
           (4) affected by other error of law; 
           (5) unsupported by substantial evidence in view of the 
        entire record as submitted; or 
           (6) arbitrary or capricious. 
           (e) The department shall be considered the primary 
        responding party to any judicial action involving a senior an 
        unemployment review law judge's decision or order.  The 
        department may be represented by an attorney who is an employee 
        of the department. 
           [EFFECTIVE DATE.] This section applies to unemployment law 
        judge decisions issued on or after 30 days following final 
        enactment of this act. 
           Sec. 35.  Minnesota Statutes 2004, section 268.145, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTIFICATION.] (a) Upon filing an 
        application for unemployment benefits, the applicant shall be 
        informed that: 
           (1) unemployment benefits are subject to federal and state 
        income tax; 
           (2) there are requirements for filing estimated tax 
        payments; 
           (3) the applicant may elect to have federal income tax 
        withheld from unemployment benefits; 
           (4) if the applicant elects to have federal income tax 
        withheld, the applicant may, in addition, elect to have 
        Minnesota state income tax withheld; and 
           (5) at any time during the benefit year the applicant may 
        change a prior election. 
           (b) If an applicant elects to have federal income tax 
        withheld, the commissioner shall deduct ten percent for federal 
        income tax, rounded down to the next lower whole dollar.  If an 
        applicant also elects to have Minnesota state income tax 
        withheld, the commissioner shall make an additional five percent 
        deduction for state income tax, rounded down to the next lower 
        whole dollar.  Any amounts deducted or offset pursuant to 
        sections 268.155, 268.156, 268.18, and 268.184 have priority 
        over any amounts deducted under this section.  Federal income 
        tax withholding has priority over state income tax withholding. 
           (c) An election to have income tax withheld shall not be 
        retroactive and shall only apply to unemployment benefits paid 
        after the election. 
           Sec. 36.  Minnesota Statutes 2004, section 268.18, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NONFRAUD OVERPAYMENT.] (a) Any applicant 
        who (1) by reason of the applicant's own mistake, or (2) because 
        of an error by any employee of the department, or (3) because of 
        a determination or amended determination issued pursuant to 
        section 268.07 or 268.101, or (4) because of an appeal decision 
        under section 268.105, has received any unemployment benefits 
        that the applicant was not entitled to, shall promptly repay the 
        unemployment benefits to the trust fund. The commissioner shall, 
        as soon as the overpayment is discovered, determine the amount 
        due and notify the applicant to repay the unemployment benefits. 
           (b) Unless the applicant files an appeal within 30 calendar 
        days after the sending of the determination of overpayment to 
        the applicant by mail or electronic transmission, the 
        determination shall become final.  Proceedings on the appeal 
        shall be conducted in accordance with section 268.105.  An 
        applicant may not collaterally attack, by way of an appeal to an 
        overpayment determination, any prior determination issued 
        pursuant to section 268.07 or 268.101, or decision issued 
        pursuant to section 268.105, that has become final. 
           (c) If the applicant fails to repay the unemployment 
        benefits determined overpaid under this subdivision, the 
        commissioner may offset from any future unemployment benefits 
        otherwise payable the amount of the overpayment.  Except when 
        the overpayment resulted because the applicant failed to report 
        deductible earnings or deductible or benefit delaying payments, 
        no single offset shall exceed 50 percent of the amount of the 
        payment from which the offset is made.  The overpayment may also 
        be collected by the same methods as delinquent payments from an 
        employer.  A determination of overpayment shall state the 
        methods of collection the commissioner may use to recover the 
        overpayment.  
           (d) If an applicant has been overpaid unemployment benefits 
        under the law of another state, due to a reason other than 
        fraud, and that state certifies that the applicant is liable 
        under its law to repay the unemployment benefits and requests 
        the commissioner to recover the overpayment, the commissioner 
        may offset from future unemployment benefits otherwise payable 
        the amount of overpayment, except that no single offset shall 
        exceed 50 percent of the amount of the payment from which the 
        offset is made.  
           (e) If under paragraph (c) or (d) the reduced unemployment 
        benefits as a result of a 50 percent offset is not a whole 
        dollar amount, it shall be rounded down to the next lower whole 
        dollar. 
           (f) Unemployment benefits paid for weeks more than three 
        years prior to the discovery date of a determination of 
        overpayment issued under this subdivision are shall not be 
        considered overpaid unemployment benefits. 
           Sec. 37.  Minnesota Statutes 2004, section 268.18, 
        subdivision 2, is amended to read: 
           Subd. 2.  [OVERPAYMENT DUE TO FRAUD.] (a) Any applicant who 
        receives unemployment benefits by knowingly misrepresenting, 
        misstating, or failing to disclose any material fact, or who 
        makes a false statement or representation without a good faith 
        belief as to the correctness of the statement or representation, 
        has committed fraud.  After the discovery of facts indicating 
        fraud, the commissioner shall make a determination that the 
        applicant obtained unemployment benefits by fraud and that the 
        applicant must promptly repay the unemployment benefits to the 
        trust fund.  In addition, the commissioner shall assess a 
        penalty equal to 25 percent of the amount fraudulently 
        obtained.  If the applicant had a prior overpayment due to 
        fraud, the commissioner shall, on the present overpayment, 
        assess a penalty equal to 50 percent of the amount fraudulently 
        obtained.  This penalty is in addition to penalties under 
        section 268.182. 
           (b) Unless the applicant files an appeal within 30 calendar 
        days after the sending of the determination of overpayment by 
        fraud to the applicant by mail or electronic transmission, the 
        determination shall become final.  Proceedings on the appeal 
        shall be conducted in accordance with section 268.105.  
