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Minnesota Legislature

Office of the Revisor of Statutes

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

                            CHAPTER 151-H.F.No. 2228 
                  An act relating to financing and operation of 
                  government in this state; recodifying and clarifying 
                  the powers of the commissioner of revenue; changing 
                  income, corporate franchise, withholding, estate, 
                  property, sales and use, mortgage registry, motor 
                  fuels, gambling, cigarette and tobacco products, 
                  liquor, insurance, and other taxes and tax-related 
                  provisions; making technical, clarifying, collection, 
                  enforcement, refund, and administrative changes to 
                  certain taxes and tax-related provisions, 
                  tax-forfeited lands, revenue recapture, unfair 
                  cigarette sales, state debt collection, sustainable 
                  forest incentive programs, border city development, 
                  property tax refund, and metropolitan solid waste 
                  landfill fee; changing local government aids and 
                  credits; providing for determination of population for 
                  certain purposes; changing property tax exemptions, 
                  homesteads, assessment, valuation, classification, 
                  levies, deferral, review and equalization, appeals, 
                  notices and statements, allocation, and distribution 
                  provisions; changing provisions relating to 
                  manufactured home certificates of title; providing for 
                  compliance with streamlined sales tax agreement; 
                  authorizing charges for certain emergency services; 
                  regulating tax preparers; prohibiting purchases of 
                  tax-forfeited lands by certain local officials; 
                  providing for data classification and exchange of 
                  data; providing and imposing powers and duties on the 
                  commissioner of revenue and on certain political 
                  subdivisions and officials; changing town spending and 
                  taxing provisions; changing and imposing penalties; 
                  reducing certain court appropriations; transferring 
                  funds; recodifying a criminal penalty; appropriating 
                  money; amending Minnesota Statutes 2004, sections 
                  4A.02; 16D.08, subdivision 2; 16D.10; 115B.49, 
                  subdivision 4; 168A.05, subdivision 1a; 239.785, 
                  subdivision 4; 256.9657, subdivision 7; 256.9792, 
                  subdivision 8; 270.11, subdivision 2; 270.16, 
                  subdivision 2; 270.30, subdivisions 1, 5, 6, 8, by 
                  adding subdivisions; 270.65; 270.67, subdivision 4; 
                  270.69, subdivision 4; 270A.03, subdivision 5; 272.01, 
                  subdivision 2; 272.02, subdivisions 1a, 47, 53, 56, by 
                  adding subdivisions; 272.0211, subdivisions 1, 2; 
                  272.029, subdivisions 4, 6; 273.11, subdivisions 5, 8; 
                  273.124, subdivisions 3, 6, 8, 13, 14, 21; 273.13, 
                  subdivision 25; 273.1315; 273.1384, subdivision 1; 
                  273.19, subdivision 1a; 273.372; 274.014, subdivisions 
                  2, 3; 274.14; 275.07, subdivisions 1, 4; 276.112; 
                  276A.01, subdivision 7; 282.016; 282.08; 282.15; 
                  282.21; 282.224; 282.301; 287.04; 287.37; 289A.08, 
                  subdivisions 3, 16; 289A.18, subdivision 1; 289A.19, 
                  subdivision 4; 289A.31, subdivision 2; 289A.35; 
                  289A.37, subdivision 5; 289A.38, subdivisions 6, 7, by 
                  adding a subdivision; 289A.39, subdivision 1; 289A.40, 
                  subdivision 2, by adding subdivisions; 289A.42, 
                  subdivision 1; 289A.50, subdivision 1a; 289A.60, 
                  subdivisions 2a, 6, 11, 12, 13; 290.01, subdivisions 
                  7b, 19a, 19b, 19c; 290.06, subdivision 22; 290.0671, 
                  subdivision 1a; 290.0674, subdivision 1; 290.92, 
                  subdivisions 1, 4b; 290A.07, by adding a subdivision; 
                  290B.05, subdivision 3; 290C.05; 290C.10; 291.005, 
                  subdivision 1; 291.03, subdivision 1; 295.57, 
                  subdivision 1; 295.60, subdivisions 3, 7; 296A.22, by 
                  adding a subdivision; 297A.61, subdivisions 3, 4; 
                  297A.64, subdivisions 3, 4; 297A.668, subdivisions 1, 
                  5; 297A.67, subdivisions 2, 7, 9; 297A.68, 
                  subdivisions 2, 5, 28, 39; 297A.71, subdivision 12; 
                  297A.75, subdivision 1; 297A.87, subdivisions 2, 3; 
                  297A.99, subdivision 4; 297B.11; 297E.01, subdivisions 
                  5, 7, by adding subdivisions; 297E.06, subdivision 2; 
                  297E.07; 297F.08, subdivision 12, by adding a 
                  subdivision; 297F.09, subdivisions 1, 2; 297F.14, 
                  subdivision 4; 297G.09, by adding a subdivision; 
                  297H.10, subdivision 1; 297I.01, by adding a 
                  subdivision; 297I.05, subdivision 5; 297I.10, by 
                  adding a subdivision; 298.24, subdivision 1; 325D.33, 
                  subdivision 6; 365.43, subdivision 1; 365.431; 
                  366.011; 366.012; 373.45, subdivision 7; 469.1735, 
                  subdivision 3; 473.843, subdivision 5; 473F.02, 
                  subdivision 7; 477A.011, subdivisions 3, 34, 36, as 
                  amended, 38; 477A.0124, subdivisions 2, 4; 477A.03, 
                  subdivision 2b; Laws 1998, chapter 389, article 3, 
                  section 42, subdivision 2, as amended; Laws 2001 First 
                  Special Session chapter 5, article 3, section 8; Laws 
                  2003, chapter 127, article 5, sections 27; 28; Laws 
                  2003 First Special Session chapter 21, article 5, 
                  section 13; Laws 2003 First Special Session, chapter 
                  21, article 6, section 9; Laws 2005, chapter 43, 
                  section 1; proposing coding for new law in Minnesota 
                  Statutes, chapters 270; 290C; 473; proposing coding 
                  for new law as Minnesota Statutes, chapter 270C; 
                  repealing Minnesota Statutes 2004, sections 270.01; 
                  270.02; 270.021; 270.022; 270.04; 270.05; 270.052; 
                  270.058; 270.059; 270.06; 270.0601; 270.0602; 
                  270.0603; 270.0604; 270.0605; 270.061; 270.062; 
                  270.063; 270.064; 270.065; 270.066; 270.0665; 270.067; 
                  270.068; 270.0681; 270.0682; 270.069; 270.07; 270.084; 
                  270.09; 270.10; 270.101; 270.102; 270.11, subdivisions 
                  2, 3, 4, 5, 6, 7; 270.13; 270.14; 270.15; 270.16; 
                  270.17; 270.18; 270.19; 270.20; 270.21; 270.22; 
                  270.23; 270.24; 270.25; 270.26; 270.27; 270.271; 
                  270.272; 270.273; 270.274; 270.275; 270.276; 270.277; 
                  270.278; 270.30; 270.485; 270.494; 270.60; 270.65; 
                  270.652; 270.66; 270.67; 270.68; 270.69; 270.691; 
                  270.70; 270.7001; 270.7002; 270.701; 270.702; 270.703; 
                  270.704; 270.705; 270.706; 270.707; 270.708; 270.709; 
                  270.71; 270.72; 270.721; 270.73; 270.74; 270.75; 
                  270.76; 270.771; 270.78; 270.79; 270.85; 270.88; 
                  273.19, subdivision 5; 273.37, subdivision 3; 274.05; 
                  275.15; 275.61, subdivision 2; 283.07; 287.39; 
                  289A.07; 289A.13; 289A.31, subdivisions 3, 4, 6; 
                  289A.36; 289A.37, subdivisions 1, 3, 4, 5; 289A.38, 
                  subdivision 13; 289A.43; 289A.65; 290.48, subdivisions 
                  3, 4; 290.92, subdivisions 6b, 22, 23; 290.97; 
                  296A.20; 296A.201; 296A.25; 297A.86; 297A.93; 297D.14; 
                  297E.08; 297E.09; 297E.12, subdivision 10; 297E.15; 
                  297F.15, subdivisions 1, 2, 3, 4, 5, 6, 7, 8; 297F.16; 
                  297F.22; 297G.14, subdivisions 1, 2, 3, 4, 5, 6, 7, 8; 
                  297G.15; 297G.21; 297I.45; 297I.50; 297I.55; 297I.95; 
                  Laws 1975, chapter 287, section 5; Laws 1998, chapter 
                  389, article 3, section 41; Laws 2003, chapter 127, 
                  article 9, section 9, subdivision 4; Minnesota Rules, 
                  parts 8093.2000; 8093.3000; 8130.0110, subpart 4; 
                  8130.0200, subparts 5, 6; 8130.0400, subpart 9; 
                  8130.1200, subparts 5, 6; 8130.2900; 8130.3100, 
                  subpart 1; 8130.4000, subparts 1, 2; 8130.4200, 
                  subpart 1; 8130.4400, subpart 3; 8130.5200; 8130.5600, 
                  subpart 3; 8130.5800, subpart 5; 8130.7300, subpart 5; 
                  8130.8800, subpart 4. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 

                                   ARTICLE 1 
                                 RECODIFICATION 
                          COMMISSIONER GENERAL POWERS 
           Section 1.  [270C.01] [DEFINITIONS.] 
           Subdivision 1.  [APPLICABILITY.] For purposes of this 
        chapter only, the following words, terms, and phrases have the 
        meanings given them in this section unless the language or 
        context clearly indicates that a different meaning is intended. 
           Subd. 2.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of revenue or a person to whom the commissioner has 
        delegated functions. 
           Subd. 3.  [DEPARTMENT.] "Department" means the Department 
        of Revenue. 
           Subd. 4.  [ELECTRONIC MEANS; ELECTRONICALLY.] "Electronic 
        means" and "electronically" mean a method that is electronic, as 
        defined in section 325L.02, paragraph (e), and that is 
        prescribed by the commissioner. 
           Subd. 5.  [LAW ADMINISTERED BY THE COMMISSIONER.] "Law 
        administered by the commissioner" means a law or rule that vests 
        or imposes a power, duty, responsibility, or authority in the 
        commissioner, except the following laws:  (1) the property tax 
        laws, and (2) Minnesota Statutes, chapter 16D. 
           Subd. 6.  [PERSON.] "Person" means an individual, trust, 
        estate, fiduciary, partnership, company, corporation, limited 
        liability company, association, governmental unit or agency, 
        public or private organization of any kind, or other legal 
        entity. 
           Subd. 7.  [PROPERTY TAX LAWS.] "Property tax laws" means 
        all laws and rules related to the administration of the tax on 
        property referred to in section 272.01, subdivision 1, and all 
        laws related to the administration of the tax on wind energy 
        production imposed under section 272.029, subdivision 1. 
           Subd. 8.  [RETURN.] "Return" means a return, information 
        return, or report, required by a law administered by the 
        commissioner. 
           Subd. 9.  [STATE REVENUE LAWS.] "State revenue laws" means 
        all laws administered by the commissioner and the property tax 
        laws. 
           Subd. 10.  [TAX.] "Tax" means a tax or fee imposed by a law 
        administered by the commissioner. 
           Subd. 11.  [TAXPAYER.] "Taxpayer" means a person subject 
        to, or liable for, a tax or fee imposed by a law administered by 
        the commissioner; a person required to file a return, 
        information return, or report, with respect to, or to pay, or 
        withhold or collect and remit, a tax or fee imposed by a law 
        administered by the commissioner; a person required to obtain a 
        license or a permit under a law administered by the 
        commissioner; or a person required to keep records regarding a 
        tax or fee imposed by a law administered by the commissioner. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 2.  [270C.02] [DEPARTMENT OF REVENUE; COMMISSIONER.] 
           Subdivision 1.  [COMMISSIONER; SUPERVISION OF DEPARTMENT 
        AND APPOINTMENT.] The Department of Revenue is under the 
        supervision and control of the commissioner.  The commissioner 
        shall be appointed by the governor under the provisions of 
        section 15.06.  The commissioner shall be selected on the basis 
        of ability and experience in the field of tax administration and 
        without regard to political affiliations.  [270.01; 270.02, 
        subd. 8] 
           Subd. 2.  [POWER TO APPOINT STAFF.] (a) The commissioner 
        may organize the department as the commissioner deems necessary, 
        and appoint one deputy commissioner, a department secretary, 
        directors of divisions, and such other officers, employees, and 
        agents, as the commissioner deems necessary to carry out the 
        duties, responsibilities, and authority entrusted to the 
        commissioner.  The commissioner may define the duties of such 
        officers, employees, and agents, and delegate to them any of the 
        commissioner's powers or duties, subject to the commissioner's 
        control and under such conditions as the commissioner may 
        prescribe.  Appointments to exercise delegated power to sign 
        documents which require the signature of the commissioner or a 
        delegate by law shall be by written order filed with the 
        secretary of state.  [270.02, subd. 3] 
           (b) The commissioner may appoint agents as the commissioner 
        considers necessary to make examinations and determinations.  
        The agents have the rights and powers conferred on the 
        commissioner to subpoena, examine, and copy books, records, 
        papers, or memoranda, subpoena witnesses, administer oaths and 
        affirmations, and take testimony.  [270.06, clause (17)] 
           Subd. 3.  [SALARIES.] The commissioner shall appoint and 
        employ additional employees and other agents, purchase supplies 
        or materials, or incur other expenditures in the administration 
        and enforcement of state revenue laws as considered necessary.  
        The salaries of all agents and employees provided for in this 
        chapter shall be fixed by the appointing authority, subject to 
        the approval of the commissioner of employee relations.  
        [270.06, clause (18)] 
           Subd. 4.  [OFFICE AND SUPPLIES FURNISHED; EXPENSES.] The 
        commissioner shall be provided with suitable and necessary 
        office furniture, supplies, stationery, books, periodicals, 
        newspapers, maps, and financial and commercial reports; and all 
        necessary expenses therefor shall be audited and paid as other 
        expenses are audited and paid.  The actual necessary expenses of 
        the commissioner, the commissioner's employees and agents, and 
        such experts and assistants as may be employed by the 
        commissioner while traveling on the business of the department, 
        shall be paid by the state.  The expenditures must be sworn to 
        by the party who incurred the expense and approved by the 
        commissioner.  [270.04] 
           Subd. 5.  [FILING OFFICERS.] The commissioner is the filing 
        officer and custodian of the books, files, and records of the 
        department.  The commissioner may certify copies of the books, 
        files, and records in the custody of the commissioner for all 
        purposes in the same manner as other custodians of public 
        records.  The commissioner may authorize other employees of the 
        department to certify books, files, and records in the custody 
        of the commissioner.  The authorization must be made by a 
        written order stating the documents that may be certified and 
        must be filed with the secretary of state.  [270.022] 
           Subd. 6.  [DEPARTMENT SEAL.] The department shall have a 
        seal engraved with the words, "State of Minnesota, Department of 
        Revenue."  Such seal may be used to authenticate the official 
        acts of the commissioner or any other employees of the 
        department, but the failure to use the seal shall not invalidate 
        any such acts.  Duplicate seals may be provided for the use of 
        directors of divisions or other employees of the department.  
        [270.02, subd. 4] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 3.  [270C.03] [POWERS AND DUTIES.] 
           Subdivision 1.  [POWERS AND DUTIES.] The commissioner shall 
        have and exercise the following powers and duties: 
           (1) administer and enforce the assessment and collection of 
        taxes; [270.06, clause (14)] 
           (2) make determinations, corrections, and assessments with 
        respect to taxes, including interest, additions to taxes, and 
        assessable penalties; [289A.35, first sentence] 
           (3) use statistical or other sampling techniques consistent 
        with generally accepted auditing standards in examining returns 
        or records and making assessments; [289A.35, last sentence] 
           (4) investigate the tax laws of other states and countries, 
        and formulate and submit to the legislature such legislation as 
        the commissioner may deem expedient to prevent evasions of state 
        revenue laws and to secure just and equal taxation and 
        improvement in the system of state revenue laws; [270.06, clause 
        (10)] 
           (5) consult and confer with the governor upon the subject 
        of taxation, the administration of the laws in regard thereto, 
        and the progress of the work of the department, and furnish the 
        governor, from time to time, such assistance and information as 
        the governor may require relating to tax matters; [270.06, 
        clause (11)] 
           (6) execute and administer any agreement with the secretary 
        of the treasury of the United States or a representative of 
        another state regarding the exchange of information and 
        administration of the state revenue laws; [270.06, clause (19)] 
           (7) require town, city, county, and other public officers 
        to report information as to the collection of taxes received 
        from licenses and other sources, and such other information as 
        may be needful in the work of the commissioner, in such form as 
        the commissioner may prescribe; [270.06, clause (5)] 
           (8) authorize the use of unmarked motor vehicles to conduct 
        seizures or criminal investigations pursuant to the 
        commissioner's authority; and [270.06, clause (20)] 
           (9) exercise other powers and authority and perform other 
        duties required of or imposed upon the commissioner by law.  
        [270.06, clause (21)] 
           Subd. 2.  [MISSION; EFFICIENCY.] It is part of the 
        department's mission that within the department's resources the 
        commissioner shall endeavor to: 
           (1) prevent the waste or unnecessary spending of public 
        money; 
           (2) use innovative fiscal and human resource practices to 
        manage the state's resources and operate the department as 
        efficiently as possible; 
           (3) coordinate the department's activities wherever 
        appropriate with the activities of other governmental agencies; 
           (4) use technology where appropriate to increase agency 
        productivity, improve customer service, increase public access 
        to information about government, and increase public 
        participation in the business of government; 
           (5) utilize constructive and cooperative labor-management 
        practices to the extent otherwise required by chapters 43A and 
        179A; 
           (6) report to the legislature on the performance of agency 
        operations and the accomplishment of agency goals in the 
        agency's biennial budget according to section 16A.10, 
        subdivision 1; and 
           (7) recommend to the legislature appropriate changes in law 
        necessary to carry out the mission and improve the performance 
        of the department.  [270.02, subd. 3a] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 4.  [270C.04] [USE OF INFORMATION.] 
           Notwithstanding the provisions of any other law, the 
        commissioner may use any and all information in the 
        commissioner's possession, or to which the commissioner has 
        access, to insure equal and consistent application and 
        enforcement of all state revenue laws.  This section shall not 
        be construed as granting to the commissioner any power to 
        release any information outside the department.  [270.065] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 5.  [270C.05] [ACCESS TO CRIMINAL JUSTICE DATA.] 
           The commissioner may enter into an agreement with the 
        commissioner of public safety to allow designated employees of 
        the Department of Revenue to have access to the criminal justice 
        data communications network provided in section 299C.46.  For 
        purposes of that section, the criminal investigation unit of the 
        Department of Revenue is considered a criminal justice agency.  
        [270.062] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 6.  [270C.055] [CRIMINAL INVESTIGATIONS, REFERRAL, AND 
        INFORMATION DISCLOSURE.] 
           Subdivision 1.  [REQUESTING ASSISTANCE.] If the 
        commissioner has reason to believe that a criminal violation of 
        the state revenue laws or chapter 349 has occurred, the 
        commissioner may request the attorney general or the prosecuting 
        authority of any county to assist in a criminal investigation.  
        [270.064] 
           Subd. 2.  [REFERRAL FOR PROSECUTION.] If a proceeding is 
        referred to a prosecuting authority, and the prosecuting 
        authority fails to issue or cause to be issued an indictment or 
        criminal complaint within 30 days after the referral by the 
        commissioner, the attorney general may conduct the proceeding.  
        [270.68, subd. 1, paragraph (c)] 
           Subd. 3.  [AUTHORITY TO DISCLOSE INFORMATION.] The 
        commissioner may disclose information to the prosecuting 
        authority and attorney general pursuant to section 270B.05, 
        subdivision 2, clause (1).  [270.0647] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 7.  [270C.06] [RULEMAKING AUTHORITY.] 
           The commissioner shall, from time to time, make, publish, 
        and distribute rules for the administration and enforcement of 
        state revenue laws.  The rules have the force of law.  [270.06, 
        clause (14)] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 8.  [270C.07] [REVENUE NOTICES.] 
           Subdivision 1.  [AUTHORITY.] The commissioner may make, 
        adopt, and publish interpretive revenue notices.  A "revenue 
        notice" is a policy statement that has been published pursuant 
        to subdivision 5 and that provides interpretation, details, or 
        supplementary information concerning the application of state 
        revenue laws or rules promulgated by the commissioner.  Revenue 
        notices are published for the information and guidance of 
        taxpayers, local government officials, the department, and 
        others concerned. 
           Subd. 2.  [EFFECT.] Revenue notices do not have the force 
        and effect of law and have no precedential effect, but may be 
        relied on by taxpayers until revoked or modified.  A notice may 
        be expressly revoked or modified by the commissioner, by the 
        issuance of a revenue notice, but may not be revoked or modified 
        retroactively to the detriment of the taxpayers.  A change in 
        the law or an interpretation of the law occurring after the 
        revenue notice is issued, whether in the form of a statute, 
        court decision, administrative rule, or revenue notice, results 
        in revocation or modification of the notice to the extent that 
        the change affects the notice. 
           Subd. 3.  [RETROACTIVITY.] Revenue notices are generally 
        interpretive of existing law and therefore are retroactive to 
        the effective date of the applicable law provision unless 
        otherwise stated in the notice. 
           Subd. 4.  [ISSUANCE.] The issuance of revenue notices is at 
        the discretion of the commissioner.  The commissioner shall 
        establish procedures governing the issuance of revenue notices 
        and tax information bulletins.  At least one week before 
        publication of a revenue notice in the State Register, the 
        commissioner shall provide a copy of the notice to the chairs of 
        the Taxes Committee of the house of representatives and the 
        Taxes and Tax Laws Committee of the senate. 
           Subd. 5.  [PUBLICATION.] The commissioner shall publish the 
        revenue notices in the State Register and in any other manner 
        that makes them accessible to the general public.  The 
        commissioner may charge a reasonable fee for publications.  
        [270.0604] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 9.  [270C.08] [TAX INFORMATION BULLETINS.] 
           The commissioner may issue tax information bulletins.  "Tax 
        information bulletins" are informational guides to enable 
        taxpayers and local governmental officials to become more 
        familiar with state revenue laws and their rights and 
        responsibilities under these laws.  Nothing contained in the tax 
        information bulletins supersedes, alters, or otherwise changes 
        any provisions of the state revenue laws, administrative rules, 
        court decisions, or revenue notices.  [270.0605] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 10.  [270C.09] [OPINION OF ATTORNEY GENERAL; EFFECT.] 
           The commissioner may in writing request the opinion of the 
        attorney general upon any matter regarding the state revenue 
        laws.  Any written opinion of the attorney general upon any such 
        matter rendered in response to such request shall have the force 
        and effect of law unless and until overruled by a decision of 
        the Tax Court or a court of competent jurisdiction.  [270.09] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 11.  [270C.10] [EX-EMPLOYEES NOT TO REPRESENT 
        TAXPAYERS; PENALTY.] 
           An employee of the department may not, for a period of one 
        year after the employee's employment has terminated, act as 
        counsel, attorney, or agent for a taxpayer in connection with a 
        claim or proceeding pending in the department.  An employee of 
        the department may not act as counsel, attorney, or agent for a 
        taxpayer at any time after termination of employment in 
        connection with a claim or proceeding of which the person has 
        knowledge that was acquired during the term of employment.  A 
        violation of this section is a gross misdemeanor.  [270.021] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 12.  [270C.105] [BASIS FOR EVALUATION OF DEPARTMENT OF 
        REVENUE EMPLOYEES.] 
           The department must not use tax enforcement results to 
        impose individual revenue quotas with respect to employees or 
        their immediate supervisors who are directly involved in 
        assessment or collection activities.  The department may, 
        however, use individual performance with regard to number of 
        cases completed and, in the case of collections employees, 
        dollars collected, as factors in evaluating an employee and not 
        be considered as failing to comply with this section.  
        [270.0602] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 13.  [270C.11] [TAX EXPENDITURE BUDGET.] 
           Subdivision 1.  [STATEMENT OF PURPOSE.] State governmental 
        policy objectives are sought to be achieved both by direct 
        expenditure of governmental funds and by the granting of special 
        and selective tax relief or tax expenditures.  Both direct 
        expenditures of governmental funds and tax expenditures have an 
        effect on the ability of the state and local governments to 
        lower tax rates or to increase expenditures.  As a result, tax 
        expenditures should receive a regular and comprehensive review 
        by the legislature as to (1) their total cost, (2) their 
        effectiveness in achieving their objectives, (3) their effect on 
        the fairness and equity of the distribution of the tax burden, 
        and (4) the public and private cost of administering tax 
        expenditure financed programs.  This section is intended to 
        facilitate a regular review of the state and local tax 
        expenditure budget by the legislature by providing for the 
        preparation of a regular biennial tax expenditure budget.  
           Subd. 2.  [PREPARATION; SUBMISSION.] The commissioner shall 
        prepare a tax expenditure budget for the state. The tax 
        expenditure budget report shall be submitted to the legislature 
        by February 1 of each even-numbered year. 
           Subd. 3.  [PERIOD COVERED.] The report shall include 
        estimates of annual tax expenditures for, at a minimum, a 
        three-year period including the two-year period covered in the 
        governor's budget submitted in the preceding January pursuant to 
        section 16A.11.  
           Subd. 4.  [CONTENTS.] The report shall detail for each tax 
        expenditure item the amount of tax revenue foregone, a citation 
        of the statutory or other legal authority for the expenditure, 
        and the year in which it was enacted or the tax year in which it 
        became effective.  The report may contain additional information 
        which the commissioner considers relevant to the legislature's 
        consideration and review of individual tax expenditure items.  
        This may include, but is not limited to, statements of the 
        intended purpose of the tax expenditure, analysis of whether the 
        expenditure is achieving that objective, and the effect of the 
        expenditure device on the distribution of the tax burden and 
        administration of the tax system.  
           Subd. 5.  [REVENUE ESTIMATES; LEGISLATIVE BILLS.] Upon 
        reasonable notice from the chair of the house or senate tax 
        committee that a bill is scheduled for hearing, the commissioner 
        shall prepare an estimate of the effect on the state's tax 
        revenues which would result from the passage of a legislative 
        bill establishing, extending, or restricting a tax expenditure.  
        These revenue estimates shall contain the same information as 
        provided in subdivision 4 for expenditure items contained in the 
        tax expenditure budget, as appropriate.  
           Subd. 6.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given:  
           (1) "tax expenditure" means a tax provision which provides 
        a gross income definition, deduction, exemption, credit, or rate 
        for certain persons, types of income, transactions, or property 
        that results in reduced tax revenue; and 
           (2) "tax" means any tax of statewide application or any tax 
        authorized by state law to be levied by local governments 
        generally.  It does not include a special local tax levied 
        pursuant to special law or to a special local tax levied 
        pursuant to general authority that is no longer applicable to 
        local governments generally.  [270.067] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 14.  [270C.12] [TAX INFORMATION SAMPLE DATA.] 
           Subdivision 1.  [PREPARATION OF SAMPLES.] The commissioner 
        shall prepare microdata samples of income tax returns and other 
        information useful for purposes of: 
           (1) estimating state revenues; 
           (2) simulating the effect of changes or proposed changes in 
        state and federal tax law on the amount of state revenues; and 
           (3) analyzing the incidence of present or proposed taxes. 
           Subd. 2.  [COORDINATING COMMITTEE.] A coordinating 
        committee is established to oversee and coordinate preparation 
        of the microdata samples.  The committee consists of: 
           (1) the director of the Research Division of the department 
        who shall serve as chair of the committee; 
           (2) the state economist; 
           (3) the chair of the Committee on Taxes of the house of 
        representatives or the chair's designee; and 
           (4) the chair of the Committee on Taxes and Tax Laws of the 
        senate or the chair's designee.  The committee shall consider 
        the analysis needs and use of the microdata samples by the 
        finance and revenue departments and the legislature in designing 
        and preparing the samples, including the type of data to be 
        included, the structure of the samples, size of the samples, and 
        other relevant factors. 
           Subd. 3.  [CONTENTS OF SAMPLES.] The samples must consist 
        of information derived from a random sample of federal and 
        Minnesota individual income tax returns.  The samples prepared 
        in odd numbered years must be augmented by additional 
        information from other sources as the coordinating committee 
        determines is feasible and appropriate.  The coordinating 
        committee shall consider inclusion of: 
           (1) information derived from property tax refund returns; 
           (2) the estimated market value of the taxpayer's home from 
        the homestead declaration; and 
           (3) information from other sources, such as the surveys 
        conducted by the United States Departments of Commerce and Labor.
           Subd. 4.  [CONSULTATION ON ANALYSIS MODELS.] The 
        coordinating committee shall facilitate regular consultation 
        among the Department of Revenue, the Department of Finance, and 
        house and senate staffs in development and maintenance of their 
        respective computer models used to analyze the microdata 
        samples.  The committee shall encourage efforts to attain more 
        commonality in the models, greater sharing of program 
        development efforts and programming tasks, and more consistency 
        in the resulting analyses.  [270.0681] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 15.  [270C.13] [TAX INCIDENCE REPORTS.] 
           Subdivision 1.  [BIENNIAL REPORT.] The commissioner shall 
        report to the legislature by March 1 of each odd-numbered year 
        on the overall incidence of the income tax, sales and excise 
        taxes, and property tax.  The report shall present information 
        on the distribution of the tax burden as follows:  (1) for the 
        overall income distribution, using a systemwide incidence 
        measure such as the Suits index or other appropriate measures of 
        equality and inequality; (2) by income classes, including at a 
        minimum deciles of the income distribution; and (3) by other 
        appropriate taxpayer characteristics. 
           Subd. 2.  [BILL ANALYSES.] At the request of the chair of 
        the house Tax Committee or the senate Committee on Taxes and Tax 
        Laws, the commissioner shall prepare an incidence impact 
        analysis of a bill or a proposal to change the tax system which 
        increases, decreases, or redistributes taxes by more than 
        $20,000,000.  To the extent data is available on the changes in 
        the distribution of the tax burden that are affected by the bill 
        or proposal, the analysis shall report on the incidence effects 
        that would result if the bill were enacted.  The report may 
        present information using systemwide measures, such as Suits or 
        other similar indexes, by income classes, taxpayer 
        characteristics, or other relevant categories.  The report may 
        include analyses of the effect of the bill or proposal on 
        representative taxpayers.  The analysis must include a statement 
        of the incidence assumptions that were used in computing the 
        burdens. 
           Subd. 3.  [INCOME MEASURE.] The incidence analyses shall 
        use the broadest measure of economic income for which reliable 
        data is available.  [270.0682] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 16.  [270C.14] [AUTHORITY TO PAY LOCAL TAXES; 
        APPROPRIATION.] 
           The commissioner may pay to any local government unit, any 
        locally imposed sales taxes that may be assessed against the 
        department.  There is appropriated to the commissioner from the 
        general fund the amount needed to make the payments.  [270.058] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 17.  [270C.15] [REVENUE DEPARTMENT SERVICE AND 
        RECOVERY SPECIAL REVENUE FUND.] 
           A Revenue Department service and recovery special revenue 
        fund is created for the purpose of recovering the costs of 
        furnishing government data and related services or products, as 
        well as recovering costs associated with collecting local taxes 
        on sales.  All money collected under this section is deposited 
        in the Revenue Department service and recovery special revenue 
        fund.  Money in the fund is appropriated to the commissioner to 
        reimburse the department for the costs incurred in administering 
        the tax law or providing the data, service, or product.  Any 
        money paid to the department as a criminal fine for a violation 
        of state revenue law that is designated by the court to fund 
        enforcement of state revenue law is appropriated to this fund.  
        [270.059] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 18.  [270C.16] [COLLECTION OF DELINQUENT LIABILITIES; 
        COSTS.] 
           Subdivision 1.  [APPROPRIATION.] For the purpose of 
        collecting delinquent tax liabilities or debts as defined in 
        section 16D.02, subdivision 3, there is appropriated to the 
        commissioner an amount representing the cost of collection by 
        contract with collection agencies, revenue departments of other 
        states, or attorneys to enable the commissioner to reimburse 
        these agencies, departments, or attorneys for this service.  The 
        commissioner shall report quarterly on the status of this 
        program to the chair of the house Tax and Appropriation 
        Committees and senate Tax and Finance Committees.  [270.063, 
        subd. 1] 
           Subd. 2.  [PREPAYMENT.] Notwithstanding section 16A.15, 
        subdivision 3, the commissioner may authorize the prepayment of 
        sheriff's fees, attorney fees, fees charged by revenue 
        departments of other states, or court costs to be incurred in 
        connection with the collection of delinquent tax liabilities 
        owed to the commissioner.  [270.063, subd. 2] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 19.  [270C.17] [COMMISSIONER TO COLLECT CERTAIN LOCAL 
        TAXES.] 
           Subdivision 1.  [COSTS DEDUCTED; APPROPRIATION.] If the 
        commissioner agrees to collect a local tax, the local unit of 
        government must agree that all the direct and indirect costs of 
        the department for collecting the tax and any other statewide 
        indirect costs will be deducted from the amounts collected and 
        paid to the local unit of government.  
           Subd. 2.  [DEVELOPMENT COSTS.] If the commissioner 
        determines that a new computer system will be required to 
        collect the local taxes, the costs of development of the system 
        will be charged to the first local units of government to be 
        included in the system.  Any additional local units of 
        government that by agreement are added to the system will be 
        charged for a share of the development costs.  The charge will 
        be determined by the commissioner who shall then refund to the 
        original local units of government their portion of the 
        development costs recovered from the additional users.  
        [270.069] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 20.  [270C.18] [SETOFF OF POLITICAL SUBDIVISION 
        DEBTS.] 
           (a) As used in this section, "political subdivision" means 
        counties and home rule charter or statutory cities, and "debts" 
        means a legal obligation to pay a fixed amount of money, which 
        equals or exceeds $100 and which is due and payable to the 
        claimant political subdivision. 
           (b) If one political subdivision owes a debt to another 
        political subdivision, and the debt has not been paid within six 
        months of the date when payment was due, the creditor political 
        subdivision may notify the commissioner of the debt, and shall 
        provide the commissioner with information sufficient to verify 
        the claim.  If the commissioner has reason to believe that the 
        claim is valid, and the debt has not been paid, the commissioner 
        shall initiate setoff procedures under this section. 
           (c) Within ten days of receipt of the notification from the 
        creditor political subdivision, the commissioner shall send a 
        written notice to the debtor political subdivision, advising it 
        of the nature and amount of the claim.  This written notice 
        shall advise the debtor of the creditor political subdivision's 
        intention to request setoff of the refund against the debt. 
           The notice will also advise the debtor that the debt can be 
        setoff against a state aid payment, and will advise the debtor 
        of the right to contest the validity of the claim at a hearing.  
        The debtor must assert this right by written request to the 
        commissioner, which request the commissioner must receive within 
        45 days of the mailing date of the notice. 
           (d) If the commissioner receives written notice of a debtor 
        political subdivision's intention to contest at hearing the 
        claim upon which the intended setoff is based, the commissioner 
        shall initiate a hearing according to contested case procedures 
        established in the state Administrative Procedure Act not later 
        than 30 days after receipt of the debtor's request for a 
        hearing.  The costs of the hearing shall be paid equally by the 
        political subdivisions that are parties to the hearing.  The 
        Office of Administrative Hearings shall separately bill each 
        political subdivision for one-half of the costs. 
           (e) If the debtor political subdivision does not object to 
        the claim, or does not prevail in an objection to the claim or 
        at a hearing on the claim, the commissioner shall deduct the 
        amount of the debt from the next payment scheduled to be made to 
        the debtor under section 273.1398 or chapter 477A.  The 
        commissioner shall remit the amount deducted to the claimant 
        political subdivision.  [270.66, subd. 4] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 21.  [270C.19] [TAXES AND FEES; REFUND AND SHARING 
        AGREEMENTS WITH INDIANS.] 
           Subdivision 1.  [TAXES PAID BY INDIANS.] The commissioner 
        is authorized to enter into a tax refund agreement with the 
        governing body of any federally recognized Indian reservation in 
        Minnesota.  The agreement may provide for a mutually agreed upon 
        amount as a refund to the governing body of any sales or excise 
        tax paid by the total resident Indian population on or adjacent 
        to a reservation into the state treasury, or for an amount which 
        measures the economic value of an agreement by the tribal 
        government to pay the equivalent of the state sales tax on items 
        included in the sales tax base but exempt on the reservation, 
        notwithstanding any other law which limits the refundment of 
        taxes.  The total resident Indian population on or adjacent to a 
        reservation shall be defined according to the United States 
        Department of the Interior, Bureau of Indian Affairs, as 
        determined and stated in its Report on Service Population and 
        Labor Force. 
           Subd. 2.  [SALES, USE, AND EXCISE TAXES.] (a) The 
        commissioner is authorized to enter into a tax agreement with 
        the governing body of any federally recognized Indian 
        reservation in Minnesota, that provides for the state and the 
        tribal government to share sales, use, and excise tax revenues 
        generated from on reservation activities of non-Indians and off 
        reservation activities of members of the reservation.  Every 
        agreement entered into pursuant to this subdivision must require 
        the commissioner to collect all state and tribal taxes covered 
        by the agreement.  
           (b) The commissioner is authorized to collect any tribal 
        taxes imposed pursuant to any agreement entered into pursuant to 
        this subdivision and to make payments authorized by the 
        agreement to the tribal government from the funds collected. 
           (c) The commissioner shall pay to the tribal government its 
        share of the taxes collected pursuant to the agreement, as 
        indicated in the agreement, and grant the taxpayer a credit for 
        the taxpayer's share of the amount paid to the tribal government 
        against the taxpayer's Minnesota tax.  
           Subd. 3.  [APPROPRIATION.] There is annually appropriated 
        from the general fund to the commissioner the amounts necessary 
        to make the refunds provided in this section. 
           Subd. 4.  [PAYMENTS TO COUNTIES.] (a) The commissioner 
        shall pay to a county in which an Indian gaming casino is 
        located: 
           (1) ten percent of the state share of all taxes generated 
        from activities on reservations and collected under a tax 
        agreement under this section with the tribal government for the 
        reservation located in the county; or 
           (2) five percent of excise taxes collected by the state 
        that are determined by the department to have been generated 
        from activities on a reservation located in the county, the 
        tribal government of which does not have a tax agreement under 
        this section and did not have a tax agreement on June 30, 2003. 
           If the tribe has casinos located in more than one county, 
        the payment must be divided equally among the counties in which 
        the casinos are located. 
           (b) The commissioner shall make the payments required under 
        this subdivision by February 28 of the year following the year 
        the taxes are collected. 
           (c) An amount sufficient to make the payments authorized by 
        this subdivision is annually appropriated from the general fund 
        to the commissioner.  
           Subd. 5.  [FEES; APPROPRIATION.] (a) The commissioner may 
        enter into an agreement with the governing body of any federally 
        recognized Indian reservation in Minnesota concerning fees 
        administered by the commissioner that are paid by the tribe, 
        members of the tribe, or persons who conduct business with the 
        tribe, or otherwise imposed on on-reservation activities.  The 
        agreement may provide for the refund or sharing of the fee.  The 
        commissioner may make any payments required by the agreement 
        from the fees collected. 
           (b) Each head of an agency, board, or other governmental 
        entity that administers a program that is funded by fees 
        administered by the commissioner may sign an agreement entered 
        into by the commissioner under this subdivision.  An agreement 
        is not valid until signed by the head of each agency, board, or 
        other governmental entity that administers a program funded by 
        the particular fee covered in an agreement and by the 
        commissioner. 
           (c) There is annually appropriated to the commissioner from 
        the funds for which the fees are collected the amounts necessary 
        to make payments as provided in this subdivision.  [270.60] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
                               TAX ADMINISTRATION 
           Sec. 22.  [270C.25] [PROHIBITION OF SUITS TO RESTRAIN 
        ASSESSMENT OR COLLECTION.] 
           Subdivision 1.  [GENERAL RULE.] No suit to restrain 
        assessment or collection of a tax, fee, penalty, or interest, 
        imposed by a law administered by the commissioner, including a 
        declaratory judgment action, can be maintained in any court by 
        any person except pursuant to the express procedures in (1) this 
        chapter, (2) chapter 271, (3) chapter 289A, and (4) any other 
        law administered by the commissioner for contesting the 
        assessment or collection of taxes, fees, penalties, or interest. 
           Subd. 2.  [FACIAL CHALLENGE TO CONSTITUTIONALITY.] An 
        action, otherwise prohibited under subdivision 1, that asserts a 
        facial challenge to the constitutionality of a tax or fee 
        imposed by a law administered by the commissioner may be 
        maintained only if it is demonstrated to the court by clear and 
        convincing evidence that under no circumstances could the 
        commissioner ultimately prevail and that the taxpayer or fee 
        payer will suffer irreparable harm if the relief sought is not 
        granted.  [289A.43] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 23.  [270C.26] [PENALTY FOR FILING CERTAIN DOCUMENTS 
        AGAINST DEPARTMENT OF REVENUE EMPLOYEES.] 
           Subdivision 1.  [DEFINITIONS.] (a) "Recording office" means 
        a county recorder, registrar of titles, or secretary of state in 
        this state or another state. 
           (b) "Filing party" means the person or persons requesting 
        or causing another person to request that the recording office 
        accept documents or instruments for recording or filing. 
           Subd. 2.  [INVALID DOCUMENTS NAMING COMMISSIONER OR 
        DEPARTMENT EMPLOYEES.] Filing a document, including a 
        nonconsensual common law lien under section 514.99, that 
        purports to create a claim against the commissioner or an 
        employee of the department based on performance or 
        nonperformance of duties by the commissioner or employee is 
        invalid unless accompanied by a specific order from a court of 
        competent jurisdiction authorizing the filing of the document or 
        unless a specific statute authorizes the filing of the document. 
           Subd. 3.  [CIVIL PENALTY.] If a filing party causes a 
        document described in subdivision 2 to be recorded in a 
        recording office, the commissioner may assess a penalty against 
        the filing party of $1,000 per document filed, payable to the 
        general fund.  An order assessing a penalty under this section 
        is reviewable administratively under section 270C.35 and is 
        appealable to Tax Court under chapter 271.  The penalty is 
        collected and paid in the same manner as a tax collected by the 
        commissioner.  The penalty is in addition to any other remedy 
        available to the commissioner or to an employee of the 
        department against whom the document has been filed.  [270.278] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 24.  [270C.27] [CIVIL DAMAGES FOR FAILURE TO RELEASE 
        LIEN.] 
           Subdivision 1.  [IN GENERAL.] (a) A taxpayer may bring a 
        civil action for damages against the commissioner in district 
        court when an employee or the department has knowingly or 
        negligently: 
           (1) failed to release a lien as required by section 
        270C.63, subdivision 11; or 
           (2) failed to release a lien within 30 days after 
        satisfaction of the liability on which the lien is based. 
           (b) An action under paragraph (a), clause (2), must be 
        preceded by 30 days' written notice by the taxpayer to the 
        commissioner and the taxpayer's rights advocate that the lien 
        has not been released.  An action under paragraph (a) must be 
        commenced within two years after the date the right of action 
        accrued. 
           Subd. 2.  [DAMAGES.] On a finding of liability on the part 
        of the defendant in an action brought under subdivision 1, the 
        defendant is liable to the plaintiff in an amount equal to the 
        sum of actual, direct economic damages sustained by the 
        plaintiff due to the actions of the defendant, plus the costs of 
        the action.  Damages must be paid in accordance with section 
        3.736, subdivision 7. 
           Subd. 3.  [MITIGATION OF DAMAGES.] Damages awarded must be 
        reduced by the amount of the damages that could reasonably have 
        been mitigated by the plaintiff.  [270.275] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 25.  [270C.275] [CIVIL DAMAGES FOR CERTAIN 
        UNAUTHORIZED COLLECTION ACTIONS.] 
           Subdivision 1.  [IN GENERAL.] If in connection with the 
        collection of delinquent taxes, an employee of the department 
        recklessly or intentionally disregards a law administered by the 
        commissioner, the taxpayer may bring a civil action for damages 
        against the commissioner in district court within two years 
        after the date the right of action accrues. 
           Subd. 2.  [DAMAGES.] On a finding of liability on the part 
        of the defendant in an action brought under subdivision 1, the 
        defendant is liable to the plaintiff in an amount equal to the 
        lesser of $200,000, or the sum of (1) actual, direct economic 
        damages sustained by the plaintiff as a proximate result of the 
        reckless or intentional actions of the employee and (2) the 
        costs of the action.  Damages must be paid in accordance with 
        section 3.736, subdivision 7. 
           Subd. 3.  [LIMITATIONS.] A judgment for damages must not be 
        awarded under subdivision 2 unless the court determines that the 
        plaintiff has exhausted the administrative remedies available to 
        the plaintiff within the department.  Damages awarded must be 
        reduced by the amount of the damages that could reasonably have 
        been mitigated by the plaintiff. 
           Subd. 4.  [PENALTIES FOR PROCEDURES INSTITUTED PRIMARILY 
        FOR DELAY.] When it appears to the district court that: 
           (1) proceedings before it under this section have been 
        instituted or maintained by the taxpayer primarily for delay; 
           (2) the taxpayer's position in such proceeding is frivolous 
        or groundless; or 
           (3) the taxpayer unreasonably failed to pursue available 
        administrative remedies, 
        the district court, in its decision, may require the taxpayer to 
        pay to the department a penalty not in excess of $25,000.  The 
        penalty may be collected and paid in the same manner as a tax 
        collected by the commissioner.  [270.276] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 26.  [270C.28] [DISCLOSURE OF RIGHTS OF TAXPAYERS.] 
           Subdivision 1.  [IN GENERAL.] The commissioner shall 
        prepare statements that set forth in simple and nontechnical 
        terms: 
           (1) the rights and obligations of the department and the 
        taxpayer during an audit; 
           (2) the procedures by which a taxpayer may appeal an 
        adverse decision of the department, including administrative and 
        judicial appeals; 
           (3) the procedures for filing refund claims and filing of 
        taxpayer complaints; and 
           (4) the procedures that the department may use in enforcing 
        a law administered by the commissioner, including assessment, 
        jeopardy assessment, levy and distraint, and the filing of liens.
           Subd. 2.  [DISTRIBUTION.] The appropriate statement 
        prepared in accordance with subdivision 1 must be distributed by 
        the commissioner to all taxpayers contacted with respect to the 
        determination or collection of a tax, other than the providing 
        of tax forms.  Failure to receive the statement does not 
        invalidate the determination or collection action.  [270.0603] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 27.  [270C.285] [PROCEDURES INVOLVING IN-PERSON 
        TAXPAYER INTERVIEWS.] 
           Subdivision 1.  [RECORDING OF INTERVIEWS.] (a) Upon 
        reasonable advance notice from the taxpayer, a taxpayer shall be 
        allowed to make an audio recording, with the taxpayer's 
        equipment and at the taxpayer's expense, of an interview of the 
        taxpayer by the department regarding the audit or collection of 
        a tax. 
           (b) An employee of the department may record an interview 
        described in paragraph (a) if the taxpayer is informed of the 
        recording before the interview and a transcript or copy of the 
        recording is made available to the taxpayer on the taxpayer's 
        request, provided the department is reimbursed by the taxpayer 
        for the cost of transcribing or copying the recording. 
           Subd. 2.  [SAFEGUARDS.] (a) Before or at the start of an 
        initial interview, an employee of the department shall provide 
        to the taxpayer in the case of an audit interview an explanation 
        of the audit process and the taxpayer's rights under that 
        process and, in the case of a collection interview, an 
        explanation of the collection process and the taxpayer's rights 
        under that process. 
           (b) If a taxpayer requests to consult with an attorney, 
        accountant, agent, preparer, or any other person permitted to 
        represent the taxpayer before the department at any time during 
        an interview, except an interview initiated by an administrative 
        subpoena, the interview must be suspended for no more than 30 
        days. 
           Subd. 3.  [REPRESENTATIVES HOLDING POWER OF ATTORNEY.] An 
        attorney, accountant, agent, preparer, or any other person 
        permitted to represent the taxpayer before the department who 
        has a written power of attorney executed by the taxpayer may 
        represent the taxpayer in an interview described in subdivision 
        1.  The taxpayer may be required to accompany the representative 
        only if a subpoena is issued.  In this instance, with the 
        consent of an immediate supervisor and after ten days' notice to 
        the representative, the department employee may notify the 
        taxpayer directly that the employee believes the representative 
        is unreasonably delaying the examination or investigation 
        process. 
           Subd. 4.  [NOT TO APPLY TO CERTAIN INVESTIGATIONS.] This 
        section does not apply to criminal investigations or 
        investigations relating to the conduct of an employee of the 
        department.  [270.272] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 28.  [270C.29] [NOTICES TO HOLDERS OF POWERS OF 
        ATTORNEY.] 
           If a taxpayer has executed a written power of attorney, in 
        a form prescribed by the commissioner, the commissioner shall 
        allow the taxpayer to elect, in writing, that all notices and 
        correspondence between the department and the taxpayer will be 
        sent to the holder of the power of attorney.  [270.277] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 29.  [270C.30] [RETURNS; FORMAT; FURNISHING.] 
           The commissioner shall prescribe the content and format of 
        all returns, and may furnish them subject to charge on 
        application.  [270.07, subd. 1, paragraph (a); 270.06, clause 
        (15)] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 30.  [270C.302] [RETURNS, OTHER FORMS; WHERE FILED.] 
           Returns and other forms required to be filed under a law 
        administered by the commissioner must be filed at the 
        commissioner's office in St. Paul, or such other place as the 
        commissioner may designate.  [289A.13] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 31.  [270C.304] [ELECTRONICALLY FILED RETURNS; 
        SIGNATURES.] 
           For purposes of a law administered by the commissioner, the 
        name of the taxpayer, the name of the taxpayer's authorized 
        agent, or the taxpayer's identification number, will constitute 
        a signature when transmitted as part of the return information 
        on returns filed by electronic means by the taxpayer or at the 
        taxpayer's direction.  "Electronic means" includes, but is not 
        limited to, the use of a touch-tone telephone to transmit return 
        information in a manner prescribed by the commissioner.  
        [289A.07] 
           [EFFECTIVE DATE.] This section is effective for returns 
        filed on or after August 1, 2005. 
           Sec. 32.  [270C.306] [COMMISSIONER MAY REQUIRE SOCIAL 
        SECURITY OR IDENTIFYING NUMBERS ON FORMS.] 
           Notwithstanding the provisions of any other law, the 
        commissioner may require that a form required to be filed with 
        the commissioner include the Social Security number, federal 
        employer identification number, or Minnesota taxpayer 
        identification number of the taxpayer or applicant.  [270.066] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 33.  [270C.308] [PROHIBITION OF DISPLAY OF SOCIAL 
        SECURITY NUMBERS.] 
           No label, envelope, or other material printed by the 
        department may include the Social Security number of the 
        taxpayer in a place that will be visible to a third party when 
        delivered or mailed to the taxpayer.  [270.0665] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 34.  [270C.31] [EXAMINATIONS AND INVESTIGATIONS.] 
           Subdivision 1.  [SCOPE.] To determine the accuracy of a 
        return, to fix liability under state revenue law, to administer 
        state revenue law, when conducting an investigation or an audit 
        of a taxpayer, for the purpose of collection, and in any matter 
        which the commissioner has the power to investigate or 
        determine, the commissioner has authority to take the actions 
        allowed in this section.  [270.06, clauses (6) and (9); 289A.36, 
        subd. 1] 
           Subd. 2.  [REASONABLE EXAMINATIONS OR INVESTIGATIONS OF 
        TAXPAYER.] The commissioner may make reasonable examinations or 
        investigations of a taxpayer's place of business, tangible 
        personal property, equipment, computer systems, and facilities.  
        The commissioner may inspect and copy the taxpayer's relevant 
        books, records, papers, documents, and other data, in whatever 
        form.  [289A.36, subds. 1 and 3, clause (1), regarding 
        taxpayers] 
           Subd. 3.  [ACCESS TO RECORDS.] The commissioner may 
        examine, except where privileged by law, the relevant records 
        and files of any person, business, institution, financial 
        institution, state agency, agency of the United States 
        government, or agency of any other state where permitted by 
        statute, agreement, or reciprocity.  [289A.36, subd. 2] 
           Subd. 4.  [EXAMINATIONS UNDER OATH.] The commissioner may 
        administer oaths and affirmations and examine taxpayers and 
        other persons under oath or affirmation.  [270.15; 289A.36, 
        subd. 3, clauses (1) and (2)] 
           Subd. 5.  [DEPOSITIONS.] The commissioner may depose 
        witnesses who reside inside or outside the state, or who are 
        absent from the state.  Depositions are to be taken, upon notice 
        to the interested party, if any, in the same manner that 
        depositions of witnesses are taken in civil actions in the 
        district court.  [270.06, clause (9)] 
           Subd. 6.  [WITNESS FEES.] The fees of witnesses required by 
        the commissioner to appear are equal to those allowed to 
        witnesses appearing before courts of this state.  The fees must 
        be paid in the manner provided for the payment of other expenses 
        incident to the administration of state revenue law.  [289A.36, 
        subd. 3, clause (2)] 
           Subd. 7.  [LIMITATION OF AUTHORITY.] The authority granted 
        in this section to the commissioner does not apply to a matter 
        that has been appealed to Tax Court.  [270.0601] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 35.  [270C.32] [SUBPOENAS.] 
           Subdivision 1.  [AUTHORITY TO ISSUE SUBPOENAS.] In addition 
        to the authority to examine and investigate granted under 
        section 270C.31, and to carry out that authority, the 
        commissioner may issue subpoenas to compel a person, at a time 
        and place reasonable under the circumstances, to appear and give 
        testimony, and to produce relevant books, records, papers, 
        documents, and other data, in whatever form, for inspection and 
        copying.  [289A.36, subds. 2 and 3, clause (1); 270.06, clause 
        (7)] 
           Subd. 2.  [REQUEST BY TAXPAYER FOR SUBPOENA.] When the 
        commissioner has the authority to issue a subpoena, the 
        commissioner shall honor a reasonable request by a taxpayer to 
        issue a subpoena.  [289A.36, subd. 6] 
           Subd. 3.  [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 
        IS KNOWN.] (a) An examination or investigation may extend to a 
        person that the commissioner determines has access to 
        information that may be relevant to the examination or 
        investigation.  When a subpoena requiring the production of 
        records as described in subdivision 1 is served on a third-party 
        record keeper, written notice of the subpoena must be mailed to 
        the taxpayer and to any other person who is identified in the 
        subpoena.  The notices must be given within three days of the 
        day on which the subpoena is served.  The notice required by 
        this subdivision is sufficient if it is mailed to the last known 
        address of the addressee. 
           (b) The provisions of this subdivision regarding notice to 
        the taxpayer or other parties identified in the subpoena do not 
        apply if there is reasonable cause to believe that the giving of 
        notice may lead to attempts to conceal, destroy, or alter 
        records or assets relevant to the examination, to prevent the 
        communication of information from other persons through 
        intimidation, bribery, or collusion, or to flee to avoid 
        prosecution, testifying, or production of records.  [289A.36, 
        subd. 4] 
           Subd. 4.  [THIRD-PARTY SUBPOENA WHERE TAXPAYER'S IDENTITY 
        IS NOT KNOWN.] (a) The commissioner may issue a subpoena that 
        does not identify the person or persons with respect to whose 
        liability the subpoena is issued, but only if: 
           (1) the subpoena relates to the investigation of a 
        particular person or ascertainable group or class of persons; 
           (2) there is a reasonable basis to believe that the person 
        or group or class of persons may fail or may have failed to 
        comply with a state revenue law; 
           (3) the information sought to be obtained from the 
        examination of the records, and the identity of the person or 
        persons with respect to whose liability the subpoena is issued, 
        is not readily available from other sources; 
           (4) the subpoena is clear and specific as to the 
        information sought to be obtained; and 
           (5) the information sought to be obtained is limited solely 
        to the scope of the investigation. 
           (b) The party served with a subpoena that does not identify 
        the person or persons with respect to whose tax liability the 
        subpoena is issued shall, within 20 days after service of the 
        subpoena, petition the district court for the judicial district 
        of the county in which that party is located for a determination 
        as to whether the commissioner has complied with all the 
        requirements in paragraph (a), clauses (1) to (5), and thus, 
        whether the subpoena is enforceable.  If no petition is made by 
        the party served within the time prescribed, the subpoena shall 
        have the force and effect of a court order.  [270.06, clause 
        (8); 289A.36, subd. 5] 
           Subd. 5.  [ACCESS TO RECORDS IN CONNECTION WITH EXAMINATION 
        OF BUSINESSES LOCATED OUTSIDE THE STATE.] (a) In order to 
        determine whether a business located outside the state of 
        Minnesota is required to file a return under a law administered 
        by the commissioner, the commissioner may examine the relevant 
        records and files of the business.  To the full extent permitted 
        by the Minnesota and United States Constitutions, the 
        commissioner may compel production of those relevant records and 
        files by subpoena.  The subpoena may be served on the secretary 
        of state along with the address to which service of the subpoena 
        is to be sent and a fee of $50.  The secretary of state shall 
        forward a copy of the subpoena to the business using the 
        procedures for service of process in section 5.25, subdivision 6.
           (b) The commissioner shall pay the reasonable cost of 
        producing records subject to subpoena under this subdivision if: 
           (1) the subpoenaed party cannot produce the records without 
        undue burden; and 
           (2) the examination made pursuant to paragraph (a) shows 
        that the subpoenaed party is not required to file a return under 
        a law administered by the commissioner.  [289A.36, subd. 9] 
           Subd. 6.  [DEMAND FOR COURT ADMINISTRATOR'S SUBPOENA.] In 
        addition to administrative subpoenas of the commissioner, upon 
        demand of the commissioner or an agent of the commissioner, the 
        court administrator of any district court shall issue a subpoena 
        for a witness to appear before the agent, or for the production 
        of relevant books, records, papers, documents, and other data, 
        in whatever form, to the agent for inspection and copying.  
        [270.06, clause (17)] 
           Subd. 7.  [ENFORCEMENT OF SUBPOENAS.] Failure to comply 
        with a subpoena shall be punished in the same manner as contempt 
        of the district court in the following venues: 
           (1) the district court of the district in which a court 
        administrator's subpoena is issued under subdivision 6; [270.06, 
        clause (17)] 
           (2) the district court of the district in which the party 
        served with a subpoena is located, when the subpoena is issued 
        by the commissioner or the commissioner's agent; and [270.06, 
        clause (17); 289A.36, subd. 7, paragraph (a)] 
           (3) the District Court for Ramsey County, when a subpoena 
        is issued under subdivision 5.  In addition to contempt 
        remedies, the court may issue any order it deems reasonable to 
        enforce compliance with a subpoena issued under subdivision 5.  
        [289A.36, subd. 7, paragraph (b)] 
           Subd. 8.  [PENALTY FOR VIOLATING COURT ORDER TO COMPLY WITH 
        SUBPOENA.] In addition to sanctions imposed under subdivision 7, 
        a penalty of $250 per day is imposed on any business that is in 
        violation of a court order to comply with a subpoena that is 
        seeking information necessary for the commissioner to be able to 
        determine whether the business is required to file a return or 
        pay a tax.  The maximum penalty is $25,000.  Upon the request of 
        the commissioner, the court shall determine the amount of the 
        penalty and enter it as a judgment in favor of the 
        commissioner.  The penalty is not payable until the judgment is 
        entered.  [289A.36, subd. 10] 
           Subd. 9.  [COST OF PRODUCTION OF RECORDS.] The cost of 
        producing records of a third party required by a subpoena must 
        be paid by the taxpayer, if the taxpayer requests the subpoena 
        to be issued, or if the taxpayer has the records available but 
        has refused to provide them to the commissioner.  In other cases 
        where the taxpayer cannot produce records and the commissioner 
        then issues a subpoena for third-party records, the commissioner 
        shall pay the reasonable cost of producing the records.  The 
        commissioner may later assess the reasonable costs against the 
        taxpayer if the records contribute to the determination of an 
        assessment of tax against the taxpayer.  [289A.36, subd. 8] 
           Subd. 10.  [LIMITATION OF AUTHORITY.] The authority granted 
        in this section to the commissioner and the commissioner's 
        agents does not apply to a matter that has been appealed to Tax 
        Court.  [270.0601] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 36.  [270C.33] [COMMISSIONER ASSESSMENT PROCEDURES.] 
           Subdivision 1.  [ORDERS AND DECISIONS.] All orders and 
        decisions of the commissioner, or any subordinates, respecting 
        any tax, assessment, or other obligation, must be in writing and 
        entered into the records of the commissioner.  [270.10, subd. 1] 
           Subd. 2.  [NOTICES.] (a) At the same time that notice of an 
        assessment, determination, or order, of the commissioner is 
        given to a taxpayer, the taxpayer must be given a written notice 
        that: 
           (1) describes the taxpayer's appeal rights; 
           (2) lists the amounts of tax, interest, additions to tax, 
        and penalties due; and 
           (3) explains the basis for the assessment. 
           (b) Failure to provide all the required information does 
        not invalidate the assessment, determination, or order for 
        purposes of satisfying statutory notice requirements if the 
        assessment, determination, or order contains sufficient 
        information to advise the taxpayer that an assessment has been 
        made.  [270.10, subd. 1a; 289A.37, subd. 1, paragraph (a)] 
           Subd. 3.  [COMMISSIONER FILED RETURNS.] If a taxpayer fails 
        to file a return, the commissioner, from information in the 
        commissioner's possession or obtainable by the commissioner, may 
        make and file a return for the taxpayer, or may issue an order 
        of assessment under subdivision 4.  [289A.35] 
           Subd. 4.  [ORDERS OF ASSESSMENT.] (a) The commissioner may 
        issue an order of assessment in any of the following 
        circumstances: 
           (1) the commissioner determines that the correct amount of 
        tax is different than that assessed on a return filed with the 
        commissioner; [289A.37, subd. 1] 
           (2) no return has been filed and the commissioner 
        determines the amount of tax that should have been assessed; 
        [289A.37, subd. 1] 
           (3) the commissioner determines that the correct amount of 
        a refundable credit is different than the amount claimed by a 
        taxpayer.  For purposes of this subdivision, "refundable credit" 
        means a refund benefit or credit due a person that is unrelated 
        to the person's liability for a tax.  "Refundable credit" does 
        not include estimated tax payments or withholding taxes.  An 
        assessment for an overpayment of a refundable credit may be 
        collected in the same manner as a tax collected by the 
        commissioner; and 
           (4) the commissioner determines the correct amount of a tax 
        that the taxpayer is not required to assess by a return filed 
        with the commissioner. 
           (b) An order of assessment must be in writing.  [270.10, 
        subd. 1] 
           (c) An order of assessment must be signed by the 
        commissioner or a delegate, or have their facsimile signature, 
        if the change in tax, excluding penalties and interest, exceeds 
        $1,000.  [270.10, subd. 1] 
           (d) An order of assessment is final when made but, as 
        applicable, is reviewable administratively under section 
        270C.35, or appealable to Tax Court under chapter 271. [289A.37, 
        subd. 1, paragraph (a)] 
           Subd. 5.  [PROHIBITION AGAINST COLLECTION DURING APPEAL 
        PERIOD OF AN ORDER.] No collection action can be taken on an 
        order of assessment, including the filing of liens under section 
        270C.63, and no late payment penalties may be imposed when a 
        return has been filed for the tax type and period upon which the 
        order is based, during the appeal period of an order.  The 
        appeal period of an order ends:  (1) 60 days after the order has 
        been mailed to the taxpayer by the commissioner; (2) if an 
        administrative appeal is filed under section 270C.35, 60 days 
        after determination of the administrative appeal; (3) if an 
        appeal to Tax Court is filed under chapter 271, when the 
        decision of the Tax Court is made; or (4) if an appeal to Tax 
        Court is filed and the appeal is based upon a constitutional 
        challenge to the tax, 60 days after final determination of the 
        appeal.  This subdivision does not apply to a jeopardy 
        assessment under section 270C.36, or a jeopardy collection under 
        section 270C.36.  [289A.37, subd. 1, paragraph (b); 270.10, 
        subd. 5] 
           Subd. 6.  [ASSESSMENT PRESUMED VALID.] A return or 
        assessment of tax made by the commissioner is prima facie 
        correct and valid.  The taxpayer has the burden of establishing 
        its incorrectness or invalidity in any related action or 
        proceeding.  [289A.37, subd. 3] 
           Subd. 7.  [AGGREGATE REFUND OR ASSESSMENT.] The 
        commissioner, on examining returns for more than one year or 
        period, may issue one order covering the period under 
        examination that reflects the aggregate refund or additional tax 
        due.  [289A.37, subd. 4] 
           Subd. 8.  [SUFFICIENCY OF NOTICE.] An assessment of tax 
        made by the commissioner, sent postage prepaid by United States 
        mail to the taxpayer at the taxpayer's last known address, is 
        sufficient even if the taxpayer is deceased or is under a legal 
        disability, or, in the case of a corporation, has terminated its 
        existence, unless the commissioner has been provided with a new 
        address by a party authorized to receive notices of assessment.  
        [289A.37, subd. 5] 
           Subd. 9.  [CONSENT AGREEMENT.] A taxpayer shall have the 
        right at any time, whether or not an order has been issued, to 
        sign and deliver to the commissioner a written consent to a 
        change in tax liability that waives the requirement of any 
        additional notice and all rights to an administrative appeal and 
        appeal to Tax Court concerning the assessment and collection of 
        any part or all of the tax liability.  [270.67, subd. 3] 
           [EFFECTIVE DATE.] This section is effective for assessments 
        made on or after August 1, 2005. 
           Sec. 37.  [270C.34] [ABATEMENT OF PENALTY, INTEREST, AND 
        ADDITIONAL TAX CHARGE.] 
           Subdivision 1.  [AUTHORITY.] (a) The commissioner may 
        abate, reduce, or refund any penalty or interest that is imposed 
        by a law administered by the commissioner as a result of the 
        late payment of tax or late filing of a return, if the failure 
        to timely pay the tax or failure to timely file the return is 
        due to reasonable cause, or if the taxpayer is located in a 
        presidentially declared disaster area.  [270.07, subd. 1, 
        paragraph (e)] 
           (b) The commissioner shall abate any part of a penalty or 
        additional tax charge under section 289A.25, subdivision 2, or 
        289A.26, subdivision 4, attributable to erroneous advice given 
        to the taxpayer in writing by an employee of the department 
        acting in an official capacity, if the advice:  
           (1) was reasonably relied on and was in response to a 
        specific written request of the taxpayer; and 
           (2) was not the result of failure by the taxpayer to 
        provide adequate or accurate information.  [270.07, subd. 6, 
        paragraph (c)] 
           Subd. 2.  [PROCEDURE.] (a) A request for abatement of 
        penalty under subdivision 1 or section 289A.60, subdivision 4, 
        must be filed with the commissioner within 60 days of the date 
        the notice was mailed to the taxpayer's last known address, 
        stating that a penalty has been imposed. 
           (b) If the commissioner issues an order denying a request 
        for abatement of penalty, the taxpayer may file an 
        administrative appeal as provided in section 270C.35 or appeal 
        to Tax Court as provided in section 271.06. 
           (c) If the commissioner does not issue an order on the 
        abatement request within 60 days from the date the request is 
        received, the taxpayer may appeal to Tax Court as provided in 
        section 271.06.  [270.07, subd. 6, paragraphs (a) and (b)] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 38.  [270C.345] [DETERMINATION OF MINIMUMS AND 
        CANCELLATION; ADDITIONAL TAX, COLLECTION, REFUNDS.] 
           Notwithstanding any other provision of law, the 
        commissioner may: 
           (1) based upon the administrative costs of processing, 
        determine minimum standards for the determination of additional 
        tax for which an order shall be issued; 
           (2) based upon collection costs as compared to the amount 
        of tax involved, determine minimum standards of collection; 
           (3) based upon the administrative costs of processing, 
        determine the minimum amount of a refund to be made where no 
        claim has been filed; and 
           (4) cancel any amounts below these minimum standards 
        determined under clauses (1) and (2).  [270.07, subd. 3] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 39.  [270C.346] [ERRONEOUS REMITTANCES.] 
           If a remittance is erroneously made payable to the 
        commissioner and the commissioner had knowledge that the proper 
        payee is a state or local official of this state, the 
        commissioner may endorse such remittance to the proper state or 
        local official.  The commissioner is also authorized to return a 
        remittance if the records indicate that it has been erroneously 
        submitted.  [270.07, subd. 4] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 40.  [270C.347] [REBATE CHECKS AND WARRANTS; AUTHORITY 
        TO REISSUE; APPROPRIATION.] 
           Subdivision 1.  [CHECKS AND WARRANTS, AUTHORITY TO 
        REISSUE.] Notwithstanding any other provision of law, the 
        commissioner may, based on a showing of reasonable cause, 
        reissue an uncashed rebate or property tax refund warrant or 
        check that has lapsed under any provision of law relating to 
        rebates or under section 290A.18, subdivision 2.  The authority 
        to reissue warrants or checks under this paragraph is limited to 
        five years after the date of issuance of the original warrant or 
        check.  [270.07, subd. 3, paragraph (f)] 
           Subd. 2.  [APPROPRIATION.] An amount sufficient for the 
        reissuance of rebate warrants authorized under subdivision 1 is 
        appropriated to the commissioner from the general fund.  
        [270.07, subd. 3a] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 41.  [270C.35] [ADMINISTRATIVE REVIEW.] 
           Subdivision 1.  [TAXPAYER RIGHT TO RECONSIDERATION.] A 
        taxpayer may obtain reconsideration by the commissioner of an 
        order assessing tax, a denial of a request for abatement of 
        penalty or interest imposed by a law administered by the 
        commissioner, or a denial of a claim for refund by filing an 
        administrative appeal under subdivision 4.  A taxpayer cannot 
        obtain reconsideration under this section if the action taken by 
        the commissioner is the outcome of an administrative appeal. 
           Subd. 2.  [APPEAL BY TAXPAYER.] A taxpayer who wishes to 
        seek administrative review must follow the procedures in 
        subdivision 4.  
           Subd. 3.  [NOTICE DATE.] For purposes of this section, the 
        term "notice date" means the date of the order adjusting the tax 
        or order denying a request for abatement, or, in the case of a 
        denied refund, the date of the notice of denial.  
           Subd. 4.  [TIME AND CONTENT FOR ADMINISTRATIVE APPEAL.] 
        Within 60 days after the notice date, the taxpayer must file a 
        written appeal with the commissioner.  The appeal need not be in 
        any particular form but must contain the following information:  
           (1) name and address of the taxpayer; 
           (2) if a corporation, the state of incorporation of the 
        taxpayer, and the principal place of business of the 
        corporation; 
           (3) the Minnesota identification number or Social Security 
        number of the taxpayer; 
           (4) the type of tax involved; 
           (5) the date; 
           (6) the tax years or periods involved and the amount of tax 
        involved for each year or period; 
           (7) the findings in the notice that the taxpayer disputes; 
           (8) a summary statement that the taxpayer relies on for 
        each exception; and 
           (9) the taxpayer's signature or signature of the taxpayer's 
        duly authorized agent.  
           Subd. 5.  [EXTENSIONS.] When requested in writing and 
        within the time allowed for filing an administrative appeal, the 
        commissioner may extend the time for filing an appeal for a 
        period not more than 30 days from the expiration of the 60 days 
        from the notice date.  
           Subd. 6.  [DETERMINATION OF APPEAL.] On the basis of 
        applicable law and available information, the commissioner shall 
        determine the validity, if any, in whole or part of the appeal 
        and notify the taxpayer of the decision.  This notice must be in 
        writing and contain the basis for the determination.  
           Subd. 7.  [AGREEMENT DETERMINING TAX LIABILITY.] When it 
        appears to be in the best interests of the state, the 
        commissioner may settle any taxes, penalties, or interest that 
        the commissioner has under consideration by virtue of an appeal 
        filed under this section.  An agreement must be in writing and 
        signed by the commissioner and the taxpayer, or the taxpayer's 
        representative authorized by the taxpayer to enter into an 
        agreement.  The agreement shall be final and conclusive and, 
        except upon a showing of fraud or malfeasance, or 
        misrepresentation of a material fact, the case shall not be 
        reopened as to the matters agreed upon.  
           Subd. 8.  [ORDER AND APPEAL OF AN ADMINISTRATIVE 
        DETERMINATION.] Following the determination of an appeal and 
        notwithstanding any period of limitations for making assessments 
        or other determinations to the contrary, the commissioner must 
        issue an order reflecting that disposition.  If the statute of 
        limitations for making assessments or other determinations would 
        have expired before the issuance of this order, except for this 
        section, the order is limited to issues or matters contained in 
        the appealed determination.  The order is appealable to the 
        Minnesota Tax Court under section 271.06. 
           Subd. 9.  [APPEAL WHERE NO DETERMINATION.] If the 
        commissioner does not make a determination within six months of 
        the filing of an administrative appeal, the taxpayer may elect 
        to appeal to Tax Court.  
           Subd. 10.  [EXEMPTION FROM ADMINISTRATIVE PROCEDURE ACT.] 
        This section is not subject to chapter 14.  [289A.65] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 42.  [270C.36] [JEOPARDY ASSESSMENT AND COLLECTION.] 
           Subdivision 1.  [ASSESSMENT.] If the commissioner has 
        reasonable grounds to believe that a taxpayer is about to leave, 
        or take property from, this state with the purpose of evading a 
        tax, or that the collection of the tax will be jeopardized by 
        delays incident to other methods of collection, the commissioner 
        may immediately declare the taxpayer's reporting period to be at 
        an end and assess the tax due by issuing an order under section 
        270C.33, subdivision 4.  The commissioner may make the 
        assessment on the basis of knowledge or information available to 
        the commissioner, and notwithstanding the prohibition against 
        collection under section 270C.33, subdivision 5, demand 
        immediate payment of the amount due shown in the assessment.  
        [290.48, subd. 4; 290.92, subd. 6b; 297A.93, paragraph (a)] 
           Subd. 2.  [COLLECTION.] Notwithstanding the prohibition 
        against collection in section 270C.33, subdivision 5, and the 
        notice provisions in section 270C.67, subdivision 3, if the 
        commissioner has reason to believe that collection of a tax is 
        in jeopardy, notice and demand for immediate payment of the tax 
        may be made.  If the tax is not paid, the commissioner may 
        proceed to collect by levy or by filing a lien under section 
        270C.63.  For this purpose, "tax" includes any penalty, 
        interest, and costs, properly payable.  [270.70, subds. 1 and 2, 
        paragraph (b)] 
           Subd. 3.  [ADMINISTRATIVE REVIEW.] Within five days after a 
        jeopardy assessment or jeopardy collection is made to assess or 
        collect a tax, the commissioner shall provide the taxpayer with 
        a written statement of the information relied on in making the 
        assessment or levy.  Within 30 days after the written statement 
        is provided or, if not provided, within 35 days after the 
        assessment or levy, the taxpayer may request the commissioner to 
        review the action taken.  After a request for review, the 
        commissioner shall determine whether the assessment or levy is 
        reasonable and whether the amount assessed or demanded as a 
        result of the action is appropriate under the circumstances. 
           Subd. 4.  [JUDICIAL REVIEW.] A determination by the 
        commissioner under subdivision 3 is appealable to the Tax Court 
        in the manner provided by law, and the appeal must be 
        expeditiously heard by the court.  If the court determines that 
        the making of the assessment or levy is unreasonable, or that 
        the amount assessed or demanded is inappropriate, the court may 
        order the commissioner to release the levy, abate the 
        assessment, redetermine in whole or in part the amount assessed 
        or demanded, or take other action.  A determination by the court 
        under this subdivision is final and may not be appealed by 
        either party. 
           Subd. 5.  [BURDEN OF PROOF.] In a proceeding under 
        subdivision 4, the burden of proving that the assessment or 
        collection of the tax was jeopardized by delay is on the 
        commissioner.  Regarding the issue of whether the amount 
        assessed or demanded as a result of the action is appropriate, 
        the commissioner shall provide a written statement explaining 
        the basis for determining the amount, and the burden is on the 
        taxpayer to show that the statement is incorrect or invalid.  
        [270.274] 
           Subd. 6.  [DEFENSES.] It is not a defense to an assessment 
        or demand made under this section that the tax period has not 
        terminated, that the time otherwise allowed by law to file a 
        return has not expired, that the notices otherwise required by 
        law for making an assessment or demand have not been given, or 
        that the time otherwise allowed by law to appeal or pay the tax 
        has not expired.  [297A.93, paragraph (b)] 
           [EFFECTIVE DATE.] This section is effective for assessments 
        made and collection action taken on or after August 1, 2005. 
           Sec. 43.  [270C.37] [TAXPAYER ASSISTANCE ORDERS; TAXPAYER'S 
        RIGHTS ADVOCATE.] 
           Subdivision 1.  [AUTHORITY TO ISSUE.] On application filed 
        by a taxpayer with the Department of Revenue taxpayer's rights 
        advocate, in the form, manner, and in the time prescribed by the 
        commissioner, and after thorough investigation, the taxpayer's 
        rights advocate may issue a taxpayer assistance order if, in the 
        determination of the taxpayer's rights advocate, the manner in 
        which a law administered by the commissioner is being carried 
        out is creating or will create an unjust and inequitable result 
        for the taxpayer. 
           Subd. 2.  [TERMS OF A TAXPAYER ASSISTANCE ORDER.] A 
        taxpayer assistance order may require the department within a 
        specified time period to release property of the taxpayer levied 
        on, cease any action, take any action as permitted by law, or 
        refrain from taking any action to enforce a law administered by 
        the commissioner against the taxpayer, until the issue or issues 
        giving rise to the order have been resolved. 
           Subd. 3.  [AUTHORITY TO MODIFY OR RESCIND.] A taxpayer 
        assistance order issued by the taxpayer's rights advocate under 
        this section may be modified or rescinded by the commissioner. 
           Subd. 4.  [SUSPENSION OF RUNNING OF PERIOD OF LIMITATION.] 
        The running of the period of limitation with respect to an 
        action described in subdivision 2 is suspended from the date of 
        the taxpayer assistance order until the expiration date of the 
        order or, if modified, the expiration date of the modified order 
        or, if rescinded, the date of the rescission. 
           Subd. 5.  [INDEPENDENT ACTION OF TAXPAYER'S RIGHTS 
        ADVOCATE.] This section does not prevent the taxpayer's rights 
        advocate from taking action in the absence of an application 
        under subdivision 1. 
           Subd. 6.  [TAXPAYER'S RIGHTS ADVOCATE.] For purposes of 
        this section, the term "taxpayer's rights advocate" includes a 
        designee of the taxpayer's rights advocate.  The taxpayer's 
        rights advocate shall represent the interests of taxpayers who 
        have grievances against the department in connection with an 
        audit or collection activity, and shall report directly to the 
        commissioner.  A determination of the taxpayer's rights advocate 
        under this section to issue or to not issue a taxpayer 
        assistance order is final and cannot be appealed to the Tax 
        Court or any other court.  [270.273] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 44.  [270C.38] [NOTICE OF DETERMINATION OR ACTION OF 
        THE COMMISSIONER.] 
           Subdivision 1.  [SUFFICIENT NOTICE.] If no method of 
        notification of a written determination or action of the 
        commissioner is otherwise specifically provided for by law, 
        notice of the determination or action sent postage prepaid by 
        United States mail to the taxpayer or other person affected by 
        the determination or action at the taxpayer's or person's last 
        known address, is sufficient.  If the taxpayer or person being 
        notified is deceased or is under a legal disability, or, in the 
        case of a corporation being notified that has terminated its 
        existence, notice to the last known address of the taxpayer, 
        person, or corporation is sufficient, unless the department has 
        been provided with a new address by a party authorized to 
        receive notices from the commissioner. 
           Subd. 2.  [SERVICE OF NOTICE BY MAIL.] Notwithstanding any 
        other law to the contrary, the commissioner, if required to 
        serve notices by registered or certified mail, may choose to 
        make such service by regular mail, retaining a record of 
        adequate proof of such service.  [270.061] 
           [EFFECTIVE DATE.] This section is effective for notices 
        issued on or after August 1, 2005. 
           Sec. 45.  [270C.39] [DUE DATE ON SATURDAY, SUNDAY, OR 
        HOLIDAY.] 
           When the last day prescribed by law for the payment of any 
        tax to or the filing of any return, statement, or document with 
        the commissioner or the department falls on Saturday, Sunday, or 
        a legal holiday, the performance of such act shall be considered 
        timely if it is performed on the next succeeding day which is 
        not a Saturday, Sunday, or legal holiday.  For purposes of this 
        section, the last day for the performance of the prescribed act 
        shall be determined by including any authorized extension of 
        time; the term "legal holiday" shall mean any day made a holiday 
        in Minnesota by section 645.44, subdivision 5, or by the laws of 
        the United States.  [270.27] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 46.  [270C.395] [TIMELY MAILING TREATED AS TIMELY 
        FILING AND PAYING.] 
           Subdivision 1.  [DATE OF DELIVERY.] When a document, 
        including a return, claim, or statement, is required to be 
        filed, or a payment is required to be made to the commissioner 
        within a prescribed period, or on or before a prescribed date, 
        and if the document or payment is delivered by electronic means 
        or by United States mail after the period or the date to the 
        place prescribed for filing or payment, then the date of 
        delivery or of payment is the date of the confirmation 
        time-and-date stamp of the transaction, if delivered by 
        electronic means, or the date of the United States postmark 
        stamped on the cover in which the document or payment is mailed, 
        if delivered by United States mail, as the case may be. 
           Subd. 2.  [MAILING REQUIREMENTS.] Subdivision 1 applies 
        only if: 
           (1) the postmark date falls within the prescribed period or 
        on or before the prescribed date, 
           (i) for filing (including any extension granted for the 
        filing) of the document, or 
           (ii) for making the payment (including any extension 
        granted for making the payment); and 
           (2) the document or payment was within the time prescribed 
        in clause (1), deposited in the mail in the United States in an 
        envelope or other appropriate wrapper, postage prepaid, properly 
        addressed to the office of the Department of Revenue with which 
        the document is required to be filed or to which payment is 
        required to be made. 
           Subd. 3.  [CONFIRMATION OF ELECTRONIC FILING AND PAYMENT 
        AND UNITED STATES POSTAL SERVICE POSTMARK.] The confirmation 
        numbers and confirmation time-and-date stamps received by the 
        taxpayer following electronic payment or filing are proof of the 
        payment authorization and filing dates.  Only the postmark of 
        the United States Postal Service, rather than those of private 
        postage meters, qualifies as proof of timely mailing under this 
        section.  If the document or payment is sent by United States 
        registered mail, the date of registration shall be treated as 
        the postmark date.  If the document or payment is sent by United 
        States certified mail and the sender's receipt is postmarked by 
        the postal employee to whom the envelope containing such 
        document or payment is presented, the date of the United States 
        postmark on the receipt shall be treated as the postmark date of 
        the document or payment. 
           Subd. 4.  [RECEIPT DATE OTHERWISE GOVERNS.] In any case in 
        which the document or payment is not treated as timely filed or 
        paid under this section, the date of receipt by the 
        commissioner, and not the postmark date, shall govern for 
        purposes of determining the amount of any penalties for late 
        filing or payment.  
           Subd. 5.  [PRIVATE DELIVERY SERVICES.] A reference in this 
        section to the United States mail shall be treated as including 
        a reference to any designated delivery service, and any 
        reference in this section to a postmark by the United States 
        Postal Service shall be treated as including a reference to any 
        date recorded or marked by any designated delivery service in 
        accordance with section 7502(f) of the Internal Revenue Code.  
        [270.271] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 47.  [270C.40] [INTEREST PAYABLE TO COMMISSIONER.] 
           Subdivision 1.  [INTEREST; RATE.] If any tax payable to the 
        commissioner or to the department is not paid within the time 
        specified by law for payment, the unpaid tax shall bear interest 
        at the rate for each year determined in subdivision 5 from the 
        date such tax should have been paid until the date that the tax 
        was paid, unless otherwise provided by law. 
           Subd. 2.  [EXTENSION OF TIME.] When an extension of time 
        has been granted by the commissioner, interest shall be paid at 
        the rate for each year determined in subdivision 5 from the date 
        such payment should have been made, if no extension had been 
        granted, until the date of payment of such tax. 
           Subd. 3.  [PENALTY.] If any penalty payable to the 
        commissioner shall by law bear interest, such penalty shall bear 
        interest at the rate for each year determined in subdivision 5 
        from the date the penalty was assessable until the date that 
        such penalty was paid, unless a different rate of interest is 
        otherwise provided by law. 
           Subd. 4.  [UNDERPAYMENT OF ESTIMATED TAX.] There shall be 
        added to the amount of any underpayment of estimated tax, 
        computed pursuant to chapter 289A, an amount in lieu of 
        interest.  The amount in lieu of interest for that taxable year 
        shall be the amount determined in subdivision 5 for January 1 on 
        which begins the taxable year or precedes the beginning of the 
        taxable year.  The amount in lieu of interest does not bear 
        interest after the due date of the return for that taxable year. 
           Subd. 5.  [ANNUAL INTEREST RATE.] The rate of interest or 
        amount in lieu of interest contained in subdivisions 1 to 4 
        shall be determined by the commissioner not later than October 
        15 of each year and shall be equal to the prime rate charged by 
        banks during the six-month period ending on September 30 of that 
        year, rounded to the nearest full percent.  The rate of interest 
        or amount in lieu of interest becomes effective on January 1 of 
        the immediately succeeding year except as provided in 
        subdivision 4.  For purposes of this subdivision, the term 
        "prime rate charged by banks" means the average predominant 
        prime rate quoted by commercial banks to large businesses, as 
        determined by the Board of Governors of the Federal Reserve 
        System.  The determination of the commissioner pursuant to this 
        subdivision shall not be considered a "rule" and shall not be 
        subject to the Administrative Procedure Act contained in chapter 
        14.  
           Subd. 6.  [UNPAID JUDGMENT.] Notwithstanding section 
        549.09, if judgment is entered upon any tax payable to the 
        commissioner which has not been paid within the time specified 
        by law for payment, the unpaid judgment shall bear interest at 
        the rate specified in this section from the date judgment is 
        entered until the date of payment.  [270.75] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 48.  [270C.405] [INTEREST ON REFUNDS.] 
           When any tax payable to the commissioner or to the 
        department is overpaid and an amount is due the taxpayer as a 
        refund of the overpayment, the overpayment shall bear interest 
        from the date of payment of the tax until the date the refund is 
        paid or credit is made, unless another period for computing 
        interest is provided by law.  The interest rate per annum on 
        overpayments shall be the interest rate contained in section 
        270C.40, subdivision 5; the rate shall be adjusted annually and 
        become effective as provided in section 270C.40, subdivision 5.  
        The determination of the commissioner pursuant to this 
        subdivision is not a "rule" and is not subject to the 
        Administrative Procedure Act contained in chapter 14.  [270.76] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 49.  [270C.41] [AGREEMENT WITH INTERNAL REVENUE 
        SERVICE.] 
           Pursuant to section 270B.12, the commissioner may enter 
        into an agreement with the Internal Revenue Service to identify 
        taxpayers who have refunds due from the department and 
        liabilities owing to the Internal Revenue Service.  In 
        accordance with the procedures established in the agreement, the 
        Internal Revenue Service may levy against the refunds to be paid 
        by the department.  For each refund levied upon, the 
        commissioner shall first deduct from the refund a fee of $20, 
        and then remit the refund or the amount of the levy, whichever 
        is less, to the Internal Revenue Service.  The proceeds of fees 
        shall be deposited into the Department of Revenue recapture 
        revolving fund under section 270A.07, subdivision 1.  [270.052] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 50.  [270C.42] [ELECTRONIC PAYMENTS; PENALTY.] 
           Subdivision 1.  [PAYMENTS REQUIRED TO BE MADE 
        ELECTRONICALLY.] (a) If a taxpayer is required to make payment 
        of a tax to the commissioner by electronic means, the taxpayer 
        shall make all payments of all taxes and fees paid to the 
        commissioner by electronic means. 
           (b) Paragraph (a) does not apply to payments required to be 
        made for individual income taxes under section 289A.20, 
        subdivision 1, paragraph (a), or 289A.25.  [270.771] 
           Subd. 2.  [PENALTY FOR FAILURE TO PAY ELECTRONICALLY.] In 
        addition to other applicable penalties imposed by law, after 
        notification from the commissioner to the taxpayer that payments 
        for a tax payable to the commissioner are required to be made by 
        electronic means, and the payments are remitted by some other 
        means, there is a penalty in the amount of five percent of each 
        payment that should have been remitted electronically.  After 
        the commissioner's initial notification to the taxpayer that 
        payments are required to be made by electronic means, the 
        commissioner is not required to notify the taxpayer in 
        subsequent periods if the initial notification specified the 
        amount of tax liability at which a taxpayer is required to remit 
        payments by electronic means.  The penalty can be abated under 
        the abatement procedures prescribed in section 270C.34 if the 
        failure to remit the payment electronically is due to reasonable 
        cause.  The penalty bears interest at the rate specified in 
        section 270C.40 from the due date of the payment of the tax to 
        the date of payment of the penalty.  [270.78] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 51.  [270C.425] [FINANCIAL TRANSACTION CARDS; PAYMENT 
        OF TAXES; APPROPRIATION.] 
           (a) The commissioner may allow taxpayers to use financial 
        transaction cards, as defined in section 325G.02, subdivision 2, 
        to pay any of the following which are payable to the 
        commissioner: 
           (1) taxes; 
           (2) estimated tax deposits; 
           (3) penalties; 
           (4) interest; 
           (5) additions to taxes; and 
           (6) fees. 
           (b) The commissioner may impose a fee on each transaction 
        under paragraph (a).  The fee is equal to the fee the 
        commissioner is required to pay for the taxpayer's use of the 
        financial transaction card.  This fee must be deposited in the 
        general fund and is appropriated to the commissioner for the 
        purpose of paying the transaction card fee. 
           (c) The types of financial transaction cards that will be 
        accepted shall be determined solely by the commissioner.  The 
        selection of transaction card vendors shall be made through a 
        request for proposals process.  Before issuing a request for 
        proposals, the commissioner shall review the request for 
        proposals and any specifications with the commissioner of 
        finance.  The commissioner shall select the transaction card 
        vendors from among those which meet the operational and cost 
        requirements of the department.  The commissioner may limit the 
        number of different types of financial transaction cards that 
        will be accepted. 
           (d) If the commissioner allows taxpayers to pay taxes with 
        financial transaction cards, the commissioner shall report 
        quarterly on the status of this program to the chairs of the 
        house tax and appropriations committees and the chairs of the 
        senate tax and finance committees.  [270.74] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 52.  [270C.43] [REFUNDS PAYABLE IN INSTALLMENTS.] 
           Subdivision 1.  [LAW HELD UNCONSTITUTIONAL.] Where there is 
        (1) a final judicial determination that a law administered by 
        the commissioner is unconstitutional, is in violation of state 
        or federal law, or that a regulation or statute has been 
        misinterpreted by the department; and (2) the determination is 
        not limited to prospective application, the procedures in this 
        section relating to refunds attributable to that determination 
        apply.  
           Subd. 2.  [ESTIMATE OF CUMULATIVE REFUNDS.] The 
        commissioner shall estimate the cumulative refunds due resulting 
        from the judicial determination.  
           Subd. 3.  [GENERAL REFUND PROVISIONS.] If the commissioner 
        determines that the cumulative refunds due all affected 
        taxpayers will not exceed $50,000,000, the general provisions 
        for refunding for the particular tax type apply.  
           Subd. 4.  [REFUND PROCEDURES.] (a) If the commissioner 
        determines that the cumulative refunds due all affected 
        taxpayers will exceed $50,000,000, the refund procedures in this 
        subdivision apply.  
           (b) The refunds due shall be paid in five installments.  
        The first installment will be paid during the calendar year 
        following the later of the filing of the refund claim or the 
        final judicial determination and subsequent installments will be 
        paid at any time during each of the four succeeding calendar 
        years. 
           (c) The commissioner shall compute the annual refund 
        installment due under this subdivision, and notify the taxpayer 
        of the total amount of the claim for refund which has been 
        allowed. 
           (d) The installment paid each year equals 20 percent of the 
        refund allowed unless the commissioner determines that the 
        cumulative refunds due for a particular year under this section 
        will exceed $150,000,000.  If the refunds payable will exceed 
        that amount, they will be reduced pro rata with any balance 
        remaining due payable with the final refund installment. 
           (e) Unless contrary to the provisions in this section, the 
        provisions for refunds in the various tax types, including 
        provisions related to the payment of interest, apply to the 
        refunds subject to these provisions.  
           (f) The commissioner may establish a de minimis individual 
        refund amount below which the installment provisions do not 
        apply.  The amount established under this paragraph is not 
        subject to the provisions of chapter 14. 
           (g) If the commissioner of finance determines that it is in 
        the best interest of the state, refunds payable under this 
        section may be paid in fewer than five installments.  [270.79] 
           [EFFECTIVE DATE.] This section is effective for refunds 
        payable on or after August 1, 2005. 
           Sec. 53.  [270C.44] [PRACTICE BEFORE THE COMMISSIONER.] 
           The commissioner shall prescribe rules governing the 
        qualification and practice of agents, attorneys, or other 
        persons representing taxpayers before the commissioner.  The 
        rules may require that those persons, agents, and attorneys show 
        that they are of good character and in good repute, have the 
        necessary qualifications to give taxpayers valuable services, 
        and are otherwise competent to advise and assist taxpayers in 
        the presentation of their case before being recognized as 
        representatives of taxpayers.  After due notice and opportunity 
        for hearing, the commissioner may suspend and bar from further 
        practice before the commissioner any person, agent, or attorney 
        who is shown to be incompetent or disreputable, who refuses to 
        comply with the rules, or who with intent to defraud, willfully 
        or knowingly deceives, misleads, or threatens a taxpayer or 
        prospective taxpayer, by words, circular, letter, or by 
        advertisement.  This section does not curtail the rights of 
        individuals to appear in their own behalf or partners or 
        corporations' officers to appear in behalf of their respective 
        partnerships or corporations.  [270.06, clause (16)] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 54.  [270C.445] [TAX PREPARATION SERVICES.] 
           Subdivision 1.  [SCOPE.] (a) This section applies to a 
        person who offers, provides, or facilitates the provision of 
        refund anticipation loans, as part of or in connection with the 
        provision of tax preparation services. 
           (b) This section does not apply to: 
           (1) a tax preparer who provides tax preparation services 
        for fewer than six clients in a calendar year; 
           (2) the provision by a person of tax preparation services 
        to a spouse, parent, grandparent, child, or sibling; and 
           (3) the provision of services by an employee for an 
        employer. 
           Subd. 2.  [DEFINITIONS.] (a) For purposes of this section, 
        the following terms have the meanings given. 
           (b) "Client" means an individual for whom a tax preparer 
        performs or agrees to perform tax preparation services. 
           (c) "Person" means an individual, corporation, partnership, 
        limited liability company, association, trustee, or other legal 
        entity. 
           (d) "Refund anticipation loan" means a loan, whether 
        provided by the tax preparer or another entity such as a 
        financial institution, in anticipation of, and whose payment is 
        secured by, a client's federal or state income tax refund or 
        both. 
           (e) "Tax preparation services" means services provided for 
        a fee or other consideration to a client to: 
           (1) assist with preparing or filing state or federal 
        individual income tax returns; 
           (2) assume final responsibility for completed work on an 
        individual income tax return on which preliminary work has been 
        done by another; or 
           (3) offer or facilitate the provision of refund 
        anticipation loans.  
           (f) "Tax preparer" or "preparer" means a person providing 
        tax preparation services subject to this section. 
           Subd. 3.  [STANDARDS OF CONDUCT.] No tax preparer shall: 
           (1) without good cause fail to promptly, diligently, and 
        without unreasonable delay complete a client's tax return; 
           (2) obtain the signature of a client to a tax return or 
        authorizing document that contains blank spaces to be filled in 
        after it has been signed; 
           (3) fail to sign a client's tax return when payment for 
        services rendered has been made; 
           (4) fail or refuse to give a client a copy of any document 
        requiring the client's signature within a reasonable time after 
        the client signs the document; 
           (5) fail to retain for at least four years a copy of 
        individual income tax returns; 
           (6) fail to maintain a confidential relationship between 
        themselves and their clients or former clients; 
           (7) fail to take commercially reasonable measures to 
        safeguard a client's nonpublic personal information; 
           (8) make, authorize, publish, disseminate, circulate, or 
        cause to make, either directly or indirectly, any false, 
        deceptive, or misleading statement or representation relating to 
        or in connection with the offering or provision of tax 
        preparation services; 
           (9) require a client to enter into a loan arrangement in 
        order to complete a tax return; 
           (10) claim credits or deductions on a client's tax return 
        for which the tax preparer knows or reasonably should know the 
        taxpayer does not qualify; 
           (11) charge, offer to accept, or accept a fee based upon a 
        percentage of an anticipated refund for tax preparation 
        services; 
           (12) under any circumstances, withhold or fail to return to 
        a client a document provided by the client for use in preparing 
        the client's tax return. 
           Subd. 4.  [REQUIRED DISCLOSURES; REFUND ANTICIPATION 
        LOANS.] (a) If a tax preparer offers to make or facilitate a 
        refund anticipation loan to the client, the preparer must make 
        the disclosures in this subdivision.  The disclosures must be 
        made before or at the same time the preparer offers the refund 
        anticipation loan to the client. 
           (b) The tax preparer must provide to a client a written 
        notice on a single sheet of paper, separate from any other 
        document or writing, containing: 
           (1) a legend, centered at the top on the single sheet of 
        paper, in bold, capital letters, and in 28-point type stating 
        "NOTICE"; 
           (2) the following verbatim statements: 
           (i) "This is a loan.  The annual percentage rate (APR), 
        based on the estimated payment period, is (fill in the estimated 
        APR)." 
           (ii) "Your refund will be used to repay the loan.  As a 
        result, the amount of your refund will be reduced by (fill in 
        appropriate dollar amount) for fees, interest, and other 
        charges." 
           (iii) "You can get your refund in about two weeks if you 
        file your return electronically and have the Internal Revenue 
        Service send your refund to your own bank account." and 
           (3) if the client is subject to additional interest when a 
        refund is delayed, the following verbatim statement must also be 
        included in the notice:  "If you choose to take this loan and 
        your refund is delayed, you may have to pay additional interest."
           (c) All required statements must be in capital and small 
        font type fonts, in a minimum of 14-point type, with at least a 
        double space between each line in the statement and four spaces 
        between each statement. 
           (d) The notice must be signed and dated by the tax preparer 
        and the client. 
           Subd. 5.  [ITEMIZED BILL REQUIRED.] A tax preparer must 
        provide an itemized statement of the charges for services, at 
        least separately stating the charges for: 
           (1) return preparation; 
           (2) electronic filing; and 
           (3) providing or facilitating a refund anticipation loan. 
           Subd. 6.  [ENFORCEMENT; PENALTIES.] The commissioner may 
        impose an administrative penalty of not more than $1,000 per 
        violation of subdivision 3, 4, or 5.  The commissioner may 
        terminate a tax preparer's authority to transmit returns 
        electronically to the state, if the commissioner determines the 
        tax preparer engaged in a pattern and practice of violating this 
        section.  Imposition of a penalty under this subdivision is 
        subject to the contested case procedure under chapter 14.  The 
        commissioner shall collect the penalty in the same manner as a 
        tax collected by the commissioner. 
           Subd. 7.  [ENFORCEMENT; CIVIL ACTIONS.] (a) Any violation 
        of this section is an unfair, deceptive, and unlawful trade 
        practice within the meaning of section 8.31. 
           (b) A client may bring a civil action seeking redress for a 
        violation of this section in the conciliation or the district 
        court of the county in which unlawful action is alleged to have 
        been committed or where the respondent resides or has a 
        principal place of business. 
           (c) A district court finding for the plaintiff must award 
        actual damages, including incidental and consequential damages, 
        reasonable attorney fees, court costs, and any other equitable 
        relief as the court considers appropriate. 
           Subd. 8.  [EXEMPTIONS; ENFORCEMENT PROVISIONS.] The 
        provisions of subdivisions 6 and 7 do not apply to: 
           (1) an attorney admitted to practice under section 481.01; 
           (2) a certified public accountant holding a certificate 
        under section 326A.04 or a person issued a permit to practice 
        under section 326A.05; 
           (3) a person designated as a registered accounting 
        practitioner under Minnesota Rules, part 1105.6600, or a 
        registered accounting practitioner firm issued a permit under 
        Minnesota Rules, part 1105.7100; 
           (4) an enrolled agent who has passed the special enrollment 
        examination administered by the Internal Revenue Service; and 
           (5) any fiduciary, or the regular employees of a fiduciary, 
        while acting on behalf of the fiduciary estate, the testator, 
        trustor, grantor, or beneficiaries of them.  [270.30] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 55.  [270C.447] [LEGAL ACTION TO ENJOIN TAX RETURN 
        PREPARER.] 