           (c) If the applicant fails to repay the unemployment 
        benefits, penalty, and interest assessed, the commissioner shall 
        offset from future unemployment benefits otherwise payable the 
        total amount due.  The total due may also be collected by the 
        same methods as delinquent payments from an employer.  A 
        determination of overpayment by fraud shall state the methods of 
        collection the commissioner may use to recover the overpayment.  
        Money received in repayment of fraudulently obtained 
        unemployment benefits, penalties, and interest shall first be 
        applied to the unemployment benefits overpaid, then to the 
        penalty amount due, then to any interest due.  Payments made 
        toward the penalty and interest shall be credited to the 
        contingent account. 
           (d) If an applicant has been overpaid unemployment benefits 
        under the law of another state because of fraud and that state 
        certifies that the applicant is liable to repay the unemployment 
        benefits and requests the commissioner to recover the 
        overpayment, the commissioner may offset from future 
        unemployment benefits otherwise payable the amount of 
        overpayment.  
           (e) Unemployment benefits paid for weeks more than four 
        years prior to the date of a determination of overpayment by 
        fraud may only be made within four years of the effective date 
        of the benefit account from which the issued under this 
        subdivision shall not be considered overpaid unemployment 
        benefits were fraudulently obtained.  
           Sec. 38.  Minnesota Statutes 2004, section 268.18, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [INTEREST.] (a) On any unemployment benefits 
        fraudulently obtained, and any penalty amounts assessed under 
        subdivision 2, the commissioner may assess interest at the rate 
        of 1-1/2 percent per month on any amount that remains unpaid 30 
        calendar days after the date of the determination of overpayment 
        by fraud.  A determination of overpayment by fraud shall state 
        that interest shall be assessed. 
           (b) If this subdivision became effective after the date of 
        the determination, or the determination did not state that 
        interest shall be assessed, interest shall be assessed beginning 
        30 calendar days after notification, by mail or electronic 
        transmission, to the applicant. 
           (c) Interest payments under this section shall be credited 
        to the administration account. 
           Sec. 39.  Minnesota Statutes 2004, section 268.182, 
        subdivision 2, is amended to read: 
           Subd. 2.  [ADMINISTRATIVE PENALTIES.] Any individual 
        applicant who knowingly makes a false statement or 
        representation, who knowingly fails to disclose a material fact, 
        or who makes a false statement or representation without a good 
        faith belief as to the correctness of the statement or 
        representation, in order to obtain or in an attempt to obtain 
        unemployment benefits may be assessed, in addition to any other 
        penalties, an administrative penalty of denial of being 
        ineligible for unemployment benefits for one to 52 13 to 104 
        weeks that the individual would otherwise be entitled to 
        unemployment benefits.  A denial shall not apply to any week 
        more than two years after the week that the penalty was 
        determined.  A determination of denial ineligibility setting out 
        the weeks the applicant shall be ineligible shall be sent to the 
        individual applicant by mail or electronic transmission.  Unless 
        an appeal is filed within 30 calendar days of sending, the 
        determination shall be final.  Proceeding on the appeal shall be 
        conducted in accordance with section 268.105.  
           Sec. 40.  [TAX RATE COMPUTATION.] 
           Notwithstanding any provision of Minnesota Statutes, 
        chapter 268, to the contrary, the commissioner may compute, to 
        the nearest 1/100 of a percent, any unemployment tax rate 
        assigned on or after July 1, 2005, regardless of the year or 
        portion of any year for which the tax rate is applicable. 
           Sec. 41.  [REVISOR'S INSTRUCTION.] 
           (a) The revisor of statutes shall change the name of the 
        Department of Economic Security to the Department of Employment 
        and Economic Development in Minnesota Statutes and Minnesota 
        Rules. 
           (b) The revisor of statutes shall change the headnote for 
        Minnesota Statutes, section 268.095 from "DISQUALIFICATION 
        PROVISIONS" to "DISQUALIFICATION BECAUSE OF A QUIT OR DISCHARGE."
           (c) The revisor of statutes shall change the headnote for 
        Minnesota Statutes, section 268.101 from "DETERMINATIONS ON 
        DISQUALIFICATION AND ELIGIBILITY" to "DETERMINATIONS ON ISSUES 
        OF DISQUALIFICATION AND ELIGIBILITY." 
           (d) The revisor of statutes shall renumber Minnesota 
        Statutes, section 268.095, subdivision 8, as section 268.085, 
        subdivision 13c, and correct cross-references accordingly. 
           (e) The revisor of statutes shall change the term "court 
        order" to "district court order" wherever the term appears in 
        Minnesota Statutes, sections 268.01 to 268.83. 
           Sec. 42.  [REPEALER.] 
           (a) Minnesota Rules, parts 3310.2926; 3310.5000; 3315.0910, 
        subpart 9; 3315.1301; 3315.1315, subparts 1, 2, and 3; 
        3315.1650; and 3315.2210, are repealed. 
           (b) Minnesota Statutes 2004, section 268.086, subdivision 
        4, is repealed. 
           (c) Laws 1997, chapter 66, section 64, subdivision 1, is 
        repealed. 
           Sec. 43.  [EFFECTIVE DATE.] 
           Sections 1 to 33, 35 to 40, and 42 are effective July 1, 
        2005.  Section 41 is effective the day following final enactment.
           Presented to the governor May 24, 2005 
           Signed by the governor May 26, 2005, 9:10 p.m.