           Subdivision 1.  [COMMENCEMENT OF ACTION.] A civil action in 
        the name of the state of Minnesota may be commenced to enjoin 
        any person who is a tax return preparer doing business in this 
        state from further engaging in any conduct described in 
        subdivision 2.  An action under this subdivision must be brought 
        by the attorney general in the district court for the judicial 
        district of the tax return preparer's residence or principal 
        place of business, or in which the taxpayer with respect to 
        whose tax return the action is brought resides.  The court may 
        exercise its jurisdiction over the action separate and apart 
        from any other action brought by the state of Minnesota against 
        the tax return preparer or any taxpayer. 
           Subd. 2.  [INJUNCTION PROHIBITING SPECIFIC CONDUCT.] In an 
        action under subdivision 1, if the court finds that a tax return 
        preparer has: 
           (1) engaged in any conduct subject to a civil penalty under 
        section 289A.60 or a criminal penalty under section 289A.63; 
           (2) misrepresented the preparer's eligibility to practice 
        before the Department of Revenue, or otherwise misrepresented 
        the preparer's experience or education as a tax return preparer; 
           (3) guaranteed the payment of any tax refund or the 
        allowance of any tax credit; or 
           (4) engaged in any other fraudulent or deceptive conduct 
        that substantially interferes with the proper administration of 
        a law administered by the commissioner, and injunctive relief is 
        appropriate to prevent the recurrence of that conduct, 
        the court may enjoin the person from further engaging in that 
        conduct. 
           Subd. 3.  [INJUNCTION PROHIBITING ALL BUSINESS ACTIVITIES.] 
        If the court finds that a tax return preparer has continually or 
        repeatedly engaged in conduct described in subdivision 2, and 
        that an injunction prohibiting that conduct would not be 
        sufficient to prevent the person's interference with the proper 
        administration of a law administered by the commissioner, the 
        court may enjoin the person from acting as a tax return 
        preparer.  The court may not enjoin the employer of a tax return 
        preparer for conduct described in subdivision 2 engaged in by 
        one or more of the employer's employees unless the employer was 
        also actively involved in that conduct.  [289A.60, subd. 13, 
        paragraphs (b), (c), and (d)] 
           Subd. 4.  [TAX RETURN PREPARER.] For purposes of this 
        section, the term "tax return preparer" means an individual who 
        prepares for compensation, or who employs one or more 
        individuals to prepare for compensation, a return of tax or a 
        claim for refund of tax.  The preparation of a substantial part 
        of a return or claim for refund is treated as if it were the 
        preparation of the entire return or claim for refund.  An 
        individual is not considered a tax return preparer merely 
        because the individual: 
           (1) gives typing, reproducing, or other mechanical 
        assistance; 
           (2) prepares a return or claim for refund of the employer, 
        or an officer or employee of the employer, by whom the 
        individual is regularly and continuously employed; 
           (3) prepares a return or claim for refund of any person as 
        a fiduciary for that person; or 
           (4) prepares a claim for refund for a taxpayer in response 
        to a tax order issued to the taxpayer. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
                                   COLLECTION 
           Sec. 56.  [270C.50] [USE OF COLLECTION REMEDIES.] 
           In addition to the remedies provided in the state revenue 
        laws, the commissioner may use any remedy available to 
        nongovernmental creditors to collect taxes.  [270.06, clause 
        (14)] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 57.  [270C.51] [ALLOCATION OF PAYMENT.] 
           In the discretion of the commissioner, payments received 
        for taxes may be credited first to the oldest liability not 
        secured by a judgment or lien.  For liabilities to which 
        payments are applied, the commissioner may credit payments first 
        to penalties, next to interest, and then to the tax due.  
        [270.652; 297E.12, subd. 10] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 58.  [270C.52] [SETTLEMENT AGREEMENTS, PAYMENT 
        AGREEMENTS, AND OFFERS IN COMPROMISE.] 
           Subdivision 1.  [LIABILITY AGREEMENTS.] The commissioner, 
        or any employee of the department authorized in writing by the 
        commissioner, is authorized to enter into an agreement in 
        writing with any taxpayer, or duly authorized agent or 
        representative of the taxpayer, relating to the liability of the 
        taxpayer in respect of any tax for any tax period ending prior 
        to the date of the agreement.  The agreement shall be final and 
        conclusive and, except upon a showing of fraud or malfeasance, 
        or misrepresentation of a material fact, the case shall not be 
        reopened as to the matters agreed upon, or the agreement 
        modified, by any employee or agent of the state; and, in any 
        suit, action, or proceeding, the agreement, or any 
        determination, assessment, collection, payment, abatement, 
        refund, or credit, made in accordance with the agreement, shall 
        not be annulled, modified, set aside, or disregarded.  [270.67, 
        subd. 1] 
           Subd. 2.  [PAYMENT AGREEMENTS.] (a) When any portion of any 
        tax payable to the commissioner together with interest and 
        penalty thereon, if any, has not been paid, the commissioner may 
        extend the time for payment for a further period.  When the 
        authority of this section is invoked, the extension shall be 
        evidenced by written agreement signed by the taxpayer and the 
        commissioner, stating the amount of the tax with penalty and 
        interest, if any, and providing for the payment of the amount in 
        installments. 
           (b) The agreement may contain a confession of judgment for 
        the amount and for any unpaid portion thereof.  If the agreement 
        contains a confession of judgment, the confession of judgment 
        must provide that the commissioner may enter judgment against 
        the taxpayer in the district court of the county of residence as 
        shown upon the taxpayer's tax return for the unpaid portion of 
        the amount specified in the extension agreement.  
           (c) The agreement shall provide that it can be terminated, 
        after notice by the commissioner, if information provided by the 
        taxpayer prior to the agreement was inaccurate or incomplete, 
        collection of the tax covered by the agreement is in jeopardy, 
        there is a subsequent change in the taxpayer's financial 
        condition, the taxpayer has failed to make a payment due under 
        the agreement, or the taxpayer has failed to pay any other tax 
        or file a tax return coming due after the agreement.  
           (d) The notice must be given at least 14 calendar days 
        prior to termination, and shall advise the taxpayer of the right 
        to request a reconsideration from the commissioner of whether 
        termination is reasonable and appropriate under the 
        circumstances.  A request for reconsideration does not stay 
        collection action beyond the 14-day notice period.  If the 
        commissioner has reason to believe that collection of the tax 
        covered by the agreement is in jeopardy, the commissioner may 
        proceed under section 270C.36 and terminate the agreement 
        without regard to the 14-day period. 
           (e) The commissioner may accept other collateral the 
        commissioner considers appropriate to secure satisfaction of the 
        tax liability.  The principal sum specified in the agreement 
        shall bear interest at the rate specified in section 270C.40 on 
        all unpaid portions thereof until the same has been fully paid 
        or the unpaid portion thereof has been entered as a judgment.  
        The judgment shall bear interest at the rate specified in 
        section 270C.40. 
           (f) If it appears to the commissioner that the tax reported 
        by the taxpayer is in excess of the amount actually owing by the 
        taxpayer, the extension agreement or the judgment entered 
        pursuant thereto shall be corrected.  If after making the 
        extension agreement or entering judgment with respect thereto, 
        the commissioner determines that the tax as reported by the 
        taxpayer is less than the amount actually due, the commissioner 
        shall assess a further tax in accordance with the provisions of 
        law applicable to the tax. 
           (g) The authority granted to the commissioner by this 
        section is in addition to any other authority granted to the 
        commissioner by law to extend the time of payment or the time 
        for filing a return and shall not be construed in limitation 
        thereof.  [270.67, subd. 2] 
           Subd. 3.  [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT 
        PROGRAM.] (a) In implementing the authority provided in 
        subdivision 2 or in sections 8.30 and 16D.15 to accept offers of 
        installment payments or offers-in-compromise of tax liabilities, 
        the commissioner shall prescribe guidelines for employees of the 
        department to determine whether an offer-in-compromise or an 
        offer to make installment payments is adequate and should be 
        accepted to resolve a dispute.  In prescribing the guidelines, 
        the commissioner shall develop and publish schedules of national 
        and local allowances designed to provide that taxpayers entering 
        into a compromise or payment agreement have an adequate means to 
        provide for basic living expenses.  The guidelines must provide 
        that the taxpayer's ownership interest in a motor vehicle, to 
        the extent of the value allowed in section 550.37, will not be 
        considered as an asset; in the case of an offer related to a 
        joint tax liability of spouses, that value of two motor vehicles 
        must be excluded.  The guidelines must provide that employees of 
        the department shall determine, on the basis of the facts and 
        circumstances of each taxpayer, whether the use of the schedules 
        is appropriate and that employees must not use the schedules to 
        the extent the use would result in the taxpayer not having 
        adequate means to provide for basic living expenses.  The 
        guidelines must provide that: 
           (1) an employee of the department shall not reject an 
        offer-in-compromise or an offer to make installment payments 
        from a low-income taxpayer solely on the basis of the amount of 
        the offer; and 
           (2) in the case of an offer-in-compromise which relates 
        only to issues of liability of the taxpayer: 
           (i) the offer must not be rejected solely because the 
        commissioner is unable to locate the taxpayer's return or return 
        information for verification of the liability; and 
           (ii) the taxpayer shall not be required to provide an 
        audited, reviewed, or compiled financial statement. 
           (b) The commissioner shall establish procedures: 
           (1) that require presentation of a counteroffer or a 
        written rejection of the offer by the commissioner if the amount 
        offered by the taxpayer in an offer-in-compromise or an offer to 
        make installment payments is not accepted by the commissioner; 
           (2) for an administrative review of any written rejection 
        of a proposed offer-in-compromise or installment agreement made 
        by a taxpayer under this section before the rejection is 
        communicated to the taxpayer; 
           (3) that allow a taxpayer to request reconsideration of any 
        written rejection of the offer or agreement to the commissioner 
        to determine whether the rejection is reasonable and appropriate 
        under the circumstances; and 
           (4) that provide for notification to the taxpayer when an 
        offer-in-compromise has been accepted, and issuance of 
        certificates of release of any liens imposed under section 
        270C.63 related to the liability which is the subject of the 
        compromise.  [270.67, subd. 4] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 59.  [270C.53] [COLLECTION; TAXPAYER INABILITY TO 
        PAY.] 
           Notwithstanding any other provision of law, the 
        commissioner may, based upon the inability of a taxpayer to pay 
        a delinquent tax liability, abate the liability if the taxpayer 
        agrees to perform uncompensated public service work for a state 
        agency, a political subdivision or public corporation of this 
        state, or a nonprofit educational, medical, or social service 
        agency.  The Department of Corrections shall administer the work 
        program.  No benefits under chapter 176 or 268 shall be 
        available, but a claim authorized under section 3.739 may be 
        made by the taxpayer.  The state may not enter into any 
        agreement that has the purpose of or results in the displacement 
        of public employees by a delinquent taxpayer under this 
        section.  The state must certify to the appropriate bargaining 
        agent or employees, as applicable, that the work performed by a 
        delinquent taxpayer will not result in the displacement of 
        currently employed workers or layoff from a substantially 
        equivalent position, including partial displacement such as 
        reduction in hours of nonovertime work, wages, or other 
        employment benefits.  [270.07, subd. 3, clause (e)] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 60.  [270C.54] [COLLECTION OF FINANCIAL INSTITUTION 
        FEES.] 
           The commissioner shall collect from a taxpayer any 
        collection fees or costs charged by financial institutions and 
        incurred by the commissioner.  [270.063, subd. 3] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 61.  [270C.545] [FEDERAL TAX REFUND OFFSET FEES; TIME 
        LIMIT FOR SUBMITTING CLAIMS FOR OFFSET.] 
           For fees charged by the Department of the Treasury of the 
        United States for the offset of federal tax refunds that are 
        deducted from the refund amounts remitted to the commissioner, 
        the unpaid debts of the taxpayers whose refunds are being offset 
        to satisfy the debts are reduced only by the actual amount of 
        the refund payments received by the commissioner.  
        Notwithstanding any other provision of law to the contrary, a 
        claim for the offset of a federal tax refund must be submitted 
        to the Department of the Treasury of the United States within 
        ten years after the date of the assessment of the tax owed by 
        the taxpayer whose refund is to be offset to satisfy the debt.  
        [270.063, subd. 4] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 62.  [270C.56] [PERSONAL LIABILITY.] 
           Subdivision 1.  [LIABILITY IMPOSED.] A person who, either 
        singly or jointly with others, has the control of, supervision 
        of, or responsibility for filing returns or reports, paying 
        taxes, or collecting or withholding and remitting taxes and who 
        fails to do so, or a person who is liable under any other law, 
        is liable for the payment of taxes, penalties, and interest 
        arising under chapters 295, 296A, 297F, 297A, and 297G, or 
        sections 290.92 and 297E.02.  
           Subd. 2.  [PERSON DEFINED.] The term "person" includes, but 
        is not limited to, a corporation, estate, trust, organization, 
        or association, whether organized for profit or not, an officer 
        or director of a corporation, a member of a partnership, an 
        employee, a third party (including, but not limited to, a 
        financial institution, lender, or surety), and any other 
        individual or entity.  "Person" does not include an unpaid, 
        volunteer member of a board of trustees or directors of an 
        organization exempt from taxation under section 290.05, if the 
        member is solely serving in an honorary capacity, does not 
        participate in the day-to-day or financial operations of the 
        organization, and has no actual knowledge of the failure to file 
        returns or remit taxes.  
           Subd. 3.  [PROCEDURE FOR ASSESSMENT.] The commissioner may 
        assess liability for the taxes described in subdivision 1 
        against a person liable under this section.  The assessment may 
        be based upon information available to the commissioner.  It 
        must be made within the prescribed period of limitations for 
        assessing the underlying tax, or within one year after the date 
        of an order assessing underlying tax, whichever period expires 
        later.  An order assessing personal liability under this section 
        is reviewable under section 270C.35 and is appealable to Tax 
        Court. 
           If a person has been assessed under this section for an 
        amount for a given period and the time for appeal has expired or 
        there has been a final determination that the person is liable, 
        collection action is not stayed pursuant to section 270C.33, 
        subdivision 5, for subsequent assessments of additional amounts 
        for the same person for the same period and tax type.  
           Subd. 4.  [RIGHT OF CONTRIBUTION.] A person who has paid 
        all or part of a liability assessed under this section has a 
        cause of action against other liable persons to recover the 
        amount paid in excess of that person's share of the liability.  
        A claim for recovery of contribution may be made only in a 
        proceeding which is separate from, and cannot be joined or 
        consolidated with, an administrative or judicial proceeding or 
        investigation involving the commissioner's administration or 
        enforcement of this section.  An order assessing liability under 
        this section against the person from whom contribution is being 
        sought is not a prerequisite for bringing an action for recovery 
        of contribution, nor is the issuance of an order binding on the 
        court in which the proceeding is brought.  The court can 
        determine whether each person would be liable under this section 
        and the share of liability.  The commissioner cannot be made a 
        party to any proceeding for recovery of contribution, nor is a 
        determination in such a proceeding binding on the commissioner 
        for the purpose of administering or enforcing this section.  An 
        action for contribution arises when the liability under this 
        section is paid in full, or the liability of the person seeking 
        contribution has been determined by agreement between the 
        commissioner and such person and paid, and must be brought 
        within the time period prescribed in section 541.05.  [270.101] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 63.  [270C.57] [SUCCESSOR LIABILITY OF BUSINESSES.] 
           Subdivision 1.  [DEFINITIONS.] (a) The following terms used 
        in this section have the following meanings. 
           (b) "Successor" means a person who directly or indirectly 
        purchases, acquires, is gifted, or succeeds to the business or 
        stock of goods of any person quitting, selling, or otherwise 
        disposing of a business or stock of goods.  Successor does not 
        include a personal representative or beneficiary of an estate, a 
        trustee in bankruptcy, a debtor in possession, a receiver, a 
        secured party, a mortgagee, an assignee of rents, or any other 
        lienholder.  
           (c) "Person" means an individual, partnership, corporation, 
        sole proprietorship, joint venture, limited liability company, 
        or any other type of business entity or association.  
           (d) "Withhold" means setting aside money or dealing with 
        the payment of consideration in a manner that denies a 
        transferring business the benefit of the transfer in an amount 
        equal to the sales and withholding tax liability of the 
        transferring business.  
           (e) "Purchase price" means the consideration paid or to be 
        paid for the transfer by the successor to the transferring 
        business, and includes amounts paid for tangible property or 
        intangibles such as leases, licenses, or goodwill.  Purchase 
        price also includes debts assumed or forgiven by the successor, 
        or real or personal property conveyed or to be conveyed by the 
        successor to the transferring business.  
           (f) "Arm's-length transaction" means a transfer for 
        adequate consideration between independent parties both acting 
        in their own best interests.  If the parties are related to each 
        other, a rebuttable presumption arises that the transaction is 
        not at arm's length.  
           (g) "Transfer" means every mode, direct or indirect, 
        absolute or conditional, voluntary or involuntary, of disposing 
        of or parting with a business or an interest in a business, or a 
        stock of goods, whether by gift or for consideration.  Transfer 
        includes a change in the type of business entity or the name of 
        the business, where one business is discontinued and a new one 
        started.  Transfer also includes the acquisition by a new 
        corporation of the assets of a prior business in exchange for 
        the stock of the new corporation.  Transfer does not include an 
        assignment for the benefit of creditors, foreclosure or 
        enforcement of a mortgage, assignment of rents, security 
        interest or lien, sale or disposition in a bankruptcy 
        proceeding, or sale or disposition by a receiver. 
           (h) "Transfer in bulk" means a transfer, other than in the 
        ordinary course of the transferor's trade or business, of more 
        than one-half of all the property of a business at all locations 
        combined, as measured by the value of the property at the time 
        of the transfer.  
           Subd. 2.  [BULK TRANSFERS; LIABILITY OF SUCCESSOR; LIEN.] 
        (a) Whenever a business transfers in bulk to a successor the 
        business assets, and an enforceable lien for unpaid sales and 
        withholding taxes has been filed against the business by the 
        commissioner under section 270C.63, at least 20 days before 
        taking possession of the assets or paying the purchase price, 
        the successor shall notify the commissioner of the transfer and 
        the terms and conditions related to it.  The notice must include 
        the tax identification number of the transferring business.  If 
        an agreement to transfer has been entered into, this notice 
        requirement only applies:  (1) if a lien described under this 
        paragraph has been filed prior to the date of the agreement; or 
        (2) if the date of the transfer is more than 30 days after the 
        date of the agreement, and a lien described under this paragraph 
        is filed at least 30 days prior to the date of transfer. 
           (b) If the successor fails to give the notice required in 
        paragraph (a), the successor is liable for any unpaid sales and 
        withholding taxes, interest, and penalties due from the 
        transferring business to the extent of the purchase price.  If 
        the successor provides the notice required in paragraph (a) and, 
        within 20 days after receipt of the notice, the commissioner 
        notifies the successor that tax liabilities exist in addition to 
        those included on the lien or there are sales and withholding 
        tax returns due but not filed, the successor is, in addition to 
        being liable for the amounts included on the lien, liable for 
        all other uncontested sales and withholding taxes, interest, and 
        penalties as stated in the commissioner's notice from the 
        transferring business to the extent of the purchase price if the 
        successor pays the purchase price or takes possession of the 
        assets without withholding and remitting the liability to the 
        commissioner.  The successor is liable whether the purchase 
        price is paid or the assets are transferred prior to or after 
        notification from the commissioner.  The commissioner may also 
        notify the successor that there are no sales or withholding tax 
        liabilities or returns due from the transferring business other 
        than the liabilities included on the lien, and of the current 
        balance due to satisfy the lien. 
           (c) If, based upon the information available, the 
        commissioner determines that a transfer was not at arm's length 
        or was a gift, the successor's liability under this section 
        equals the value of the assets transferred.  For purposes of 
        imposing the liability, the value of the property transferred is 
        presumed, subject to rebuttal, to equal the unpaid sales and 
        withholding taxes, interest, and penalties of the transferring 
        business. 
           (d) In the case of a gift resulting in successor liability 
        under this section, return of the gifted property by the donee 
        to the donor releases the donee's successor liability. 
           (e) A successor who complies with the requirements of 
        paragraphs (a) and (b) is not liable for any assessments of 
        sales and withholding taxes of the transferring business made 
        after the commissioner provides notice to the successor under 
        paragraph (b), except for taxes assessed on returns filed to 
        comply with the notice.  If the commissioner fails to provide 
        the notice and the 20-day period expires, the successor is not 
        liable for any sales and withholding taxes of the transferring 
        business other than those included on the lien.  
           Subd. 3.  [ASSESSMENT ABATEMENT; REVIEW.] The commissioner 
        may assess liability under this section within the time 
        prescribed for collecting the underlying sales and withholding 
        taxes, interest, and penalties.  The assessment is presumed to 
        be valid, and the burden is upon the successor to show it is 
        incorrect or invalid.  An order assessing successor liability is 
        reviewable administratively under section 270C.35 and is 
        appealable to Tax Court under chapter 271.  The commissioner may 
        abate an assessment if the successor's failure to give the 
        notice required under this section is due to reasonable cause.  
        The procedural and appeal provisions under section 270C.34 apply 
        to abatement requests under this subdivision.  Collection 
        remedies available against the transferring business are 
        available against the successor from the date of assessment of 
        successor liability.  
           Subd. 4.  [DISCLOSURE.] Notification by the commissioner to 
        the successor under subdivision 2, paragraph (b), that the 
        transferring business owes sales and withholding taxes, 
        interest, and penalties or has returns that are due, or that 
        there are no outstanding liabilities or returns other than the 
        liabilities included on the lien, or of the current balance due 
        to satisfy the lien, is not a disclosure violation under chapter 
        270B.  [270.102] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 64.  [270C.58] [LIABILITY OF TRANSFEREES AND 
        FIDUCIARIES.] 
           Subdivision 1.  [TRANSFEREES AND FIDUCIARIES.] The amounts 
        of the following liabilities are, except as otherwise provided 
        in subdivision 3, assessed, collected, and paid in the same 
        manner and subject to the same provisions and limitations as a 
        deficiency in a tax imposed by chapter 290, including any 
        provisions of law for the collection of taxes: 
           (1) the liability, at law or in equity, of a transferee of 
        property of a taxpayer for tax or overpayment of a refund, 
        including interest, additional amounts, and additions to the tax 
        or overpayment provided by law, imposed upon the taxpayer by 
        chapter 290 or provided for in chapter 290A; and 
           (2) the liability of a fiduciary under subdivision 2, for 
        the payment of tax from the estate of the taxpayer.  The 
        liability may reflect the amount of tax shown on the return or 
        any deficiency in tax.  [289A.31, subd. 3] 
           Subd. 2.  [TAX AS A PERSONAL DEBT OF A FIDUCIARY.] A tax 
        imposed by chapter 290 and an overpayment of a refund provided 
        for in chapter 290A, and interest and penalties, is a personal 
        debt of the taxpayer from the time the liability arises, 
        regardless of when the time for discharging the liability by 
        payment occurs.  The debt is, in the case of the personal 
        representative of the estate of a decedent and in the case of 
        any fiduciary, that of the individual in the individual's 
        official or fiduciary capacity only, unless the individual has 
        voluntarily distributed the assets held in that capacity without 
        reserving sufficient assets to pay the tax, interest, and 
        penalties, in which event the individual is personally liable 
        for the deficiency.  [289A.31, subd. 4] 
           Subd. 3.  [TIME LIMIT FOR ASSESSMENT AND COLLECTION FOR 
        TRANSFEREE OR FIDUCIARY.] The period of limitation for 
        assessment and collection of any liability of a transferee or 
        fiduciary is as follows:  
           (1) In the case of the liability of an initial transferee 
        of the property of the taxpayer, the tax may be assessed within 
        one year after the expiration of the period of limitation of 
        assessment against the taxpayer.  The tax may be collected by 
        action brought within one year after the expiration of the 
        period of limitation for the starting of an action against the 
        taxpayer.  
           (2) In the case of the liability of the transferee of a 
        transferee of the property of the taxpayer, the tax may be 
        assessed within one year after the expiration of the period of 
        limitation for assessment against the preceding transferee, but 
        only if within 3-1/2 years after the expiration of the period of 
        limitation for assessment against the taxpayer.  The tax may be 
        collected by action brought within one year after the expiration 
        of the period of limitation for the starting of an action 
        against the preceding transferee, but only if within four years 
        after the expiration of the period of limitation for bringing an 
        action against the taxpayer; except that if before the 
        expiration of the period of limitation for the assessment of the 
        liability of the transferee a court proceeding for the 
        collection of the tax or liability has been begun against the 
        taxpayer or last preceding transferee, liability of the 
        transferee expires one year after the return of execution in the 
        court proceeding and the period of limitation for collection by 
        action will expire one year after the liability is assessed.  
           (3) In the case of the liability of a fiduciary, the tax 
        may be assessed up to one year after the liability arises or not 
        later than the expiration of the period for collection of the 
        tax for which the liability arises, whichever is later, and may 
        be collected by action brought within one year after assessment. 
           (4) For the purposes of this subdivision, if the taxpayer 
        is deceased, or in the case of a corporation, has ended its 
        existence, the period of limitation for assessment against the 
        taxpayer will be the period that would be in effect had death or 
        termination of existence not occurred. 
           As used in this subdivision, the term "transferee" includes 
        heir, legatee, devisee, and distributee.  [289A.38, subd. 13] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 65.  [270C.585] [TRANSFEREE LIABILITY FOR ESTATE TAX.] 
           The personal representative and person to whom property 
        that is subject to taxation under chapter 291 is transferred, 
        other than a bona fide purchaser, mortgagee, or lessee, is 
        personally liable for that tax, until its payment, to the extent 
        of the value of the property at the time of the transfer.  
        Personal liability also does not extend to subsequent 
        transferees from bona fide purchasers, mortgagees, and lessees.  
        [289A.31, subd. 6] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 66.  [270C.59] [LIABILITY OF THIRD PARTIES PAYING OR 
        PROVIDING FOR WAGES.] 
           (a) For purposes of section 290.92, if a lender, surety, or 
        other person, who is not an employer with respect to an employee 
        or group of employees, pays wages directly to such an employee 
        or group of employees, employed by one or more employers, or to 
        an agent on behalf of such employee or employees, such lender, 
        surety, or other person shall be liable to the commissioner in a 
        sum equal to the taxes required to be deducted and withheld from 
        such wages by such employer. 
           (b) If a lender, surety, or other person supplies funds to 
        or for the account of an employer for the specific purpose of 
        paying wages of the employees of such employer, with actual 
        notice or knowledge that such employer does not intend to or 
        will not be able to make timely payment or deposit of the 
        amounts of tax required by section 290.92 to be deducted and 
        withheld by such employer from such wages, such lender, surety, 
        or other person shall be liable personally to the commissioner 
        in a sum equal to the taxes which are not paid over to the 
        commissioner by such employer with respect to such wages. 
           (c) For purposes of this section, a person shall be deemed 
        for purposes of a particular transaction to have actual notice 
        or knowledge of any fact from the time such fact is brought to 
        the attention of the individual conducting such transaction, and 
        in any event from the time such fact would have been brought to 
        such individual's attention if the person had exercised due 
        diligence.  A person exercises due diligence by maintaining 
        reasonable routines for communicating significant information to 
        the person conducting the transaction and there is reasonable 
        compliance with the routines.  Due diligence does not require an 
        individual acting for the person to communicate information 
        unless such communication is part of the individual's regular 
        duties or unless the individual has reason to know of the 
        transaction and that the transaction would be materially 
        affected by the information. 
           (d) Any amounts paid to the commissioner pursuant to this 
        section shall be credited to the liability of the employer.  
        [290.92, subd. 22] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 67.  [270C.61] [LEGAL ACTION; CONFESSION OF JUDGMENT.] 
           Subdivision 1.  [LEGAL ACTION.] (a) In addition to all 
        other methods authorized by law for the collection of tax, if 
        any tax payable to the commissioner or to the department, 
        including penalties and interest thereon, is not paid within 60 
        days after it is required by law to be paid, the commissioner 
        may proceed under this subdivision.  Within five years after the 
        date of assessment of the tax or at any time a lien filed under 
        section 270C.63 is enforceable, or, if the action is to renew or 
        enforce a judgment, at any time before the judgment's 
        expiration, the commissioner may bring an action in court 
        against the person liable for the payment or collection of the 
        tax, in the name of the state, for the recovery of the tax and 
        interest and penalties due in respect thereof.  The action may 
        be commenced by the commissioner in the same manner as any other 
        civil action. 
           (b) The commissioner may also serve the summons and 
        complaint by mailing a copy to the taxpayer's last known address 
        by certified mail.  Service by certified mail is complete when 
        mailed in acceptable form with the United States Postal Service 
        or with the central mail system of the state of Minnesota.  
        [270.68, subd. 1] 
           Subd. 2.  [COURT-ORDERED RETURNS.] In addition to other 
        remedies that may be available, the commissioner may bring an 
        action in equity by the state against a taxpayer for an 
        injunction ordering the taxpayer to file a complete and proper 
        return or amended return.  The district courts of this state 
        have jurisdiction over the action and disobedience of an 
        injunction issued under this subdivision will be punished as a 
        contempt of district court.  The action may be commenced by the 
        commissioner in the same manner as any other civil action.  
        [289A.36, subd. 3, clause (3)] 
           Subd. 3.  [PROSECUTING AUTHORITY.] The commissioner may 
        request the county attorney or the attorney general to conduct 
        the proceedings on behalf of the state.  [270.68, subd. 1, 
        paragraph (c)] 
           Subd. 4.  [APPEALS.] Either party to an action or a 
        judgment for the recovery of any taxes, interest, or penalties 
        under subdivision 1 may appeal the judgment as in other civil 
        cases.  [270.68, subd. 2] 
           Subd. 5.  [TAX PRESUMED VALID.] The tax, as assessed by the 
        commissioner, with any penalties included therein, shall be 
        presumed to be valid and correctly determined and assessed, and 
        the burden shall be upon the taxpayer to show its incorrectness 
        or invalidity.  A statement filed by the commissioner showing 
        the amount of the tax and penalties as determined or assessed by 
        the commissioner, is admissible in evidence and shall establish 
        prima facie the facts set forth therein.  [270.68, subd. 3] 
           Subd. 6.  [CONFESSION OF JUDGMENT.] (a) The commissioner 
        may, within 3-1/2 years after any return is filed, 
        notwithstanding section 541.09, enter judgment on any confession 
        of judgment contained in the return after ten days' notice 
        served upon the taxpayer by mail at the address shown in the 
        return.  The judgment shall be entered by the court 
        administrator of district court upon the filing of a photocopy 
        or similar reproduction of that part of the return containing 
        the confession of judgment along with a statement of the 
        commissioner or an agent that the tax has not been paid.  The 
        commissioner may prescribe the words for the confession of 
        judgment statement contained on the return.  
           (b) Notwithstanding any other provision of the law to the 
        contrary, the commissioner may, within five years after a 
        written agreement is signed by the taxpayer and the commissioner 
        under the provisions of section 270C.52, subdivision 2, enter 
        judgment on the confession of judgment contained within the 
        agreement after ten days' notice served upon the taxpayer at the 
        address shown in the agreement.  Such judgment shall be entered 
        by the court administrator of district court upon the filing of 
        the agreement or a certified copy thereof along with a statement 
        of the commissioner or an agent that the tax has not been paid.  
        [270.68, subd. 4] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 68.  [270C.62] [DATE OF ASSESSMENT; DEFINITION.] 
           For purposes of taxes, the term "date of assessment" means 
        the date a liability reported on a return was entered into the 
        records of the commissioner or the date a return should have 
        been filed, whichever is later; or, in the case of taxes 
        assessed by the commissioner, "date of assessment" means the 
        date of the order assessing taxes or date of the return made by 
        the commissioner; or, in the case of an amended return filed by 
        the taxpayer, the assessment date is the date additional 
        liability reported on the return, if any, was entered into the 
        records of the commissioner; or, in the case of a check from a 
        taxpayer that is dishonored and results in an erroneous refund 
        being given to the taxpayer, remittance of the check is deemed 
        to be an assessment and the "date of assessment" is the date the 
        check was received by the commissioner.  [270.65] 
           [EFFECTIVE DATE.] This section is effective for assessments 
        made on or after August 1, 2005. 
           Sec. 69.  [270C.63] [LIEN FOR TAXES.] 
           Subdivision 1.  [CREATION OF LIEN.] Tax, and interest and 
        penalties imposed with respect thereto, including any recording 
        fees, sheriff fees, or court costs that may accrue, shall become 
        a lien upon all the property within this state, both real and 
        personal, of the person liable for the payment or collection of 
        the tax, except property exempt under subdivision 8, from and 
        after the date of assessment of the tax. 
           Subd. 2.  [FILING OF LIENS NECESSARY FOR ENFORCEABILITY 
        AGAINST CERTAIN PERSONS.] The lien imposed by subdivision 1 is 
        not enforceable against any purchaser, mortgagee, pledgee, 
        holder of a Uniform Commercial Code security interest, 
        mechanic's lienor, or judgment lien creditor whose interest has 
        been duly perfected or is a conveyance or interest entitled to 
        protection against judgments and attachments under section 
        507.34 or under any other applicable provisions of state law, 
        until a notice of lien has been filed by the commissioner in the 
        office of the county recorder of the county in which real 
        property is situated, or in the case of personal property in the 
        Office of the Secretary of State. 
           Subd. 3.  [METHOD OF FILING.] Notices of liens, and lien 
        releases, transcriptions, and renewals, in a form prescribed by 
        the commissioner, may be filed with the county recorder or the 
        secretary of state by mail, personal delivery, or by electronic 
        transmission by the commissioner or an agent of the department 
        into the computerized filing system of the secretary of state.  
        The secretary of state shall transmit the notice electronically 
        to the office of the county recorder, if that is the place of 
        filing, in the county or counties shown on the computer entry.  
        The filing officer, whether the county recorder or the secretary 
        of state, shall endorse and index a printout of the notice in 
        the same manner as if the notice had been mailed or delivered.  
           Subd. 4.  [ENTRY OF INFORMATION INTO CENTRAL 
        DATABASE.] County recorders and the secretary of state shall 
        enter information relative to lien notices, transcriptions, 
        renewals, and releases filed in their offices into the central 
        database of the secretary of state.  For notices filed 
        electronically with the county recorders, the date and time of 
        receipt of the notice and county recorder's file number, and for 
        notices filed electronically with the secretary of state, the 
        secretary of state's recording information, must be entered by 
        the filing officer into the central database before the close of 
        the working day following the day of the original data entry by 
        the department.  
           Subd. 5.  [CONFORMITY WITH FEDERAL LIEN REGISTRATION 
        ACT.] The filing and indexing of all notices must be in 
        accordance with the filing and indexing of notices of federal 
        liens, certificates of release, and refiled notices under 
        section 272.483.  
           Subd. 6.  [PAYMENT OF RECORDING FEES.] Notwithstanding any 
        other law to the contrary, the department is exempt from payment 
        of fees when a lien, lien renewal, or lien transcription is 
        offered for recording.  The recording fees must be paid along 
        with the release fee at the end of the month in which the 
        release of lien is recorded, after receipt of a monthly 
        statement from a county recorder or the secretary of state.  The 
        department shall add the recording fees to the delinquent tax 
        liability of the taxpayer.  Notwithstanding any other law to the 
        contrary, the fee for filing or recording a notice of lien, or 
        lien release, transcription, or renewal is $15.  
           Subd. 7.  [APPROPRIATION.] There is appropriated to the 
        commissioner an amount representing the cost of payment of 
        recording fees to the county recorders and the secretary of 
        state.  The commissioner shall keep a separate accounting of the 
        costs and of payments for recording fees remitted by taxpayers, 
        and make the records available to the legislature upon request.  
           Subd. 8.  [EXEMPT PROPERTY.] The lien imposed on personal 
        property by this section, even though properly filed, is not 
        enforceable:  (1) against a purchaser with respect to tangible 
        personal property purchased at retail in the ordinary course of 
        the seller's trade or business, unless at the time of purchase 
        the purchaser intends the purchase to or knows the purchase will 
        hinder, evade, or defeat the collection of a tax; or (2) against 
        the personal property listed as exempt in sections 550.37, 
        550.38, and 550.39. 
           Subd. 9.  [PERIOD OF LIMITATIONS.] The lien imposed by this 
        section shall, notwithstanding any other provision of law to the 
        contrary, be enforceable from the time the lien arises and for 
        ten years from the date of filing the notice of lien, which must 
        be filed by the commissioner within five years after the date of 
        assessment of the tax or final administrative or judicial 
        determination of the assessment.  A notice of lien filed in one 
        county may be transcribed to any other county within ten years 
        after the date of its filing, but the transcription shall not 
        extend the period during which the lien is enforceable.  A 
        notice of lien may be renewed by the commissioner before the 
        expiration of the ten-year period for an additional ten years.  
        The taxpayer must receive written notice of the renewal. 
           Subd. 10.  [ENFORCEABILITY OF LIEN.] The lien imposed by 
        this section shall be enforceable by levy as authorized in 
        section 270C.67, or by judgment lien foreclosure as authorized 
        in chapter 550.  
           Subd. 11.  [NOTICE OF MORTGAGE FORECLOSURE OR CONTRACT 
        TERMINATION.] In the case of a mortgage foreclosure upon real 
        property commenced under chapter 580, or a termination of 
        contract of sale of real property commenced under section 
        559.21, if the commissioner has filed a lien under this section 
        before the foreclosure sale or date of termination, notice of 
        the mortgage foreclosure or termination of contract of sale 
        shall be mailed to the commissioner not less than 25 days prior 
        to the foreclosure sale or date of termination.  Provided, 
        notice need not be given pursuant to this subdivision if the 
        lien of the commissioner has been filed within 30 days or less 
        prior to the foreclosure sale or date of termination.  The 
        notice must contain the following information:  (1) the name and 
        address of the taxpayer; (2) a copy of the notice of mortgage 
        foreclosure or contract for deed cancellation; (3) a copy of the 
        lien filed by the commissioner; (4) the total unpaid balance of 
        the mortgage or contract for deed; (5) a legal description of 
        the property; and (6) the fair market value of the property.  
           Subd. 12.  [FILING ENTITLEMENT.] Execution of notices of 
        liens or of other notices affecting state tax liens by the 
        original or facsimile signature of the commissioner entitles 
        them to be filed, and no other attestation, certification, or 
        acknowledgment is necessary.  For purposes of this subdivision, 
        transmission of notices under subdivision 3 constitutes 
        execution. 
           Subd. 13.  [LIEN SEARCH FEES.] Upon request of any person, 
        the filing officer shall issue a certificate showing whether 
        there is recorded in that filing office, on the date and hour 
        stated in the certificate, any notice of lien or certificate or 
        notice affecting any lien filed on or after ten years before the 
        date of the search certificate, naming a particular person, and 
        giving the date and hour of filing of each notice or certificate 
        naming the person.  The fee for a certificate shall be as 
        provided by section 336.9-525 or 357.18, subdivision 1, clause 
        (3).  Upon request, the filing officer shall furnish a copy of 
        any notice of state lien, or notice or certificate affecting a 
        state lien, for a fee of 50 cents per page. 
           Subd. 14.  [LIMITATION FOR HOMESTEAD PROPERTY.] A lien 
        imposed under this section upon property defined as homestead 
        property in sections 510.01 and 510.02 may not be enforced 
        against homestead property by levy under section 270C.67, or by 
        judgment lien foreclosure under chapter 550, but notwithstanding 
        section 510.07, is enforceable against the proceeds from the 
        sale, conveyance, or transfer of the homestead. 
           Subd. 15.  [ERRONEOUS LIENS.] After the filing of a notice 
        of lien under this section on the property or rights to property 
        of a person, the person may appeal to the commissioner, in the 
        form and at the time prescribed by the commissioner, alleging an 
        error in the filing of the lien and requesting its release.  If 
        the commissioner determines that the filing of the notice of any 
        lien was erroneous, within 14 days after the determination, the 
        commissioner must issue a certificate of release of the lien.  
        The certificate must include a statement that the filing of the 
        lien was erroneous.  In the event that the lien is erroneous and 
        is not released within the 14-day period, reasonable attorney 
        fees shall be paid.  Damages must be paid in accordance with 
        section 3.736, subdivision 7.  Even if a lien is not erroneous, 
        the commissioner may withdraw the lien if the filing of the lien 
        was premature or not in accordance with administrative 
        procedures of the commissioner, or withdrawal of the lien will 
        facilitate the collection of the tax liability. 
           Subd. 16.  [LIEN RELEASE FEE.] A fee of $25 must be paid to 
        the commissioner for each duplicate of an original release of 
        lien. 
           Subd. 17.  [FORTY-FIVE DAY RULE.] A notice of tax lien 
        filed under this section has priority over a security interest 
        arising under article 9 of the Uniform Commercial Code that is 
        perfected before the date of filing of the lien imposed by this 
        section, but only if: 
           (1) the perfected security interest secures property 
        acquired by the taxpayer or advances made by the secured party 
        after the notice of tax lien is filed; and 
           (2) the property is acquired or the advance is made after 
        the 45th day following the day on which the notice of tax lien 
        is filed, or after the secured party has actual notice or 
        knowledge of the tax lien filing, whichever is earlier.  
           Subd. 18.  [REGISTERED LAND.] When a lien is filed with a 
        county recorder under subdivisions 2 to 5, the county recorder 
        shall search the registered land records in that county and 
        cause the lien to be memorialized on every certificate of title 
        or certificate of possessory title of registered land in that 
        county which can be reasonably identified as owned by the 
        taxpayer who is named on the lien.  The fees for memorializing 
        the lien shall be paid in the manner prescribed by subdivision 
        6.  The county recorders, and their employees and agents, shall 
        not be liable for any loss or damages arising from failure to 
        identify a parcel of registered land owned by the taxpayer who 
        is named on the lien. 
           Subd. 19.  [ASSIGNMENT OF LIENS.] The commissioner may sell 
        and assign to a third party the right of redemption in specific 
        real property for liens filed under this section.  The 
        redemption in the hands of the assignee shall not be enforceable 
        by any of the collection remedies provided to the commissioner 
        by law.  The assignee is limited to the same rights of 
        redemption the commissioner would have in any mortgage 
        foreclosure proceeding, but in any bankruptcy proceeding does 
        not obtain the priority of the commissioner as a tax claimant.  
        Should the taxpayer or its assigns exercise the right of 
        redemption the assignment by the commissioner is extinguished. 
           Subd. 20.  [ATTACHMENT TO PROCEEDS OF PROPERTY.] Any lien 
        imposed under this section attaches to the proceeds of property 
        with the same priority that the lien has with respect to the 
        property itself.  "Proceeds of property" means proceeds from the 
        sale, lease, license, exchange, or other disposition of the 
        property, including insurance proceeds arising from the loss or 
        destruction of the property.  [270.69] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 70.  [270C.64] [CREDIT OF OVERPAYMENT TO DELINQUENT 
        TAX LIABILITIES.] 
           Notwithstanding any other provision of law to the contrary, 
        in the case of an overpayment of any tax collected by the 
        commissioner, the commissioner may credit the amount of such 
        overpayment against any uncontested delinquent tax liability on 
        the part of the taxpayer who made the overpayment.  An 
        overpayment may be credited under this subdivision only if the 
        uncontested delinquent liability has been assessed within ten 
        years of the date on which the overpayment is credited.  
        However, this limitation shall not be applicable if the 
        delinquent liability has been entered into judgment or if legal 
        action is pending for collection of the liability or for renewal 
        of the judgment.  An amount paid as tax shall constitute an 
        overpayment even if in fact there was no tax liability with 
        respect to which such amount was paid.  [270.07, subd. 5] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 71.  [270C.65] [RIGHT OF SETOFF.] 
           Subdivision 1.  [CERTIFICATION BY COMMISSIONER.] The 
        commissioner of revenue is authorized to certify to the 
        commissioner of finance, or to any state agency described in 
        subdivision 3 which disburses its own funds, that a taxpayer has 
        an uncontested delinquent tax liability owed to the commissioner 
        of revenue.  The certification must be made within ten years 
        after the date of assessment of the tax.  Once certification is 
        made, the commissioner of finance or the state agency shall 
        apply to the delinquent tax liability funds sufficient to 
        satisfy the unpaid tax liability from funds appropriated for 
        payment of an obligation of the state or any of its agencies 
        that are due and owing the taxpayer.  No setoff shall be made 
        against any funds exempt under section 550.37 or those funds 
        owed an individual taxpayer who receives assistance under the 
        provisions of chapter 256. 
           Subd. 2.  [SETOFF SATISFIES STATE OBLIGATION.] All funds, 
        whether general or dedicated, shall be subject to setoff in the 
        manner herein provided.  Transfer of funds as herein provided is 
        payment of the obligation of the state or any of its agencies to 
        such taxpayer and any actions for said funds, if any, shall be 
        had against the Department of Revenue on the issue of such tax 
        liability.  Nothing in this section shall be construed to limit 
        the previously existing right of the state or any of its 
        agencies to setoff. 
           Subd. 3.  [AGENCIES SHALL MAINTAIN RECORDS.] 
        Notwithstanding any provision to the contrary, every person, 
        organization, or corporation doing business (hereafter called 
        vendor) with the state of Minnesota or any of its departments, 
        agencies, or educational institutions including the University 
        of Minnesota (all hereafter called agency) shall provide that 
        agency with either their Social Security number, federal 
        taxpayer identification number, or Minnesota tax identification 
        number.  The commissioner may verify to the agency the 
        identifying information provided by a vendor.  The agency shall 
        maintain records of this information, and shall make these 
        records available, on request, to the commissioner for the sole 
        purpose of identifying people who have not filed state tax 
        returns or who have not paid uncontested tax liabilities 
        (hereafter called delinquent taxpayer).  When an agency is 
        notified by the commissioner that a vendor is a delinquent 
        taxpayer, payments shall not be made by the agency to the vendor 
        until the commissioner notifies the agency that the vendor no 
        longer is a delinquent taxpayer.  Furthermore, if the vendor has 
        an uncontested delinquent tax liability, the setoff provided in 
        subdivision 1 may be implemented.  The commissioner shall 
        determine that a vendor no longer is a delinquent taxpayer when 
        the vendor has filed all delinquent returns and (1) paid all 
        uncontested tax liabilities or (2) entered into an agreement 
        with the commissioner which provides for the payment of these 
        liabilities.  [270.66] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 72.  [270C.66] [CONTRACTS WITH STATE; WITHHOLDING.] 
           No department of the state of Minnesota, nor any political 
        or governmental subdivision of the state shall make final 
        settlement with any contractor under a contract requiring the 
        employment of employees for wages by said contractor and by 
        subcontractors until satisfactory showing is made that said 
        contractor or subcontractor has complied with the provisions of 
        section 290.92.  A certificate by the commissioner shall satisfy 
        this requirement with respect to the contractor or 
        subcontractor.  If, at the time of final settlement, there are 
        any unpaid withholding taxes, penalties, or interest arising 
        from the government contract, the commissioner shall issue a 
        certification to the contractor or subcontractor upon payment, 
        with certified funds, of any unpaid withholding taxes, 
        penalties, and interest.  Payment is received by the 
        commissioner upon delivery of the certified funds to the central 
        office located in St. Paul, or any district or subdistrict 
        office located throughout the state.  [290.97] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 73.  [270C.67] [LEVY AND DISTRAINT.] 
           Subdivision 1.  [AUTHORITY.] If any tax payable to the 
        commissioner or to the department is not paid when due, such tax 
        may be collected by the commissioner within five years after the 
        date of assessment of the tax, or if a lien has been filed, 
        during the period the lien is enforceable, or if the tax 
        judgment has been filed, within the statutory period of 
        enforcement of a valid tax judgment, by a levy upon all property 
        and rights to property, including any property in the possession 
        of law enforcement officials, of the person liable for the 
        payment or collection of such tax (except that which is exempt 
        from execution pursuant to section 550.37) or property on which 
        there is a lien provided in section 270C.63.  For this purpose, 
        "tax" includes any penalty, interest, and costs, properly 
        payable.  
           Subd. 2.  [WRIT OF ENTRY.] The term "levy" includes the 
        power of distraint and seizure by any means; provided, no entry 
        can be made upon the business premises or residence of a 
        taxpayer in order to seize property without first obtaining a 
        writ of entry listing the property to be seized and signed by a 
        judge of the district court of the district in which the 
        business premises or residence is located. 
           Subd. 3.  [NOTICE AND DEMAND; COLLECTION BY LEVY.] Before a 
        levy is made, notice and demand for payment of the amount due 
        must be given to the person liable for the payment or collection 
        of the tax at least 30 days prior to the levy.  The notice 
        required under this subdivision must be sent to the taxpayer's 
        last known address and must include a brief statement that sets 
        forth in simple and nontechnical terms: 
           (1) the administrative appeals available to the taxpayer 
        with respect to the levy and sale; and 
           (2) the alternatives available to the taxpayer that can 
        prevent a levy, including installment payment agreements under 
        section 270C.52, subdivision 2. 
           Subd. 4.  [MANNER OF EXECUTION AND SALE.] In making the 
        execution of the levy and in collecting the taxes due, the 
        commissioner shall have all of the powers provided in chapter 
        550 and in any other law for purposes of effecting an execution 
        against property in this state.  The sale of property levied 
        upon, and the time and manner of redemption therefrom, shall, to 
        the extent not provided in sections 270C.7101 to 270C.7109, be 
        governed by chapter 550.  The seal of the court, subscribed by 
        the court administrator, as provided in section 550.04, shall 
        not be required. The levy for collection of taxes may be made 
        whether or not the commissioner has commenced a legal action for 
        collection of such taxes.  
           Subd. 5.  [STAY OF SALE.] (a) Where a jeopardy assessment 
        or any other assessment has been made by the commissioner, the 
        property seized for collection of the tax shall not be sold 
        until the time has expired for filing an appeal of the 
        assessment with the Tax Court pursuant to chapter 271.  If an 
        appeal has been filed, no sale shall be made unless the taxes 
        remain unpaid for a period of more than 30 days after final 
        determination of the appeal by the Tax Court or by the 
        appropriate judicial forum. 
           (b) Notwithstanding paragraph (a), seized property may be 
        sold if: 
           (1) the taxpayer consents in writing to the sale; or 
           (2) the commissioner determines that the property is 
        perishable or may become greatly reduced in price or value by 
        keeping, or that such property cannot be kept without great 
        expense. 
           (c) The Tax Court has jurisdiction to review a 
        determination made under paragraph (b), clause (2).  Review is 
        commenced by motion of the commissioner or the taxpayer.  The 
        order of the court in response to the motion is reviewable in 
        the same manner as any other decision of the Tax Court. 
           Subd. 6.  [PROBATE PROCEEDINGS.] Where a levy has been made 
        to collect taxes pursuant to this section and the property 
        seized is properly included in a formal proceeding commenced 
        under sections 524.3-401 to 524.3-505 and maintained under full 
        supervision of the court, such property shall not be sold until 
        the probate proceedings are completed or until the court so 
        orders.  
           Subd. 7.  [BOND OR SECURITY TO RELEASE SEIZURE.] The 
        property seized shall be returned by the commissioner if the 
        owner gives a surety bond equal to the appraised value of the 
        owner's interest in the property, as determined by the 
        commissioner, or deposits with the commissioner security in such 
        form and amount as the commissioner deems necessary to insure 
        payment of the liability, but not more than twice the liability. 
           Subd. 8.  [INJUNCTION.] Notwithstanding any other provision 
        to the contrary, if a levy or sale pursuant to this section 
        would irreparably injure rights in property which the court 
        determines to be superior to rights of the state in such 
        property, the district court may grant an injunction to prohibit 
        the enforcement of such levy or to prohibit such sale. 
           Subd. 9.  [OPTIONAL REMEDY.] Any action taken by the 
        commissioner pursuant to this section shall not constitute an 
        election by the state to pursue a remedy to the exclusion of any 
        other remedy. 
           Subd. 10.  [EQUITABLE RELIEF.] After the commissioner has 
        seized the property of any person, that person may, upon giving 
        48 hours notice to the commissioner and to the court, bring a 
        claim for equitable relief before the district court for the 
        release of the property to the taxpayer upon such terms and 
        conditions as the court may deem equitable. 
           Subd. 11.  [LEVY AND SALE BY SHERIFF.] If any tax payable 
        to the commissioner or to the department is not paid as provided 
        in subdivision 3, the commissioner may, within the time periods 
        provided in subdivision 1 for collection of taxes, delegate the 
        authority granted by subdivision 1, by means of issuing a 
        warrant to the sheriff of any county of the state commanding the 
        sheriff, as agent for the commissioner, to levy upon and sell 
        the real and personal property of the person liable for the 
        payment or collection of the tax and to levy upon the rights to 
        property of that person within the county, or to levy upon and 
        seize any property within the county on which there is a lien 
        provided in section 270C.63, and to return the warrant to the 
        commissioner and pay to the commissioner the money collected by 
        virtue thereof by a time to be therein specified not less than 
        60 days from the date of the warrant.  The sheriff shall proceed 
        thereunder to levy upon and seize any property of the person and 
        to levy upon the rights to property of the person within the 
        county (except the person's homestead or that property which is 
        exempt from execution pursuant to section 550.37), or to levy 
        upon and seize any property within the county on which there is 
        a lien provided in section 270C.63.  For purposes of the 
        preceding sentence, "tax" includes any penalty, interest, and 
        costs, properly payable.  The sheriff shall then sell so much of 
        the property levied upon as is required to satisfy the taxes, 
        interest, and penalties, together with the sheriff's costs; but 
        the sales, and the time and manner of redemption therefrom, 
        shall, to the extent not provided in sections 270C.7101 to 
        270C.7109, be governed by chapter 550.  The proceeds of the 
        sales, less the sheriff's costs, shall be turned over to the 
        commissioner, who shall then apply the proceeds as provided in 
        section 270C.7108. 
           Subd. 12.  [PRIORITY OF LEVY.] Notwithstanding section 
        52.12, a levy by the commissioner made pursuant to the 
        provisions of this section upon a taxpayer's funds on deposit in 
        a financial institution located in this state, shall have 
        priority over any unexercised right of setoff of the financial 
        institution to apply the levied funds toward the balance of an 
        outstanding loan or loans owed by the taxpayer to the financial 
        institution.  A claim by the financial institution that it 
        exercised its right to setoff prior to the levy by the 
        commissioner must be substantiated by evidence of the date of 
        the setoff, and shall be verified by the sworn statement of a 
        responsible corporate officer of the financial institution.  
        Furthermore, for purposes of determining the priority of any 
        levy made under this section, the levy shall be treated as if it 
        were an execution made pursuant to chapter 550. 
           Subd. 13.  [EFFECT OF HONORING LEVY.] Any person in 
        possession of (or obligated with respect to) property or rights 
        to property subject to levy upon which a levy has been made who, 
        upon demand by the commissioner, surrenders the property or 
        rights to property (or who pays a liability under section 
        270C.70, subdivision 1) shall be discharged from any obligation 
        or liability to the person liable for the payment or collection 
        of the delinquent tax with respect to the property or rights to 
        property so surrendered or paid.  
           Subd. 14.  [NOTICE OF LEVY.] Notwithstanding any other 
        provision of law to the contrary, the notice of any levy 
        authorized by this section may be served by mail or by delivery 
        by an agent of the department.  
           Subd. 15.  [UNECONOMICAL LEVY.] No levy may be made on 
        property if the amount of the expenses that the commissioner 
        estimates would be incurred by the department with respect to 
        the levy and sale of the property exceeds the fair market value 
        of the property at the anticipated time of levy. 
           Subd. 16.  [LEVY ON APPEARANCE DATE OF SUBPOENA.] No levy 
        may be made on the property of a person on the day on which the 
        person, or an officer or employee of the person, is required to 
        appear in response to a subpoena issued by the commissioner to 
        collect unpaid taxes, unless the commissioner determines that 
        the collection of the tax is in jeopardy.  [270.70] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 74.  [270C.68] [CONTINUOUS LEVY.] 
           Subdivision 1.  [AUTHORITY.] The commissioner may, within 
        five years after the date of assessment of the tax, or if a lien 
        has been filed under section 270C.63, within the statutory 
        period for enforcement of the lien, give notice to a person to 
        withhold the amount of any tax, interest, or penalties, due from 
        a taxpayer.  The amounts withheld shall be transmitted to the 
        commissioner at the times the commissioner designates. 
           Subd. 2.  [LEVY CONTINUOUS.] The levy made under 
        subdivision 1 is continuous from the date the notice is received 
        until the amount due stated on the notice has been withheld or 
        the notice has been released by the commissioner under section 
        270C.7109, whichever occurs first. 
           Subd. 3.  [AMOUNT TO BE WITHHELD.] The amount required to 
        be withheld under this section is the least of: 
           (1) the amount stated on the notice; 
           (2) if the taxpayer is not a natural person, 100 percent of 
        the payment; or 
           (3) if the taxpayer is an individual, 25 percent of the 
        payment. 
           Subd. 4.  [PAYMENTS COVERED.] For purposes of this section, 
        the term "payments" does not include wages as defined in section 
        290.92 or funds in a deposit account as defined in section 
        336.9-102(a)(29).  The term payments does include the following: 
           (1) payments due for services of independent contractors, 
        dividends, rents, royalties, residuals, patent rights, and 
        mineral or other natural resource rights; 
           (2) payments or credits under written or oral contracts for 
        services or sales whether denominated as wages, salary, 
        commission, bonus, or otherwise, if the payments are not covered 
        by section 270C.69; and 
           (3) any other periodic payments or credits resulting from 
        an enforceable obligation to the taxpayer. 
           Subd. 5.  [DETERMINATION OF STATUS; EFFECT.] A 
        determination of a taxpayer's status as an independent 
        contractor under this section does not affect the determination 
        of the taxpayer's status for the purposes of any other law or 
        rule.  [270.7001] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 75.  [270C.69] [WITHHOLDING BY EMPLOYER OF DELINQUENT 
        TAXES.] 
           Subdivision 1.  [NOTICE AND PROCEDURES.] (a) The 
        commissioner may, within five years after the date of assessment 
        of the tax, or if a lien has been filed under section 270C.63, 
        within the statutory period for enforcement of the lien, give 
        notice to any employer deriving income which has a taxable situs 
        in this state regardless of whether the income is exempt from 
        taxation, that an employee of that employer is delinquent in a 
        certain amount with respect to any taxes, including penalties, 
        interest, and costs.  The commissioner can proceed under this 
        section only if the tax is uncontested or if the time for appeal 
        of the tax has expired.  The commissioner shall not proceed 
        under this section until the expiration of 30 days after mailing 
        to the taxpayer, at the taxpayer's last known address, a written 
        notice of (1) the amount of taxes, interest, and penalties due 
        from the taxpayer and demand for their payment, and (2) the 
        commissioner's intention to require additional withholding by 
        the taxpayer's employer pursuant to this section.  The effect of 
        the notice shall expire one year after it has been mailed to the 
        taxpayer provided that the notice may be renewed by mailing a 
        new notice which is in accordance with this section.  The 
        renewed notice shall have the effect of reinstating the priority 
        of the original claim.  The notice to the taxpayer shall be in 
        substantially the same form as that provided in section 571.72.  
        The notice shall further inform the taxpayer of the wage 
        exemptions contained in section 550.37, subdivision 14.  If no 
        statement of exemption is received by the commissioner within 30 
        days from the mailing of the notice, the commissioner may 
        proceed under this section.  The notice to the taxpayer's 
        employer may be served by mail or by delivery by an agent of the 
        department and shall be in substantially the same form as 
        provided in section 571.75.  Upon receipt of notice, the 
        employer shall withhold from compensation due or to become due 
        to the employee, the total amount shown by the notice, subject 
        to the provisions of section 571.922.  The employer shall 
        continue to withhold each pay period until the notice is 
        released by the commissioner under section 270C.7109.  Upon 
        receipt of notice by the employer, the claim of the state of 
        Minnesota shall have priority over any subsequent garnishments 
        or wage assignments.  The commissioner may arrange between the 
        employer and the employee for withholding a portion of the total 
        amount due the employee each pay period, until the total amount 
        shown by the notice plus accrued interest has been withheld.  
           (b) The "compensation due" any employee is defined in 
        accordance with the provisions of section 571.921.  The maximum 
        withholding allowed under this section for any one pay period 
        shall be decreased by any amounts payable pursuant to a 
        garnishment action with respect to which the employer was served 
        prior to being served with the notice of delinquency and any 
        amounts covered by any irrevocable and previously effective 
        assignment of wages; the employer shall give notice to the 
        commissioner of the amounts and the facts relating to such 
        assignments within ten days after the service of the notice of 
        delinquency on the form provided by the commissioner as noted in 
        this section.  
           (c) Within ten days after the expiration of such pay 
        period, the employer shall remit to the commissioner, on a form 
        and in the manner prescribed by the commissioner, the amount 
        withheld during each pay period under this section.  
           Subd. 2.  [TERMINATION OF EMPLOYMENT.] If the employee 
        ceases to be employed by the employer before the full amount set 
        forth in a notice of delinquency plus accrued interest has been 
        withheld, the employer shall immediately notify the commissioner 
        in writing of the termination date of the employee and the total 
        amount withheld.  No employer may discharge any employee by 
        reason of the fact that the commissioner has proceeded under 
        subdivision 1.  If an employer discharges an employee in 
        violation of this provision, the employee shall have the same 
        remedy as provided in section 571.927, subdivision 2.  
           Subd. 3.  [APPLICATION TO GOVERNMENT 
        EMPLOYER.] Subdivisions 1 and 2 apply to cases in which the 
        employer is the United States or any instrumentality thereof or 
        this state or any municipality or other subordinate unit 
        thereof.  The provisions imposing liability on the employer for 
        failure to withhold or remit under section 270C.70 do not apply 
        to such government employers. 
           Subd. 4.  [REFUND TO EMPLOYEE.] The commissioner shall 
        refund to the employee excess amounts withheld from the employee 
        under this section.  If any excess results from payments by the 
        employer because of payments made under section 270C.70, the 
        excess attributable to the employer's payment shall be refunded 
        to the employer.  
           Subd. 5.  [ADDITIONAL INTEREST, COSTS, CHARGES.] Employers 
        required to withhold delinquent taxes, penalties, interest, and 
        costs under this section shall not be required to compute any 
        additional interest, costs or other charges to be withheld.  
           Subd. 6.  [LEGAL EFFECT.] The collection remedy provided to 
        the commissioner by this section shall have the same legal 
        effect as if it were a levy made pursuant to section 270C.67.  
        [290.92, subd. 23] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 76.  [270C.70] [PERSONAL LIABILITY FOR FAILURE TO 
        HONOR A LEVY.] 
           Subdivision 1.  [SURRENDER OF PROPERTY SUBJECT TO LEVY.] A 
        person who fails or refuses to surrender property or rights to 
        property subject to a levy served on the person under section 
        270C.67, 270C.68, or 270C.69 is liable in an amount equal to the 
        value of the property or rights not surrendered, or the amount 
        of taxes, penalties, and interest for the collection of which 
        the levy was made, whichever is less.  A financial institution 
        need not surrender funds on deposit until ten days after service 
        of the levy. 
           Subd. 2.  [PENALTY.] In addition to the personal liability 
        imposed by subdivision 1, if a person required to surrender 
        property or rights to property fails to do so without reasonable 
        cause, the person is liable for a penalty equal to 25 percent of 
        the amount under subdivision 1. 
           Subd. 3.  [PERSON DEFINED.] The term "person" as used in 
        this section includes an officer or employee of a corporation, 
        or a member or employee of a partnership, who as such officer, 
        employee, or member is under a duty to surrender the property or 
        rights to property or to respond to the levy. 
           Subd. 4.  [ORDER ASSESSING LIABILITY.] The liability 
        imposed by this section may, after demand to honor a levy has 
        been made, be assessed by the commissioner within 60 days after 
        service of the demand.  The assessment may be based on 
        information available to the commissioner.  The assessment is 
        presumed to be valid, and the burden is on the person assessed 
        to show it is incorrect or invalid.  An order assessing 
        liability for failure to honor a levy is reviewable 
        administratively under section 270C.35, and is appealable to Tax 
        Court under chapter 271.  The amount assessed, plus interest at 
        the rate specified in section 270C.40, may be collected by any 
        remedy available to the commissioner for the collection of 
        taxes.  The proceeds collected are applied first to the 
        liability of the original taxpayer to the extent of the 
        liability under subdivision 1 plus interest, and then to the 
        penalty under subdivision 2.  [270.7002] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 77.  [270C.7101] [SALE OF SEIZED PROPERTY.] 
           Subdivision 1.  [NOTICE OF SEIZURE.] As soon as practicable 
        after seizure of property, notice in writing shall be given by 
        the commissioner to the owner of the property (or, in the case 
        of personal property, the possessor thereof), and shall be 
        served in like manner as a summons in a civil action in the 
        district court.  If the owner cannot be readily located, or has 
        no dwelling or place of business within this state, the notice 
        may be mailed to the last known address.  The notice shall 
        specify the sum demanded and shall contain, in the case of 
        personal property, an account of the property seized and, in the 
        case of real property, a description with reasonable certainty 
        of the property seized.  
           Subd. 2.  [NOTICE OF SALE.] The commissioner shall as soon 
        as practicable after the seizure of the property give notice of 
        sale of the property to the owner, in the manner of service 
        prescribed in subdivision 1.  In the case of personal property, 
        the notice shall be served at least ten days prior to the sale.  
        In the case of real property, the notice shall be served at 
        least four weeks prior to the sale.  The commissioner shall also 
        cause public notice of each sale to be made.  In the case of 
        personal property, notice shall be posted at least ten days 
        prior to the sale at the county courthouse for the county where 
        the seizure is made, and in not less than two other public 
        places.  For purposes of this requirement, the Internet is a 
        public place for posting the information.  In the case of real 
        property, six weeks' published notice shall be given prior to 
        the sale, in a newspaper published or generally circulated in 
        the county.  The notice of sale provided in this subdivision 
        shall specify the property to be sold, and the time, place, 
        manner, and conditions of the sale.  Whenever levy is made 
        without regard to the 30-day period provided in section 270C.67, 
        subdivision 3, public notice of sale of the property seized 
        shall not be made within the 30-day period unless section 
        270C.7102 (relating to sale of perishable goods) is applicable.  
           Subd. 3.  [SALE OF INDIVISIBLE PROPERTY.] If any property 
        liable to levy is not divisible, so as to enable the 
        commissioner by sale of a part thereof to raise the whole amount 
        of the tax and expenses, the whole of the property shall be sold.
           Subd. 4.  [TIME AND PLACE OF SALE.] The time of sale shall 
        be after the expiration of the notice periods prescribed in 
        subdivision 2.  The place of sale shall be within the county in 
        which the property is seized, except by special order of the 
        commissioner.  
           Subd. 5.  [MANNER AND CONDITIONS OF SALE.] (a) Before the 
        sale the commissioner shall determine a minimum price for which 
        the property shall be sold, and if no person offers for the 
        property at the sale the amount of the minimum price, the 
        property shall be declared to be purchased at the minimum price 
        for the state of Minnesota; otherwise the property shall be 
        declared to be sold to the highest bidder.  In determining the 
        minimum price, the commissioner shall take into account the 
        expense of making the levy and sale.  The announcement of the 
        minimum price determined by the commissioner may be delayed 
        until the receipt of the highest bid.  
           (b) The sale shall not be conducted in any manner other 
        than:  
           (1) by public auction; 
           (2) by public sale under sealed bids; or 
           (3) in the case of items which individually or in usually 
        marketable units have a value of $50 or less, by public or 
        private proceedings as a unit or in parcels at any time and 
        place and on any terms, but every aspect of the disposition 
        including the method, manner, time, place, and terms must be 
        commercially reasonable.  
           (c) In the case of seizure of several items of property, 
        the items may be offered separately, in groups, or in the 
        aggregate, and shall be sold under whichever method produces the 
        highest aggregate amount, except that sales under paragraph (b), 
        clause (3), must produce a reasonable amount under the 
        circumstances.  
           (d) Payment in full shall be required at the time of 
        acceptance of a bid, except that a part of the payment may be 
        deferred by the commissioner for a period not to exceed 30 days. 
           (e) Other methods (including advertising) in addition to 
        those prescribed in subdivision 2 may be used in giving notice 
        of the sale.  
           (f) The commissioner may adjourn the sale from time to time 
        for a period not to exceed 30 days.  
           (g) If payment in full is required at the time of 
        acceptance of a bid and is not then and there paid, the 
        commissioner shall forthwith proceed to again sell the property 
        in the manner provided in this section.  If the conditions of 
        the sale permit part of the payment to be deferred, and if the 
        part is not paid within the prescribed period, suit may be 
        instituted against the purchaser for the purchase price or that 
        part thereof as has not been paid, together with interest at the 
        rate specified in section 549.09 from the date of the sale; or, 
        in the discretion of the commissioner, the sale may be declared 
        by the commissioner to be null and void for failure to make full 
        payment of the purchase price and the property may again be 
        advertised and sold as provided in this section.  In the event 
        of a readvertisement and sale, any new purchaser shall receive 
        the property or rights to property free and clear of any claim 
        or right of the former defaulting purchaser, of any nature 
        whatsoever, and the amount paid upon the bid price by the 
        defaulting purchaser shall be forfeited.  
           Subd. 6.  [RIGHT TO REQUEST SALE OF SEIZED PROPERTY WITHIN 
        60 DAYS.] The owner of property seized by levy may request that 
        the commissioner offer to sell the property within 60 days after 
        the request, or within a longer period requested by the owner.  
        The request must be complied with unless the commissioner 
        determines and notifies the owner within that period that 
        compliance is not in the best interests of the state of 
        Minnesota.  A determination by the commissioner not to comply 
        with the request is appealable to the Tax Court in the manner 
        provided by law. 
           Subd. 7.  [SALE OF SEIZED SECURITIES.] (a) At the time of 
        levy on securities, the commissioner shall provide notice to the 
        taxpayer that the securities may be sold after ten days from the 
        date of seizure.  
           (b) If the commissioner levies upon nonexempt publicly 
        traded securities and the value of the securities is less than 
        or equal to the total obligation for which the levy is done, 
        after ten days the person who possesses or controls the 
        securities shall liquidate the securities in a commercially 
        reasonable manner.  After liquidation, the person shall transfer 
        the proceeds to the commissioner, less any applicable 
        commissions or fees, or both, which are charged in the normal 
        course of business.  
           (c) If the commissioner levies upon nonexempt publicly 
        traded securities and the value of the securities exceeds the 
        total amount of the levy, the owner of the securities may, 
        within seven days after receipt of the commissioner's notice of 
        levy given pursuant to subdivision 1, instruct the person who 
        possesses or controls the securities which securities are to be 
        sold to satisfy the obligation.  If the owner does not provide 
        instructions for liquidation, the person who possesses or 
        controls the securities shall liquidate the securities in an 
        amount sufficient to pay the obligation, plus any applicable 
        commissions or fees, or both, which are charged in the normal 
        course of business, beginning with the nonexempt securities 
        purchased most recently.  After liquidation, the person who 
        possesses or controls the securities shall transfer to the 
        commissioner the amount of money needed to satisfy the levy.  
        [270.701] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 78.  [270C.7102] [SALE OF PERISHABLE GOODS.] 
           If the commissioner determines that any property seized is 
        liable to perish or become greatly reduced in price or value by 
        keeping, or that the property cannot be kept without great 
        expense, the commissioner shall appraise the value of the 
        property, and if the owner of the property can be readily found, 
        the commissioner shall give the owner notice of the 
        determination of the appraised value of the property.  The 
        property shall be returned to the owner if, within the time 
        specified in the notice, the owner (a) pays to the commissioner 
        an amount equal to the appraised value, or (b) gives bond in the 
        form, with the sureties, and in the amount as the commissioner 
        prescribes to pay the appraised amount at the time the 
        commissioner determines to be appropriate in the circumstances.  
        If the owner does not pay the amount or furnish the bond in 
        accordance with this section, the commissioner shall as soon as 
        practicable make public sale of the property in accordance with 
        section 270C.7101.  [270.702] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 79.  [270C.7103] [REDEMPTION OF PROPERTY.] 
           Subdivision 1.  [BEFORE SALE.] Any person whose property 
        has been levied upon shall have the right to pay the amount due, 
        together with the expenses of the proceeding, if any, to the 
        commissioner at any time prior to the sale thereof, and upon 
        payment the commissioner shall restore the property to the 
        person, and all further proceedings in connection with the levy 
        on the property shall cease from the time of payment.  
           Subd. 2.  [REDEMPTION OF REAL ESTATE AFTER SALE.] The 
        owners of any real property sold as provided in this section, 
        their heirs, executors, or administrators, or any person having 
        any interest therein, or a lien thereon, or any person in their 
        behalf, shall be permitted to redeem the property sold, or any 
        particular tract of the property, at any time within six months, 
        or in case the real property sold exceeds ten acres in size, at 
        any time within 12 months, after the sale thereof.  The property 
        or tract of property shall be permitted to be redeemed upon 
        payment to the purchaser (or if not found in the county in which 
        the property to be redeemed is situated, then to the 
        commissioner, for the use of the purchaser, or the purchaser's 
        heirs or assigns) of the amount paid by the purchaser together 
        with interest at the rate of 20 percent per annum.  
           Subd. 3.  [RECORD.] When any lands sold are redeemed as 
        provided in this section, the commissioner shall cause entry of 
        the fact to be made upon the record required by section 
        270C.7106 and the entry shall be evidence of the redemption.  
        [270.703] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 80.  [270C.7104] [CERTIFICATE OF SALE.] 
           In the case of property sold as provided in section 
        270C.7101, the commissioner shall give to the purchaser a 
        certificate of sale upon payment in full of the purchase price.  
        In the case of real property the certificate shall set forth the 
        real property purchased, for whose taxes the property was sold, 
        the name of the purchaser, and the price paid.  If real property 
        is declared purchased by the state of Minnesota, the 
        commissioner shall within ten days from the sale cause the 
        certificate of sale to be duly recorded by the county recorder 
        of the county in which the real property is located.  [270.704] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 81.  [270C.7105] [EFFECT OF CERTIFICATE OF SALE.] 
           Subdivision 1.  [PERSONAL PROPERTY.] (a) In all cases of 
        sale pursuant to section 270C.7101 of personal property, the 
        certificate of sale given pursuant to section 270C.7104 shall be 
        prima facie evidence of the right of the commissioner to make 
        the sale, and conclusive evidence of the regularity of the 
        proceedings in making the sale.  The certificate shall transfer 
        to the purchaser all right, title, and interest of the party 
        delinquent in and to the property sold.  
           (b) If the property consists of stocks, the certificate of 
        sale shall be notice, when received, to any corporation, 
        company, or association of the transfer, and shall be authority 
        to the corporation, company, or association to record the 
        transfer on its books and records in the same manner as if the 
        stocks were transferred or assigned by the party holding the 
        same, in lieu of any original or prior certificate, which shall 
        be void, whether canceled or not.  
           (c) If the subject of sale is securities or other evidences 
        of debt, the certificate of sale shall be a good and valid 
        receipt to the person holding the same, as against any person 
        holding or claiming to hold possession of the securities or 
        other evidences of debt.  
           (d) If the property consists of a motor vehicle, the 
        certificate of sale shall be notice, when received, to the 
        registrar of motor vehicles of this state of the transfer, and 
        shall be authority to the registrar to record the transfer on 
        the books and records in the same manner as if the certificate 
        of title to the motor vehicle were transferred or assigned by 
        the party holding the same, in lieu of any original or prior 
        certificate, which shall be void, whether canceled or not.  
           Subd. 2.  [REAL PROPERTY.] In the case of the sale of real 
        property pursuant to section 270C.7101, the certificate of sale 
        given pursuant to section 270C.7104 shall be prima facie 
        evidence of the facts therein stated, and shall be considered 
        and operate as a conveyance of all the right, title, and 
        interest the party delinquent had in and to the real property 
        thus sold at the time the lien of the state of Minnesota 
        attached thereto.  
           Subd. 3.  [JUNIOR ENCUMBRANCES.] A certificate of sale of 
        personal property or real property given pursuant to section 
        270C.7104 shall discharge the property from all liens, 
        encumbrances, and titles over which the lien of the state of 
        Minnesota with respect to which the levy was made had priority.  
        [270.705] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 82.  [270C.7106] [RECORDS OF SALE.] 
           The commissioner shall maintain a record of all sales of 
        property under section 270C.7101 and of redemptions of real 
        property.  The record shall set forth the tax for which the sale 
        was made, the dates of seizure and sale, the name of the party 
        assessed and all proceedings in making the sale, the amount of 
        expenses, the names of the purchasers, and the date of the 
        certificate of sale.  A copy of the record, or any part thereof, 
        certified by the commissioner shall be evidence in any court of 
        the truth of the facts therein stated.  [270.706] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 83.  [270C.7107] [EXPENSE OF LEVY AND SALE.] 
           The commissioner shall determine the expenses to be allowed 
        in all cases of levy and sale.  [270.707] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 84.  [270C.7108] [APPLICATION OF PROCEEDS OF LEVY.] 
           Subdivision 1.  [COLLECTION OF LIABILITY.] Any money 
        realized by proceedings under this chapter, whether by seizure, 
        by surrender under section 270C.67, by sale of seized property, 
        by sale of property redeemed by the state of Minnesota (if the 
        interest of the state of Minnesota in the property was a lien 
        arising under the provisions of section 270C.63), or by 
        agreement, arrangement, or any other means shall be applied as 
        follows: 
           (a) First, against the expenses of the proceedings; then 
           (b) If the property seized and sold is subject to a tax 
        that has not been paid, the amount remaining after applying 
        clause (a) shall next be applied against the tax liability (and, 
        if the tax was not previously assessed, it shall then be 
        assessed); and 
           (c) The amount, if any, remaining after applying clauses 
        (a) and (b) shall be applied against the tax liability in 
        respect of which the levy was made or the sale was conducted. 
           Subd. 2.  [SURPLUS PROCEEDS.] Any surplus proceeds 
        remaining after the application of subdivision 1 shall, upon 
        application and satisfactory proof in support thereof, be 
        credited or refunded by the commissioner to the person or 
        persons legally entitled thereto.  [270.708] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 85.  [270C.7109] [AUTHORITY TO RELEASE LEVY AND RETURN 
        PROPERTY.] 
           Subdivision 1.  [RELEASE OF LEVY.] The commissioner shall 
        release a levy on all or part of the property or rights to 
        property levied on and shall promptly notify the person on whom 
        the levy was made that the levy has been released if:  (1) the 
        liability for which the levy was made is satisfied or has become 
        unenforceable by lapse of time; (2) release of the levy will 
        facilitate collection of the liability; (3) the taxpayer has 
        entered into an installment payment agreement under section 
        270C.52, subdivision 2, unless the agreement provides otherwise, 
        or unless release of the levy will jeopardize the status of the 
        department as a secured creditor; or (4) the fair market value 
        of the property exceeds the liability, and release of the levy 
        on a part of the property can be made without hindering 
        collection.  In the case of tangible personal property essential 
        in carrying on the trade or business of the taxpayer, the 
        commissioner shall provide for an expedited determination under 
        this subdivision.  A release of levy under this subdivision does 
        not prevent a subsequent levy on the property released. 
           Subd. 2.  [RETURN OF PROPERTY.] If the commissioner 
        determines that property has been wrongfully levied upon, it 
        shall be lawful for the commissioner to return:  
           (a) The specific property levied upon, at any time; 
           (b) An amount of money equal to the amount of money levied 
        upon, at any time before the expiration of nine months from the 
        date of the levy; or 
           (c) An amount of money equal to the amount of money 
        received by the state of Minnesota from a sale of the property, 
        at any time before the expiration of nine months from the date 
        of the sale.  
           For purposes of clause (c), if property is declared 
        purchased by the state of Minnesota at a sale pursuant to 
        section 270C.7101, subdivision 5 (relating to manner and 
        conditions of sale), the state of Minnesota shall be treated as 
        having received an amount of money equal to the minimum price 
        determined pursuant to section 270C.7101, subdivision 5, or, if 
        larger, the amount received by the state of Minnesota from the 
        resale of the property.  [270.709] 
           [EFFECTIVE DATE.] This section is effective for levies made 
        on or after August 1, 2005. 
           Sec. 86.  [270C.711] [ACQUISITION AND RESALE OF SEIZED 
        PROPERTY.] 
           For the purpose of enabling the commissioner to purchase or 
        redeem seized property in which the state of Minnesota has an 
        interest arising from a lien for unpaid taxes, or to provide for 
        the operating costs of collection activities of the department, 
        there is appropriated to the commissioner an amount representing 
        the cost of such purchases, redemptions, or collection 
        activities.  Seized property acquired by the state of Minnesota 
        to satisfy unpaid taxes shall be resold by the commissioner.  
        The commissioner shall preserve the value of seized property 
        while controlling it, including but not limited to the 
        procurement of insurance.  For the purpose of refunding the 
        proceeds from the sale of levied or redeemed property which are 
        in excess of the actual tax liability plus costs of acquiring 
        the property, there is hereby created a levied and redeemed 
        property refund account in the agency fund.  All amounts 
        deposited into this account are appropriated to the 
        commissioner.  The commissioner shall report quarterly on the 
        status of this program to the chairs of the house Taxes and Ways 
        and Means Committees and senate Taxes and Tax Laws and Finance 
        Committees.  [270.71] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 87.  [270C.72] [TAX CLEARANCE; ISSUANCE OF LICENSES.] 
           Subdivision 1.  [TAX CLEARANCE REQUIRED.] The state or a 
        political subdivision of the state may not issue, transfer, or 
        renew, and must revoke, a license for the conduct of a 
        profession, occupation, trade, or business, if the commissioner 
        notifies the licensing authority that the applicant owes the 
        state delinquent taxes payable to the commissioner, penalties, 
        or interest.  The commissioner may not notify the licensing 
        authority unless the applicant taxpayer owes $500 or more in 
        delinquent taxes, penalties, or interest, or has not filed 
        returns.  If the applicant taxpayer does not owe delinquent 
        taxes, penalties, or interest, but has not filed returns, the 
        commissioner may not notify the licensing authority unless the 
        taxpayer has been given 90 days' written notice to file the 
        returns or show that the returns are not required to be filed.  
        A licensing authority that has received a notice from the 
        commissioner may issue, transfer, renew, or not revoke the 
        applicant's license only if (a) the commissioner issues a tax 
        clearance certificate and (b) the commissioner or the applicant 
        forwards a copy of the clearance to the authority.  The 
        commissioner may issue a clearance certificate only if the 
        applicant does not owe the state any uncontested delinquent 
        taxes, penalties, or interest and has filed all required returns.
           Subd. 2.  [DEFINITIONS.] For purposes of this section, the 
        following terms have the meanings given.  
           (a) "Delinquent taxes" do not include a tax liability if 
        (i) an administrative or court action which contests the amount 
        or validity of the liability has been filed or served, (ii) the 
        appeal period to contest the tax liability has not expired, or 
        (iii) the applicant has entered into a payment agreement and is 
        current with the payments.  
           (b) "Applicant" means an individual, if the license is 
        issued to or in the name of an individual, or the corporation or 
        partnership, if the license is issued to or in the name of a 
        corporation or partnership.  "Applicant" also means an officer 
        of a corporation, a member of a partnership, or an individual 
        who is liable for delinquent taxes, either for the entity for 
        which the license is at issue or for another entity for which 
        the liability was incurred, or personally as a licensee.  In the 
        case of a license transfer, "applicant" also means both the 
        transferor and the transferee of the license.  "Applicant" also 
        means any holder of a license. 
           (c) "License" means any permit, registration, 
        certification, or other form of approval authorized by statute 
        or rule to be issued by the state or a political subdivision of 
        the state as a condition of doing business or conducting a 
        trade, profession, or occupation in Minnesota, specifically 
        including, but not limited to, a contract for space rental at 
        the Minnesota state fair and authorization to operate 
        concessions or rides at county and local fairs, festivals, or 
        events. 
           (d) "Licensing authority" includes the Minnesota State Fair 
        Board and county and local boards or governing bodies. 
           Subd. 3.  [NOTICE AND HEARING.] (a) The commissioner, on 
        notifying a licensing authority pursuant to subdivision 1 not to 
        issue, transfer, or renew a license, must send a copy of the 
        notice to the applicant.  If the applicant requests, in writing, 
        within 30 days of the date of the notice a hearing, a contested 
        case hearing must be held.  The hearing must be held within 45 
        days of the date the commissioner refers the case to the Office 
        of Administrative Hearings.  Notwithstanding any law to the 
        contrary, the applicant must be served with 20 days' notice in 
        writing specifying the time and place of the hearing and the 
        allegations against the applicant.  The notice may be served 
        personally or by mail.  
           (b) Prior to notifying a licensing authority pursuant to 
        subdivision 1 to revoke a license, the commissioner must send a 
        notice to the applicant of the commissioner's intent to require 
        revocation of the license and of the applicant's right to a 
        hearing under paragraph (a).  A license is subject to revocation 
        when 30 days have passed following the date of the notice in 
        this paragraph without the applicant requesting a hearing, or, 
        if a hearing is timely requested, upon final determination of 
        the hearing under section 14.62, subdivision 1.  A license shall 
        be revoked by the licensing authority within 30 days after 
        receiving notice from the commissioner to revoke. 
           (c) A hearing under this subdivision is in lieu of any 
        other hearing or proceeding provided by law arising from any 
        action taken under subdivision 1. 
           Subd. 4.  [LICENSING AUTHORITY; DUTIES.] All licensing 
        authorities must require the applicant to provide the 
        applicant's Social Security number and Minnesota business 
        identification number on all license applications.  Upon request 
        of the commissioner, the licensing authority must provide the 
        commissioner with a list of all applicants, including the name, 
        address, business name and address, Social Security number, and 
        business identification number of each applicant.  The 
        commissioner may request from a licensing authority a list of 
        the applicants no more than once each calendar year.  [270.72] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 88.  [270C.721] [REVOCATION OF CERTIFICATES OF 
        AUTHORITY TO DO BUSINESS IN THIS STATE.] 
           When a foreign corporation authorized to do business in 
        this state under chapter 303, or a foreign limited liability 
        company or partnership authorized to do business in this state 
        under chapter 322B, fails to comply with a law administered by 
        the commissioner that imposes a tax, the commissioner may serve 
        the secretary of state with a certified copy of an order finding 
        such failure to comply.  The secretary of state, upon receipt of 
        the order, shall revoke the certificate of authority to do 
        business in this state, and shall reinstate the certificate 
        under section 303.19 or 322B.960, subdivision 6, only when the 
        corporation or limited liability company or partnership has 
        obtained from the commissioner an order finding that the 
        corporation or limited liability company or partnership is in 
        compliance with such law.  An order requiring revocation of a 
        certificate shall not be issued unless the commissioner gives 
        the corporation or limited liability company or partnership 30 
        days' written notice of the proposed order, specifying the 
        violations of law, and affording an opportunity to request a 
        contested case hearing under chapter 14.  [270.721] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 89.  [270C.722] [REVOCATION OF SALES TAX PERMITS.] 
           Subdivision 1.  [NOTICE OF REVOCATION; HEARINGS.] (a) If:  
        (1) a person fails to comply with chapter 297A or the sales and 
        use tax provisions of chapter 289A or the rules related to sales 
        tax, or (2) any retailer purchases for resale from an unlicensed 
        seller more than 20,000 cigarettes or $500 or more worth of 
        tobacco products, without reasonable cause, the commissioner may 
        give the person 30 days' notice in writing, specifying the 
        violations, and stating that based on the violations the 
        commissioner intends to revoke the person's permit issued under 
        section 297A.84.  The notice must also advise the person of the 
        right to contest the revocation under this subdivision.  It must 
        also explain the general procedures for a contested case hearing 
        under chapter 14.  The notice may be served personally or by 
        mail in the manner prescribed for service of an order of 
        assessment. 
           (b) If the person does not request a hearing within 30 days 
        after the date of the notice of intent, the commissioner may 
        serve a notice of revocation of permit upon the person, and the 
        permit is revoked.  If a hearing is timely requested, and held, 
        the permit is revoked after the commissioner serves an order of 
        revocation of permit under section 14.62, subdivision 1. 
           Subd. 2.  [NEW PERMITS AFTER REVOCATION.] (a) The 
        commissioner shall not issue a new permit after revocation or 
        reinstate a revoked permit unless the taxpayer applies for a 
        permit and provides reasonable evidence of intention to comply 
        with the sales and use tax laws and rules.  The commissioner may 
        require the applicant to provide security, in addition to that 
        authorized by section 297A.92, in an amount reasonably necessary 
        to ensure compliance with the sales and use tax laws and rules.  
        If the commissioner issues or reinstates a permit not in 
        conformance with the requirements of this subdivision or 
        applicable rules, the commissioner may cancel the permit upon 
        notice to the permit holder.  The notice must be served by first 
        class and certified mail at the permit holder's last known 
        address.  The cancellation shall be effective immediately, 
        subject to the right of the permit holder to show that the 
        permit was issued in conformance with the requirements of this 
        subdivision and applicable rules.  Upon such showing, the permit 
        must be reissued. 
           (b) If a taxpayer has had a permit or permits revoked three 
        times in a five-year period, the commissioner shall not issue a 
        new permit or reinstate the revoked permit until 24 months have 
        elapsed after revocation and the taxpayer has satisfied the 
        conditions for reinstatement of a revoked permit or issuance of 
        a new permit imposed by this section and rules adopted under 
        this section. 
           (c) For purposes of this subdivision, "taxpayer" means: 
           (1) an individual, if a revoked permit was issued to or in 
        the name of an individual, or a corporation or partnership, if a 
        revoked permit was issued to or in the name of a corporation or 
        partnership; and 
           (2) an officer of a corporation, a member of a partnership, 
        or an individual who is liable for delinquent sales taxes, 
        either for the entity for which the new or reinstated permit is 
        at issue, or for another entity for which a permit was 
        previously revoked, or personally as a permit holder. [297A.86] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 90.  [270C.725] [POSTING OF TAX DELINQUENCY; SALE OF 
        LIQUOR OR BEER.] 
           Subdivision 1.  [POSTING, NOTICE.] Pursuant to the 
        authority to disclose under section 270B.12, subdivision 4, the 
        commissioner shall, by the 15th of each month, submit to the 
        commissioner of public safety a list of all taxpayers who are 
        required to pay, withhold, or collect the tax imposed by section 
        290.02, 290.0922, 290.92, 290.9727, 290.9728, 290.9729, or 
        297A.62, or local sales and use tax payable to the commissioner, 
        or a local option tax administered and collected by the 
        commissioner, and who are ten days or more delinquent in either 
        filing a tax return or paying the tax. 
           The commissioner is under no obligation to list a taxpayer 
        whose business is inactive.  At least ten days before notifying 
        the commissioner of public safety, the commissioner shall notify 
        the taxpayer of the intended action. 
           The commissioner of public safety shall post the list in 
        the same manner as provided in section 340A.318, subdivision 3.  
        The list will prominently show the date of posting.  If a 
        taxpayer previously listed files all returns and pays all taxes 
        specified in this subdivision then due, the commissioner shall 
        notify the commissioner of public safety within two business 
        days. 
           Subd. 2.  [SALES PROHIBITED.] Beginning the third business 
        day after the list is posted, no wholesaler, manufacturer, or 
        brewer may sell or deliver any product to a taxpayer included on 
        the posted list. 
           Subd. 3.  [PENALTY.] A wholesaler, manufacturer, or brewer 
        of intoxicating liquor or 3.2 percent malt liquor who violates 
        subdivision 2 is subject to the penalties provided in section 
        340A.304. [270.73] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 91.  [270C.728] [PUBLICATION OF NAMES OF DELINQUENT 
        TAXPAYERS.] 
           Subdivision 1.  [COMMISSIONER MAY PUBLISH.] (a) 
        Notwithstanding any other law, the commissioner may publish a 
        list or lists of taxpayers who owe delinquent taxes, and who 
        meet the requirements of paragraph (b). 
           (b) For purposes of this section, a taxpayer may be 
        included on a list if: 
           (1) the taxes owed remain unpaid at least 180 days after 
        the dates they were due; 
           (2) the taxpayer's total liability for the taxes, including 
        penalties, interest, and other charges, is at least $5,000; and 
           (3) a tax lien has been filed or a judgment for the 
        liability has been entered against the taxpayer before notice is 
        given under subdivision 3. 
           (c) In the case of listed taxpayers that are business 
        entities, the commissioner may also list the names of 
        responsible persons assessed pursuant to section 270C.56 for 
        listed liabilities, who are not protected from publication by 
        subdivision 2, and for whom the requirements of paragraph (b) 
        are satisfied with regard to the personal assessment. 
           (d) Before any list is published under this section, the 
        commissioner must certify in writing that each of the conditions 
        for publication as provided in this section has been satisfied, 
        and that procedures were followed to ensure the accuracy of the 
        list and notice was given to the affected taxpayers. 
           Subd. 2.  [REQUIRED AND EXCLUDED TAXPAYERS.] (a) The 
        commissioner may publish lists of some or all of the taxpayers 
        described in subdivision 1.  A list must include the taxpayers 
        with the largest unpaid liabilities of the kind used to define 
        the list, subject to the limitations of paragraphs (b) and (c). 
           (b) For the purposes of this section, a tax is not 
        delinquent if: 
           (1) an administrative or court action contesting the amount 
        or validity of the taxpayer's liability has been filed or served 
        and is unresolved at the time when notice would be given under 
        subdivision 3; 
           (2) an appeal period to contest the liability has not 
        expired; or 
           (3) the liability is subject to a payment agreement and 
        there is no delinquency in the payments required under the 
        agreement. 
           (c) Unpaid liabilities are not subject to publication if: 
           (1) the commissioner is in the process of reviewing or 
        adjusting the liability; 
           (2) the taxpayer is a debtor in a bankruptcy proceeding and 
        the automatic stay is in effect; 
           (3) the commissioner has been notified that the taxpayer is 
        deceased; or 
           (4) the time period for collecting the taxes has expired. 
           Subd. 3.  [NOTICE TO TAXPAYER.] (a) At least 30 days before 
        publishing the name of a delinquent taxpayer, the commissioner 
        shall mail a written notice to the taxpayer, detailing the 
        amount and nature of each liability and the intended publication 
        of the information listed in subdivision 4 related to the 
        liability.  The notice must be mailed by first class and 
        certified mail addressed to the last known address of the 
        taxpayer.  The notice must include information regarding the 
        exceptions listed in subdivision 2 and must state that the 
        taxpayer's information will not be published if the taxpayer 
        pays the delinquent obligation, enters into an agreement to pay, 
        or provides information establishing that subdivision 2 
        prohibits publication of the taxpayer's name. 
           (b) After at least 30 days has elapsed since the notice was 
        mailed and the delinquent tax has not been paid and the taxpayer 
        has not proved to the commissioner that subdivision 2 prohibits 
        publication, the commissioner may publish in a list of 
        delinquent taxpayers the information about the taxpayer that is 
        listed in subdivision 4. 
           Subd. 4.  [FORM OF LIST.] The list may be published by any 
        medium or method.  The list must contain the name, address, type 
        of tax, and period for which payment is due for each liability, 
        including penalties, interest, and other charges owed by each 
        listed delinquent taxpayer. 
           Subd. 5.  [REMOVAL FROM LIST.] The commissioner shall 
        remove the name of a taxpayer from the list of delinquent 
        taxpayers after the commissioner receives written notice of and 
        verifies any of the following facts about the liability in 
        question: 
           (1) the taxpayer has contacted the commissioner and 
        arranged resolution of the liability; 
           (2) an active bankruptcy proceeding has been initiated for 
        the liability; 
           (3) a bankruptcy proceeding concerning the liability has 
        resulted in discharge of the liability; or 
           (4) the commissioner has written off the liability. 
           Subd. 6.  [NAMES PUBLISHED IN ERROR.] If the commissioner 
        publishes a name under subdivision 1 in error, the taxpayer 
        whose name was erroneously published has a right to request a 
        retraction and apology.  If the taxpayer so requests, the 
        commissioner shall publish a retraction and apology 
        acknowledging that the taxpayer's name was published in error.  
        The retraction and apology must appear in the same medium and 
        the same format as the original list that contained the name 
        listed in error. 
           Subd. 7.  [PAYMENT OF DAMAGES.] Actions against the 
        commissioner or the state of Minnesota arising out of the 
        implementation of this program must be brought under section 
        270C.275.  If an action results in damages awarded to a 
        taxpayer, the damages must be paid out of the department's 
        operating budget rather than in accordance with section 3.736, 
        subdivision 7.  [270.691] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
              OVERSIGHT AND ADMINISTRATION OF PROPERTY TAX SYSTEM 
           Sec. 92.  [270C.85] [ADMINISTRATION OF PROPERTY TAX LAWS; 
        POWERS AND DUTIES.] 
           Subdivision 1.  [GENERAL SUPERVISION.] The commissioner 
        shall have and exercise general supervision over the 
        administration of the property tax laws, assessors, town, 
        county, and city boards of review and equalization, and all 
        other assessing officers in the performance of their duties, to 
        the end that all assessments of property be made relatively just 
        and equal in compliance with the laws of the state.  [270.06(1)] 
           Subd. 2.  [POWERS AND DUTIES.] The commissioner shall have 
        and exercise the following powers and duties in administering 
        the property tax laws. 
           (a) Confer with, advise, and give the necessary 
        instructions and directions to local assessors and local boards 
        of review throughout the state as to their duties under the laws 
        of the state.  [270.06(2)] 
           (b) Direct proceedings, actions, and prosecutions to be 
        instituted to enforce the laws relating to the liability and 
        punishment of public officers and officers and agents of 
        corporations for failure or negligence to comply with the 
        provisions of the property tax laws, and cause complaints to be 
        made against local assessors, members of boards of equalization, 
        members of boards of review, or any other assessing or taxing 
        officer, to the proper authority, for their removal from office 
        for misconduct or negligence of duty.  [270.06(3)] 
           (c) Require county attorneys to assist in the commencement 
        of prosecutions in actions or proceedings for removal, 
        forfeiture, and punishment, for violation of the property tax 
        laws in their respective districts or counties.  [270.06(4)] 
           (d) Require town, city, county, and other public officers 
        to report information as to the assessment of property, and such 
        other information as may be needful in the work of the 
        commissioner, in such form as the commissioner may prescribe.  
        [270.06(5)] 
           (e) Transmit to the governor, on or before the third Monday 
        in December of each even-numbered year, and to each member of 
        the legislature, on or before November 15 of each even-numbered 
        year, the report of the department for the preceding years, 
        showing all the taxable property subject to the property tax 
        laws and the value of the same, in tabulated form.  [270.06(12)] 
           (f) Inquire into the methods of assessment and taxation and 
        ascertain whether the assessors faithfully discharge their 
        duties.  [270.06(13)] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 93.  [270C.86] [POWER TO ABATE; CORRECTION OF ERRORS.] 
           Subdivision 1.  [POWERS OF COMMISSIONER; APPLICATION FOR 
        ABATEMENT; ORDERS.] (a) Except for matters delegated to the 
        various boards of county commissioners under section 375.192, 
        and except as otherwise provided by law, the commissioner shall 
        have power to grant such reduction or abatement of net tax 
        capacities, taxes imposed by the property tax laws, or special 
        assessments, and of any costs, penalties, or interest thereon as 
        the commissioner may deem just and equitable, and to order the 
        refundment, in whole or in part, of any taxes or special 
        assessments, and costs, penalties, or interest thereon which 
        have been erroneously or unjustly paid.  Application therefor 
        shall be submitted with a statement of facts in the case and the 
        favorable recommendation of the county board or of the board of 
        abatement of any city where any such board exists, and the 
        county auditor of the county wherein such tax was levied or 
        paid.  No reduction, abatement, or refundment of any special 
        assessments made or levied by any municipality for local 
        improvements shall be made unless it is also approved by the 
        board of review or similar taxing authority of such municipality.
           (b) The commissioner shall forward to the county auditor a 
        copy of the order made by the commissioner in all cases in which 
        the approval of the county board is required.  [270.07, subd. 
        1(c)] 
           (c) An appeal may not be taken to the Tax Court from any 
        order of the commissioner made in the exercise of the 
        discretionary authority granted in paragraph (a) with respect to 
        the reduction or abatement of real or personal property taxes in 
        response to an application for an abatement, reduction, or 
        refund of taxes, net tax capacities, costs, penalties, or 
        interest.  [270.07, subd. 1(f)] 
           Subd. 2.  [EXAMINATION OF APPLICATION; REDUCTIONS; 
        APPEALS.] (a) The commissioner shall examine all applications 
        submitted by a county board pursuant to section 375.192, 
        subdivision 3.  If the applicant has previously submitted a 
        claim for property tax relief pursuant to chapter 290A based on 
        the property taxes payable prior to receiving the abatement, the 
        commissioner may approve the application in an amount reduced by 
        the relief provided pursuant to chapter 290A. 
           (b) An appeal may be taken to the Tax Court from an order 
        of the commissioner made pursuant to this subdivision.  [270.07, 
        subd. 1a] 
           Subd. 3.  [CORRECTION OF ERRORS.] On application of the 
        county auditor with the approval of the county board, the 
        commissioner may order the correction of any administrative and 
        clerical errors in the assessment, levy, and extension of taxes 
        under the property tax laws, other than valuation.  [270.07, 
        subd. 2] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 94.  [270C.87] [REVISION OF MINNESOTA ASSESSORS' 
        MANUAL.] 
           In accordance with the provisions of section 270C.06, the 
        commissioner shall periodically revise the Minnesota assessors' 
        manual.  [270.068] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 95.  [270C.88] [ORDERS; DECISIONS.] 
           Subdivision 1.  [IN WRITING.] Any order or decision of the 
        commissioner increasing or decreasing any tax, assessment, or 
        other obligation by a sum exceeding $1,000 on real or personal 
        property, or the net tax capacity thereof, or other obligation 
        relating thereto, the result of which is to increase or decrease 
        the total amount payable under the property tax laws, including 
        penalties and interest, by a sum exceeding $1,000, must bear the 
        written signature or facsimile signature of the commissioner or 
        the commissioner's delegate.  Written approval of the 
        commissioner or a delegate shall not be required with respect to 
        orders reducing net tax capacity of property by reason of its 
        classification as a homestead. 
           Subd. 2.  [ONLY OFFICIAL ACTIONS OF COUNTY BOARD OR OTHER 
        AGENCY ACTED UPON.] No action requiring the recommendation or 
        approval of any county board or other public agency shall be 
        taken by the commissioner, or any other employees or agents of 
        the department, unless such recommendation or approval shall 
        have been made upon official action by such county board or 
        other agency, entered upon the minutes or record of its 
        proceedings as a public record, showing the names of the 
        taxpayers and other persons concerned and the amounts involved, 
        and so certified by the recording officer of such board or 
        agency. [270.10] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 96.  [270C.89] [COUNTY ASSESSOR'S REPORTS OF 
        ASSESSMENT FILED WITH COMMISSIONER.] 
           Subdivision 1.  [INITIAL REPORT.] Each county assessor 
        shall file by April 1 with the commissioner a copy of the 
        abstract that will be acted upon by the local and county boards 
        of review.  The abstract must list the real and personal property 
        in the county itemized by assessment districts.  The assessor of 
        each county in the state shall file with the commissioner, 
        within ten working days following final action of the local 
        board of review or equalization and within five days following 
        final action of the county board of equalization, any changes 
        made by the local or county board.  The information must be 
        filed in the manner prescribed by the commissioner.  It must be 
        accompanied by a printed or typewritten copy of the proceedings 
        of the appropriate board.  [270.11, subd. 2] 
           Subd. 2.  [FINAL REPORT.] The final abstract of assessments 
        after adjustments by the State Board of Equalization and 
        inclusion of any omitted property shall be submitted to the 
        commissioner on or before September 1 of each calendar year.  
        The final abstract must separately report the captured tax 
        capacity of tax increment financing districts under section 
        469.177, subdivision 2, the metropolitan revenue contribution 
        value under section 473F.07, and the value subject to the power 
        line credit under section 273.42.  [270.11, subd. 2] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 97.  [270C.90] [COUNTY AUDITOR TO CALCULATE TAX RATE.] 
           The county auditor shall calculate the tax rate necessary 
        to raise the required amount of the various taxes on the net tax 
        capacity of all property as returned by the commissioner and the 
        State Board of Equalization.  [270.14] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 98.  [270C.91] [RECORD OF PROCEEDINGS CHANGING NET TAX 
        CAPACITY; DUTIES OF COUNTY AUDITOR.] 
           A record of all proceedings of the commissioner affecting 
        any change in the net tax capacity of any property, as revised 
        by the State Board of Equalization, shall be kept by the 
        commissioner and a copy thereof, duly certified, shall be mailed 
        each year to the auditor of each county wherein such property is 
        situated, on or before June 30 or 30 days after submission of 
        the abstract required by section 270C.89, whichever is later.  
        This record shall specify the amounts or amount, or both, added 
        to or deducted from the net tax capacity of the real property of 
        each of the several towns and cities, and of the real property 
        not in towns or cities, also the percent or amount of both, 
        added to or deducted from the several classes of personal 
        property in each of the towns and cities, and also the amount 
        added to or deducted from the assessment of any person.  The 
        county auditor shall add to or deduct from such tract or lot, or 
        portion thereof, of any real property in the county the required 
        percent or amount, or both, on the net tax capacity thereof as 
        it stood after equalized by the county board, adding in each 
        case a fractional sum of 50 cents or more, and deducting in each 
        case any fractional sum of less than 50 cents, so that no net 
        tax capacity of any separate tract or lot shall contain any 
        fraction of a dollar; and add to, or deduct from, the several 
        classes of personal property in the county the required percent 
        or amount, or both, on the net tax capacity thereof as it stood 
        after equalized by the county board, adding or deducting in 
        manner aforesaid any fractional sum so that no net tax capacity 
        of any separate class of personal property shall contain a 
        fraction of a dollar, and add to or deduct from assessment of 
        any person, as they stood after equalization by the county 
        board, the required amounts to agree with the assessments as 
        returned by the commissioner.  [270.13] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 99.  [270C.92] [IMPROPER OR NEGLIGENT ADMINISTRATION 
        OF PROPERTY TAX LAWS.] 
           Subdivision 1.  [EXAMINATION OF COMPLAINTS; 
        PROCEEDINGS.] The commissioner shall receive complaints and 
        examine all cases where it is alleged that property subject to 
        taxation has not been assessed or has been fraudulently or for 
        any reason improperly or unequally assessed, or the law in any 
        manner evaded or violated, and cause to be instituted such 
        proceedings as will remedy improper or negligent administration 
        of the property tax laws.  [270.11, subd. 5] 
           Subd. 2.  [CHANGE OF MARKET VALUES.] In administering the 
        property tax laws, the commissioner shall raise or lower the 
        market value of any real or personal property, including the 
        power to raise or lower the market value of the real or personal 
        property of any person; provided, that before any such 
        assessment against the property of any person is so raised, 
        notice of an intention to raise such market value and of the 
        time and place at which a hearing thereon will be held shall be 
        given to such person, by mail, addressed to the person at the 
        place of residence listed upon the assessment book, at least 
        five days before the day of such hearing.  
           All relevant and material evidence concerning the market 
        value of the real or personal property shall be submitted at the 
        hearing, and the hearing shall not be a "contested case" within 
        the meaning of section 14.02, subdivision 3.  The person 
        notified of the hearing, or any other person having an interest 
        in the property, may present evidence and argument bearing upon 
        the market value of the property. [270.11, subd. 6] 
           Subd. 3.  [APPEARANCES BEFORE THE COMMISSIONER.] A property 
        owner, other than a public utility or mining company, for which 
        the original assessments are determined by the commissioner, may 
        not appear before the commissioner for the purposes provided in 
        subdivision 1 or 2 unless a timely appearance in person, by 
        counsel, or by written communication has been made before the 
        county board of equalization as provided in section 274.13, to 
        appeal the assessment of the property, or that the property 
        owner can establish not receiving notice of market value at 
        least five days before the local board of review meeting. 
           The commissioner may refuse to hear an appeal that is 
        within the jurisdiction of the Small Claims Division of the Tax 
        Court as stated in section 271.21, subdivision 2.  The property 
        owner shall be notified by the commissioner of the right to 
        appeal to the Small Claims Division whenever an appeal to the 
        commissioner is denied.  [270.11, subd. 7] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 100.  [270C.921] [MUNICIPALITY MAY BE PARTY TO TAX 
        HEARING.] 
           Any city, town, school district, or county (all of which 
        governmental subdivisions shall be embraced in the word 
        "municipality" as used in sections 270C.921 to 270C.928) may 
        appear at and become a party to any proceedings before the 
        commissioner under section 270C.92 held for the purpose of 
        equalizing or assessing any real or personal property in the 
        municipality, or reducing the net tax capacity of any such 
        property.  For that purpose the municipality may employ counsel 
        and disburse money for other expenses in connection with the 
        proceedings, on duly itemized, verified claims, which shall be 
        audited and allowed as now provided by law for the allowance of 
        claims against a municipality.  It shall be the duty of the 
        commissioner, at the time of a hearing, to grant the 
        municipality, at its request, any further reasonable time as may 
        be necessary for the municipality to prepare for further 
        hearing.  Before granting any reduction in net tax capacity 
        exceeding $100,000, it shall be the duty of the commissioner, 
        when any taxpayer or property owner has applied to the 
        commissioner after June 30, 1983, for a reduction of the net tax 
        capacity of any real or personal property in an amount exceeding 
        $100,000, to give written notice to the officials of the 
        municipality where the property is located and to permit the 
        municipality to have reasonable opportunity to be heard at any 
        proceedings concerning such reduction.  [270.19] 
           Sec. 101.  [270C.922] [MUNICIPALITY MAY REQUEST TAX 
        HEARING.] 
           Any municipality may, at any time within ten days after the 
        final adjournment of the county board of equalization of the 
        county in which the municipality is located or within ten days 
        after the filing with the auditor of such county of any order of 
        the commissioner reducing the net tax capacity of any property 
        in the municipality, file a written request with the 
        commissioner for a hearing under section 270C.92 upon the 
        equalization or assessment of any property within the 
        municipality, specifying the property and the name and address 
        of the owner thereof, as they appear from the assessment books.  
        The commissioner shall then order a hearing and mail a notice 
        stating the time and place of the hearing to the municipality 
        and to the owner of the property.  It shall be the duty of the 
        commissioner, at the time of a hearing, to grant the 
        municipality, at its request, such further reasonable time as 
        may be necessary for the municipality to prepare for further 
        hearing.  [270.20] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 102.  [270C.923] [WITNESSES SUMMONED.] 
           In any hearing before the commissioner under section 
        270C.92, the commissioner shall, upon the request of a 
        municipality or any other party to the proceedings, issue 
        subpoenas and summon witnesses to appear and give testimony, and 
        to produce books, records, papers, and documents.  For the 
        purpose of preparing for and participating in a hearing the 
        municipality shall have access to, and use of, all the data, 
        records, and files of the commissioner pertaining to the 
        property in question.  Upon demand of any party a record shall 
        be kept by the commissioner of all evidence offered or received 
        at a hearing, the cost thereof to be paid by the party making 
        such demand.  [270.21] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 103.  [270C.924] [FINDINGS OF FACT AND ORDER; 
        APPEALS.] 
           Subdivision 1.  [FINDINGS OF FACT.] For hearings held under 
        section 270C.92, the commissioner shall determine the 
        controversy upon the evidence produced at the hearing and shall 
        make and file written findings of fact and an order determining 
        the controversy.  In the equalization and determination of net 
        tax capacities, the findings and net tax capacities as given by 
        the assessor of the local assessment district shall be 
        considered as prima facie correct.  Copies of the order and 
        findings shall be mailed to all parties appearing at the hearing 
        and to the auditor of the county in which the property is 
        located.  
           Subd. 2.  [APPEAL BY MUNICIPALITY.] Any municipality which 
        has appeared in the proceedings, and which is aggrieved by the 
        order of the commissioner reducing the net tax capacity of any 
        of the property, or failing to increase the net tax capacity, 
        may have the order of the commissioner reviewed by appeal to the 
        Court of Appeals, on either of the following grounds:  (1) that 
        the determination of the commissioner was not in accordance with 
        the property tax laws, or that the commissioner committed any 
        other error of law; or (2) that the findings of fact and 
        determination of net tax capacity were unwarranted by or were 
        contrary to the weight of the evidence.  
           Subd. 3.  [APPEAL BY PROPERTY OWNER.] Any owner of property 
        who has appeared in the proceedings and who is aggrieved by the 
        order of the commissioner raising the net tax capacity of the 
        property, or failing to reduce the net tax capacity, may have 
        the order of the commissioner reviewed on appeal to the Court of 
        Appeals in like manner and upon the same grounds as provided for 
        review on the appeal of any municipality.  [270.22] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 104.  [270C.925] [NOTICE OF APPEAL.] 
           To secure review of a determination made by the 
        commissioner under section 270C.924, the municipality shall, 
        within 30 days after mailing of notice of the determination, 
        serve upon the commissioner a notice of appeal to the Court of 
        Appeals from the order of the commissioner and file the 
        original, with proof of service, with the clerk of the appellate 
        courts, paying the filing fee provided by law for appeals in 
        civil actions.  The filing of the notice of appeal shall vest 
        the court with jurisdiction and the appeal shall be heard and 
        disposed of as in other civil cases.  
           The court shall reverse or affirm the order of the 
        commissioner or remand the cause to the commissioner for a new 
        hearing or further proceedings or for other disposition, with 
        further directions as the court deems proper.  [270.23] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 105.  [270C.926] [APPEAL DOES NOT STAY COLLECTION.] 
           The institution of any appeal under sections 270C.924 and 
        270C.925 from the order of the commissioner does not stay any 
        proceedings for the assessment or collection of taxes against 
        the property involved therein.  Notwithstanding such appeal, the 
        commissioner shall file with the auditor of the county in which 
        such property is situated an order confirming, increasing, 
        decreasing, or determining the net tax capacity thereof, and the 
        county auditor shall extend and levy against such property, or 
        the owner thereof, the taxes thereupon for such year according 
        to such assessment, and all subsequent proceedings for the 
        determination of the taxes and the collection thereof shall be 
        taken as if no appeal from such order were pending.  When the 
        matter is finally determined on review a properly authenticated 
        copy of the findings, order, or judgment shall be filed with the 
        auditor of the county in which the land or property referred to 
        in the proceedings is situated.  If such order or judgment 
        lowers the net tax capacity of the land or property referred to 
        in the proceedings, the commissioner, upon petition of the 
        owner, approved by the county board, shall abate so much of the 
        taxes against such property as is attributable to the excessive 
        net tax capacity thereof.  If such tax has been paid, the county 
        auditor, upon petition of the owner, approved by the county 
        board and the commissioner, shall refund so much of such payment 
        as is attributable to such excess net tax capacity.  Upon such 
        refund being made the county auditor shall charge the same to 
        the state and the various governmental subdivisions thereof that 
        participated in such excessive payment, in proportion to their 
        respective shares therein, and deduct the same in the next tax 
        apportionment.  [270.24] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 106.  [270C.927] [INCREASE IN NET TAX CAPACITY; 
        ADDITIONAL TAXES.] 
           If the final order and judgment in a hearing before the 
        commissioner under section 270C.92, or any appeal thereof, 
        result in raising the net tax capacity of the property affected 
        by the proceedings, the county officers shall, for the next 
        ensuing year, in addition to the regular taxes levied for such 
        ensuing year, levy, extend, and spread against such property, if 
        real property, or against the owner thereof, if personal 
        property, a tax equal to the difference between the taxes 
        actually levied and extended against such property, or owner, 
        for the year in question and the taxes which should have been 
        levied or extended against such property, or owner, at the 
        increased net tax capacity as finally determined.  [270.25] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 107.  [270C.928] [PROCEEDINGS TO DETERMINE NET TAX 
        CAPACITY.] 
           The proceedings provided in sections 270C.92 to 270C.927 
        are for determining the net tax capacity upon the basis of which 
        taxes are spread against property, or its owner, in the first 
        instance.  The order of the commissioner, or the final order for 
        judgment of the Court of Appeals on it, shall not be a bar to 
        any defense against the taxes interposed at the time of the 
        proceedings for judgment on them.  All defenses which may be set 
        up against the proceedings for judgment upon the taxes may be 
        asserted notwithstanding the determination of the commissioner 
        or the court.  If the taxes are levied or extended pending 
        review of the order of the commissioner by the court, a judgment 
        entered upon the taxes in the tax delinquency proceedings shall 
        not be a bar to the spreading of further taxes against the 
        property for that year, in the event the net tax capacity of the 
        property is raised as herein provided.  In the proceedings for 
        the collection of any taxes which include an additional levy 
        because of the raising of the net tax capacity of any property, 
        the owner may answer separately to the proceedings to obtain 
        judgment for the excess levy.  [270.26] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
               REASSESSMENT OF OMITTED OR UNDERVALUED PROPERTIES 
           Sec. 108.  [270C.94] [PROPERTY OMITTED OR UNDERVALUED; 
        REASSESSMENT; APPOINTMENT OF SPECIAL ASSESSOR.] 
           Subdivision 1.  [PROPERTY OMITTED OR UNDERVALUED.] When it 
        shall be made to appear to the commissioner, by complaint or by 
        the finding of a court or of the legislature, or either body of 
        the legislature, or any committee of the legislature, or any 
        city council or county board, that any considerable amount of 
        property has been improperly omitted from the tax list or 
        assessment roll of any district or county for any year, or, if 
        assessed, that the same has been undervalued or overvalued, as 
        compared with like property in the same county or in the state 
        so that the assessment for such year in such district or county 
        is grossly unfair and inequitable, whether or not the same has 
        been equalized by the county board of equalization or the 
        commissioner, the commissioner shall examine into the facts in 
        the matter and, if satisfied that it would be for the best 
        interests of the state that a reassessment of such property be 
        made, the commissioner shall appoint a special assessor and such 
        deputy assessors as may be necessary and cause a reassessment to 
        be made of all or any of the real and personal property, or 
        either, in any such district or county as the commissioner may 
        deem best, to the end that all property in such district or 
        county shall be assessed equitably as compared with like 
        property in such district or county.  [270.16, subd. 1] 
           Subd. 2.  [SPECIAL ASSESSORS, DEPUTIES; REASSESSMENTS.] The 
        commissioner shall appoint a special assessor and deputies and 
        cause to be made, in any year, a reassessment of all or any real 
        and personal property, or either, in any assessment district, 
        when in the commissioner's judgment such reassessment is 
        desirable or necessary, to the end that any and all property in 
        such district shall be assessed equitably as compared with like 
        property in the county wherein such district is situated.  
        [270.11, subd. 3] 
           Subd. 3.  [FAILURE TO APPRAISE.] When an assessor has 
        failed to properly appraise at least one-quarter of the parcels 
        of property in a district or county as provided in section 
        273.01, the commissioner shall appoint a special assessor and 
        deputy assessor as necessary and cause a reappraisal to be made 
        of the property due for reassessment in accordance with law.  
        [270.16, subd. 2] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 109.  [270C.95] [QUALIFICATION OF ASSESSORS; 
        REASSESSMENT, HOW MADE.] 
           Every special assessor and deputy appointed under the 
        provisions of section 270C.94 shall subscribe and file with the 
        commissioner an oath to faithfully and fairly perform the duties 
        of office.  Such special assessor, assisted by deputies, shall 
        thereupon proceed to carefully examine and reassess the property 
        so to be reassessed and prepare duplicate lists of such 
        reassessment in such form as the commissioner may prescribe, 
        showing the property or person so reassessed, the amount of the 
        original assessment thereof made in such year, and opposite the 
        same the reassessment so made by such special assessor.  The 
        special assessor shall file both copies of such list with the 
        commissioner; and the commissioner shall thereupon examine, 
        equalize, and correct such reassessment so as to substantially 
        conform with the assessment of like property throughout the 
        state and transmit to the auditor of the county wherein such 
        reassessment was so made one copy of such reassessment by the 
        commissioner so corrected and equalized.  Such list shall for 
        all purposes supersede and be in place of the original 
        assessment made for such year upon such property and the county 
        auditor, upon receipt thereof, shall extend and levy against 
        such property so reassessed the taxes thereon for such year 
        according to such reassessment in the same manner as though such 
        list was the original assessment list of such property.  Any 
        person feeling aggrieved by an assessment so made against the 
        person, or upon any property at that time owned by the person, 
        may appeal therefrom to the district court of the county in 
        which such assessment is made.  To render the appeal effective 
        for any purpose, the appellant shall file a notice of the appeal 
        with the auditor of such county within 30 days after the making 
        of the assessment, which notice shall specify the ground upon 
        which the appeal was taken, and no other or different service 
        shall be required to perfect it.  Upon the filing of the notice 
        the county auditor shall make and file in the office of the 
        court administrator of the district court a certified copy of 
        the notice and of the particular assessment appealed from and 
        notify the county attorney of such county of the pendency of the 
        appeal.  Thereupon the district court shall be deemed to have 
        acquired jurisdiction of the matter and proceed to hear and 
        determine it in like manner as other tax matters are tried and 
        determined in the district courts of this state.  The county 
        attorney of such county shall appear for and defend the 
        interests of the state in such matter.  [270.17] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 110.  [270C.96] [REASSESSMENT; COMPENSATION; 
        REIMBURSEMENT BY COUNTIES.] 
           The compensation of each special assessor and deputies, 
        appointed under the provisions of section 270C.94 and the 
        expenses as such, shall be fixed by the commissioner and paid 
        out of money appropriated for operation of the department.  The 
        commissioner on August 1 shall notify the auditor of each 
        affected county of the amount thereof paid on behalf of such 
        county since August 1 of the preceding year, whereupon the 
        county auditor shall levy a tax upon the taxable property in the 
        assessment district or districts wherein such reassessment was 
        made sufficient to pay the same.  One-half of such tax shall be 
        levied in the year in which the commissioner so notifies the 
        county auditor and the remaining one-half shall be levied in the 
        following year.  The respective counties shall reimburse the 
        state by paying one-half of the tax so assessed on or before 
        July 1 and the remaining one-half on or before December 1 in the 
        year in which the tax is payable by owner, whether or not the 
        tax was collected by the county.  The reimbursement shall be 
        credited to the general fund.  If any county fails to reimburse 
        the state within the time specified herein, the commissioner is 
        empowered to order withholding of state aids or distributions to 
        such county equal to the amount delinquent.  [270.18] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 111.  [270C.97] [OMITTED PROPERTY.] 
           The commissioner shall require the county auditor to place 
        upon the assessment rolls omitted property which may be 
        discovered to have escaped assessment and taxation in previous 
        years.  [270.11, subd. 4] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 112.  [270C.98] [SENIOR ACCREDITATION.] 
           The legislature finds that the property tax system would be 
        enhanced by requiring that every senior appraiser in the 
        Property Tax Division of the department obtain senior 
        accreditation from the State Board of Assessors.  Every senior 
        appraiser, including the department's regional representatives, 
        and every county assessor within two years of the first 
        appointment under section 273.061, must obtain senior 
        accreditation from the state Board of Assessors.  The board 
        shall provide the necessary courses or training.  If a 
        department senior appraiser or regional representative fails to 
        obtain or maintain senior accreditation, the failure shall be 
        grounds for dismissal, disciplinary action, or corrective 
        action.  Except as provided in section 273.061, subdivision 2, 
        paragraph (c), the commissioner must not approve the appointment 
        of a county assessor who is not senior accredited by the State 
        Board of Assessors.  No employee hired by the commissioner as a 
        senior appraiser or regional representative shall attain 
        permanent status until the employee obtains senior accreditation.
        [270.485] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 113.  [270C.99] [CERTAIN TOWNSHIPS AND CITIES OPTION 
        TO ELECT TO REINSTATE THE OFFICE OF ASSESSOR.] 
           Notwithstanding the provisions of section 273.05, 
        subdivision 1, a city or township in which the office of 
        assessor has been eliminated because of failure to fill a 
        vacancy in the office within 90 days pursuant to section 273.05, 
        subdivision 1, may elect, with the approval of the commissioner, 
        to have the office of assessor reinstated by hiring a certified 
        or accredited assessor.  This section shall not apply to Ramsey 
        county or to cities and townships located in counties which have 
        elected a county assessment system in accordance with section 
        273.055.  [270.494] 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 114.  [RULES; EFFECT OF RECODIFICATION.] 
           Notwithstanding Minnesota Statutes, section 14.05, 
        subdivision 1, Minnesota Rules, chapters 8001, 8002, 8007, 8009, 
        8017, 8019, 8020, 8031, 8034, 8038, 8043, 8050, 8052, 8092, 
        8093, 8100, 8106, 8110, 8120, 8121, 8122, 8125, 8130, 8160, 
        8165, 8170, and 8175, shall continue under the authority granted 
        in Minnesota Statutes, section 270C.06.  Furthermore, Minnesota 
        Statutes, section 14.125, does not apply, and the Department of 
        Revenue may subsequently amend or repeal these rules from time 
        to time without additional legislative authorization. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 115.  [PURPOSE AND EFFECT.] 
           Subdivision 1.  [PURPOSE.] It is the intent of the 
        legislature to simplify Minnesota's tax laws by consolidating 
        and recodifying tax administration and compliance provisions now 
        contained in Minnesota Statutes, chapter 270, and several other 
        chapters of Minnesota Statutes.  The provisions of this act may 
        not be used to determine the law in effect prior to the 
        effective dates in this act. 
           Subd. 2.  [EFFECT.] Due to the complexity of the 
        recodification, prior provisions are repealed on the effective 
        date of the new provisions.  The repealed provisions, however, 
        continue to remain in effect until superseded by the analogous 
        provision in the new law.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 116.  [REVISOR INSTRUCTION.] 
           (a) To the extent practicable, the revisor shall publish 
        the statutory derivations of the laws repealed and recodified in 
        this article in Laws of Minnesota. 
           (b) The revisor shall correct cross-references in Minnesota 
        Statutes and Minnesota Rules to sections that are repealed and 
        recodified by this article. 
           (c) Notwithstanding any law to the contrary, if a provision 
        of a section of Minnesota Statutes repealed by this article is 
        amended or repealed during the same legislative session, the 
        amendment or repealer shall supersede the provisions of this 
        article, and the revisor shall codify the amendment or repealer 
        consistent with the recodification of the affected section by 
        this article.  In addition, the revisor shall code new sections 
        or subdivisions enacted during the legislative session 
        consistent with the recodification. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 117.  [REPEALER.] 
           Minnesota Statutes 2004, sections 270.01; 270.02; 270.021; 
        270.022; 270.04; 270.05; 270.052; 270.058; 270.059; 270.06; 
        270.0601; 270.0602; 270.0603; 270.0604; 270.0605; 270.061; 
        270.062; 270.063; 270.064; 270.065; 270.066; 270.0665; 270.067; 
        270.068; 270.0681; 270.0682; 270.069; 270.07; 270.084; 270.09; 
        270.10; 270.101; 270.102; 270.11, subdivisions 2, 3, 4, 5, 6, 
        and 7; 270.13; 270.14; 270.15; 270.16; 270.17; 270.18; 270.19; 
        270.20; 270.21; 270.22; 270.23; 270.24; 270.25; 270.26; 270.27; 
        270.271; 270.272; 270.273; 270.274; 270.275; 270.276; 270.277; 
        270.278; 270.30; 270.485; 270.494; 270.60; 270.65; 270.652; 
        270.66; 270.67; 270.68; 270.69; 270.691; 270.70; 270.7001; 
        270.7002; 270.701; 270.702; 270.703; 270.704; 270.705; 270.706; 
        270.707; 270.708; 270.709; 270.71; 270.72; 270.721; 270.73; 
        270.74; 270.75; 270.76; 270.771; 270.78; 270.79; 287.39; 
        289A.07; 289A.13; 289A.31, subdivisions 3, 4, and 6; 289A.36; 
        289A.37, subdivisions 1, 3, 4, and 5; 289A.38, subdivision 13; 
        289A.43; 289A.65; 290.48, subdivisions 3 and 4; 290.92, 
        subdivisions 6b, 22, and 23; 290.97; 296A.20; 296A.201; 296A.25; 
        297A.86; 297A.93; 297D.14; 297E.08; 297E.09; 297E.12, 
        subdivision 10; 297E.15; 297F.15, subdivisions 1, 2, 3, 4, 5, 6, 
        7, and 8; 297F.16; 297F.22; 297G.14, subdivisions 1, 2, 3, 4, 5, 
        6, 7, and 8; 297G.15; 297G.21; 297I.45; 297I.50; 297I.55; and 
        297I.95, are repealed. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 

                                   ARTICLE 2 
                             CONFORMING PROVISIONS 
           Section 1.  Minnesota Statutes 2004, section 16D.08, 
        subdivision 2, is amended to read: 
           Subd. 2.  [POWERS.] (a) In addition to the collection 
        remedies available to private collection agencies in this state, 
        the commissioner, with legal assistance from the attorney 
        general, may utilize any statutory authority granted to a 
        referring agency for purposes of collecting debt owed to that 
        referring agency.  The commissioner may also use the tax 
        collection remedies in sections 270.06, 270.66, 270.67, 
        subdivisions 2 and 4, 270.69, 270.70, 270.7001 to 270.72, and 
        290.92, subdivision 23 270C.03, subdivision 1, clause (8), 
        270C.31, 270C.32, 270C.52, subdivisions 2 and 3, 270C.63, 
        270C.65, and 270C.67 to 270C.72.  A debtor may take advantage of 
        any administrative or appeal rights contained in the listed 
        sections.  For administrative and appeal rights for nontax 
        debts, references to administrative appeals or to the taxpayer 
        rights advocate shall be construed to be references to the case 
        reviewer, references to Tax Court shall be construed to mean 
        district court, and offers in compromise shall be submitted to 
        the referring agency.  A debtor who qualifies for cancellation 
        of collection costs under section 16D.11, subdivision 3, clause 
        (1), can apply to the commissioner for reduction or release of a 
        continuous wage levy, if the debtor establishes that the debtor 
        needs all or a portion of the wages being levied upon to pay for 
        essential living expenses, such as food, clothing, shelter, 
        medical care, or expenses necessary for maintaining employment.  
        The commissioner's determination not to reduce or release a 
        continuous wage levy is appealable to district court.  The word 
        "tax" or "taxes" when used in the tax collection statutes listed 
        in this subdivision also means debts referred under this chapter.
           (b) Before using the tax collection remedies listed in this 
        subdivision, notice and demand for payment of the amount due 
        must be given to the person liable for the payment or collection 
        of the debt at least 30 days prior to the use of the remedies.  
        The notice must be sent to the person's last known address and 
        must include a brief statement that sets forth in simple and 
        nontechnical terms the amount and source of the debt, the nature 
        of the available collection remedies, and remedies available to 
        the debtor. 
           Sec. 2.  Minnesota Statutes 2004, section 115B.49, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REGISTRATION; FEES.] (a) The owner or operator 
        of a dry cleaning facility shall register on or before October 1 
        of each year with the commissioner of revenue in a manner 
        prescribed by the commissioner of revenue and pay a registration 
        fee for the facility.  The amount of the fee is: 
           (1) $500, for facilities with a full-time equivalence of 
        fewer than five; 
           (2) $1,000, for facilities with a full-time equivalence of 
        five to ten; and 
           (3) $1,500, for facilities with a full-time equivalence of 
        more than ten. 
           (b) A person who sells dry cleaning solvents for use by dry 
        cleaning facilities in the state shall collect and remit to the 
        commissioner of revenue in a manner prescribed by the 
        commissioner of revenue, on or before the 20th day of the month 
        following the month in which the sales of dry cleaning solvents 
        are made, a fee of: 
           (1) $3.50 for each gallon of perchloroethylene sold for use 
        by dry cleaning facilities in the state; 
           (2) 70 cents for each gallon of hydrocarbon-based dry 
        cleaning solvent sold for use by dry cleaning facilities in the 
        state; and 
           (3) 35 cents for each gallon of other nonaqueous solvents 
        sold for use by dry cleaning facilities in the state. 
           (c) The audit, assessment, appeal, collection, enforcement, 
        and administrative provisions of chapters 270C and 289A apply to 
        the fee imposed by this subdivision.  To enforce this 
        subdivision, the commissioner of revenue may examine documents, 
        assess and collect fees, conduct investigations, issue 
        subpoenas, grant extensions to file returns and pay fees, impose 
        penalties and interest on the annual registration fee under 
        paragraph (a) and the monthly fee under paragraph (b), and abate 
        penalties and interest, and administer appeals, in the manner 
        provided in chapters 270 270C and 289A.  The penalties and 
        interest imposed on taxes under chapter 297A apply to the fees 
        imposed under this subdivision.  Disclosure of data collected by 
        the commissioner of revenue under this subdivision is governed 
        by chapter 270B. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 3.  Minnesota Statutes 2004, section 239.785, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COMMISSIONER'S AUTHORITY ADMINISTRATION AND 
        ENFORCEMENT.] The provisions of chapter 296A relating to the 
        commissioner's authority to audit, assess, and collect the tax 
        imposed by that chapter assessment, appeal, collection, and 
        administrative provisions of chapters 270C and 296A, that apply 
        to the taxes imposed by chapter 296A, apply to the fee imposed 
        by this section.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 4.  Minnesota Statutes 2004, section 256.9657, 
        subdivision 7, is amended to read: 
           Subd. 7.  [COLLECTION; CIVIL PENALTIES.] The provisions of 
        sections 270C.31, except subdivisions 5 and 7; 270C.32, except 
        subdivisions 6 and 10; 270C.33; 270C.61, subdivision 2; and 
        289A.35 to 289A.50 relating to the authority to audit, assess, 
        collect, and pay refunds of other state taxes may be implemented 
        by the commissioner of human services with respect to the tax, 
        penalty, and interest imposed by this section.  The commissioner 
        of human services shall impose civil penalties for violation of 
        this section as provided in section 289A.60, and the tax and 
        penalties are subject to interest at the rate provided in 
        section 270.75 270C.40.  The commissioner of human services 
        shall have the power to abate penalties and interest when 
        discrepancies occur resulting from, but not limited to, 
        circumstances of error and mail delivery.  The commissioner of 
        human services shall bring appropriate civil actions to collect 
        provider payments due under this section. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 5.  Minnesota Statutes 2004, section 256.9792, 
        subdivision 8, is amended to read: 
           Subd. 8.  [REMEDIES.] (a) The commissioner of revenue is 
        authorized to use the tax collection remedies in sections 
        270.06, clause (7), 270.69 to 270.72, and 290.92, subdivision 23 
        270C.32, subdivision 1, 270C.63, 270C.67, 270C.68, 270C.69, 
        270C.70 to 270C.72, and 270C.728, and tax return information to 
        collect arrearages. 
           (b) Liens arising under paragraph (a) shall be perfected 
        under the provisions of section 270.69 270C.63.  The lien may be 
        filed as long as the time period allowed by law for collecting 
        the arrearages has not expired.  The lien shall attach to all 
        property of the debtor within the state, both real and personal 
        under the provisions of section 270.69 270C.63.  The lien shall 
        be enforced under the provisions in section 270.69 270C.63 
        relating to state tax liens. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 6.  Minnesota Statutes 2004, section 273.11, 
        subdivision 5, is amended to read: 
           Subd. 5.  [BOARDS OF REVIEW AND EQUALIZATION.] 
        Notwithstanding any other provision of law to the contrary, the 
        limitation contained in subdivisions 1 and 1a shall also apply 
        to the authority of the local board of review as provided in 
        section 274.01, the county board of equalization as provided in 
        section 274.13, the State Board of Equalization and the 
        commissioner of revenue as provided in sections 
        270.11, subdivision 1, 270.12, 270C.92, and 270.16 270C.94. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 7.  Minnesota Statutes 2004, section 287.37, is 
        amended to read: 
           287.37 [INVESTIGATIONS AND ASSESSMENTS.] 
           The commissioner of revenue may investigate and examine 
        persons and transactions that are subject to this chapter using 
        the powers and authorities granted in chapters 270 270C and 289A.
        The commissioner may issue orders of assessment under chapter 
        289A, and enforce collection of unpaid tax or penalty amounts, 
        including interest, under the authority of chapter 270.  The 
        audit, assessment, appeal, collection, enforcement, and 
        administrative provisions of chapters 270C and 289A apply to the 
        taxes imposed by this chapter.  All tax amounts collected by the 
        commissioner must be apportioned under section 287.12.  The 
        commissioner's expenses under this section are not expenses of 
        administration under section 287.33.  All data and information 
        made available to the commissioner under this section is public 
        except for investigative data covered by section 270B.03, 
        subdivision 6. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 8.  Minnesota Statutes 2004, section 289A.35, is 
        amended to read: 
           289A.35 [ASSESSMENTS; COMMISSIONER FILED ON RETURNS.] 
           The commissioner has the authority to make determinations, 
        corrections, and assessments with respect to state taxes, 
        including interest, additions to taxes, and assessable 
        penalties.  The commissioner may audit and adjust the taxpayer's 
        computation of federal taxable income, items of federal tax 
        preferences, or federal credit amounts to make them conform with 
        the provisions of chapter 290 or section 298.01.  If a taxpayer 
        fails to file a required return, the commissioner, from 
        information in the commissioner's possession or obtainable by 
        the commissioner, may make a return for the taxpayer.  The 
        return will be prima facie correct and valid.  If a return has 
        been filed, the commissioner shall enter the liability reported 
        on the return and may make any audit or investigation that is 
        considered necessary.  The commissioner may use statistical or 
        other sampling techniques consistent with generally accepted 
        auditing standards in examining returns or records and making 
        assessments. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 9.  Minnesota Statutes 2004, section 289A.42, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXTENSION AGREEMENT.] If before the 
        expiration of time prescribed in sections 270C.58, subdivision 
        13, 289A.38, and 289A.40 for the assessment of tax or the filing 
        of a claim for refund, both the commissioner and the taxpayer 
        have consented in writing to the assessment or filing of a claim 
        for refund after that time, the tax may be assessed or the claim 
        for refund filed at any time before the expiration of the agreed 
        upon period.  The period may be extended by later agreements in 
        writing before the expiration of the period previously agreed 
        upon.  The taxpayer and the commissioner may also agree to 
        extend the period for collection of the tax. 
           Sec. 10.  Minnesota Statutes 2004, section 289A.60, 
        subdivision 13, is amended to read: 
           Subd. 13.  [PENALTIES FOR TAX RETURN PREPARERS.] (a) If an 
        understatement of liability with respect to a return or claim 
        for refund is due to a willful attempt in any manner to 
        understate the liability for a tax by a person who is a tax 
        return preparer with respect to the return or claim, the person 
        shall pay to the commissioner a penalty of $500.  If a part of a 
        property tax refund claim is excessive due to a willful attempt 
        in any manner to overstate the claim for relief allowed under 
        chapter 290A by a person who is a tax refund or return preparer, 
        the person shall pay to the commissioner a penalty of $500 with 
        respect to the claim.  These penalties may not be assessed 
        against the employer of a tax return preparer unless the 
        employer was actively involved in the willful attempt to 
        understate the liability for a tax or to overstate the claim for 
        refund.  These penalties are income tax liabilities and may be 
        assessed at any time as provided in section 289A.38, subdivision 
        5. 
           (b) A civil action in the name of the state of Minnesota 
        may be commenced to enjoin any person who is a tax return 
        preparer doing business in this state from further engaging in 
        any conduct described in paragraph (c).  An action under this 
        paragraph must be brought by the attorney general in the 
        district court for the judicial district of the tax return 
        preparer's residence or principal place of business, or in which 
        the taxpayer with respect to whose tax return the action is 
        brought resides.  The court may exercise its jurisdiction over 
        the action separate and apart from any other action brought by 
        the state of Minnesota against the tax return preparer or any 
        taxpayer as provided in section 270C.447. 
           (c) In an action under paragraph (b), if the court finds 
        that a tax return preparer has: 
           (1) engaged in any conduct subject to a civil penalty under 
        section 289A.60 or a criminal penalty under section 289A.63; 
           (2) misrepresented the preparer's eligibility to practice 
        before the Department of Revenue, or otherwise misrepresented 
        the preparer's experience or education as a tax return preparer; 
           (3) guaranteed the payment of any tax refund or the 
        allowance of any tax credit; or 
           (4) engaged in any other fraudulent or deceptive conduct 
        that substantially interferes with the proper administration of 
        state tax law, and injunctive relief is appropriate to prevent 
        the recurrence of that conduct, 
        the court may enjoin the person from further engaging in that 
        conduct. 
           (d) If the court finds that a tax return preparer has 
        continually or repeatedly engaged in conduct described in 
        paragraph (c), and that an injunction prohibiting that conduct 
        would not be sufficient to prevent the person's interference 
        with the proper administration of state tax laws, the court may 
        enjoin the person from acting as a tax return preparer.  The 
        court may not enjoin the employer of a tax return preparer for 
        conduct described in paragraph (c) engaged in by one or more of 
        the employer's employees unless the employer was also actively 
        involved in that conduct. 
           (e) For purposes of this subdivision, the term 
        "understatement of liability" means an understatement of the net 
        amount payable with respect to a tax imposed by state tax law, 
        or an overstatement of the net amount creditable or refundable 
        with respect to a tax.  The determination of whether or not 
        there is an understatement of liability must be made without 
        regard to any administrative or judicial action involving the 
        taxpayer.  For purposes of this subdivision, the amount 
        determined for underpayment of estimated tax under either 
        section 289A.25 or 289A.26 is not considered an understatement 
        of liability. 
           (f) (d) For purposes of this subdivision, the term 
        "overstatement of claim" means an overstatement of the net 
        amount refundable with respect to a claim for property tax 
        relief provided by chapter 290A.  The determination of whether 
        or not there is an overstatement of a claim must be made without 
        regard to administrative or judicial action involving the 
        claimant. 
           (g) (e) For purposes of this section, the term "tax refund 
        or return preparer" means an individual who prepares for 
        compensation, or who employs one or more individuals to prepare 
        for compensation, a return of tax, or a claim for refund of 
        tax.  The preparation of a substantial part of a return or claim 
        for refund is treated as if it were the preparation of the 
        entire return or claim for refund.  An individual is not 
        considered a tax return preparer merely because the individual: 
           (1) gives typing, reproducing, or other mechanical 
        assistance; 
           (2) prepares a return or claim for refund of the employer, 
        or an officer or employee of the employer, by whom the 
        individual is regularly and continuously employed; 
           (3) prepares a return or claim for refund of any person as 
        a fiduciary for that person; or 
           (4) prepares a claim for refund for a taxpayer in response 
        to a tax order issued to the taxpayer. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 11.  Minnesota Statutes 2004, section 295.57, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION OF OTHER CHAPTERS.] Unless 
        specifically provided otherwise by sections 295.50 to 295.59, 
        the enforcement, interest, appeal, criminal penalties, and 
        refunds provisions in chapter 289A, the civil penalty provisions 
        applicable to withholding and sales taxes under section 289A.60, 
        and collection and rulemaking provisions under chapter 270 the 
        audit, assessment, appeal, collection, enforcement, and 
        administrative provisions of chapters 270C and 289A, apply to 
        taxes imposed under sections 295.50 to 295.59. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 12.  Minnesota Statutes 2004, section 295.60, 
        subdivision 7, is amended to read: 
           Subd. 7.  [APPLICATION OF OTHER CHAPTERS.] Unless 
        specifically provided otherwise by this section, the 
        enforcement, interest, appeal, criminal penalties, and refunds 
        provisions in chapter 289A, the civil penalty provisions 
        applicable to withholding and sales taxes under section 289A.60, 
        and collection and rulemaking provisions under chapter 270 the 
        audit, assessment, appeal, collection, enforcement, and 
        administrative provisions of chapters 270C and 289A, apply to 
        taxes imposed under this section. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 13.  Minnesota Statutes 2004, section 297A.64, 
        subdivision 3, is amended to read: 
           Subd. 3.  [ADMINISTRATION.] The retailer shall report and 
        pay the tax imposed in subdivision 1 to the commissioner of 
        revenue with the taxes imposed in this chapter.  The tax imposed 
        in subdivision 1 and the fee imposed in subdivision 2 are 
        subject to the same interest, penalty, and other provisions 
        provided for sales and use taxes under this chapter and chapter 
        289A and this chapter.  The commissioner has the same powers to 
        assess and collect the tax and fee that are given the 
        commissioner in chapters 270 and 289A and this chapter to assess 
        and collect sales and use tax.  The audit, assessment, appeal, 
        collection, enforcement, and administrative provisions of this 
        chapter and chapters 270C and 289A, that apply to sales and use 
        taxes, apply to the tax and fee. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 14.  Minnesota Statutes 2004, section 297B.11, is 
        amended to read: 
           297B.11 [REGISTRAR AS AGENT OF COMMISSIONER OF REVENUE; 
        POWERS.] 
           The state commissioner of revenue is charged with the 
        administration of the sales tax on motor vehicles.  The 
        commissioner may prescribe all rules not inconsistent with the 
        provisions of this chapter, necessary and advisable for the 
        proper and efficient administration of the law.  The collection 
        of this sales tax on motor vehicles shall be carried out by the 
        motor vehicle registrar who shall act as the agent of the 
        commissioner and who shall be subject to all rules not 
        inconsistent with the provisions of this chapter, that may be 
        prescribed by the commissioner.  
           The provisions of chapters 270C, 289A, and 297A relating to 
        the commissioner's authority to audit, assess, and collect the 
        tax, and to issue refunds and to hear appeals, are applicable to 
        the sales tax on motor vehicles.  The commissioner may impose 
        civil penalties as provided in chapters 289A and 297A, and the 
        additional tax and penalties are subject to interest at the rate 
        provided in section 270.75 270C.40.  
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 15.  Minnesota Statutes 2004, section 297H.10, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ADMINISTRATION AND ENFORCEMENT.] The 
        audit, assessment, appeal, collection, refund, penalty, 
        interest, enforcement, collection remedies, appeal, and 
        administrative provisions of chapters 270 270C and 289A that are 
        applicable to taxes imposed under by chapter 297A apply to this 
        chapter. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 16.  Minnesota Statutes 2004, section 297I.10, is 
        amended by adding a subdivision to read: 
           Subd. 4.  [COLLECTION AND ADMINISTRATION.] The commissioner 
        shall administer the surcharge imposed by this section in the 
        same manner as the taxes imposed by this chapter. 
           [EFFECTIVE DATE.] This section is effective August 1, 2005. 
           Sec. 17.  [REVISOR'S INSTRUCTION.] 
           In each section of Minnesota Statutes referred to in column 
        A, the revisor of statutes shall delete the reference in column 
        B and insert the reference in column C. 
           Column A            Column B               Column C
        13.4961, subd 2      270.062                270C.05
                             270.064                270C.055, subd 1
                             270.21                 270C.923
        16D.11, subd 2       270.06, clause (7)     270C.32
                             270.66                 270C.65
        16D.13, subd 2       270.75                 270C.40
        115C.09, subd 1      270.75                 270C.40
        126C.46              270.07                 270C.86
        126C.65, subd 4      270.13                 270C.91
        127A.49, subd 2      270.07                 270C.86
        144.1501, subd 5     270.75                 270C.40
        144.1502, subd 5     270.75                 270C.40
        239.785, subd 5      270.75                 270C.40
        256.9657, subd 7     270.75                 270C.40
        256B.064, subd 1c    270.75                 270C.40
        256B.431, subd 2d    270.75                 270C.40
        270.072, subd 6      270.65                 270C.62
                             270.69                 270C.63
        270.075, subd 2      270.75                 270C.40
        270A.07, subd 5      270.76                 270C.405
        270B.03, subd 1      270.102 (twice)        270C.57 (twice)
                             289A.31, subd 3        270C.58, subd 1
        270B.08              297A.86                270C.722
        270B.085, subd 1     270.70                 270C.67
        270B.085, subd 2     270.69                 270C.63
        270B.07, subd 1      270.72                 270C.72
        270B.09              270.66 (twice)         270C.65 (twice)
                             290.97                 270C.66 
        270B.12, subd 4      270.73                 270C.725
        270B.12, subd 7      270.72                 270C.72
        270B.12, subd 10     270.60                 270C.19
        271.06, subd 1       270.07, subd 1,        270C.86
                              para (a)
        271.09, subd 1       270.07, subd 1         270C.86
        271.12               270.76                 270C.405
        272.115, subd 1      270.066                270C.306
        273.124, subd 13     270.0681               270C.12
        273.16               270.19 to 270.26       270C.921 to 270C.928
        273.372              270.11, subd 6         270C.92, subd 2
        273.41               270.75                 270C.40
        274.13, subd 1a      270.11, subds 5        270C.92, subds 1
                              and 6                  and 2
        274.16               270.11, subd 2         270C.89
        275.025, subd 1      270.11, subd 2         270C.89
        275.48               270.07                 270C.86
        277.20, subd 2       270.69                 270C.63
        277.21, subd 3       270.7001, 270.7002,    270C.68, 270C.69,
                              and 290.92, subd 23    and 270C.70
                             270.70 to 270.709      270C.67 to 270C.72
        277.21, subd 13      270.701 to 270.709     270C.7101 to
                                                     270C.7109
                             270.708                270C.7108
        279.01, subd 2       270.07                 270C.86
        279.03, subd 1a      270.75 (twice)         270C.40 (twice)
        279.34               270.07                 270C.86
        287.12               270.771                270C.42
        287.29, subd 1       270.771                270C.42
        287.385, subd 1      270.75                 270C.40
        287.385, subd 5      270.75                 270C.40
        287.385, subd 6      270.75                 270C.40
        289A.08, subd 1      289A.38, subd 13       270C.58, subd 3
        289A.19, subd 2      270.75                 270C.40
        289A.25, subd 2      270.75                 270C.40
        289A.26, subd 4      270.75                 270C.40
        289A.31, subd 1      289A.38, subd 13       270C.58, subd 3
        289A.31, subd 3      289A.38, subd 13       270C.58, subd 3
        289A.31, subd 5      270.101                270C.56
                             290.92, subd 22        270C.59
        289A.31, subd. 7     270.101                270C.56
        289A.38, subd 12     289A.31, subd 4        270C.58, subd 2
                             (twice)                (twice)
        289A.40, subd 1      289A.37, subd 1        270C.33
                             289A.65                270C.35
                             289A.35                270C.33, subd 3
        289A.50, subd 1      270.10, subd 1         270C.33
        289A.50, subd 7      289A.65                270C.35
        289A.50, subd 8      270.07, subd 5         270C.64
        289A.55, subd 1      270.75                 270C.40
        289A.55, subd 7      270.75                 270C.40
        289A.55, subd 8      270.75                 270C.40
        289A.56, subd 1      270.76                 270C.405
        289A.60, subd 4      270.75                 270C.40
        289A.60, subd 5a     270.07, subds 1, 
                              para (e), and 6       270C.34
        289A.60, subd 16     297A.86                270C.722
        289A.60, subd 21     270.07, subd 6         270C.34, subd 2
        289A.63, subd 3      297A.86                270C.722
        290.05, subd 8       289A.65                270C.35
        290.06, subd 23      270.76                 270C.405
        290.30               289A.31, subd 3        270C.58, subd 1 
        290.92, subd 4b      270.69                 270C.63
                             270.70                 270C.67
        290.92, subd 30      289A.37 (twice)        270C.33 (twice)
                             289A.65 (twice)        270C.35 (twice)
        290.9201, subd 7     270.06, para (16)      270C.02, subd 2,
                                                     para (b)
        290B.04, subd 5      289A (twice)           270C (twice)
        290B.07              270.75                 270C.40
        290C.08, subd 1      270.75                 270C.40
        295.55, subd 2       270.75                 270C.40
        295.55, subd 3       270.75                 270C.40
        295.57, subd 1       270                    270C
        295.60, subd 3       270.75                 270C.40
        295.60, subd 7       270                    270C
        296A.02, subd 2      section 270.06         chapter 270C
                             section                chapter
        296A.13              270.101                270C.56
        296A.21, subd 2      270.68                 270C.61
        296A.22, subd 1      270.75                 270C.40
        296A.22, subd 2      270                    270C
        296A.22, subd 3      270.75                 270C.40
        297A.72, subd 2      289A.07                270C.304
        297A.75, subd 4      270.76                 270C.405
        297A.85              297A.86                270C.722
        297A.92, subd 2      289A.37, subd 5        270C.33, subd 8
        297D.12, subd 1      270.70                 270C.36
                             270 (twice)            270C (twice)
        297E.02, subd 4      270.76                 270C.405
        297E.02, subd 7      270.70                 270C.36
                             270 (twice)            270C (twice)
        297E.03, subd 7      270.70                 270C.36
                             270 (twice)            270C (twice)
        297E.03, subd 8      270.064                270C.055, subd 1
        297E.11, subd 4      270.76                 270C.405
        297E.12, subd 6      270.07, subds 1,
                              para (e), and 6       270C.34
        297E.14, subd 1      270.75                 270C.40
        297E.14, subd 6      270.75                 270C.40
        297F.02, subd 2      section 270.06         chapter 270C
                             section                chapter
        297F.04, subd 2      270.72                 270C.72
        297F.08, subd 4      270.60                 270C.19
        297F.09, subd 5      270.75                 270C.40
        297F.09, subd 9      270.75                 270C.40
        297F.18, subd 1      270.75                 270C.40
        297F.18, subd 6      270.75                 270C.40
        297F.185             297A.86                270C.722
        297F.19, subd 6      270.07, subds 1,
                              para (e), and 6       270C.34
        297G.02, subd 3      section 270.06         chapter 270C
                             section                chapter
        297G.09, subd 8      270.75                 270C.40
        297G.17, subd 1      270.75                 270C.40
        297G.17, subd 6      270.75                 270C.40
        297G.18, subd 6      270.07, subds 1,
                              para (e), and 6       270C.34
        297I.40, subd 4      270.75                 270C.40
        297I.60, subd 2      297I.95                270C.35
        297I.80, subd 1      270.75                 270C.40
        297I.80, subd 2      270.76                 270C.405
        297I.85, subd 7      270.07, subd 6         270C.34, subd 2
        299L.07, subd 8      270.72                 270C.72
        325D.33, subd 8      270 (three times)      270C (three times)
                             270.75 (three          270C.40 (three
                              times)                 times)
        336.9-531            270.69, subd 2, para
                              (b), clause (2)       270C.63, subd 4
        349.155, subd 3      270.72                 270C.72
        349A.06, subd 2      270.72                 270C.72
        357.18, subd 2       270.69, subd 2,
                              para (c)              270C.63, subd 6
        559.21, subd 5       270.69, subd 7         270C.63, subd 11
        469.171, subd 10     270.76                 270C.405
        469.1734, subd 6     270.76                 270C.405
        469.178, subd 7      270.75 (twice)         270C.40 (twice)
        469.319, subd 4      270                    270C
                             270.75                 270C.40
        469.340, subd 4      270                    270C
                             270.75                 270C.40
        580.15               270.69, subd 7         270C.63, subd 11
        588.21               289A.36, subd 3        270C.61, subd 2

                                   ARTICLE 3 
                                 PROPERTY TAXES 
           Section 1.  Minnesota Statutes 2004, section 272.02, 
        subdivision 47, is amended to read: 
           Subd. 47.  [POULTRY LITTER BIOMASS GENERATION FACILITY; 
        PERSONAL PROPERTY.] Notwithstanding subdivision 9, clause (a), 
        attached machinery and other personal property which is part of 
        an electrical generating facility that meets the requirements of 
        this subdivision is exempt.  At the time of construction, the 
        facility must: 
           (1) be designed to utilize poultry litter as a primary fuel 
        source; and 
           (2) be constructed for the purpose of generating power at 
        the facility that will be sold pursuant to a contract approved 
        by the Public Utilities Commission in accordance with the 
        biomass mandate imposed under section 216B.2424. 
           Construction of the facility must be commenced after 
        January 1, 2003, and before December 31, 2003 2005.  Property 
        eligible for this exemption does not include electric 
        transmission lines and interconnections or gas pipelines and 
        interconnections appurtenant to the property or the facility. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        levied in 2005, payable in 2006, and thereafter. 
           Sec. 2.  Minnesota Statutes 2004, section 272.02, 
        subdivision 53, is amended to read: 
           Subd. 53.  [ELECTRIC GENERATION FACILITY; PERSONAL 
        PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
        machinery and other personal property which is part of a 3.2 
        megawatt run-of-the-river hydroelectric generation facility and 
        that meets the requirements of this subdivision is exempt.  At 
        the time of construction, the facility must: 
           (1) utilize two turbine generators at a dam site existing 
        on March 31, 1994; 
           (2) be located on publicly owned land and within 1,500 feet 
        of a 13.8 kilovolt distribution substation; and 
           (3) be eligible to receive a renewable energy production 
        incentive payment under section 216C.41. 
           Construction of the facility must be commenced after 
        January 1, 2002 December 31, 2004, and before January 1, 2005 
        2007.  Property eligible for this exemption does not include 
        electric transmission lines and interconnections or gas 
        pipelines and interconnections appurtenant to the property or 
        the facility. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        levied in 2005, payable in 2006 and thereafter.  
           Sec. 3.  Minnesota Statutes 2004, section 272.02, 
        subdivision 56, is amended to read: 
           Subd. 56.  [ELECTRIC GENERATION FACILITY; PERSONAL 
        PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
        attached machinery and other personal property which is part of 
        a combined-cycle combustion-turbine electric generation facility 
        that exceeds 550 300 megawatts of installed capacity and that 
        meets the requirements of this subdivision is exempt.  At the 
        time of construction, the facility must: 
           (1) be designed to utilize natural gas as a primary fuel; 
           (2) not be owned by a public utility as defined in section 
        216B.02, subdivision 4; 
           (3) be located within five miles of an existing natural gas 
        pipeline and within four miles of an existing electrical 
        transmission substation; 
           (4) be located outside the metropolitan area as defined 
        under section 473.121, subdivision 2; and 
           (5) be designed to provide energy and ancillary services 
        and have received a certificate of need under section 216B.243. 
           (b) Construction of the facility must be commenced after 
        January 1, 2004, and before January 1, 2007, except that 
        property eligible for this exemption includes any expansion of 
        the facility that also meets the requirements of paragraph (a), 
        clauses (1) to (5), without regard to the date that construction 
        of the expansion commences.  Property eligible for this 
        exemption does not include electric transmission lines and 
        interconnections or gas pipelines and interconnections 
        appurtenant to the property or the facility. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        levied in 2005, payable in 2006, and thereafter. 
           Sec. 4.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 68.  [ELECTRIC GENERATION FACILITY; PERSONAL 
        PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
        attached machinery and other personal property which is part of 
        a simple-cycle combustion-turbine electric generation facility 
        that exceeds 290 megawatts of installed capacity and that meets 
        the requirements of this subdivision is exempt.  At the time of 
        construction, the facility must: 
           (1) be designed to utilize natural gas as a primary fuel; 
           (2) not be owned by a public utility as defined in section 
        216B.02, subdivision 4; 
           (3) be located within 15 miles of an existing natural gas 
        pipeline and within five miles of an existing electrical 
        transmission substation; 
           (4) be located outside the metropolitan area as defined 
        under section 473.121, subdivision 2; 
           (5) be designed to provide peaking capacity energy and 
        ancillary services and have satisfied all of the requirements 
        under section 216B.243; and 
           (6) have received, by resolution, the approval from the 
        governing body of the county, city, and school district in which 
        the proposed facility is to be located for the exemption of 
        personal property under this subdivision. 
           (b) Construction of the facility must be commenced after 
        January 1, 2005, and before January 1, 2009.  Property eligible 
        for this exemption does not include electric transmission lines 
        and interconnections or gas pipelines and interconnections 
        appurtenant to the property or the facility. 
           [EFFECTIVE DATE.] This section is effective for assessment 
        year 2006, taxes payable in 2007, and thereafter. 
           Sec. 5.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 69.  [ELECTRIC GENERATION FACILITY PERSONAL 
        PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), and 
        section 453.54, subdivision 20, attached machinery and other 
        personal property which is part of an electric generation 
        facility that exceeds 150 megawatts of installed capacity and 
        meets the requirements of this subdivision is exempt.  At the 
        time of construction, the facility must: 
           (1) be designed to utilize natural gas as a primary fuel; 
           (2) be owned and operated by a municipal power agency as 
        defined in section 453.52, subdivision 8; 
           (3) have received the certificate of need under section 
        216B.243; 
           (4) be located outside the metropolitan area as defined 
        under section 473.121, subdivision 2; and 
           (5) be designed to be a combined-cycle facility, although 
        initially the facility will be operated as a simple-cycle 
        combustion turbine. 
           (b) To qualify under this subdivision, an agreement must be 
        negotiated between the municipal power agency and the host city, 
        for a payment in lieu of property taxes to the host city. 
           (c) Construction of the facility must be commenced after 
        January 1, 2004, and before January 1, 2006.  Property eligible 
        for this exemption does not include electric transmission lines 
        and interconnections or gas pipelines and interconnections 
        appurtenant to the property or the facility. 
           [EFFECTIVE DATE.] This section is effective for assessment 
        year 2005, taxes payable in 2006, and thereafter. 
           Sec. 6.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 70.  [ELECTRIC GENERATION FACILITY; PERSONAL 
        PROPERTY.] Notwithstanding subdivision 9, clause (a), attached 
        machinery and other personal property which is part of an 
        existing simple-cycle, combustion-turbine electric generation 
        facility that exceeds 300 megawatts of installed capacity and 
        that meets the requirements of this subdivision is exempt.  At 
        the time of the construction, the facility must: 
           (1) be designed to utilize natural gas as a primary fuel; 
           (2) be owned by a public utility as defined in section 
        216B.02, subdivision 4, and be located at or interconnected with 
        an existing generating plant of the utility; 
           (3) be designed to provide peaking, emergency backup, or 
        contingency services; 
           (4) satisfy a resource need identified in an approved 
        integrated resource plan filed under section 216B.2422; and 
           (5) have received, by resolution, the approval from the 
        governing body of the county and the city for the exemption of 
        personal property under this subdivision. 
           Construction of the facility expansion must be commenced 
        after January 1, 2004, and before January 1, 2005.  Property 
        eligible for this exemption does not include electric 
        transmission lines and interconnections or gas pipelines and 
        interconnections appurtenant to the property or the facility. 
           [EFFECTIVE DATE.] This section is effective beginning with 
        assessment year 2005, for taxes payable in 2006 and thereafter. 
           Sec. 7.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 71.  [ELECTRIC GENERATION FACILITY; PERSONAL 
        PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
        attached machinery and other personal property which is part of 
        a simple-cycle combustion-turbine electric generation facility 
        that exceeds 150 megawatts of installed capacity and that meets 
        the requirements of this subdivision is exempt.  At the time of 
        construction, the facility must: 
           (1) utilize natural gas as a primary fuel; 
           (2) be owned by an electric generation and transmission 
        cooperative; 
           (3) be located within five miles of parallel existing 
        12-inch and 16-inch natural gas pipelines and a 69-kilovolt 
        high-voltage electric transmission line; 
           (4) be designed to provide peaking, emergency backup, or 
        contingency services; 
           (5) have received a certificate of need under section 
        216B.243 demonstrating demand for its capacity; and 
           (6) have received by resolution the approval from the 
        governing body of the county and township in which the proposed 
        facility is to be located for the exemption of personal property 
        under this subdivision. 
           (b) Construction of the facility must be commenced after 
        July 1, 2005, and before January 1, 2009.  Property eligible for 
        this exemption does not include electric transmission lines and 
        interconnections or gas pipelines and interconnections 
        appurtenant to the property or the facility. 
           [EFFECTIVE DATE.] This section is effective for assessment 
        year 2006 and thereafter, for taxes payable in 2007 and 
        thereafter. 
           Sec. 8.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 72.  [ELECTRIC GENERATION FACILITY PERSONAL 
        PROPERTY.] (a) Notwithstanding subdivision 9, clause (a), 
        attached machinery and other personal property which is part of 
        either a simple-cycle, combustion-turbine electric generation 
        facility, or a combined-cycle, combustion-turbine electric 
        generation facility that does not exceed 325 megawatts of 
        installed capacity and that meets the requirements of this 
        subdivision is exempt.  At the time of construction, the 
        facility must: 
           (1) utilize either a simple-cycle or a combined-cycle 
        combustion-turbine generator fueled by natural gas; 
           (2) be connected to an existing 115-kilovolt high-voltage 
        electric transmission line that is within two miles of the 
        facility; 
           (3) be located on an underground natural gas storage 
        aquifer; 
           (4) be designed as either a peaking or intermediate load 
        facility; and 
           (5) have received, by resolution, the approval from the 
        governing body of the county for the exemption of personal 
        property under this subdivision. 
           (b) Construction of the facility must be commenced after 
        January 1, 2006, and before January 1, 2008.  Property eligible 
        for this exemption does not include electric transmission lines 
        and interconnections or gas pipelines and interconnections 
        appurtenant to the property or the facility. 
           [EFFECTIVE DATE.] This section is effective for assessment 
        year 2005, taxes payable in 2006, and thereafter. 
           Sec. 9.  Minnesota Statutes 2004, section 272.0211, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EFFICIENCY DETERMINATION AND 
        CERTIFICATION.] An owner or operator of a new or existing 
        electric power generation facility, excluding wind energy 
        conversion systems, may apply to the commissioner of revenue for 
        a market value exclusion on the property as provided for in this 
        section.  This exclusion shall apply only to the market value of 
        the equipment of the facility, and shall not apply to the 
        structures and the land upon which the facility is located.  The 
        commissioner of revenue shall prescribe the forms and procedures 
        for this application.  Upon receiving the application, the 
        commissioner of revenue shall request the commissioner of 
        commerce to make a determination of the efficiency of the 
        applicant's electric power generation facility.  In calculating 
        the efficiency of a facility, The commissioner of commerce shall 
        use a definition of calculate efficiency which calculates 
        efficiency as the sum of: 
           (1) the useful electrical power output; plus 
           (2) the useful thermal energy output; plus 
           (3) the fuel energy of the useful chemical products, 
        all divided by the total energy input to the facility, expressed 
        as a percentage as the ratio of useful energy outputs to energy 
        inputs, expressed as a percentage, based on the performance of 
        the facility's equipment during normal full load operation.  The 
        commissioner must include in this formula the energy used in any 
        on-site preparation of materials necessary to convert the 
        materials into the fuel used to generate electricity, such as a 
        process to gasify petroleum coke.  The commissioner shall use 
        the high Higher Heating Value (HHV) for all substances in the 
        commissioner's efficiency calculations, except for wood for fuel 
        in a biomass-eligible project under section 216B.2424; for these 
        instances, the commissioner shall adjust the heating value to 
        allow for energy consumed for evaporation of the moisture in the 
        wood.  The applicant shall provide the commissioner of commerce 
        with whatever information the commissioner deems necessary to 
        make the determination.  Within 30 days of the receipt of the 
        necessary information, the commissioner of commerce shall 
        certify the findings of the efficiency determination to the 
        commissioner of revenue and to the applicant.  The commissioner 
        of commerce shall determine the efficiency of the facility and 
        certify the findings of that determination to the commissioner 
        of revenue every two years thereafter from the date of the 
        original certification. 
           [EFFECTIVE DATE.] This section is effective for assessment 
        year 2005 and thereafter, for taxes payable in 2006 and 
        thereafter. 
           Sec. 10.  Minnesota Statutes 2004, section 272.0211, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SLIDING SCALE EXCLUSION.] Based upon the 
        efficiency determination provided by the commissioner of 
        commerce as described in subdivision 1, the commissioner of 
        revenue shall subtract five eight percent of the taxable market 
        value of the qualifying property for each percentage point that 
        the efficiency of the specific facility, as determined by the 
        commissioner of commerce, is above 35 40 percent.  The reduction 
        in taxable market value shall be reflected in the taxable market 
        value of the facility beginning with the assessment year 
        immediately following the determination.  For a facility that is 
        assessed by the county in which the facility is located, the 
        commissioner of revenue shall certify to the assessor of that 
        county the percentage of the taxable market value of the 
        facility to be excluded. 
           [EFFECTIVE DATE.] This section is effective for assessment 
        year 2005 and thereafter, for taxes payable in 2006 and 
        thereafter. 
           Sec. 11.  Minnesota Statutes 2004, section 273.124, 
        subdivision 14, is amended to read: 
           Subd. 14.  [AGRICULTURAL HOMESTEADS; SPECIAL PROVISIONS.] 
        (a) Real estate of less than ten acres that is the homestead of 
        its owner must be classified as class 2a under section 273.13, 
        subdivision 23, paragraph (a), if:  
           (1) the parcel on which the house is located is contiguous 
        on at least two sides to (i) agricultural land, (ii) land owned 
        or administered by the United States Fish and Wildlife Service, 
        or (iii) land administered by the Department of Natural 
        Resources on which in lieu taxes are paid under sections 477A.11 
        to 477A.14; 
           (2) its owner also owns a noncontiguous parcel of 
        agricultural land that is at least 20 acres; 
           (3) the noncontiguous land is located not farther than four 
        townships or cities, or a combination of townships or cities 
        from the homestead; and 
           (4) the agricultural use value of the noncontiguous land 
        and farm buildings is equal to at least 50 percent of the market 
        value of the house, garage, and one acre of land. 
           Homesteads initially classified as class 2a under the 
        provisions of this paragraph shall remain classified as class 
        2a, irrespective of subsequent changes in the use of adjoining 
        properties, as long as the homestead remains under the same 
        ownership, the owner owns a noncontiguous parcel of agricultural 
        land that is at least 20 acres, and the agricultural use value 
        qualifies under clause (4).  Homestead classification under this 
        paragraph is limited to property that qualified under this 
        paragraph for the 1998 assessment. 
           (b)(i) Agricultural property consisting of at least 40 
        acres shall be classified as the owner's homestead, to the same 
        extent as other agricultural homestead property, if all of the 
        following criteria are met: 
           (1) the owner, the owner's spouse, or the son or daughter 
        of the owner or owner's spouse, or the grandson or granddaughter 
        of the owner or the owner's spouse, is actively farming the 
        agricultural property, either on the person's own behalf as an 
        individual or on behalf of a partnership operating a family 
        farm, family farm corporation, joint family farm venture, or 
        limited liability company of which the person is a partner, 
        shareholder, or member; 
           (2) both the owner of the agricultural property and the 
        person who is actively farming the agricultural property under 
        clause (1), are Minnesota residents; 
           (3) neither the owner nor the spouse of the owner claims 
        another agricultural homestead in Minnesota; and 
           (4) neither the owner nor the person actively farming the 
        property lives farther than four townships or cities, or a 
        combination of four townships or cities, from the agricultural 
        property, except that if the owner or the owner's spouse is 
        required to live in employer-provided housing, the owner or 
        owner's spouse, whichever is actively farming the agricultural 
        property, may live more than four townships or cities, or 
        combination of four townships or cities from the agricultural 
        property. 
           The relationship under this paragraph may be either by 
        blood or marriage. 
           (ii) Real property held by a trustee under a trust is 
        eligible for agricultural homestead classification under this 
        paragraph if the qualifications in clause (i) are met, except 
        that "owner" means the grantor of the trust. 
           (iii) Property containing the residence of an owner who 
        owns qualified property under clause (i) shall be classified as 
        part of the owner's agricultural homestead, if that property is 
        also used for noncommercial storage or drying of agricultural 
        crops. 
           (c) Noncontiguous land shall be included as part of a 
        homestead under section 273.13, subdivision 23, paragraph (a), 
        only if the homestead is classified as class 2a and the detached 
        land is located in the same township or city, or not farther 
        than four townships or cities or combination thereof from the 
        homestead.  Any taxpayer of these noncontiguous lands must 
        notify the county assessor that the noncontiguous land is part 
        of the taxpayer's homestead, and, if the homestead is located in 
        another county, the taxpayer must also notify the assessor of 
        the other county. 
           (d) Agricultural land used for purposes of a homestead and 
        actively farmed by a person holding a vested remainder interest 
        in it must be classified as a homestead under section 273.13, 
        subdivision 23, paragraph (a).  If agricultural land is 
        classified class 2a, any other dwellings on the land used for 
        purposes of a homestead by persons holding vested remainder 
        interests who are actively engaged in farming the property, and 
        up to one acre of the land surrounding each homestead and 
        reasonably necessary for the use of the dwelling as a home, must 
        also be assessed class 2a. 
           (e) Agricultural land and buildings that were class 2a 
        homestead property under section 273.13, subdivision 23, 
        paragraph (a), for the 1997 assessment shall remain classified 
        as agricultural homesteads for subsequent assessments if:  
           (1) the property owner abandoned the homestead dwelling 
        located on the agricultural homestead as a result of the April 
        1997 floods; 
           (2) the property is located in the county of Polk, Clay, 
        Kittson, Marshall, Norman, or Wilkin; 
           (3) the agricultural land and buildings remain under the 
        same ownership for the current assessment year as existed for 
        the 1997 assessment year and continue to be used for 
        agricultural purposes; 
           (4) the dwelling occupied by the owner is located in 
        Minnesota and is within 30 miles of one of the parcels of 
        agricultural land that is owned by the taxpayer; and 
           (5) the owner notifies the county assessor that the 
        relocation was due to the 1997 floods, and the owner furnishes 
        the assessor any information deemed necessary by the assessor in 
        verifying the change in dwelling.  Further notifications to the 
        assessor are not required if the property continues to meet all 
        the requirements in this paragraph and any dwellings on the 
        agricultural land remain uninhabited. 
           (f) Agricultural land and buildings that were class 2a 
        homestead property under section 273.13, subdivision 23, 
        paragraph (a), for the 1998 assessment shall remain classified 
        agricultural homesteads for subsequent assessments if: 
           (1) the property owner abandoned the homestead dwelling 
        located on the agricultural homestead as a result of damage 
        caused by a March 29, 1998, tornado; 
           (2) the property is located in the county of Blue Earth, 
        Brown, Cottonwood, LeSueur, Nicollet, Nobles, or Rice; 
           (3) the agricultural land and buildings remain under the 
        same ownership for the current assessment year as existed for 
        the 1998 assessment year; 
           (4) the dwelling occupied by the owner is located in this 
        state and is within 50 miles of one of the parcels of 
        agricultural land that is owned by the taxpayer; and 
           (5) the owner notifies the county assessor that the 
        relocation was due to a March 29, 1998, tornado, and the owner 
        furnishes the assessor any information deemed necessary by the 
        assessor in verifying the change in homestead dwelling.  For 
        taxes payable in 1999, the owner must notify the assessor by 
        December 1, 1998.  Further notifications to the assessor are not 
        required if the property continues to meet all the requirements 
        in this paragraph and any dwellings on the agricultural land 
        remain uninhabited. 
           (g) Agricultural property consisting of at least 40 acres 
        of a family farm corporation, joint family farm venture, family 
        farm limited liability company, or partnership operating a 
        family farm as described under subdivision 8 shall be classified 
        homestead, to the same extent as other agricultural homestead 
        property, if all of the following criteria are met: 
           (1) a shareholder, member, or partner of that entity is 
        actively farming the agricultural property; 
           (2) that shareholder, member, or partner who is actively 
        farming the agricultural property is a Minnesota resident; 
           (3) neither that shareholder, member, or partner, nor the 
        spouse of that shareholder, member, or partner claims another 
        agricultural homestead in Minnesota; and 
           (4) that shareholder, member, or partner does not live 
        farther than four townships or cities, or a combination of four 
        townships or cities, from the agricultural property. 
           Homestead treatment applies under this paragraph for 
        property leased to a family farm corporation, joint farm 
        venture, limited liability company, or partnership operating a 
        family farm if legal title to the property is in the name of an 
        individual who is a member, shareholder, or partner in the 
        entity. 
           (h) To be eligible for the special agricultural homestead 
        under this subdivision, an initial full application must be 
        submitted to the county assessor where the property is located.  
        Owners and the persons who are actively farming the property 
        shall be required to complete only a one-page abbreviated 
        version of the application in each subsequent year provided that 
        none of the following items have changed since the initial 
        application: 
           (1) the day-to-day operation, administration, and financial 
        risks remain the same; 
           (2) the owners and the persons actively farming the 
        property continue to live within the four townships or city 
        criteria and are Minnesota residents; 
           (3) the same operator of the agricultural property is 
        listed with the Farm Service Agency; 
           (4) a Schedule F or equivalent income tax form was filed 
        for the most recent year; 
           (5) the property's acreage is unchanged; and 
           (6) none of the property's acres have been enrolled in a 
        federal or state farm program since the initial application. 
           The owners and any persons who are actively farming the 
        property must include the appropriate Social Security numbers, 
        and sign and date the application.  If any of the specified 
        information has changed since the full application was filed, 
        the owner must notify the assessor, and must complete a new 
        application to determine if the property continues to qualify 
        for the special agricultural homestead.  The commissioner of 
        revenue shall prepare a standard reapplication form for use by 
        the assessors. 
           [EFFECTIVE DATE.] This section is effective for assessment 
        year 2005 and thereafter, for taxes payable in 2006 and 
        thereafter. 
           Sec. 12.  Minnesota Statutes 2004, section 273.13, 
        subdivision 25, is amended to read: 
           Subd. 25.  [CLASS 4.] (a) Class 4a is residential real 
        estate containing four or more units and used or held for use by 
        the owner or by the tenants or lessees of the owner as a 
        residence for rental periods of 30 days or more.  Class 4a also 
        includes hospitals licensed under sections 144.50 to 144.56, 
        other than hospitals exempt under section 272.02, and contiguous 
        property used for hospital purposes, without regard to whether 
        the property has been platted or subdivided.  The market value 
        of class 4a property has a class rate of 1.8 percent for taxes 
        payable in 2002, 1.5 percent for taxes payable in 2003, and 1.25 
        percent for taxes payable in 2004 and thereafter, except that 
        class 4a property consisting of a structure for which 
        construction commenced after June 30, 2001, has a class rate of 
        1.25 percent of market value for taxes payable in 2003 and 
        subsequent years. 
           (b) Class 4b includes: 
           (1) residential real estate containing less than four units 
        that does not qualify as class 4bb, other than seasonal 
        residential recreational property; 
           (2) manufactured homes not classified under any other 
        provision; 
           (3) a dwelling, garage, and surrounding one acre of 
        property on a nonhomestead farm classified under subdivision 23, 
        paragraph (b) containing two or three units; and 
           (4) unimproved property that is classified residential as 
        determined under subdivision 33.  
           The market value of class 4b property has a class rate of 
        1.5 percent for taxes payable in 2002, and 1.25 percent for 
        taxes payable in 2003 and thereafter. 
           (c) Class 4bb includes: 
           (1) nonhomestead residential real estate containing one 
        unit, other than seasonal residential recreational property; and 
           (2) a single family dwelling, garage, and surrounding one 
        acre of property on a nonhomestead farm classified under 
        subdivision 23, paragraph (b). 
           Class 4bb property has the same class rates as class 1a 
        property under subdivision 22. 
           Property that has been classified as seasonal residential 
        recreational property at any time during which it has been owned 
        by the current owner or spouse of the current owner does not 
        qualify for class 4bb. 
           (d) Class 4c property includes: 
           (1) except as provided in subdivision 22, paragraph (c), 
        real property devoted to temporary and seasonal residential 
        occupancy for recreation purposes, including real property 
        devoted to temporary and seasonal residential occupancy for 
        recreation purposes and not devoted to commercial purposes for 
        more than 250 days in the year preceding the year of 
        assessment.  For purposes of this clause, property is devoted to 
        a commercial purpose on a specific day if any portion of the 
        property is used for residential occupancy, and a fee is charged 
        for residential occupancy.  In order for a property to be 
        classified as class 4c, seasonal residential recreational for 
        commercial purposes, at least 40 percent of the annual gross 
        lodging receipts related to the property must be from business 
        conducted during 90 consecutive days and either (i) at least 60 
        percent of all paid bookings by lodging guests during the year 
        must be for periods of at least two consecutive nights; or (ii) 
        at least 20 percent of the annual gross receipts must be from 
        charges for rental of fish houses, boats and motors, 
        snowmobiles, downhill or cross-country ski equipment, or charges 
        for marina services, launch services, and guide services, or the 
        sale of bait and fishing tackle.  For purposes of this 
        determination, a paid booking of five or more nights shall be 
        counted as two bookings.  Class 4c also includes commercial use 
        real property used exclusively for recreational purposes in 
        conjunction with class 4c property devoted to temporary and 
        seasonal residential occupancy for recreational purposes, up to 
        a total of two acres, provided the property is not devoted to 
        commercial recreational use for more than 250 days in the year 
        preceding the year of assessment and is located within two miles 
        of the class 4c property with which it is used.  Class 4c 
        property classified in this clause also includes the remainder 
        of class 1c resorts provided that the entire property including 
        that portion of the property classified as class 1c also meets 
        the requirements for class 4c under this clause; otherwise the 
        entire property is classified as class 3.  Owners of real 
        property devoted to temporary and seasonal residential occupancy 
        for recreation purposes and all or a portion of which was 
        devoted to commercial purposes for not more than 250 days in the 
        year preceding the year of assessment desiring classification as 
        class 1c or 4c, must submit a declaration to the assessor 
        designating the cabins or units occupied for 250 days or less in 
        the year preceding the year of assessment by January 15 of the 
        assessment year.  Those cabins or units and a proportionate 
        share of the land on which they are located will be designated 
        class 1c or 4c as otherwise provided.  The remainder of the 
        cabins or units and a proportionate share of the land on which 
        they are located will be designated as class 3a.  The owner of 
        property desiring designation as class 1c or 4c property must 
        provide guest registers or other records demonstrating that the 
        units for which class 1c or 4c designation is sought were not 
        occupied for more than 250 days in the year preceding the 
        assessment if so requested.  The portion of a property operated 
        as a (1) restaurant, (2) bar, (3) gift shop, and (4) other 
        nonresidential facility operated on a commercial basis not 
        directly related to temporary and seasonal residential occupancy 
        for recreation purposes shall not qualify for class 1c or 4c; 
           (2) qualified property used as a golf course if: 
           (i) it is open to the public on a daily fee basis.  It may 
        charge membership fees or dues, but a membership fee may not be 
        required in order to use the property for golfing, and its green 
        fees for golfing must be comparable to green fees typically 
        charged by municipal courses; and 
           (ii) it meets the requirements of section 273.112, 
        subdivision 3, paragraph (d). 
           A structure used as a clubhouse, restaurant, or place of 
        refreshment in conjunction with the golf course is classified as 
        class 3a property; 
           (3) real property up to a maximum of one acre of land owned 
        by a nonprofit community service oriented organization; provided 
        that the property is not used for a revenue-producing activity 
        for more than six days in the calendar year preceding the year 
        of assessment and the property is not used for residential 
        purposes on either a temporary or permanent basis.  For purposes 
        of this clause, a "nonprofit community service oriented 
        organization" means any corporation, society, association, 
        foundation, or institution organized and operated exclusively 
        for charitable, religious, fraternal, civic, or educational 
        purposes, and which is exempt from federal income taxation 
        pursuant to section 501(c)(3), (10), or (19) of the Internal 
        Revenue Code of 1986, as amended through December 31, 1990.  For 
        purposes of this clause, "revenue-producing activities" shall 
        include but not be limited to property or that portion of the 
        property that is used as an on-sale intoxicating liquor or 3.2 
        percent malt liquor establishment licensed under chapter 340A, a 
        restaurant open to the public, bowling alley, a retail store, 
        gambling conducted by organizations licensed under chapter 349, 
        an insurance business, or office or other space leased or rented 
        to a lessee who conducts a for-profit enterprise on the 
        premises.  Any portion of the property which is used for 
        revenue-producing activities for more than six days in the 
        calendar year preceding the year of assessment shall be assessed 
        as class 3a.  The use of the property for social events open 
        exclusively to members and their guests for periods of less than 
        24 hours, when an admission is not charged nor any revenues are 
        received by the organization shall not be considered a 
        revenue-producing activity; 
           (4) postsecondary student housing of not more than one acre 
        of land that is owned by a nonprofit corporation organized under 
        chapter 317A and is used exclusively by a student cooperative, 
        sorority, or fraternity for on-campus housing or housing located 
        within two miles of the border of a college campus; 
           (5) manufactured home parks as defined in section 327.14, 
        subdivision 3; 
           (6) real property that is actively and exclusively devoted 
        to indoor fitness, health, social, recreational, and related 
        uses, is owned and operated by a not-for-profit corporation, and 
        is located within the metropolitan area as defined in section 
        473.121, subdivision 2; 
           (7) a leased or privately owned noncommercial aircraft 
        storage hangar not exempt under section 272.01, subdivision 2, 
        and the land on which it is located, provided that: 
           (i) the land is on an airport owned or operated by a city, 
        town, county, Metropolitan Airports Commission, or group 
        thereof; and 
           (ii) the land lease, or any ordinance or signed agreement 
        restricting the use of the leased premise, prohibits commercial 
        activity performed at the hangar. 
           If a hangar classified under this clause is sold after June 
        30, 2000, a bill of sale must be filed by the new owner with the 
        assessor of the county where the property is located within 60 
        days of the sale; and 
           (8) a privately owned noncommercial aircraft storage hangar 
        not exempt under section 272.01, subdivision 2, and the land on 
        which it is located, provided that: 
           (i) the land abuts a public airport; and 
           (ii) the owner of the aircraft storage hangar provides the 
        assessor with a signed agreement restricting the use of the 
        premises, prohibiting commercial use or activity performed at 
        the hangar; and 
           (9) residential real estate, a portion of which is used by 
        the owner for homestead purposes, and that is also a place of 
        lodging, if all of the following criteria are met: 
           (i) rooms are provided for rent to transient guests that 
        generally stay for periods of 14 or fewer days; 
           (ii) meals are provided to persons who rent rooms, the cost 
        of which is incorporated in the basic room rate; 
           (iii) meals are not provided to the general public except 
        for special events on fewer than seven days in the calendar year 
        preceding the year of the assessment; and 
           (iv) the owner is the operator of the property. 
        The market value subject to the 4c classification under this 
        clause is limited to five rental units.  Any rental units on the 
        property in excess of five, must be valued and assessed as class 
        3a.  The portion of the property used for purposes of a 
        homestead by the owner must be classified as class 1a property 
        under subdivision 22. 
           Class 4c property has a class rate of 1.5 percent of market 
        value, except that (i) each parcel of seasonal residential 
        recreational property not used for commercial purposes has the 
        same class rates as class 4bb property, (ii) manufactured home 
        parks assessed under clause (5) have the same class rate as 
        class 4b property, (iii) commercial-use seasonal residential 
        recreational property has a class rate of one percent for the 
        first $500,000 of market value, which includes any market value 
        receiving the one percent rate under subdivision 22, and 1.25 
        percent for the remaining market value, (iv) the market value of 
        property described in clause (4) has a class rate of one 
        percent, (v) the market value of property described in clauses 
        (2) and (6) has a class rate of 1.25 percent, and (vi) that 
        portion of the market value of property in clause (8) qualifying 
        for class 4c property has a class rate of 1.25 percent.  
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2006 and subsequent years. 
           Sec. 13.  Minnesota Statutes 2004, section 290A.07, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [EARLY PAYMENT; E-FILE CLAIMS.] The commissioner 
        may pay a claim up to 30 days earlier than the first permitted 
        date under subdivision 2a or 3 if the claim is submitted by 
        electronic means. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 14.  Minnesota Statutes 2004, section 365.43, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [LEVIED AMOUNT IS SPENDING LIMIT TOTAL 
        REVENUE DEFINED.] A town must not contract debts or spend more 
        money in a year than the taxes levied for the year its total 
        revenue without a favorable vote of a majority of the town's 
        electors.  In this section, "total revenue" means property taxes 
        payable in that year as well as amounts received from all other 
        sources and amounts carried forward from the last year. 
           Sec. 15.  Minnesota Statutes 2004, section 365.431, is 
        amended to read: 
           365.431 [AMOUNT VOTED AT MEETING IS TAX LIMIT.] 
           Except as otherwise authorized by law, the tax for town 
        purposes must not be more than the amount voted to be raised at 
        the annual town meeting. 
           Sec. 16.  Minnesota Statutes 2004, section 366.011, is 
        amended to read: 
           366.011 [CHARGES FOR EMERGENCY SERVICES; COLLECTION.] 
           A town may impose a reasonable service charge for emergency 
        services, including fire, rescue, medical, and related services 
        provided by the town or contracted for by the town.  If the 
        service charge remains unpaid 30 days after a notice of 
        delinquency is sent to the recipient of the service or the 
        recipient's representative or estate, the town or its contractor 
        on behalf of the town may use any lawful means allowed to a 
        private party for the collection of an unsecured delinquent 
        debt.  The town may also use the authority of section 366.012 to 
        collect unpaid service charges of this kind from delinquent 
        recipients of services who are owners of taxable real property 
        in the town state. 
           The powers conferred by this section are in addition and 
        supplemental to the powers conferred by any other law for a town 
        to impose a service charge or assessment for a service provided 
        by the town or contracted for by the town. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 17.  Minnesota Statutes 2004, section 366.012, is 
        amended to read: 
           366.012 [COLLECTION OF UNPAID SERVICE CHARGES.] 
           If a town is authorized to impose a service charge on the 
        owner, lessee, or occupant of property, or any of them, for a 
        governmental service provided by the town, the town board may 
        certify to the county auditor of the county in which the 
        recipient of the services owns real property, on or before 
        October 15 for each year, any unpaid service charges which shall 
        then be collected together with property taxes levied against 
        the property.  The county auditor shall remit to the town all 
        service charges collected by the auditor on behalf of the town.  
        A charge may be certified to the auditor only if, on or before 
        September 15, the town has given written notice to the property 
        owner of its intention to certify the charge to the auditor.  
        The service charges shall be subject to the same penalties, 
        interest, and other conditions provided for the collection of 
        property taxes.  This section is in addition to other law 
        authorizing the collection of unpaid costs and service charges. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 18.  Laws 1998, chapter 389, article 3, section 42, 
        subdivision 2, as amended by Laws 2002, chapter 377, article 4, 
        section 24, is amended to read: 
           Subd. 2.  [RECAPTURE.] (a) Property or any portion thereof 
        qualifying under section 38 is subject to additional taxes if: 
           (1) ownership of the property is transferred to anyone 
        other than the spouse or child of the current owner; 
           (2) the current owner or the spouse or child of the current 
        owner has not conveyed or entered into a contract before July 1, 
        2007, to convey for ownership or public easement rights, (i) a 
        portion of the property to a one or more nonprofit foundation 
        foundations or corporation operating corporations; and (ii) a 
        portion of the property to one or more local governments; and 
        those entities shall separately or jointly operate the property 
        as an art park providing the services included in section 38, 
        clauses (2) to (5), and may also use some of the property for 
        other public purposes as determined by the local governments; or 
           (3) the nonprofit foundation or corporation to which a 
        portion of the property was transferred ceases to provide the 
        services included in section 38, clauses (2) to (5), earlier 
        than ten years following the effective date of the conveyance 
        conveyances or of the execution of the contract contracts to 
        convey. 
           (b) The additional taxes are imposed at the earlier of (1) 
        the year following transfer of ownership to anyone other than 
        the spouse or child of the current owner or a nonprofit 
        foundation or corporation or local government operating the 
        property as an art park and used for other public purposes, or 
        (2) for taxes payable in 2008, or (3) in the event the nonprofit 
        foundation or corporation to which a portion of the property was 
        conveyed ceases to provide the required services within ten 
        years after the conveyance, for taxes payable in the year 
        following the year when it ceased to do so.  
           The county board, with the approval of the city council, 
        shall determine the amount of the additional taxes due on the 
        portion of property which is no longer utilized as an art park; 
        provided, however, that the additional taxes are equal to must 
        not be greater than the difference between the taxes determined 
        on that portion of the property utilized as an art park under 
        sections 39 and 40 and the amount determined under subdivision 1 
        for all years that the property qualified under section 38.  The 
        additional taxes must be extended against the property on the 
        tax list for the current year; provided, however, that No 
        interest or penalties may be levied on the additional taxes if 
        timely paid amount provided that it is paid within 30 days of 
        the county's notice. 
           [EFFECTIVE DATE.] This section is effective March 1, 2005. 
           Sec. 19.  Laws 2001, First Special Session chapter 5, 
        article 3, section 8, the effective date, is amended to read: 
           [EFFECTIVE DATE.] This section is effective for taxes 
        levied in 2002, payable in 2003, through taxes levied in 2007 
        2009, payable in 2008 2010. 
           Sec. 20.  Laws 2005, chapter 43, section 1, the effective 
        date, is amended to read: 
           [EFFECTIVE DATE.] This section is effective for taxes 
        levied in 2005 2004, payable in 2006 2005, and thereafter. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 21.  [SCHOOL PROPERTY; EXEMPTION 2005 ONLY.] 
           Notwithstanding Minnesota Statutes, section 272.02, 
        subdivision 38, paragraph (b), the following property is exempt 
        from taxation for assessment year 2004, for taxes payable in 
        2005, if it meets all the following criteria: 
           (1) is used to provide direct educational instruction for 
        grades 7 through 10; 
           (2) is located in a city of the first class that has a 
        population greater than 250,000 and less than 350,000; 
           (3) was purchased after July 1, 2004, by a nonprofit that 
        is exempt from federal income tax under section 501(c)(3) of the 
        Internal Revenue Code; and 
           (4) is leased and operated by two nonprofit corporations 
        organized under Minnesota Statutes, chapter 317A. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment.  
           Sec. 22.  [REPEALER.] 
           Laws 1998, chapter 389, article 3, section 41, is repealed. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 

                                   ARTICLE 4 
                         PROPERTY TAX AIDS AND CREDITS 
           Section 1.  Minnesota Statutes 2004, section 4A.02, is 
        amended to read: 
           4A.02 [STATE DEMOGRAPHER.] 
           (a) The director shall appoint a state demographer.  The 
        demographer must be professionally competent in demography and 
        must possess demonstrated ability based upon past performance.  
           (b) The demographer shall: 
           (1) continuously gather and develop demographic data 
        relevant to the state; 
           (2) design and test methods of research and data 
        collection; 
           (3) periodically prepare population projections for the 
        state and designated regions and periodically prepare 
        projections for each county or other political subdivision of 
        the state as necessary to carry out the purposes of this 
        section; 
           (4) review, comment on, and prepare analysis of population 
        estimates and projections made by state agencies, political 
        subdivisions, other states, federal agencies, or nongovernmental 
        persons, institutions, or commissions; 
           (5) serve as the state liaison with the United States 
        Bureau of the Census, coordinate state and federal demographic 
        activities to the fullest extent possible, and aid the 
        legislature in preparing a census data plan and form for each 
        decennial census; 
           (6) compile an annual study of population estimates on the 
        basis of county, regional, or other political or geographical 
        subdivisions as necessary to carry out the purposes of this 
        section and section 4A.03; 
           (7) by January 1 of each year, issue a report to the 
        legislature containing an analysis of the demographic 
        implications of the annual population study and population 
        projections; 
           (8) prepare maps for all counties in the state, all 
        municipalities with a population of 10,000 or more, and other 
        municipalities as needed for census purposes, according to scale 
        and detail recommended by the United States Bureau of the 
        Census, with the maps of cities showing precinct boundaries; 
           (9) prepare an estimate of population and of the number of 
        households for each governmental subdivision for which the 
        Metropolitan Council does not prepare an annual estimate, and 
        convey the estimates to the governing body of each political 
        subdivision by May June 1 of each year; 
           (10) direct, under section 414.01, subdivision 14, and 
        certify population and household estimates of annexed or 
        detached areas of municipalities or towns after being notified 
        of the order or letter of approval by the director; 
           (11) prepare, for any purpose for which a population 
        estimate is required by law or needed to implement a law, a 
        population estimate of a municipality or town whose population 
        is affected by action under section 379.02 or 414.01, 
        subdivision 14; and 
           (12) prepare an estimate of average household size for each 
        statutory or home rule charter city with a population of 2,500 
        or more by May June 1 of each year. 
           (c) A governing body may challenge an estimate made under 
        paragraph (b) by filing their specific objections in writing 
        with the state demographer by June 10 24.  If the challenge does 
        not result in an acceptable estimate by June 24, the governing 
        body may have a special census conducted by the United States 
        Bureau of the Census.  The political subdivision must notify the 
        state demographer by July 1 of its intent to have the special 
        census conducted.  The political subdivision must bear all costs 
        of the special census.  Results of the special census must be 
        received by the state demographer by the next April 15 to be 
        used in that year's May June 1 estimate to the political 
        subdivision under paragraph (b). 
           (d) The state demographer shall certify the estimates of 
        population and household size to the commissioner of revenue by 
        July 15 each year, including any estimates still under objection.
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 273.1384, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [RESIDENTIAL HOMESTEAD MARKET VALUE 
        CREDIT.] Each county auditor shall determine a homestead credit 
        for each class 1a, 1b, 1c, and 2a homestead property within the 
        county equal to 0.4 percent of the first $76,000 of market value 
        of the property.  The amount of homestead credit for a homestead 
        may not exceed $304 and is reduced by minus .09 percent of the 
        market value in excess of $76,000.  The credit amount may not be 
        less than zero.  In the case of an agricultural or resort 
        homestead, only the market value of the house, garage, and 
        immediately surrounding one acre of land is eligible in 
        determining the property's homestead credit.  In the case of a 
        property which is classified as part homestead and part 
        nonhomestead, (i) the credit shall apply only to the homestead 
        portion of the property., but (ii) if a portion of a property is 
        classified as nonhomestead solely because not all the owners 
        occupy the property, or solely because both spouses do not 
        occupy the property, the credit amount shall be initially 
        computed as if that nonhomestead portion were also in the 
        homestead class and then prorated to the owner-occupant's 
        percentage of ownership or prorated to one-half if both spouses 
        do not occupy the property. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2006 and thereafter. 
           Sec. 3.  Minnesota Statutes 2004, section 276A.01, 
        subdivision 7, is amended to read: 
           Subd. 7.  [POPULATION.] "Population" means the most recent 
        estimate of the population of a municipality made by the state 
        demographer and filed with the commissioner of revenue as of 
        July 1 15 of the year in which a municipality's distribution net 
        tax capacity is calculated.  The state demographer shall 
        annually estimate the population of each municipality and, in 
        the case of a municipality which is located partly within and 
        partly without the area, the proportion of the total which 
        resides within the area, and shall file the estimates with the 
        commissioner of revenue. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 4.  [473.24] [POPULATION ESTIMATES.] 
           (a) The Metropolitan Council shall annually prepare an 
        estimate of population for each county, city, and town in the 
        metropolitan area and an estimate of the number of households 
        and average household size for each city in the metropolitan 
        area with a population of 2,500 or more, and an estimate of 
        population over age 65 for each county in the metropolitan area, 
        and convey the estimates to the governing body of each county, 
        city, or town by June 1 each year.  In the case of a city or 
        town that is located partly within and partly without the 
        metropolitan area, the Metropolitan Council shall estimate the 
        proportion of the total population and the average size of 
        households that reside within the area.  The Metropolitan 
        Council may prepare an estimate of the population and of the 
        average household size for any other political subdivision 
        located in the metropolitan area. 
           (b) A governing body may challenge an estimate made under 
        this section by filing its specific objections in writing with 
        the Metropolitan Council by June 24.  If the challenge does not 
        result in an acceptable estimate, the governing body may have a 
        special census conducted by the United States Bureau of the 
        Census.  The political subdivision must notify the Metropolitan 
        Council on or before July 1 of its intent to have the special 
        census conducted.  The political subdivision must bear all costs 
        of the special census.  Results of the special census must be 
        received by the Metropolitan Council by the next April 15 to be 
        used in that year's June 1 estimate under this section.  The 
        Metropolitan Council shall certify the estimates of population 
        and the average household size to the state demographer and to 
        the commissioner of revenue by July 15 each year, including any 
        estimates still under objection.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 473F.02, 
        subdivision 7, is amended to read: 
           Subd. 7.  [POPULATION.] "Population" means the most recent 
        estimate of the population of a municipality made by the 
        Metropolitan Council under section 473.24 and filed with the 
        commissioner of revenue as of July 1 15 of the year in which a 
        municipality's distribution net tax capacity is calculated.  The 
        council shall annually estimate the population of each 
        municipality as of a date which it determines and, in the case 
        of a municipality which is located partly within and partly 
        without the area, the proportion of the total which resides 
        within the area, and shall promptly thereafter file its 
        estimates with the commissioner of revenue. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 6.  Minnesota Statutes 2004, section 477A.011, 
        subdivision 3, is amended to read: 
           Subd. 3.  [POPULATION.] "Population" means the 
        population estimated or established as of July 1 15 in an aid 
        calculation year by the most recent federal census, by a special 
        census conducted under contract with the United States Bureau of 
        the Census, by a population estimate made by the Metropolitan 
        Council pursuant to section 473.24, or by a population estimate 
        of the state demographer made pursuant to section 4A.02, 
        whichever is the most recent as to the stated date of the count 
        or estimate for the preceding calendar year, and which has been 
        certified to the commissioner of revenue on or before July 15 of 
        the aid calculation year.  The term "per capita" refers to 
        population as defined by this subdivision.  A revision of an 
        estimate or count is effective for these purposes only if it is 
        certified to the commissioner on or before July 15 of the aid 
        calculation year.  Clerical errors in the certification or use 
        of the estimates and counts established as of July 15 in the aid 
        calculation year are subject to correction within the time 
        periods allowed under section 477A.014. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2004, section 477A.011, 
        subdivision 34, is amended to read: 
           Subd. 34.  [CITY REVENUE NEED.] (a) For a city with a 
        population equal to or greater than 2,500, "city revenue need" 
        is the sum of (1) 5.0734098 times the pre-1940 housing 
        percentage; plus (2) 19.141678 times the population decline 
        percentage; plus (3) 2504.06334 times the road accidents factor; 
        plus (4) 355.0547; minus (5) the metropolitan area factor; minus 
        (6) 49.10638 times the household size. 
           (b) For a city with a population less than 2,500, "city 
        revenue need" is the sum of (1) 2.387 times the pre-1940 housing 
        percentage; plus (2) 2.67591 times the commercial industrial 
        percentage; plus (3) 3.16042 times the population decline 
        percentage; plus (4) 1.206 times the transformed population; 
        minus (5) 62.772. 
           (c) For a city with a population of 2,500 or more and a 
        population in one of the most recently available five years that 
        was less than 2,500, "city revenue need" is the sum of (1) its 
        city revenue need calculated under paragraph (a) multiplied by 
        its transition factor; plus (2) its city revenue need calculated 
        under the formula in paragraph (b) multiplied by the difference 
        between one and its transition factor.  For purposes of this 
        paragraph, a city's "transition factor" is equal to 0.2 
        multiplied by the number of years that the city's population 
        estimate has been 2,500 or more.  This provision only applies 
        for aids payable in calendar years 2006 to 2008 to cities with a 
        2002 population of less than 2,500.  It applies to any city for 
        aids payable in 2009 and thereafter. 
           (d) The city revenue need cannot be less than zero. 
           (d) (e) For calendar year 2005 and subsequent years, the 
        city revenue need for a city, as determined in paragraphs (a) 
        to (c) (d), is multiplied by the ratio of the annual implicit 
        price deflator for government consumption expenditures and gross 
        investment for state and local governments as prepared by the 
        United States Department of Commerce, for the most recently 
        available year to the 2003 implicit price deflator for state and 
        local government purchases. 
           [EFFECTIVE DATE.] This section is effective beginning with 
        aids payable in 2006. 
           Sec. 8.  Minnesota Statutes 2004, section 477A.011, 
        subdivision 36, as amended by Laws 2005, chapter 38, section 1, 
        is amended to read: 
           Subd. 36.  [CITY AID BASE.] (a) Except as otherwise 
        provided in this subdivision, "city aid base" is zero. 
           (b) The city aid base for any city with a population less 
        than 500 is increased by $40,000 for aids payable in calendar 
        year 1995 and thereafter, and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $40,000 for aids payable in calendar 
        year 1995 only, provided that: 
           (i) the average total tax capacity rate for taxes payable 
        in 1995 exceeds 200 percent; 
           (ii) the city portion of the tax capacity rate exceeds 100 
        percent; and 
           (iii) its city aid base is less than $60 per capita. 
           (c) The city aid base for a city is increased by $20,000 in 
        1998 and thereafter and the maximum amount of total aid it may 
        receive under section 477A.013, subdivision 9, paragraph (c), is 
        also increased by $20,000 in calendar year 1998 only, provided 
        that: 
           (i) the city has a population in 1994 of 2,500 or more; 
           (ii) the city is located in a county, outside of the 
        metropolitan area, which contains a city of the first class; 
           (iii) the city's net tax capacity used in calculating its 
        1996 aid under section 477A.013 is less than $400 per capita; 
        and 
           (iv) at least four percent of the total net tax capacity, 
        for taxes payable in 1996, of property located in the city is 
        classified as railroad property. 
           (d) The city aid base for a city is increased by $200,000 
        in 1999 and thereafter and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $200,000 in calendar year 1999 only, 
        provided that: 
           (i) the city was incorporated as a statutory city after 
        December 1, 1993; 
           (ii) its city aid base does not exceed $5,600; and 
           (iii) the city had a population in 1996 of 5,000 or more. 
           (e) The city aid base for a city is increased by $450,000 
        in 1999 to 2008 and the maximum amount of total aid it may 
        receive under section 477A.013, subdivision 9, paragraph (c), is 
        also increased by $450,000 in calendar year 1999 only, provided 
        that: 
           (i) the city had a population in 1996 of at least 50,000; 
           (ii) its population had increased by at least 40 percent in 
        the ten-year period ending in 1996; and 
           (iii) its city's net tax capacity for aids payable in 1998 
        is less than $700 per capita. 
           (f) The city aid base for a city is increased by $150,000 
        for aids payable in 2000 and thereafter, and the maximum amount 
        of total aid it may receive under section 477A.013, subdivision 
        9, paragraph (c), is also increased by $150,000 in calendar year 
        2000 only, provided that: 
           (1) the city has a population that is greater than 1,000 
        and less than 2,500; 
           (2) its commercial and industrial percentage for aids 
        payable in 1999 is greater than 45 percent; and 
           (3) the total market value of all commercial and industrial 
        property in the city for assessment year 1999 is at least 15 
        percent less than the total market value of all commercial and 
        industrial property in the city for assessment year 1998. 
           (g) The city aid base for a city is increased by $200,000 
        in 2000 and thereafter, and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $200,000 in calendar year 2000 only, 
        provided that: 
           (1) the city had a population in 1997 of 2,500 or more; 
           (2) the net tax capacity of the city used in calculating 
        its 1999 aid under section 477A.013 is less than $650 per 
        capita; 
           (3) the pre-1940 housing percentage of the city used in 
        calculating 1999 aid under section 477A.013 is greater than 12 
        percent; 
           (4) the 1999 local government aid of the city under section 
        477A.013 is less than 20 percent of the amount that the formula 
        aid of the city would have been if the need increase percentage 
        was 100 percent; and 
           (5) the city aid base of the city used in calculating aid 
        under section 477A.013 is less than $7 per capita. 
           (h) The city aid base for a city is increased by $102,000 
        in 2000 and thereafter, and the maximum amount of total aid it 
        may receive under section 477A.013, subdivision 9, paragraph 
        (c), is also increased by $102,000 in calendar year 2000 only, 
        provided that: 
           (1) the city has a population in 1997 of 2,000 or more; 
           (2) the net tax capacity of the city used in calculating 
        its 1999 aid under section 477A.013 is less than $455 per 
        capita; 
           (3) the net levy of the city used in calculating 1999 aid 
        under section 477A.013 is greater than $195 per capita; and 
           (4) the 1999 local government aid of the city under section 
        477A.013 is less than 38 percent of the amount that the formula 
        aid of the city would have been if the need increase percentage 
        was 100 percent. 
           (i) The city aid base for a city is increased by $32,000 in 
        2001 and thereafter, and the maximum amount of total aid it may 
        receive under section 477A.013, subdivision 9, paragraph (c), is 
        also increased by $32,000 in calendar year 2001 only, provided 
        that: 
           (1) the city has a population in 1998 that is greater than 
        200 but less than 500; 
           (2) the city's revenue need used in calculating aids 
        payable in 2000 was greater than $200 per capita; 
           (3) the city net tax capacity for the city used in 
        calculating aids available in 2000 was equal to or less than 
        $200 per capita; 
           (4) the city aid base of the city used in calculating aid 
        under section 477A.013 is less than $65 per capita; and 
           (5) the city's formula aid for aids payable in 2000 was 
        greater than zero. 
           (j) The city aid base for a city is increased by $7,200 in 
        2001 and thereafter, and the maximum amount of total aid it may 
        receive under section 477A.013, subdivision 9, paragraph (c), is 
        also increased by $7,200 in calendar year 2001 only, provided 
        that: 
           (1) the city had a population in 1998 that is greater than 
        200 but less than 500; 
           (2) the city's commercial industrial percentage used in 
        calculating aids payable in 2000 was less than ten percent; 
           (3) more than 25 percent of the city's population was 60 
        years old or older according to the 1990 census; 
           (4) the city aid base of the city used in calculating aid 
        under section 477A.013 is less than $15 per capita; and 
           (5) the city's formula aid for aids payable in 2000 was 
        greater than zero. 
           (k) The city aid base for a city is increased by $45,000 in 
        2001 and thereafter and by an additional $50,000 in calendar 
        years 2002 to 2011, and the maximum amount of total aid it may 
        receive under section 477A.013, subdivision 9, paragraph (c), is 
        also increased by $45,000 in calendar year 2001 only, and by 
        $50,000 in calendar year 2002 only, provided that: 
           (1) the net tax capacity of the city used in calculating 
        its 2000 aid under section 477A.013 is less than $810 per 
        capita; 
           (2) the population of the city declined more than two 
        percent between 1988 and 1998; 
           (3) the net levy of the city used in calculating 2000 aid 
        under section 477A.013 is greater than $240 per capita; and 
           (4) the city received less than $36 per capita in aid under 
        section 477A.013, subdivision 9, for aids payable in 2000. 
           (l) The city aid base for a city with a population of 
        10,000 or more which is located outside of the seven-county 
        metropolitan area is increased in 2002 and thereafter, and the 
        maximum amount of total aid it may receive under section 
        477A.013, subdivision 9, paragraph (b) or (c), is also increased 
        in calendar year 2002 only, by an amount equal to the lesser of: 
           (1)(i) the total population of the city, as determined by 
        the United States Bureau of the Census, in the 2000 census, (ii) 
        minus 5,000, (iii) times 60; or 
           (2) $2,500,000. 
           (m) The city aid base is increased by $50,000 in 2002 and 
        thereafter, and the maximum amount of total aid it may receive 
        under section 477A.013, subdivision 9, paragraph (c), is also 
        increased by $50,000 in calendar year 2002 only, provided that: 
           (1) the city is located in the seven-county metropolitan 
        area; 
           (2) its population in 2000 is between 10,000 and 20,000; 
        and 
           (3) its commercial industrial percentage, as calculated for 
        city aid payable in 2001, was greater than 25 percent. 
           (n) The city aid base for a city is increased by $150,000 
        in calendar years 2002 to 2011 and the maximum amount of total 
        aid it may receive under section 477A.013, subdivision 9, 
        paragraph (c), is also increased by $150,000 in calendar year 
        2002 only, provided that: 
           (1) the city had a population of at least 3,000 but no more 
        than 4,000 in 1999; 
           (2) its home county is located within the seven-county 
        metropolitan area; 
           (3) its pre-1940 housing percentage is less than 15 
        percent; and 
           (4) its city net tax capacity per capita for taxes payable 
        in 2000 is less than $900 per capita. 
           (o) The city aid base for a city is increased by $200,000 
        beginning in calendar year 2003 and the maximum amount of total 
        aid it may receive under section 477A.013, subdivision 9, 
        paragraph (c), is also increased by $200,000 in calendar year 
        2003 only, provided that the city qualified for an increase in 
        homestead and agricultural credit aid under Laws 1995, chapter 
        264, article 8, section 18. 
           (p) The city aid base for a city is increased by $200,000 
        in 2004 only and the maximum amount of total aid it may receive 
        under section 477A.013, subdivision 9, is also increased by 
        $200,000 in calendar year 2004 only, if the city is the site of 
        a nuclear dry cask storage facility. 
           (q) The city aid base for a city is increased by $10,000 in 
        2004 and thereafter and the maximum total aid it may receive 
        under section 477A.013, subdivision 9, is also increased by 
        $10,000 in calendar year 2004 only, if the city was included in 
        a federal major disaster designation issued on April 1, 1998, 
        and its pre-1940 housing stock was decreased by more than 40 
        percent between 1990 and 2000. 
           (r) The city aid base for a city is increased by $25,000 in 
        2006 only and the maximum total aid it may receive under section 
        477A.013, subdivision 9, is also increased by $25,000 in 
        calendar year 2006 only if the city had a population in 2003 of 
        at least 1,000 and has a state park for which the city provides 
        rescue services and which comprised at least 14 percent of the 
        total geographic area included within the city boundaries in 
        2000. 
           [EFFECTIVE DATE.] This section is effective for aids 
        payable in 2006 and thereafter. 
           Sec. 9.  Minnesota Statutes 2004, section 477A.011, 
        subdivision 38, is amended to read: 
           Subd. 38.  [HOUSEHOLD SIZE.] "Household size" means the 
        average number of persons per household in the jurisdiction as 
        most recently estimated and reported by the state 
        demographer and Metropolitan Council as of July 1 15 of the aid 
        calculation year.  A revision to an estimate or enumeration is 
        effective for these purposes only if it is certified to the 
        commissioner on or before July 15 of the aid calculation year.  
        Clerical errors in the certification or use of estimates and 
        counts established as of July 15 in the aid calculation year are 
        subject to correction within the time periods allowed under 
        section 477A.014. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 10.  Minnesota Statutes 2004, section 477A.0124, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DEFINITIONS.] (a) For the purposes of this 
        section, the following terms have the meanings given them. 
           (b) "County program aid" means the sum of "county need aid,"
        "county tax base equalization aid," and "county transition aid." 
           (c) "Age-adjusted population" means a county's population 
        multiplied by the county age index. 
           (d) "County age index" means the percentage of the 
        population over age 65 within the county divided by the 
        percentage of the population over age 65 within the state, 
        except that the age index for any county may not be greater than 
        1.8 nor less than 0.8. 
           (e) "Population over age 65" means the population over age 
        65 established as of July 1 15 in an aid calculation year by the 
        most recent federal census, by a special census conducted under 
        contract with the United States Bureau of the Census, by a 
        population estimate made by the Metropolitan Council, or by a 
        population estimate of the state demographer made pursuant to 
        section 4A.02, whichever is the most recent as to the stated 
        date of the count or estimate for the preceding calendar 
        year and which has been certified to the commissioner of revenue 
        on or before July 15 of the aid calculation year.  A revision to 
        an estimate or count is effective for these purposes only if 
        certified to the commissioner on or before July 15 of the aid 
        calculation year.  Clerical errors in the certification or use 
        of estimates and counts established as of July 15 in the aid 
        calculation year are subject to correction within the time 
        periods allowed under section 477A.014. 
           (f) "Part I crimes" means the three-year average annual 
        number of Part I crimes reported for each county by the 
        Department of Public Safety for the most recent years available. 
        By July 1 of each year, the commissioner of public safety shall 
        certify to the commissioner of revenue the number of Part I 
        crimes reported for each county for the three most recent 
        calendar years available. 
           (g) "Households receiving food stamps" means the average 
        monthly number of households receiving food stamps for the three 
        most recent years for which data is available.  By July 1 of 
        each year, the commissioner of human services must certify to 
        the commissioner of revenue the average monthly number of 
        households in the state and in each county that receive food 
        stamps, for the three most recent calendar years available. 
           (h) "County net tax capacity" means the net tax capacity of 
        the county, computed analogously to city net tax capacity under 
        section 477A.011, subdivision 20. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 11.  Minnesota Statutes 2004, section 477A.0124, 
        subdivision 4, is amended to read: 
           Subd. 4.  [COUNTY TAX-BASE EQUALIZATION AID.] (a) For 
        2005 2006 and subsequent years, the money appropriated to county 
        tax-base equalization aid each calendar year, after the payment 
        under paragraph (f), shall be apportioned among the counties 
        according to each county's tax-base equalization aid factor. 
           (b) A county's tax-base equalization aid factor is equal to 
        the amount by which (i) $185 times the county's population, 
        exceeds (ii) 9.45 percent of the county's net tax capacity. 
           (c) In the case of a county with a population less than 
        10,000, the factor determined in paragraph (b) shall be 
        multiplied by a factor of three. 
           (d) In the case of a county with a population greater than 
        or equal to 10,000, but less than 12,500, the factor determined 
        in paragraph (b) shall be multiplied by a factor of two. 
           (e) In the case of a county with a population greater than 
        500,000, the factor determined in paragraph (b) shall be 
        multiplied by a factor of 0.25. 
           (f) Before the money appropriated to county base 
        equalization aid is apportioned among the counties as provided 
        in paragraph (a), an amount up to $73,259 is allocated annually 
        to Anoka County and up to $59,664 is annually allocated to 
        Washington County for the county to pay postretirement costs of 
        health insurance premiums for court employees.  The allocation 
        under this paragraph is in addition to the allocations under 
        paragraphs (a) to (e). 
           [EFFECTIVE DATE.] This section is effective for aids 
        payable in 2006 and thereafter. 
           Sec. 12.  Minnesota Statutes 2004, section 477A.03, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [COUNTIES.] (a) For aids payable in calendar 
        year 2005 and thereafter, the total aids paid to counties under 
        section 477A.0124, subdivision 3, are limited to $100,500,000.  
        Each calendar year, $500,000 shall be retained by the 
        commissioner of revenue to make reimbursements to the 
        commissioner of finance for payments made under section 611.27.  
        For calendar year 2004, the amount shall be in addition to the 
        payments authorized under section 477A.0124, subdivision 1.  For 
        calendar year 2005 and subsequent years, the amount shall be 
        deducted from the appropriation under this paragraph.  The 
        reimbursements shall be to defray the additional costs 
        associated with court-ordered counsel under section 611.27.  Any 
        retained amounts not used for reimbursement in a year shall be 
        included in the next distribution of county need aid that is 
        certified to the county auditors for the purpose of property tax 
        reduction for the next taxes payable year. 
           (b) For aids payable in 2005 and thereafter 2006, the total 
        aids under section 477A.0124, subdivision 4, are limited to 
        $105,000,000.  For aids payable in 2007 and thereafter, the 
        total aid under section 477A.0124, subdivision 4, is limited to 
        $105,132,923.  The commissioner of finance shall bill the 
        commissioner of revenue for the cost of preparation of local 
        impact notes as required by section 3.987, not to exceed 
        $207,000 in fiscal year 2004 and thereafter.  The commissioner 
        of education shall bill the commissioner of revenue for the cost 
        of preparation of local impact notes for school districts as 
        required by section 3.987, not to exceed $7,000 in fiscal year 
        2004 and thereafter.  The commissioner of revenue shall deduct 
        the amounts billed under this paragraph from the appropriation 
        under this paragraph.  The amounts deducted are appropriated to 
        the commissioner of finance and the commissioner of education 
        for the preparation of local impact notes. 
           [EFFECTIVE DATE.] This section is effective for aids 
        payable in 2007 and thereafter. 
           Sec. 13.  Laws 2003, First Special Session chapter 21, 
        article 5, section 13, is amended to read: 
           Sec. 13.  [2004 CITY AID REDUCTIONS.] 
           The commissioner of revenue shall compute an aid reduction 
        amount for 2004 for each city as provided in this section. 
           The initial aid reduction amount for each city is the 
        amount by which the city's aid distribution under Minnesota 
        Statutes, section 477A.013, and related provisions payable in 
        2003 exceeds the city's 2004 distribution under those provisions.
           The minimum aid reduction amount for a city is the amount 
        of its reduction in 2003 under section 12.  If a city receives 
        an increase to its city aid base under Minnesota Statutes, 
        section 477A.011, subdivision 36, its minimum aid reduction is 
        reduced by an equal amount. 
           The maximum aid reduction amount for a city is an amount 
        equal to 14 percent of the city's total 2004 levy plus aid 
        revenue base, except that if the city has a city net tax 
        capacity for aids payable in 2004, as defined in Minnesota 
        Statutes, section 477A.011, subdivision 20, of $700 per capita 
        or less, the maximum aid reduction shall not exceed an amount 
        equal to 13 percent of the city's total 2004 levy plus aid 
        revenue base. 
           If the initial aid reduction amount for a city is less than 
        the minimum aid reduction amount for that city, the final aid 
        reduction amount for the city is the sum of the initial aid 
        reduction amount and the lesser of the amount of the city's 
        payable 2004 reimbursement under Minnesota Statutes, section 
        273.1384, or the difference between the minimum and initial aid 
        reduction amounts for the city, and the amount of the final aid 
        reduction in excess of the initial aid reduction is deducted 
        from the city's reimbursements pursuant to Minnesota Statutes, 
        section 273.1384. 
           If the initial aid reduction amount for a city is greater 
        than the maximum aid reduction amount for the city, the city 
        receives an additional distribution under this section equal to 
        the result of subtracting the maximum aid reduction amount from 
        the initial aid reduction amount.  This distribution shall be 
        paid in equal installments in 2004 on the dates specified in 
        Minnesota Statutes, section 477A.015.  The amount necessary for 
        these additional distributions is appropriated to the 
        commissioner of revenue from the general fund in fiscal year 
        2005. 
           The initial aid reduction is applied to the city's 
        distribution pursuant to Minnesota Statutes, section 477A.013, 
        and any aid reduction in excess of the initial aid reduction is 
        applied to the city's reimbursements pursuant to Minnesota 
        Statutes, section 273.1384. 
           To the extent that sufficient information is available on 
        each payment date in 2004, the commissioner of revenue shall pay 
        the reimbursements reduced under this section in equal 
        installments on the payment dates provided in law. 
           [EFFECTIVE DATE.] This section is effective for aids 
        payable in 2004. 
           Sec. 14.  Laws 2003, First Special Session chapter 21, 
        article 6, section 9, is amended to read: 
           Sec. 9.  [DEFINITIONS.] 
           (a) For purposes of sections 9 to 15, the following terms 
        have the meanings given them in this section. 
           (b) The 2003 and 2004 "levy plus aid revenue base" for a 
        county is the sum of that county's certified property tax levy 
        for taxes payable in 2003, plus the sum of the amounts the 
        county was certified to receive in the designated calendar year 
        as: 
           (1) homestead and agricultural credit aid under Minnesota 
        Statutes, section 273.1398, subdivision 2, plus any additional 
        aid under section 16, minus the amount calculated under section 
        273.1398, subdivision 4a, paragraph (b), for counties in 
        judicial districts one, three, six, and ten, and 25 percent of 
        the amount calculated under section 273.1398, subdivision 4a, 
        paragraph (b), for counties in judicial districts two and four; 
           (2) the amount of county manufactured home homestead and 
        agricultural credit aid computed for the county for payment in 
        2003 under section 273.166; 
           (3) criminal justice aid under Minnesota Statutes, section 
        477A.0121; 
           (4) family preservation aid under Minnesota Statutes, 
        section 477A.0122; 
           (5) taconite aids under Minnesota Statutes, sections 298.28 
        and 298.282, including any aid which was required to be placed 
        in a special fund for expenditure in the next succeeding year; 
        and 
           (6) county program aid under section 477A.0124, exclusive 
        of the attached machinery aid component. 
           [EFFECTIVE DATE.] This section is effective for aids 
        payable in 2004. 
           Sec. 15.  [COURT AID ADJUSTMENT.] 
           For aids payable in 2005 only, the amount of court aid paid 
        to Anoka County under Minnesota Statutes, section 273.1398, 
        subdivision 4a, is increased by $36,630 for aids payable in 2005 
        only and the amount paid to Washington County under Minnesota 
        Statutes, section 273.1398, subdivision 4a, is increased by 
        $29,832 for aids payable in 2005 only. 
           [EFFECTIVE DATE.] This section is effective for aids 
        payable in 2005 only. 
           Sec. 16.  [DISTRICT COURTS BUDGET.] 
           The district courts general fund appropriation is reduced 
        by $66,462 in fiscal year 2006 and $132,923 beginning in fiscal 
        year 2007 to fund the amount transferred to county tax base 
        equalization aid to fund the payments under Minnesota Statutes, 
        section 477A.0124, subdivision 4, paragraph (f), and section 15. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 

                                   ARTICLE 5 
                      DEPARTMENT OF REVENUE PROPERTY TAXES 
           Section 1.  Minnesota Statutes 2004, section 168A.05, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [MANUFACTURED HOME; STATEMENT OF PROPERTY TAX 
        PAYMENT.] In the case of a manufactured home as defined in 
        section 327.31, subdivision 6, the department shall not issue a 
        certificate of title unless the application under section 
        168A.04 is accompanied with a statement from the county auditor 
        or county treasurer where the manufactured home is presently 
        located, stating that all manufactured home personal property 
        taxes levied on the unit in the name of the current owner at the 
        time of transfer have been paid.  For this purpose, manufactured 
        home personal property taxes are treated as levied on January 1 
        of the payable year. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 270.11, 
        subdivision 2, is amended to read: 
           Subd. 2.  [COUNTY ASSESSOR'S REPORTS OF ASSESSMENT FILED 
        WITH COMMISSIONER.] Each county assessor shall file by April 1 
        with the commissioner of revenue a copy of the abstract that 
        will be acted upon by the local and county boards of review.  
        The abstract must list the real and personal property in the 
        county itemized by assessment districts.  The assessor of each 
        county in the state shall file with the commissioner, within ten 
        working days following final action of the local board of review 
        or equalization and within five days following final action of 
        the county board of equalization, any changes made by the local 
        or county board.  The information must be filed in the manner 
        prescribed by the commissioner.  It must be accompanied by a 
        printed or typewritten copy of the proceedings of the 
        appropriate board. 
           The final abstract of assessments after adjustments by the 
        State Board of Equalization and inclusion of any omitted 
        property shall be submitted to the commissioner of revenue on or 
        before September 1 of each calendar year.  The final abstract 
        must separately report the captured tax capacity of tax 
        increment financing districts under section 469.177, subdivision 
        2, the metropolitan revenue areawide net tax capacity 
        contribution value values determined under section sections 
        276A.05, subdivision 1, and 473F.07, subdivision 1, and the 
        value subject to the power line credit under section 273.42. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 3.  Minnesota Statutes 2004, section 270.16, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FAILURE TO APPRAISE.] When an assessor has 
        failed to properly appraise at least one-quarter one-fifth of 
        the parcels of property in a district or county as provided in 
        section 273.01, the commissioner of revenue shall appoint a 
        special assessor and deputy assessor as necessary and cause a 
        reappraisal to be made of the property due for reassessment in 
        accordance with law. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 4.  Minnesota Statutes 2004, section 272.01, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EXEMPT PROPERTY USED BY PRIVATE ENTITY FOR 
        PROFIT.] (a) When any real or personal property which is exempt 
        from ad valorem taxes, and taxes in lieu thereof, is leased, 
        loaned, or otherwise made available and used by a private 
        individual, association, or corporation in connection with a 
        business conducted for profit, there shall be imposed a tax, for 
        the privilege of so using or possessing such real or personal 
        property, in the same amount and to the same extent as though 
        the lessee or user was the owner of such property. 
           (b) The tax imposed by this subdivision shall not apply to: 
           (1) property leased or used as a concession in or relative 
        to the use in whole or part of a public park, market, 
        fairgrounds, port authority, economic development authority 
        established under chapter 469, municipal auditorium, municipal 
        parking facility, municipal museum, or municipal stadium; 
           (2) property of an airport owned by a city, town, county, 
        or group thereof which is:  
           (i) leased to or used by any person or entity including a 
        fixed base operator; and 
           (ii) used as a hangar for the storage or repair of aircraft 
        or to provide aviation goods, services, or facilities to the 
        airport or general public; 
        the exception from taxation provided in this clause does not 
        apply to: 
           (i) property located at an airport owned or operated by the 
        Metropolitan Airports Commission or by a city of over 50,000 
        population according to the most recent federal census or such a 
        city's airport authority; 
           (ii) hangars leased by a private individual, association, 
        or corporation in connection with a business conducted for 
        profit other than an aviation-related business; or 
           (iii) facilities leased by a private individual, 
        association, or corporation in connection with a business for 
        profit, that consists of a major jet engine repair facility 
        financed, in whole or part, with the proceeds of state bonds and 
        located in a tax increment financing district; 
           (3) property constituting or used as a public pedestrian 
        ramp or concourse in connection with a public airport; or 
           (4) property constituting or used as a passenger check-in 
        area or ticket sale counter, boarding area, or luggage claim 
        area in connection with a public airport but not the airports 
        owned or operated by the Metropolitan Airports Commission or 
        cities of over 50,000 population or an airport authority 
        therein.  Real estate owned by a municipality in connection with 
        the operation of a public airport and leased or used for 
        agricultural purposes is not exempt; 
           (5) property leased, loaned, or otherwise made available to 
        a private individual, corporation, or association under a 
        cooperative farming agreement made pursuant to section 97A.135; 
        or 
           (6) property leased, loaned, or otherwise made available to 
        a private individual, corporation, or association under section 
        272.68, subdivision 4. 
           (c) Taxes imposed by this subdivision are payable as in the 
        case of personal property taxes and shall be assessed to the 
        lessees or users of real or personal property in the same manner 
        as taxes assessed to owners of real or personal property, except 
        that such taxes shall not become a lien against the property.  
        When due, the taxes shall constitute a debt due from the lessee 
        or user to the state, township, city, county, and school 
        district for which the taxes were assessed and shall be 
        collected in the same manner as personal property taxes.  If 
        property subject to the tax imposed by this subdivision is 
        leased or used jointly by two or more persons, each lessee or 
        user shall be jointly and severally liable for payment of the 
        tax. 
           (d) The tax on real property of the state or any of its 
        political subdivisions that is leased by a private individual, 
        association, or corporation and becomes taxable under this 
        subdivision or other provision of law must be assessed and 
        collected as a personal property assessment.  The taxes do not 
        become a lien against the real property. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 272.02, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [LIMITATIONS ON EXEMPTIONS.] The exemptions 
        granted by subdivision 1 are subject to the limits contained in 
        the other subdivisions of this section, section 272.025, or 
        273.13, subdivision 25, paragraph (c), clause (1) or (2), or 
        paragraph (d), clause (2) and all other provisions of applicable 
        law.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 6.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 73.  [PROPERTY SUBJECT TO TACONITE PRODUCTION TAX OR 
        NET PROCEEDS TAX.] (a) Real and personal property described in 
        section 298.25 is exempt to the extent the tax on taconite and 
        iron sulphides under section 298.24 is described in section 
        298.25 as being in lieu of other taxes on such property.  This 
        exemption applies for taxes payable in each year that the tax 
        under section 298.24 is payable with respect to such property. 
           (b) Deposits of mineral, metal, or energy resources the 
        mining of which is subject to taxation under section 298.015 are 
        exempt.  This exemption applies for taxes payable in each year 
        that the tax under section 298.015 is payable with respect to 
        such property. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 74.  [RELIGIOUS CORPORATIONS.] Personal and real 
        property that a religious corporation, formed under section 
        317A.909, necessarily uses for a religious purpose is exempt to 
        the extent provided in section 317A.909, subdivision 3. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 75.  [CHILDREN'S HOMES.] Personal and real property 
        owned by a corporation formed under section 317A.907 is exempt 
        to the extent provided in section 317A.907, subdivision 7. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 9.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 76.  [HOUSING AND REDEVELOPMENT AUTHORITY AND TRIBAL 
        HOUSING AUTHORITY PROPERTY.] Property owned by a housing and 
        redevelopment authority described in chapter 469, or by a 
        designated housing authority described in section 469.040, 
        subdivision 5, is exempt to the extent provided in chapter 469. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 10.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 77.  [PROPERTY OF HOUSING AND REDEVELOPMENT 
        AUTHORITIES.] Property of projects of housing and redevelopment 
        authorities are exempt to the extent permitted by sections 
        469.042, subdivision 1, and 469.043, subdivisions 2 and 5. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 11.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 78.  [PROPERTY OF REGIONAL RAIL AUTHORITY.] Property 
        of a regional rail authority as defined in chapter 398A is 
        exempt to the extent permitted by section 398A.05. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 12.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 79.  [SPIRIT MOUNTAIN RECREATION AREA 
        AUTHORITY.] Property owned by the Spirit Mountain Recreation 
        Area Authority is exempt from taxation to the extent provided in 
        Laws 1973, chapter 327, section 6. 
           Sec. 13.  Minnesota Statutes 2004, section 272.02, is 
        amended by adding a subdivision to read: 
           Subd. 80.  [INSTALLED CAPACITY DEFINED.] For purposes of 
        this section, the term "installed capacity" means generator 
        nameplate capacity. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 14.  Minnesota Statutes 2004, section 272.029, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPORTS.] (a) An owner of a wind energy 
        conversion system subject to tax under subdivision 3 shall file 
        a report with the commissioner of revenue annually on or before 
        March February 1 detailing the amount of electricity in 
        kilowatt-hours that was produced by the wind energy conversion 
        system for the previous calendar year.  The commissioner shall 
        prescribe the form of the report.  The report must contain the 
        information required by the commissioner to determine the tax 
        due to each county under this section for the current year.  If 
        an owner of a wind energy conversion system subject to taxation 
        under this section fails to file the report by the due date, the 
        commissioner of revenue shall determine the tax based upon the 
        nameplate capacity of the system multiplied by a capacity factor 
        of 40 percent. 
           (b) On or before March 31 February 28, the commissioner of 
        revenue shall notify the owner of the wind energy conversion 
        systems of the tax due to each county for the current year and 
        shall certify to the county auditor of each county in which the 
        systems are located the tax due from each owner for the current 
        year. 
           [EFFECTIVE DATE.] This section is effective for reports and 
        certifications due in 2006 and thereafter. 
           Sec. 15.  Minnesota Statutes 2004, section 272.029, 
        subdivision 6, is amended to read: 
           Subd. 6.  [DISTRIBUTION OF REVENUES.] Revenues from the 
        taxes imposed under subdivision 5 must be part of the settlement 
        between the county treasurer and the county auditor under 
        section 276.09.  The revenue must be distributed by the county 
        auditor or the county treasurer to all local taxing 
        jurisdictions in which the wind energy conversion system is 
        located, as follows:  beginning with distributions in 2006, 80 
        percent to counties; 14 percent to cities and townships; and six 
        percent to school districts; and for distributions occurring in 
        2004 and 2005 in the same proportion that each of the local 
        taxing jurisdiction's current year's net tax capacity based tax 
        rate is to the current year's total local net tax capacity based 
        rate. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 16.  Minnesota Statutes 2004, section 273.11, 
        subdivision 8, is amended to read: 
           Subd. 8.  [LIMITED EQUITY COOPERATIVE APARTMENTS.] For the 
        purposes of this subdivision, the terms defined in this 
        subdivision have the meanings given them.  
           A "limited equity cooperative" is a corporation organized 
        under chapter 308A or 308B, which has as its primary purpose the 
        provision of housing and related services to its members which 
        meets one of the following criteria with respect to the income 
        of its members:  (1) a minimum of 75 percent of members must 
        have incomes at or less than 90 percent of area median income, 
        (2) a minimum of 40 percent of members must have incomes at or 
        less than 60 percent of area median income, or (3) a minimum of 
        20 percent of members must have incomes at or less than 50 
        percent of area median income.  For purposes of this clause, 
        "member income" shall mean the income of a member existing at 
        the time the member acquires cooperative membership, and median 
        income shall mean the St. Paul-Minneapolis metropolitan area 
        median income as determined by the United States Department of 
        Housing and Urban Development.  It must also meet the following 
        requirements:  
           (a) The articles of incorporation set the sale price of 
        occupancy entitling cooperative shares or memberships at no more 
        than a transfer value determined as provided in the articles. 
        That value may not exceed the sum of the following:  
           (1) the consideration paid for the membership or shares by 
        the first occupant of the unit, as shown in the records of the 
        corporation; 
           (2) the fair market value, as shown in the records of the 
        corporation, of any improvements to the real property that were 
        installed at the sole expense of the member with the prior 
        approval of the board of directors; 
           (3) accumulated interest, or an inflation allowance not to 
        exceed the greater of a ten percent annual noncompounded 
        increase on the consideration paid for the membership or share 
        by the first occupant of the unit, or the amount that would have 
        been paid on that consideration if interest had been paid on it 
        at the rate of the percentage increase in the revised Consumer 
        Price Index for All Urban Consumers for the Minneapolis-St. Paul 
        metropolitan area prepared by the United States Department of 
        Labor, provided that the amount determined pursuant to this 
        clause may not exceed $500 for each year or fraction of a year 
        the membership or share was owned; plus 
           (4) real property capital contributions shown in the 
        records of the corporation to have been paid by the transferor 
        member and previous holders of the same membership, or of 
        separate memberships that had entitled occupancy to the unit of 
        the member involved.  These contributions include contributions 
        to a corporate reserve account the use of which is restricted to 
        real property improvements or acquisitions, contributions to the 
        corporation which are used for real property improvements or 
        acquisitions, and the amount of principal amortized by the 
        corporation on its indebtedness due to the financing of real 
        property acquisition or improvement or the averaging of 
        principal paid by the corporation over the term of its real 
        property-related indebtedness. 
           (b) The articles of incorporation require that the board of 
        directors limit the purchase price of stock or membership 
        interests for new member-occupants or resident shareholders to 
        an amount which does not exceed the transfer value for the 
        membership or stock as defined in clause (a).  
           (c) The articles of incorporation require that the total 
        distribution out of capital to a member shall not exceed that 
        transfer value. 
           (d) The articles of incorporation require that upon 
        liquidation of the corporation any assets remaining after 
        retirement of corporate debts and distribution to members will 
        be conveyed to a charitable organization described in section 
        501(c)(3) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1992, or a public agency.  
           A "limited equity cooperative apartment" is a dwelling unit 
        owned by a limited equity cooperative.  
           "Occupancy entitling cooperative share or membership" is 
        the ownership interest in a cooperative organization which 
        entitles the holder to an exclusive right to occupy a dwelling 
        unit owned or leased by the cooperative.  
           For purposes of taxation, the assessor shall value a unit 
        owned by a limited equity cooperative at the lesser of its 
        market value or the value determined by capitalizing the net 
        operating income of a comparable apartment operated on a rental 
        basis at the capitalization rate used in valuing comparable 
        buildings that are not limited equity cooperatives.  If a 
        cooperative fails to operate in accordance with the provisions 
        of clauses (a) to (d), the property shall be subject to 
        additional property taxes in the amount of the difference 
        between the taxes determined in accordance with this subdivision 
        for the last ten years that the property had been assessed 
        pursuant to this subdivision and the amount that would have been 
        paid if the provisions of this subdivision had not applied to 
        it.  The additional taxes, plus interest at the rate specified 
        in section 549.09, shall be extended against the property on the 
        tax list for the current year. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004 and thereafter. 
           Sec. 17.  Minnesota Statutes 2004, section 273.124, 
        subdivision 3, is amended to read: 
           Subd. 3.  [COOPERATIVES AND CHARITABLE CORPORATIONS; 
        HOMESTEAD AND OTHER PROPERTY.] (a) When property is owned by a 
        corporation or association organized under chapter 308A or 308B, 
        and each person who owns a share or shares in the corporation or 
        association is entitled to occupy a building on the property, or 
        a unit within a building on the property, the corporation or 
        association may claim homestead treatment for each dwelling, or 
        for each unit in the case of a building containing several 
        dwelling units, or for the part of the value of the building 
        occupied by a shareholder.  Each building or unit must be 
        designated by legal description or number.  The net tax capacity 
        of each building or unit that qualifies for assessment as a 
        homestead under this subdivision must include not more than 
        one-half acre of land, if platted, nor more than 80 acres if 
        unplatted.  The net tax capacity of the property is the sum of 
        the net tax capacities of each of the respective buildings or 
        units comprising the property, including the net tax capacity of 
        each unit's or building's proportionate share of the land and 
        any common buildings.  To qualify for the treatment provided by 
        this subdivision, the corporation or association must be wholly 
        owned by persons having a right to occupy a building or unit 
        owned by the corporation or association.  A charitable 
        corporation organized under the laws of Minnesota and not 
        otherwise exempt thereunder with no outstanding stock qualifies 
        for homestead treatment with respect to member residents of the 
        dwelling units who have purchased and hold residential 
        participation warrants entitling them to occupy the units. 
           (b) To the extent provided in paragraph (a), a cooperative 
        or corporation organized under chapter 308A may obtain separate 
        assessment and valuation, and separate property tax statements 
        for each residential homestead, residential nonhomestead, or for 
        each seasonal residential recreational building or unit not used 
        for commercial purposes.  The appropriate class rates under 
        section 273.13 shall be applicable as if each building or unit 
        were a separate tax parcel; provided, however, that the tax 
        parcel which exists at the time the cooperative or corporation 
        makes application under this subdivision shall be a single 
        parcel for purposes of property taxes or the enforcement and 
        collection thereof, other than as provided in paragraph (a) or 
        this paragraph. 
           (c) A member of a corporation or association may initially 
        obtain the separate assessment and valuation and separate 
        property tax statements, as provided in paragraph (b), by 
        applying to the assessor by June 30 of the assessment year. 
           (d) When a building, or dwelling units within a building, 
        no longer qualify under paragraph (a) or (b), the current owner 
        must notify the assessor within 30 days.  Failure to notify the 
        assessor within 30 days shall result in the loss of benefits 
        under paragraph (a) or (b) for taxes payable in the year that 
        the failure is discovered.  For these purposes, "benefits under 
        paragraph (a) or (b)" means the difference in the net tax 
        capacity of the building or units which no longer qualify as 
        computed under paragraph (a) or (b) and as computed under the 
        otherwise applicable law, times the local tax rate applicable to 
        the building for that taxes payable year.  Upon discovery of a 
        failure to notify, the assessor shall inform the auditor of the 
        difference in net tax capacity for the building or buildings in 
        which units no longer qualify, and the auditor shall calculate 
        the benefits under paragraph (a) or (b).  Such amount, plus a 
        penalty equal to 100 percent of that amount, shall then be 
        demanded of the building's owner.  The property owner may appeal 
        the county's determination by serving copies of a petition for 
        review with county officials as provided in section 278.01 and 
        filing a proof of service as provided in section 278.01 with the 
        Minnesota Tax Court within 60 days of the date of the notice 
        from the county.  The appeal shall be governed by the Tax Court 
        procedures provided in chapter 271, for cases relating to the 
        tax laws as defined in section 271.01, subdivision 5; 
        disregarding sections 273.125, subdivision 5, and 278.03, but 
        including section 278.05, subdivision 2.  If the amount of the 
        benefits under paragraph (a) or (b) and penalty are not paid 
        within 60 days, and if no appeal has been filed, the county 
        auditor shall certify the amount of the benefit and penalty to 
        the succeeding year's tax list to be collected as part of the 
        property taxes on the affected property. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004 and thereafter. 
           Sec. 18.  Minnesota Statutes 2004, section 273.124, 
        subdivision 6, is amended to read: 
           Subd. 6.  [LEASEHOLD COOPERATIVES.] When one or more 
        dwellings or one or more buildings which each contain several 
        dwelling units is owned by a nonprofit corporation subject to 
        the provisions of chapter 317A and qualifying under section 
        501(c)(3) or 501(c)(4) of the Internal Revenue Code of 1986, as 
        amended through December 31, 1990, or a limited partnership 
        which corporation or partnership operates the property in 
        conjunction with a cooperative association, and has received 
        public financing, homestead treatment may be claimed by the 
        cooperative association on behalf of the members of the 
        cooperative for each dwelling unit occupied by a member of the 
        cooperative.  The cooperative association must provide the 
        assessor with the Social Security numbers of those members.  To 
        qualify for the treatment provided by this subdivision, the 
        following conditions must be met:  
           (a) the cooperative association must be organized under 
        chapter 308A or 308B and all voting members of the board of 
        directors must be resident tenants of the cooperative and must 
        be elected by the resident tenants of the cooperative; 
           (b) the cooperative association must have a lease for 
        occupancy of the property for a term of at least 20 years, which 
        permits the cooperative association, while not in default on the 
        lease, to participate materially in the management of the 
        property, including material participation in establishing 
        budgets, setting rent levels, and hiring and supervising a 
        management agent; 
           (c) to the extent permitted under state or federal law, the 
        cooperative association must have a right under a written 
        agreement with the owner to purchase the property if the owner 
        proposes to sell it; if the cooperative association does not 
        purchase the property it is offered for sale, the owner may not 
        subsequently sell the property to another purchaser at a price 
        lower than the price at which it was offered for sale to the 
        cooperative association unless the cooperative association 
        approves the sale; 
           (d) a minimum of 40 percent of the cooperative 
        association's members must have incomes at or less than 60 
        percent of area median gross income as determined by the United 
        States Secretary of Housing and Urban Development under section 
        142(d)(2)(B) of the Internal Revenue Code of 1986, as amended 
        through December 31, 1991.  For purposes of this clause, "member 
        income" means the income of a member existing at the time the 
        member acquires cooperative membership; 
           (e) if a limited partnership owns the property, it must 
        include as the managing general partner a nonprofit organization 
        operating under the provisions of chapter 317A and qualifying 
        under section 501(c)(3) or 501(c)(4) of the Internal Revenue 
        Code of 1986, as amended through December 31, 1990, and the 
        limited partnership agreement must provide that the managing 
        general partner have sufficient powers so that it materially 
        participates in the management and control of the limited 
        partnership; 
           (f) prior to becoming a member of a leasehold cooperative 
        described in this subdivision, a person must have received 
        notice that (1) describes leasehold cooperative property in 
        plain language, including but not limited to the effects of 
        classification under this subdivision on rents, property taxes 
        and tax credits or refunds, and operating expenses, and (2) 
        states that copies of the articles of incorporation and bylaws 
        of the cooperative association, the lease between the owner and 
        the cooperative association, a sample sublease between the 
        cooperative association and a tenant, and, if the owner is a 
        partnership, a copy of the limited partnership agreement, can be 
        obtained upon written request at no charge from the owner, and 
        the owner must send or deliver the materials within seven days 
        after receiving any request; 
           (g) if a dwelling unit of a building was occupied on the 
        60th day prior to the date on which the unit became leasehold 
        cooperative property described in this subdivision, the notice 
        described in paragraph (f) must have been sent by first class 
        mail to the occupant of the unit at least 60 days prior to the 
        date on which the unit became leasehold cooperative property.  
        For purposes of the notice under this paragraph, the copies of 
        the documents referred to in paragraph (f) may be in proposed 
        version, provided that any subsequent material alteration of 
        those documents made after the occupant has requested a copy 
        shall be disclosed to any occupant who has requested a copy of 
        the document.  Copies of the articles of incorporation and 
        certificate of limited partnership shall be filed with the 
        secretary of state after the expiration of the 60-day period 
        unless the change to leasehold cooperative status does not 
        proceed; 
           (h) the county attorney of the county in which the property 
        is located must certify to the assessor that the property meets 
        the requirements of this subdivision; 
           (i) the public financing received must be from at least one 
        of the following sources: 
           (1) tax increment financing proceeds used for the 
        acquisition or rehabilitation of the building or interest rate 
        write-downs relating to the acquisition of the building; 
           (2) government issued bonds exempt from taxes under section 
        103 of the Internal Revenue Code of 1986, as amended through 
        December 31, 1991, the proceeds of which are used for the 
        acquisition or rehabilitation of the building; 
           (3) programs under section 221(d)(3), 202, or 236, of Title 
        II of the National Housing Act; 
           (4) rental housing program funds under Section 8 of the 
        United States Housing Act of 1937 or the market rate family 
        graduated payment mortgage program funds administered by the 
        Minnesota Housing Finance Agency that are used for the 
        acquisition or rehabilitation of the building; 
           (5) low-income housing credit under section 42 of the 
        Internal Revenue Code of 1986, as amended through December 31, 
        1991; 
           (6) public financing provided by a local government used 
        for the acquisition or rehabilitation of the building, including 
        grants or loans from (i) federal community development block 
        grants; (ii) HOME block grants; or (iii) residential rental 
        bonds issued under chapter 474A; or 
           (7) other rental housing program funds provided by the 
        Minnesota Housing Finance Agency for the acquisition or 
        rehabilitation of the building; 
           (j) at the time of the initial request for homestead 
        classification or of any transfer of ownership of the property, 
        the governing body of the municipality in which the property is 
        located must hold a public hearing and make the following 
        findings: 
           (1) that the granting of the homestead treatment of the 
        apartment's units will facilitate safe, clean, affordable 
        housing for the cooperative members that would otherwise not be 
        available absent the homestead designation; 
           (2) that the owner has presented information satisfactory 
        to the governing body showing that the savings garnered from the 
        homestead designation of the units will be used to reduce 
        tenant's rents or provide a level of furnishing or maintenance 
        not possible absent the designation; and 
           (3) that the requirements of paragraphs (b), (d), and (i) 
        have been met. 
           Homestead treatment must be afforded to units occupied by 
        members of the cooperative association and the units must be 
        assessed as provided in subdivision 3, provided that any unit 
        not so occupied shall be classified and assessed pursuant to the 
        appropriate class.  No more than three acres of land may, for 
        assessment purposes, be included with each dwelling unit that 
        qualifies for homestead treatment under this subdivision. 
           When dwelling units no longer qualify under this 
        subdivision, the current owner must notify the assessor within 
        60 days.  Failure to notify the assessor within 60 days shall 
        result in the loss of benefits under this subdivision for taxes 
        payable in the year that the failure is discovered.  For these 
        purposes, "benefits under this subdivision" means the difference 
        in the net tax capacity of the units which no longer qualify as 
        computed under this subdivision and as computed under the 
        otherwise applicable law, times the local tax rate applicable to 
        the building for that taxes payable year.  Upon discovery of a 
        failure to notify, the assessor shall inform the auditor of the 
        difference in net tax capacity for the building or buildings in 
        which units no longer qualify, and the auditor shall calculate 
        the benefits under this subdivision.  Such amount, plus a 
        penalty equal to 100 percent of that amount, shall then be 
        demanded of the building's owner.  The property owner may appeal 
        the county's determination by serving copies of a petition for 
        review with county officials as provided in section 278.01 and 
        filing a proof of service as provided in section 278.01 with the 
        Minnesota Tax Court within 60 days of the date of the notice 
        from the county.  The appeal shall be governed by the Tax Court 
        procedures provided in chapter 271, for cases relating to the 
        tax laws as defined in section 271.01, subdivision 5; 
        disregarding sections 273.125, subdivision 5, and 278.03, but 
        including section 278.05, subdivision 2.  If the amount of the 
        benefits under this subdivision and penalty are not paid within 
        60 days, and if no appeal has been filed, the county auditor 
        shall certify the amount of the benefit and penalty to the 
        succeeding year's tax list to be collected as part of the 
        property taxes on the affected buildings. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004 and thereafter. 
           Sec. 19.  Minnesota Statutes 2004, section 273.124, 
        subdivision 8, is amended to read: 
           Subd. 8.  [HOMESTEAD OWNED BY OR LEASED TO FAMILY FARM 
        CORPORATION, JOINT FARM VENTURE, LIMITED LIABILITY COMPANY, OR 
        PARTNERSHIP.] (a) Each family farm corporation, each; each joint 
        family farm venture,; and each limited liability company, and 
        each or partnership operating which operates a family farm; is 
        entitled to class 1b under section 273.13, subdivision 22, 
        paragraph (b), or class 2a assessment for one homestead occupied 
        by a shareholder, member, or partner thereof who is residing on 
        the land, and actively engaged in farming of the land owned by 
        the family farm corporation, joint family farm venture, limited 
        liability company, or partnership operating a family farm.  
        Homestead treatment applies even if legal title to the property 
        is in the name of the family farm corporation, joint family farm 
        venture, limited liability company, or partnership operating the 
        family farm, and not in the name of the person residing on it. 
           "Family farm corporation," "family farm," and "partnership 
        operating a family farm" have the meanings given in section 
        500.24, except that the number of allowable shareholders, 
        members, or partners under this subdivision shall not exceed 
        12.  "Limited liability company" has the meaning contained in 
        sections 322B.03, subdivision 28, and 500.24, subdivision 2, 
        paragraphs (l) and (m).  "Joint family farm venture" means a 
        cooperative agreement among two or more farm enterprises 
        authorized to operate a family farm under section 500.24. 
           (b) In addition to property specified in paragraph (a), any 
        other residences owned by family farm corporations, joint family 
        farm ventures, limited liability companies, or partnerships 
        operating a family farm described in paragraph (a) which are 
        located on agricultural land and occupied as homesteads by its 
        shareholders, members, or partners who are actively engaged in 
        farming on behalf of that corporation, joint farm venture, 
        limited liability company, or partnership must also be assessed 
        as class 2a property or as class 1b property under section 
        273.13. 
           (c) Agricultural property that is owned by a member, 
        partner, or shareholder of a family farm corporation or joint 
        family farm venture, limited liability company operating a 
        family farm, or by a partnership operating a family farm and 
        leased to the family farm corporation, limited liability 
        company, or partnership operating a family farm, or joint farm 
        venture, as defined in paragraph (a), is eligible for 
        classification as class 1b or class 2a under section 273.13, if 
        the owner is actually residing on the property, and is actually 
        engaged in farming the land on behalf of that corporation, joint 
        farm venture, limited liability company, or partnership.  This 
        paragraph applies without regard to any legal possession rights 
        of the family farm corporation, joint family farm venture, 
        limited liability company, or partnership operating a family 
        farm under the lease. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 20.  Minnesota Statutes 2004, section 273.124, 
        subdivision 13, is amended to read: 
           Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
        the homestead requirements under subdivision 1 must file a 
        homestead application with the county assessor to initially 
        obtain homestead classification. 
           (b) On or before January 2, 1993, each county assessor 
        shall mail a homestead application to the owner of each parcel 
        of property within the county which was classified as homestead 
        for the 1992 assessment year.  The format and contents of a 
        uniform homestead application shall be prescribed by the 
        commissioner of revenue.  The commissioner shall consult with 
        the chairs of the house and senate tax committees on the 
        contents of the homestead application form.  The application 
        must clearly inform the taxpayer that this application must be 
        signed by all owners who occupy the property or by the 
        qualifying relative and returned to the county assessor in order 
        for the property to continue receiving homestead treatment.  The 
        envelope containing the homestead application shall clearly 
        identify its contents and alert the taxpayer of its necessary 
        immediate response. 
           (c) Every property owner applying for homestead 
        classification must furnish to the county assessor the Social 
        Security number of each occupant who is listed as an owner of 
        the property on the deed of record, the name and address of each 
        owner who does not occupy the property, and the name and Social 
        Security number of each owner's spouse who occupies the 
        property.  The application must be signed by each owner who 
        occupies the property and by each owner's spouse who occupies 
        the property, or, in the case of property that qualifies as a 
        homestead under subdivision 1, paragraph (c), by the qualifying 
        relative. 
           If a property owner occupies a homestead, the property 
        owner's spouse may not claim another property as a homestead 
        unless the property owner and the property owner's spouse file 
        with the assessor an affidavit or other proof required by the 
        assessor stating that the property qualifies as a homestead 
        under subdivision 1, paragraph (e). 
           Owners or spouses occupying residences owned by their 
        spouses and previously occupied with the other spouse, either of 
        whom fail to include the other spouse's name and Social Security 
        number on the homestead application or provide the affidavits or 
        other proof requested, will be deemed to have elected to receive 
        only partial homestead treatment of their residence.  The 
        remainder of the residence will be classified as nonhomestead 
        residential.  When an owner or spouse's name and Social Security 
        number appear on homestead applications for two separate 
        residences and only one application is signed, the owner or 
        spouse will be deemed to have elected to homestead the residence 
        for which the application was signed. 
           The Social Security numbers or affidavits or other proofs 
        of the property owners and spouses are private data on 
        individuals as defined by section 13.02, subdivision 12, but, 
        notwithstanding that section, the private data may be disclosed 
        to the commissioner of revenue, or, for purposes of proceeding 
        under the Revenue Recapture Act to recover personal property 
        taxes owing, to the county treasurer. 
           (d) If residential real estate is occupied and used for 
        purposes of a homestead by a relative of the owner and qualifies 
        for a homestead under subdivision 1, paragraph (c), in order for 
        the property to receive homestead status, a homestead 
        application must be filed with the assessor.  The Social 
        Security number of each relative occupying the property and the 
        Social Security number of each owner who is related to an 
        occupant of the property shall be required on the homestead 
        application filed under this subdivision.  If a different 
        relative of the owner subsequently occupies the property, the 
        owner of the property must notify the assessor within 30 days of 
        the change in occupancy.  The Social Security number of a 
        relative occupying the property is private data on individuals 
        as defined by section 13.02, subdivision 12, but may be 
        disclosed to the commissioner of revenue.  
           (e) The homestead application shall also notify the 
        property owners that the application filed under this section 
        will not be mailed annually and that if the property is granted 
        homestead status for the 1993 assessment, or any assessment year 
        thereafter, that same property shall remain classified as 
        homestead until the property is sold or transferred to another 
        person, or the owners, the spouse of the owner, or the relatives 
        no longer use the property as their homestead.  Upon the sale or 
        transfer of the homestead property, a certificate of value must 
        be timely filed with the county auditor as provided under 
        section 272.115.  Failure to notify the assessor within 30 days 
        that the property has been sold, transferred, or that the owner, 
        the spouse of the owner, or the relative is no longer occupying 
        the property as a homestead, shall result in the penalty 
        provided under this subdivision and the property will lose its 
        current homestead status. 
           (f) If the homestead application is not returned within 30 
        days, the county will send a second application to the present 
        owners of record.  The notice of proposed property taxes 
        prepared under section 275.065, subdivision 3, shall reflect the 
        property's classification.  Beginning with assessment year 1993 
        for all properties, if a homestead application has not been 
        filed with the county by December 15, the assessor shall 
        classify the property as nonhomestead for the current assessment 
        year for taxes payable in the following year, provided that the 
        owner may be entitled to receive the homestead classification by 
        proper application under section 375.192. 
           (g) At the request of the commissioner, each county must 
        give the commissioner a list that includes the name and Social 
        Security number of each property owner and the property owner's 
        spouse occupying the property, or relative of a property owner, 
        applying for homestead classification under this subdivision.  
        The commissioner shall use the information provided on the lists 
        as appropriate under the law, including for the detection of 
        improper claims by owners, or relatives of owners, under chapter 
        290A.  
           (h) If the commissioner finds that a property owner may be 
        claiming a fraudulent homestead, the commissioner shall notify 
        the appropriate counties.  Within 90 days of the notification, 
        the county assessor shall investigate to determine if the 
        homestead classification was properly claimed.  If the property 
        owner does not qualify, the county assessor shall notify the 
        county auditor who will determine the amount of homestead 
        benefits that had been improperly allowed.  For the purpose of 
        this section, "homestead benefits" means the tax reduction 
        resulting from the classification as a homestead under section 
        273.13, the taconite homestead credit under section 273.135, the 
        residential homestead and agricultural homestead credits under 
        section 273.1384, and the supplemental homestead credit under 
        section 273.1391. 
           The county auditor shall send a notice to the person who 
        owned the affected property at the time the homestead 
        application related to the improper homestead was filed, 
        demanding reimbursement of the homestead benefits plus a penalty 
        equal to 100 percent of the homestead benefits.  The person 
        notified may appeal the county's determination by serving copies 
        of a petition for review with county officials as provided in 
        section 278.01 and filing proof of service as provided in 
        section 278.01 with the Minnesota Tax Court within 60 days of 
        the date of the notice from the county.  Procedurally, the 
        appeal is governed by the provisions in chapter 271 which apply 
        to the appeal of a property tax assessment or levy, but without 
        requiring any prepayment of the amount in controversy.  If the 
        amount of homestead benefits and penalty is not paid within 60 
        days, and if no appeal has been filed, the county auditor shall 
        certify the amount of taxes and penalty to the county 
        treasurer.  The county treasurer will add interest to the unpaid 
        homestead benefits and penalty amounts at the rate provided in 
        section 279.03 for real property taxes becoming delinquent in 
        the calendar year during which the amount remains unpaid.  
        Interest may be assessed for the period beginning 60 days after 
        demand for payment was made. 
           If the person notified is the current owner of the 
        property, the treasurer may add the total amount of homestead 
        benefits, penalty, interest, and costs to the ad valorem taxes 
        otherwise payable on the property by including the amounts on 
        the property tax statements under section 276.04, subdivision 
        3.  The amounts added under this paragraph to the ad valorem 
        taxes shall include interest accrued through December 31 of the 
        year preceding the taxes payable year for which the amounts are 
        first added.  These amounts, when added to the property tax 
        statement, become subject to all the laws for the enforcement of 
        real or personal property taxes for that year, and for any 
        subsequent year. 
           If the person notified is not the current owner of the 
        property, the treasurer may collect the amounts due under the 
        Revenue Recapture Act in chapter 270A, or use any of the powers 
        granted in sections 277.20 and 277.21 without exclusion, to 
        enforce payment of the homestead benefits, penalty, interest, 
        and costs, as if those amounts were delinquent tax obligations 
        of the person who owned the property at the time the application 
        related to the improperly allowed homestead was filed.  The 
        treasurer may relieve a prior owner of personal liability for 
        the homestead benefits, penalty, interest, and costs, and 
        instead extend those amounts on the tax lists against the 
        property as provided in this paragraph to the extent that the 
        current owner agrees in writing.  On all demands, billings, 
        property tax statements, and related correspondence, the county 
        must list and state separately the amounts of homestead 
        benefits, penalty, interest and costs being demanded, billed or 
        assessed. 
           (i) Any amount of homestead benefits recovered by the 
        county from the property owner shall be distributed to the 
        county, city or town, and school district where the property is 
        located in the same proportion that each taxing district's levy 
        was to the total of the three taxing districts' levy for the 
        current year.  Any amount recovered attributable to taconite 
        homestead credit shall be transmitted to the St. Louis County 
        auditor to be deposited in the taconite property tax relief 
        account.  Any amount recovered that is attributable to 
        supplemental homestead credit is to be transmitted to the 
        commissioner of revenue for deposit in the general fund of the 
        state treasury.  The total amount of penalty collected must be 
        deposited in the county general fund. 
           (j) If a property owner has applied for more than one 
        homestead and the county assessors cannot determine which 
        property should be classified as homestead, the county assessors 
        will refer the information to the commissioner.  The 
        commissioner shall make the determination and notify the 
        counties within 60 days. 
           (k) In addition to lists of homestead properties, the 
        commissioner may ask the counties to furnish lists of all 
        properties and the record owners.  The Social Security numbers 
        and federal identification numbers that are maintained by a 
        county or city assessor for property tax administration 
        purposes, and that may appear on the lists retain their 
        classification as private or nonpublic data; but may be viewed, 
        accessed, and used by the county auditor or treasurer of the 
        same county for the limited purpose of assisting the 
        commissioner in the preparation of microdata samples under 
        section 270.0681. 
           (l) On or before April 30 each year beginning in 2007, each 
        county must provide the commissioner with the following data for 
        each parcel of homestead property by electronic means as defined 
        in section 289A.02, subdivision 8: 
           (i) the property identification number assigned to the 
        parcel for purposes of taxes payable in the current year; 
           (ii) the name and Social Security number of each property 
        owner and property owner's spouse, as shown on the tax rolls for 
        the current and the prior assessment year; 
           (iii) the classification of the property under section 
        273.13 for taxes payable in the current year and in the prior 
        year; 
           (iv) an indication of whether the property was classified 
        as a homestead for taxes payable in the current year or for 
        taxes payable in the prior year because of occupancy by a 
        relative of the owner or by a spouse of a relative; 
           (v) the property taxes payable as defined in section 
        290A.03, subdivision 13, for the current year and the prior 
        year; 
           (vi) the market value of improvements to the property first 
        assessed for tax purposes for taxes payable in the current year; 
           (vii) the assessor's estimated market value assigned to the 
        property for taxes payable in the current year and the prior 
        year; 
           (viii) the taxable market value assigned to the property 
        for taxes payable in the current year and the prior year; 
           (ix) whether there are delinquent property taxes owing on 
        the homestead; 
           (x) the unique taxing district in which the property is 
        located; and 
           (xi) such other information as the commissioner decides is 
        necessary. 
           The commissioner shall use the information provided on the 
        lists as appropriate under the law, including for the detection 
        of improper claims by owners, or relatives of owners, under 
        chapter 290A. 
           Sec. 21.  Minnesota Statutes 2004, section 273.124, 
        subdivision 21, is amended to read: 
           Subd. 21.  [TRUST PROPERTY; HOMESTEAD.] Real property held 
        by a trustee under a trust is eligible for classification as 
        homestead property if: 
           (1) the grantor or surviving spouse of the grantor of the 
        trust occupies and uses the property as a homestead; 
           (2) a relative or surviving relative of the grantor who 
        meets the requirements of subdivision 1, paragraph (c), in the 
        case of residential real estate; or subdivision 1, paragraph 
        (d), in the case of agricultural property, occupies and uses the 
        property as a homestead; 
           (3) a family farm corporation, joint farm venture, limited 
        liability company, or partnership operating a family farm rents 
        the property held by a trustee under a trust, and the grantor, 
        the spouse of the grantor, or the son or daughter of the 
        grantor, who is also a shareholder, member, or partner of the 
        corporation, joint farm venture, limited liability company, or 
        partnership occupies and uses the property as a homestead, and 
        or is actively farming the property on behalf of the 
        corporation, joint farm venture, limited liability company, or 
        partnership; or 
           (4) a person who has received homestead classification for 
        property taxes payable in 2000 on the basis of an unqualified 
        legal right under the terms of the trust agreement to occupy the 
        property as that person's homestead and who continues to use the 
        property as a homestead or a person who received the homestead 
        classification for taxes payable in 2005 under clause (3) who 
        does not qualify under clause (3) for taxes payable in 2006 or 
        thereafter but who continues to qualify under clause (3) as it 
        existed for taxes payable in 2005. 
           For purposes of this subdivision, "grantor" is defined as 
        the person creating or establishing a testamentary, inter Vivos, 
        revocable or irrevocable trust by written instrument or through 
        the exercise of a power of appointment. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2006 and thereafter. 
           Sec. 22.  Minnesota Statutes 2004, section 273.1315, is 
        amended to read: 
           273.1315 [CERTIFICATION OF 1B PROPERTY.] 
           Any property owner seeking classification and assessment of 
        the owner's homestead as class 1b property pursuant to section 
        273.13, subdivision 22, paragraph (b), shall file with the 
        commissioner of revenue a 1b homestead declaration, on a form 
        prescribed by the commissioner.  The declaration shall contain 
        the following information:  
           (a) the information necessary to verify that on or before 
        June 30 of the filing year, the property owner or the owner's 
        spouse satisfies the requirements of section 273.13, subdivision 
        22, paragraph (b), for 1b classification; and 
           (b) any additional information prescribed by the 
        commissioner.  
           The declaration must be filed on or before October 1 to be 
        effective for property taxes payable during the succeeding 
        calendar year.  The declaration and any supplementary 
        information received from the property owner pursuant to this 
        section shall be subject to chapter 270B.  If approved by the 
        commissioner, the declaration remains in effect until the 
        property no longer qualifies under section 273.13, subdivision 
        22, paragraph (b).  Failure to notify the commissioner within 30 
        days that the property no longer qualifies under that paragraph 
        because of a sale, change in occupancy, or change in the status 
        or condition of an occupant shall result in the penalty provided 
        in section 273.124, subdivision 13, computed on the basis of the 
        class 1b benefits for the property, and the property shall lose 
        its current class 1b classification. 
           The commissioner shall provide to the assessor on or before 
        November 1 a listing of the parcels of property qualifying for 
        1b classification.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 23.  Minnesota Statutes 2004, section 273.19, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  For purposes of this section, a lease includes 
        any agreement, except a cooperative farming agreement pursuant 
        to section 97A.135, subdivision 3, or a lease executed pursuant 
        to section 272.68, subdivision 4, permitting a nonexempt person 
        or entity to use the property, regardless of whether the 
        agreement is characterized as a lease.  A lease has a "term of 
        at least one year" if the term is for a period of less than one 
        year and the lease permits the parties to renew the lease 
        without requiring that similar terms for leasing the property 
        will be offered to other applicants or bidders through a 
        competitive bidding or other form of offer to potential lessees 
        or users. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 24.  Minnesota Statutes 2004, section 273.372, is 
        amended to read: 
           273.372 [PROCEEDINGS AND APPEALS; UTILITY OR RAILROAD 
        VALUATIONS.] 
           Subdivision 1.  [SCOPE.] (a) As provided in this section, 
        an appeal by a utility or railroad company concerning the 
        exemption, valuation, or classification of property for which 
        the commissioner of revenue has provided the city or county 
        assessor with valuations by order, or for which the commissioner 
        has recommended values to the city or county assessor, must be 
        brought against the commissioner in Tax Court or in district 
        court of the county where the property is located, and not 
        against the county or taxing district where the property is 
        located.  
           (b) This section governs administrative appeals and appeals 
        to court of a claim that utility or railroad operating property 
        has been partially, unfairly, or unequally assessed, or assessed 
        at a valuation greater than its real or actual value, 
        misclassified, or that the property is exempt.  This section 
        applies only to property described in sections 270.81, 
        subdivision 1, 273.33, 273.35, 273.36, and 273.37, and only with 
        regard to taxable net tax capacities that have been provided to 
        the city or county by the commissioner and which have not been 
        changed by city or county.  If the taxable net tax capacity 
        being appealed is not the taxable net tax capacity established 
        by the commissioner, or if the appeal claims that the tax rate 
        applied against the parcel is incorrect, or that the tax has 
        been paid, this section does not apply. 
           Subd. 2.  [CONTENTS AND FILING OF PETITION.] (a) In all 
        appeals to court that are required to be brought against the 
        commissioner under this section, the petition initiating the 
        appeal must be served on the commissioner and must be filed with 
        the Tax Court in Ramsey County, as provided in paragraph (b) or 
        (c). 
           (b) If the appeal to court is from an order of the 
        commissioner, it must be brought under chapter 271, except that 
        when the provisions of this section conflict with chapter 271, 
        this section prevails.  In addition, the petition must include 
        all the parcels encompassed by that order which the petitioner 
        claims have been partially, unfairly, or unequally assessed, 
        assessed at a valuation greater than their real or actual value, 
        misclassified, or are exempt.  For this purpose, an order of the 
        commissioner is either (1) a certification or notice of value by 
        the commissioner for property described in subdivision 1, or (2) 
        the final determination by the commissioner of either an 
        administrative appeal conference or informal administrative 
        appeal described in subdivision 4.  
           (c) If the appeal is from the exemption, valuation, 
        classification, or tax that results from implementation of the 
        commissioner's order, certification, or recommendation, it must 
        be brought under chapter 278, and the provisions in that chapter 
        apply, except that service shall be on the commissioner only and 
        not on the county local officials specified in section 278.01, 
        subdivision 1, and if any other provision of this section 
        conflicts with chapter 278, this section prevails.  In addition, 
        the petition must include either all the utility parcels or all 
        the railroad parcels in the state in which the petitioner claims 
        an interest and which the petitioner claims have been partially, 
        unfairly, or unequally assessed, assessed at a valuation greater 
        than their real or actual value, misclassified, or are 
        exempt.  This provision applies to the property described in 
        sections 273.33, 273.35, 273.36, and 273.37, but only if the 
        appealed values have remained unchanged from those provided to 
        the city or county by the commissioner.  If the exemption, 
        valuation, or classification being appealed has been changed by 
        the city or county, then the action must be brought under 
        chapter 278 in the county where the property is located and 
        proper service must be made upon the county officials as 
        specified in section 278.01, subdivision 1. 
           Subd. 3.  [NOTICE.] Upon filing of any appeal in court by a 
        utility company or railroad against the commissioner pursuant to 
        this section, the commissioner shall give notice by first class 
        mail to the county auditor of each county which would be 
        affected by the appeal where property included in the petition 
        is located. 
           Subd. 4.  [ADMINISTRATIVE APPEALS.] (a) Companies that 
        submit the reports under section 270.82 or 273.371 by the date 
        specified in that section, or by the date specified by the 
        commissioner in an extension, may appeal administratively to the 
        commissioner under the procedures in section 270.11, subdivision 
        6, prior to bringing an action in Tax Court or in district court 
        , however, instituting an administrative appeal by submitting a 
        written request with the commissioner does not change or 
        modify for a conference within ten days after the date of the 
        commissioner's valuation certification or notice to the company, 
        or by May 15, whichever is earlier.  The commissioner shall 
        conduct the conference upon the commissioner's entire files and 
        records and such further information as may be offered.  The 
        conference must be held no later than 20 days after the date of 
        the commissioner's valuation certification or notice to the 
        company, or by the date specified by the commissioner in an 
        extension.  Within 60 days after the conference the commissioner 
        shall make a final determination of the matter and shall notify 
        the company promptly of the determination.  The conference is 
        not a contested case hearing. 
           (b) In addition to the opportunity for a conference under 
        paragraph (a), the commissioner shall also provide the railroad 
        and utility companies the opportunity to discuss any questions 
        or concerns relating to the values established by the 
        commissioner through certification or notice in a less formal 
        manner.  This does not change or modify the deadline for 
        requesting a conference under paragraph (a), the deadline in 
        section 271.06 for appealing an order of the commissioner in Tax 
        Court, or the deadline in section 278.01 for filing a property 
        tax claim or objection in Tax Court or district appealing 
        property taxes in court. 
           [EFFECTIVE DATE.] This section is effective September 1, 
        2005, and thereafter. 
           Sec. 25.  Minnesota Statutes 2004, section 274.014, 
        subdivision 2, is amended to read: 
           Subd. 2.  [APPEALS AND EQUALIZATION COURSE.] By no later 
        than January 1, Beginning in 2006, and each year thereafter, 
        there must be at least one member at each meeting of a local 
        board of appeal and equalization who has attended an appeals and 
        equalization course developed or approved by the commissioner 
        within the last four years, as certified by the commissioner.  
        The course may be offered in conjunction with a meeting of the 
        Minnesota League of Cities or the Minnesota Association of 
        Townships.  The course content must include, but need not be 
        limited to, a review of the handbook developed by the 
        commissioner under subdivision 1. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 26.  Minnesota Statutes 2004, section 274.014, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PROOF OF COMPLIANCE; TRANSFER OF DUTIES.] (a) 
        Any city or town that does not conducts local boards of appeal 
        and equalization meetings must provide proof to the county 
        assessor by December 1, 2006, and each year thereafter, that it 
        is in compliance with the requirements of subdivision 2, and 
        that it had.  Beginning in 2006, this notice must also verify 
        that there was a quorum of voting members at each meeting of the 
        board of appeal and equalization in the prior current year,.  A 
        city or town that does not comply with these requirements is 
        deemed to have transferred its board of appeal and equalization 
        powers to the county under section 274.01, subdivision 3, 
        for beginning with the following year's assessment and 
        continuing unless the powers are reinstated under paragraph (c). 
           (b) The county shall notify the taxpayers when the board of 
        appeal and equalization for a city or town has been transferred 
        to the county under this subdivision and, prior to the meeting 
        time of the county board of equalization, the county shall make 
        available to those taxpayers a procedure for a review of the 
        assessments, including, but not limited to, open book meetings.  
        This alternate review process shall take place in April and May. 
           (c) A local board whose powers are transferred to the 
        county under this subdivision may be reinstated by resolution of 
        the governing body of the city or town and upon proof of 
        compliance with the requirements of subdivision 2.  The 
        resolution and proofs must be provided to the county assessor by 
        December 1 in order to be effective for the following year's 
        assessment. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 27.  Minnesota Statutes 2004, section 274.14, is 
        amended to read: 
           274.14 [LENGTH OF SESSION; RECORD.] 
           The county board of equalization or the special board of 
        equalization appointed by it shall meet during the last ten 
        meeting days in June.  For this purpose, "meeting days" are 
        defined as any day of the week excluding Saturday and Sunday.  
        The board may meet on any ten consecutive meeting days in June, 
        after the second Friday in June, if.  The actual meeting dates 
        are must be contained on the valuation notices mailed to each 
        property owner in the county under as provided in section 
        273.121.  For this purpose, "meeting days" is defined as any day 
        of the week excluding Saturday and Sunday.  No action taken by 
        the county board of review after June 30 is valid, except for 
        corrections permitted in sections 273.01 and 274.01.  The county 
        auditor shall keep an accurate record of the proceedings and 
        orders of the board.  The record must be published like other 
        proceedings of county commissioners.  A copy of the published 
        record must be sent to the commissioner of revenue, with the 
        abstract of assessment required by section 274.16.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 28.  Minnesota Statutes 2004, section 275.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CERTIFICATION OF LEVY.] (a) Except as 
        provided under paragraph (b), the taxes voted by cities, 
        counties, school districts, and special districts shall be 
        certified by the proper authorities to the county auditor on or 
        before five working days after December 20 in each year.  A town 
        must certify the levy adopted by the town board to the county 
        auditor by September 15 each year.  If the town board modifies 
        the levy at a special town meeting after September 15, the town 
        board must recertify its levy to the county auditor on or before 
        five working days after December 20.  The taxes certified shall 
        be reduced by the county auditor by the aid received under 
        section 273.1398, subdivision 3.  If a city, town, county, 
        school district, or special district fails to certify its levy 
        by that date, its levy shall be the amount levied by it for the 
        preceding year. 
           (b)(i) The taxes voted by counties under sections 103B.241, 
        103B.245, and 103B.251 shall be separately certified by the 
        county to the county auditor on or before five working days 
        after December 20 in each year.  The taxes certified shall not 
        be reduced by the county auditor by the aid received under 
        section 273.1398, subdivision 3.  If a county fails to certify 
        its levy by that date, its levy shall be the amount levied by it 
        for the preceding year.  
           (ii) For purposes of the proposed property tax notice under 
        section 275.065 and the property tax statement under section 
        276.04, for the first year in which the county implements the 
        provisions of this paragraph, the county auditor shall reduce 
        the county's levy for the preceding year to reflect any amount 
        levied for water management purposes under clause (i) included 
        in the county's levy. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 29.  Minnesota Statutes 2004, section 275.07, 
        subdivision 4, is amended to read: 
           Subd. 4.  [REPORT TO COMMISSIONER.] (a) On or before 
        October 8 of each year, the county auditor shall report to the 
        commissioner of revenue the proposed levy certified by local 
        units of government under section 275.065, subdivision 1.  If 
        any taxing authorities have notified the county auditor that 
        they are in the process of negotiating an agreement for sharing, 
        merging, or consolidating services but that when the proposed 
        levy was certified under section 275.065, subdivision 1c, the 
        agreement was not yet finalized, the county auditor shall supply 
        that information to the commissioner when filing the report 
        under this section and shall recertify the affected levies as 
        soon as practical after October 10. 
           (b) On or before January 15 of each year, the county 
        auditor shall report to the commissioner of revenue the final 
        levy certified by local units of government under subdivision 1. 
           (c) The levies must be reported in the manner prescribed by 
        the commissioner.  The reports must show a total levy and the 
        amount of each special levy. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 30.  Minnesota Statutes 2004, section 276.112, is 
        amended to read: 
           276.112 [STATE PROPERTY TAXES; COUNTY TREASURER.] 
           On or before January 25 each year, for the period ending 
        December 31 of the prior year, and on or before June 29 28 each 
        year, for the period ending on the most recent settlement day 
        determined in section 276.09, and on or before December 2 each 
        year, for the period ending November 20, the county treasurer 
        must make full settlement with the county auditor according to 
        sections 276.09, 276.10, and 276.111 for all receipts of state 
        property taxes levied under section 275.025, and must transmit 
        those receipts to the commissioner of revenue by electronic 
        means. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 31.  Minnesota Statutes 2004, section 282.016, is 
        amended to read: 
           282.016 [PROHIBITED PURCHASERS.] 
           No (a) A county auditor, county treasurer, county attorney, 
        court administrator of the district court, or county assessor 
        or, supervisor of assessments, or deputy or clerk or an employee 
        of such officer, and no a commissioner for tax-forfeited lands 
        or an assistant to such commissioner may, must not become a 
        purchaser, either personally or as an agent or attorney for 
        another person, of the properties offered for sale under the 
        provisions of this chapter, either personally, or as agent or 
        attorney for any other person, except that in the county for 
        which the person performs duties.  A person prohibited from 
        purchasing property under this section must not directly or 
        indirectly have another person purchase it on behalf of the 
        prohibited purchaser for the prohibited purchaser's benefit or 
        gain. 
           (b) Notwithstanding paragraph (a), such officer, deputy, 
        court administrator clerk, or employee or commissioner for 
        tax-forfeited lands or assistant to such commissioner may (1) 
        purchase lands owned by that official at the time the state 
        became the absolute owner thereof or (2) bid upon and purchase 
        forfeited property offered for sale under the alternate sale 
        procedure described in section 282.01, subdivision 7a. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 32.  Minnesota Statutes 2004, section 282.08, is 
        amended to read: 
           282.08 [APPORTIONMENT OF PROCEEDS TO TAXING DISTRICTS.] 
           The net proceeds from the sale or rental of any parcel of 
        forfeited land, or from the sale of products from the forfeited 
        land, must be apportioned by the county auditor to the taxing 
        districts interested in the land, as follows: 
           (1) the amounts necessary to pay the state general tax levy 
        against the parcel for taxes payable in the year for which the 
        tax judgment was entered, and for each subsequent payable year 
        up to and including the year of forfeiture, must be apportioned 
        to the state; 
           (2) the portion required to pay any amounts included in the 
        appraised value under section 282.01, subdivision 3, as 
        representing increased value due to any public improvement made 
        after forfeiture of the parcel to the state, but not exceeding 
        the amount certified by the clerk of the municipality must be 
        apportioned to the municipal subdivision entitled to it; 
           (3) (2) the portion required to pay any amount included in 
        the appraised value under section 282.019, subdivision 5, 
        representing increased value due to response actions taken after 
        forfeiture of the parcel to the state, but not exceeding the 
        amount of expenses certified by the Pollution Control Agency or 
        the commissioner of agriculture, must be apportioned to the 
        agency or the commissioner of agriculture and deposited in the 
        fund from which the expenses were paid; 
           (4) (3) the portion of the remainder required to discharge 
        any special assessment chargeable against the parcel for 
        drainage or other purpose whether due or deferred at the time of 
        forfeiture, must be apportioned to the municipal subdivision 
        entitled to it; and 
           (5) (4) any balance must be apportioned as follows: 
           (i) The county board may annually by resolution set aside 
        no more than 30 percent of the receipts remaining to be used for 
        timber development on tax-forfeited land and dedicated memorial 
        forests, to be expended under the supervision of the county 
        board.  It must be expended only on projects approved by the 
        commissioner of natural resources. 
           (ii) The county board may annually by resolution set aside 
        no more than 20 percent of the receipts remaining to be used for 
        the acquisition and maintenance of county parks or recreational 
        areas as defined in sections 398.31 to 398.36, to be expended 
        under the supervision of the county board. 
           (iii) Any balance remaining must be apportioned as 
        follows:  county, 40 percent; town or city, 20 percent; and 
        school district, 40 percent, provided, however, that in 
        unorganized territory that portion which would have accrued to 
        the township must be administered by the county board of 
        commissioners. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment for state general tax levy amounts 
        payable in 2004 and thereafter. 
           Sec. 33.  Minnesota Statutes 2004, section 282.15, is 
        amended to read: 
           282.15 [SALES OF FORFEITED AGRICULTURAL LANDS.] 
           The sale shall be conducted by the auditor of the county in 
        which the parcels lie.  The parcels shall be sold to the highest 
        bidder but not for less than the appraised value.  The sales 
        shall be for cash or on the following terms:  The appraised 
        value of all merchantable timber on agricultural lands shall be 
        paid for in full at the date of sale.  At least 15 percent of 
        the purchase price of the land shall be paid in cash at the time 
        of purchase.  The balance shall be paid in not more than 20 
        equal annual installments, with interest at a rate equal to the 
        rate in effect at the time under section 549.09 on the unpaid 
        balance each year.  Both principal and interest are due and 
        payable on December 31 each year following that in which the 
        purchase was made.  The purchaser may pay any number of 
        installments of principal and interest on or before their due 
        date.  When the sale is on terms other than for cash in full, 
        the purchaser shall receive from the county auditor a contract 
        for deed, in a form prescribed by the attorney general.  The 
        county auditor shall make a report to the commissioner of 
        natural resources not more than 30 days after each public sale 
        showing the lands sold at the sales, and submit a copy of each 
        contract of sale. 
           All lands sold pursuant to this section shall, on the 
        second day of January following the date of the sale, must be 
        restored to the tax rolls and become subject to taxation in the 
        same manner as they were assessed and taxed before becoming the 
        absolute property of the state for the assessment year 
        determined under section 272.02, subdivision 38, paragraph (c).  
           [EFFECTIVE DATE.] This section is effective for sales 
        occurring on or after July 1, 2005. 
           Sec. 34.  Minnesota Statutes 2004, section 282.21, is 
        amended to read: 
           282.21 [FORM OF CONVEYANCE.] 
           When any sale has been made under sections 282.14 to 
        282.22, upon payment in full of the purchase price, appropriate 
        conveyance in fee in such form as may be prescribed by the 
        attorney general shall be issued by the commissioner of finance 
        natural resources to the purchaser or the purchaser's assigns 
        and this conveyance shall have the force and effect of a patent 
        from the state.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 35.  Minnesota Statutes 2004, section 282.224, is 
        amended to read: 
           282.224 [FORM OF CONVEYANCE.] 
           When any sale has been made under sections 282.221 to 
        282.226, upon payment in full of the purchase price, appropriate 
        conveyance in fee, in such form as may be prescribed by the 
        attorney general, shall be issued by the commissioner of natural 
        resources to the purchaser or the purchaser's assignee, and the 
        conveyance shall have the force and effect of a patent from the 
        state.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 36.  Minnesota Statutes 2004, section 282.301, is 
        amended to read: 
           282.301 [RECEIPTS FOR PAYMENTS.] 
           When any sale has been made under sections 282.012 and 
        282.241 to 282.324, the purchaser shall receive from the county 
        auditor at the time of repurchase a receipt, in such form as may 
        be prescribed by the attorney general.  When the purchase price 
        of a parcel of land shall be paid in full, the following facts 
        shall be certified by the county auditor to the commissioner of 
        revenue of the state of Minnesota:  the description of land, the 
        date of sale, the name of the purchaser or the purchaser's 
        assignee, and the date when the final installment of the 
        purchase price was paid.  Upon payment in full of the purchase 
        price, the purchaser or the assignee shall receive a quitclaim 
        deed from the state, to be executed by the commissioner of 
        revenue.  The deed must be sent to the county auditor who shall 
        have it recorded before it is forwarded to the purchaser.  
        Failure to make any payment herein required shall constitute 
        default and upon such default and cancellation in accord with 
        section 282.40, the right, title and interest of the purchaser 
        or the purchaser's heirs, representatives, or assigns in such 
        parcel shall terminate.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 37.  Minnesota Statutes 2004, section 290B.05, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CALCULATION OF DEFERRED PROPERTY TAX AMOUNT.] 
        When final property tax amounts for the following year have been 
        determined, the county auditor shall calculate the "deferred 
        property tax amount."  The deferred property tax amount is equal 
        to the lesser of (1) the maximum allowable deferral for the 
        year; or (2) the difference between (i) the total amount of 
        property taxes and special assessments levied upon the 
        qualifying homestead by all taxing jurisdictions and (ii) the 
        maximum property tax amount.  Any special assessments levied by 
        any local unit of government must not be included in the total 
        tax used to calculate the deferred tax amount. For this purpose 
        "special assessments" includes any assessment, fee, or other 
        charge that may by law, and which does, appear on the property 
        tax statement for the property for collection under the laws 
        applicable to the enforcement of real estate taxes.  Any tax 
        attributable to new improvements made to the property after the 
        initial application has been approved under section 290B.04, 
        subdivision 2, must be excluded when determining any subsequent 
        deferred property tax amount.  The county auditor shall 
        annually, on or before April 15, certify to the commissioner of 
        revenue the property tax deferral amounts determined under this 
        subdivision by property and by owner.  
           [EFFECTIVE DATE.] This section is effective for amounts 
        deferred in 2006 and thereafter. 
           Sec. 38.  Minnesota Statutes 2004, section 290C.05, is 
        amended to read: 
           290C.05 [ANNUAL CERTIFICATION.] 
           On or before July 1 of each year, beginning with the year 
        after the claimant has received an approved application, the 
        commissioner shall send each claimant enrolled under the 
        sustainable forest incentive program a certification form.  The 
        claimant must sign the certification, attesting that the 
        requirements and conditions for continued enrollment in the 
        program are currently being met, and must return the signed 
        certification form to the commissioner by August 15 of that same 
        year.  Failure to If the claimant does not return an annual 
        certification form by the due date shall result in removal of 
        the lands from the provisions of the sustainable forest 
        incentive program, and the imposition of any applicable removal 
        penalty, the provisions in section 290C.11 apply.  The claimant 
        may appeal the removal and any associated penalty according to 
        the procedures and within the time allowed under this chapter. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 39.  [290C.055] [LENGTH OF COVENANT.] 
           The covenant remains in effect for a minimum of eight 
        years.  If land is removed from the program before it has been 
        enrolled for four years, the covenant remains in effect for 
        eight years from the date recorded. 
           If land that has been enrolled for four years or more is 
        removed from the program for any reason, there is a waiting 
        period before the covenant terminates.  The covenant terminates 
        on January 1 of the fifth calendar year that begins after the 
        date that: 
           (1) the commissioner receives notification from the 
        claimant that the claimant wishes to remove the land from the 
        program under section 290C.10; or 
           (2) the date that the land is removed from the program 
        under section 290C.11. 
           Notwithstanding the other provisions of this section, the 
        covenant is terminated at the same time that the land is removed 
        from the program due to acquisition of title or possession for a 
        public purpose under section 290C.10. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 40.  Minnesota Statutes 2004, section 290C.10, is 
        amended to read: 
           290C.10 [WITHDRAWAL PROCEDURES.] 
           An approved claimant under the sustainable forest incentive 
        program for a minimum of four years may notify the commissioner 
        of the intent to terminate enrollment.  Within 90 days of 
        receipt of notice to terminate enrollment, the commissioner 
        shall inform the claimant in writing, acknowledging receipt of 
        this notice and indicating the effective date of termination 
        from the sustainable forest incentive program.  Termination of 
        enrollment in the sustainable forest incentive program occurs on 
        January 1 of the fifth calendar year that begins after receipt 
        by the commissioner of the termination notice.  After the 
        commissioner issues an effective date of termination, a claimant 
        wishing to continue the land's enrollment in the sustainable 
        forest incentive program beyond the termination date must apply 
        for enrollment as prescribed in section 290C.04.  A claimant who 
        withdraws a parcel of land from this program may not reenroll 
        the parcel for a period of three years.  Within 90 days after 
        the termination date, the commissioner shall execute and 
        acknowledge a document releasing the land from the covenant 
        required under this chapter.  The document must be mailed to the 
        claimant and is entitled to be recorded.  The commissioner may 
        allow early withdrawal from the Sustainable Forest Incentive Act 
        without penalty in cases of condemnation when the state of 
        Minnesota, any local government unit, or any other entity which 
        has the right of eminent domain acquires title or possession to 
        the land for a public purpose notwithstanding the provisions of 
        this section.  In the case of such acquisition, the commissioner 
        shall execute and acknowledge a document releasing the land 
        acquired by the state, local government unit, or other entity 
        from the covenant.  All other enrolled land must remain in the 
        program. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 41.  Minnesota Statutes 2004, section 373.45, 
        subdivision 7, is amended to read: 
           Subd. 7.  [AID REDUCTION FOR REPAYMENT.] (a) Except as 
        provided in paragraph (b), the commissioner may reduce, by the 
        amount paid by the state under this section on behalf of the 
        county, plus the interest due on the state payments, the 
        following aids payable to the county:  
           (1) homestead and agricultural credit aid and disparity 
        reduction aid payable under section 273.1398; 
           (2) county criminal justice aid payable under section 
        477A.0121; and 
           (3) family preservation aid payable under section 477A.0122 
        county program aid under section 477A.0124. 
        The amount of any aid reduction reverts from the appropriate 
        account to the state general fund.  
           (b) If, after review of the financial situation of the 
        county, the authority advises the commissioner that a total 
        reduction of the aids would cause an undue hardship on the 
        county, the authority, with the approval of the commissioner, 
        may establish a different schedule for reduction of aids to 
        repay the state.  The amount of aids to be reduced are decreased 
        by any amounts repaid to the state by the county from other 
        revenue sources. 
           [EFFECTIVE DATE.] This section is effective for aid payable 
        in 2005 and thereafter. 
           Sec. 42.  Minnesota Statutes 2004, section 469.1735, 
        subdivision 3, is amended to read: 
           Subd. 3.  [TRANSFER AUTHORITY FOR PROPERTY TAX.] (a) A city 
        may elect to use all or part of its allocation under subdivision 
        2 to reimburse the city or county or both for property tax 
        reductions under section 272.0212.  To elect this option, the 
        city must notify the commissioner of revenue by October 1 of 
        each calendar year of the amount of the property tax 
        reductions for which it seeks reimbursements for taxes payable 
        during the following current year and the governmental units to 
        which the amounts will be paid.  The commissioner may require 
        the city to provide information substantiating the amount of the 
        reductions granted or any other information necessary to 
        administer this provision.  The commissioner shall pay the 
        reimbursements by December 26 of the taxes payable year.  Any 
        amount transferred under this authority reduces the amount of 
        tax credit certificates available under subdivisions 1 and 2. 
           (b) The amount elected by the city under paragraph (a) is 
        appropriated to the commissioner of revenue from the general 
        fund to reimburse the city or county for tax reductions under 
        section 272.0212.  The amount appropriated may not exceed the 
        maximum amounts allocated to a city under subdivision 2, 
        paragraph (b), less the amount of certificates issued by the 
        city under subdivision 1, and is available until expended.  
           [EFFECTIVE DATE.] This section is effective for 
        reimbursements of taxes payable in 2005 and thereafter. 
           Sec. 43.  Laws 2003, chapter 127, article 5, section 27, 
        the effective date, is amended to read: 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004 and thereafter distributions occurring on or 
        after June 10, 2003. 
           Sec. 44.  Laws 2003, chapter 127, article 5, section 28, 
        the effective date, is amended to read: 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004 and thereafter distributions occurring on or 
        after June 10, 2003. 
           Sec. 45.  [LINCOLN AND PIPESTONE COUNTIES; TOWN LEVY 
        ADJUSTMENT FOR WIND ENERGY PRODUCTION TAX.] 
           Notwithstanding the deadlines in Minnesota Statutes, 
        section 275.07, towns located in Lincoln or Pipestone County are 
        authorized to adjust their payable 2004 levy for all or a 
        portion of their estimated wind energy production tax amounts 
        for 2004, as computed by the commissioner of revenue from 
        reports filed under Minnesota Statutes, section 272.029, 
        subdivision 4.  The Lincoln and Pipestone County auditors may 
        adjust the payable 2004 levy certifications under Minnesota 
        Statutes, section 275.07, subdivision 1, based upon the towns 
        that have recertified their levies under this section by March 
        15, 2004. 
           [EFFECTIVE DATE.] This section is effective for taxes 
        payable in 2004. 
           Sec. 46.  [REPEALER.] 
           (a) Minnesota Statutes 2004, sections 273.19, subdivision 
        5; 274.05; 275.15; 275.61, subdivision 2; and 283.07, are 
        repealed effective the day following final enactment. 
           (b) Laws 1975, chapter 287, section 5, and Laws 2003, 
        chapter 127, article 9, section 9, subdivision 4, are repealed 
        effective without local approval for taxes payable in 2006 and 
        thereafter. 
           (c) Minnesota Statutes 2004, sections 270.85; 270.88; and 
        273.37, subdivision 3, are repealed effective September 1, 2005. 

                                   ARTICLE 6 
                 INCOME, CORPORATE FRANCHISE, AND ESTATE TAXES 
           Section 1.  Minnesota Statutes 2004, section 289A.08, 
        subdivision 3, is amended to read: 
           Subd. 3.  [CORPORATIONS.] A corporation that is subject to 
        the state's jurisdiction to tax under section 290.014, 
        subdivision 5, must file a return, except that a foreign 
        operating corporation as defined in section 290.01, subdivision 
        6b, is not required to file a return.  The commissioner shall 
        adopt rules for the filing of one return on behalf of the 
        members of an affiliated group of corporations that are required 
        to file a combined report.  All members of an affiliated group 
        that are required to file a combined report must file one return 
        on behalf of the members of the group under rules adopted by the 
        commissioner.  If a corporation claims on a return that it has 
        paid tax in excess of the amount of taxes lawfully due, that 
        corporation must include on that return information necessary 
        for payment of the tax in excess of the amount lawfully due by 
        electronic means. 
           [EFFECTIVE DATE.] This section is effective for returns 
        filed after December 31, 2005. 
           Sec. 2.  Minnesota Statutes 2004, section 289A.18, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [INDIVIDUAL INCOME, FIDUCIARY INCOME, 
        CORPORATE FRANCHISE, AND ENTERTAINMENT TAXES; PARTNERSHIP AND S 
        CORPORATION RETURNS; INFORMATION RETURNS; MINING COMPANY 
        RETURNS.] The returns required to be made under sections 289A.08 
        and 289A.12 must be filed at the following times: 
           (1) returns made on the basis of the calendar year must be 
        filed on April 15 following the close of the calendar year, 
        except that returns of corporations must be filed on March 15 
        following the close of the calendar year; 
           (2) returns made on the basis of the fiscal year must be 
        filed on the 15th day of the fourth month following the close of 
        the fiscal year, except that returns of corporations must be 
        filed on the 15th day of the third month following the close of 
        the fiscal year; 
           (3) returns for a fractional part of a year must be filed 
        on the 15th day of the fourth month following the end of the 
        month in which falls the last day of the period for which the 
        return is made, except that the returns of corporations must be 
        filed on the 15th day of the third month following the end of 
        the month tax year of the unitary group in which falls the last 
        day of the period for which the return is made; 
           (4) in the case of a final return of a decedent for a 
        fractional part of a year, the return must be filed on the 15th 
        day of the fourth month following the close of the 12-month 
        period that began with the first day of that fractional part of 
        a year; 
           (5) in the case of the return of a cooperative association, 
        returns must be filed on or before the 15th day of the ninth 
        month following the close of the taxable year; 
           (6) if a corporation has been divested from a unitary group 
        and files a return for a fractional part of a year in which it 
        was a member of a unitary business that files a combined report 
        under section 290.34, subdivision 2, the divested corporation's 
        return must be filed on the 15th day of the third month 
        following the close of the common accounting period that 
        includes the fractional year; 
           (7) returns of entertainment entities must be filed on 
        April 15 following the close of the calendar year; 
           (8) returns required to be filed under section 289A.08, 
        subdivision 4, must be filed on the 15th day of the fifth month 
        following the close of the taxable year; 
           (9) returns of mining companies must be filed on May 1 
        following the close of the calendar year; and 
           (10) returns required to be filed with the commissioner 
        under section 289A.12, subdivision 2, 4 to 10, or 14, must be 
        filed within 30 days after being demanded by the commissioner. 
           [EFFECTIVE DATE.] This section is effective for fractional 
        years closing after December 31, 2004. 
           Sec. 3.  Minnesota Statutes 2004, section 289A.19, 
        subdivision 4, is amended to read: 
           Subd. 4.  [ESTATE TAX RETURNS.] When in the commissioner's 
        judgment good cause exists, the commissioner may extend the time 
        for filing an estate tax return for not more than six months.  
        When an extension to file the federal estate tax return has been 
        granted under section 6081 of the Internal Revenue Code, the 
        time for filing the estate tax return is extended for that 
        period.  If the estate requests an extension to file an estate 
        tax return within the time provided in section 289A.18, 
        subdivision 3, the commissioner shall extend the time for filing 
        the estate tax return for six months. 
           [EFFECTIVE DATE.] This section is effective for estates of 
        decedents dying after December 31, 2004. 
           Sec. 4.  Minnesota Statutes 2004, section 289A.31, 
        subdivision 2, is amended to read: 
           Subd. 2.  [JOINT INCOME TAX RETURNS.] (a) If a joint income 
        tax return is made by a husband and wife, the liability for the 
        tax is joint and several.  A spouse who qualifies for relief 
        from a liability attributable to an underpayment under section 
        6015(b) of the Internal Revenue Code is relieved of the state 
        income tax liability on the underpayment.  
           (b) In the case of individuals who were a husband and wife 
        prior to the dissolution of their marriage or their legal 
        separation, or prior to the death of one of the individuals, for 
        tax liabilities reported on a joint or combined return, the 
        liability of each person is limited to the proportion of the tax 
        due on the return that equals that person's proportion of the 
        total tax due if the husband and wife filed separate returns for 
        the taxable year.  This provision is effective only when the 
        commissioner receives written notice of the marriage 
        dissolution, legal separation, or death of a spouse from the 
        husband or wife.  No refund may be claimed by an ex-spouse, 
        legally separated or widowed spouse for any taxes paid more than 
        60 days before receipt by the commissioner of the written notice.
           (c) A request for calculation of separate liability 
        pursuant to paragraph (b) for taxes reported on a return must be 
        made within six years after the due date of the return.  For 
        calculation of separate liability for taxes assessed by the 
        commissioner under section 289A.35 or 289A.37, the request must 
        be made within six years after the date of assessment.  The 
        commissioner is not required to calculate separate liability if 
        the remaining unpaid liability for which recalculation is 
        requested is $100 or less. 
           [EFFECTIVE DATE.] This section is effective for requests 
        for relief made on or after the day following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 289A.38, 
        subdivision 7, is amended to read: 
           Subd. 7.  [FEDERAL TAX CHANGES.] If the amount of income, 
        items of tax preference, deductions, or credits for any year of 
        a taxpayer as reported to the Internal Revenue Service is 
        changed or corrected by the commissioner of Internal Revenue or 
        other officer of the United States or other competent authority, 
        or where a renegotiation of a contract or subcontract with the 
        United States results in a change in income, items of tax 
        preference, deductions, credits, or withholding tax, or, in the 
        case of estate tax, where there are adjustments to the taxable 
        estate resulting in a change to the credit for state death 
        taxes, the taxpayer shall report the change or correction or 
        renegotiation results in writing to the commissioner.  The 
        report must be submitted within 180 days after the final 
        determination and must be in the form of either an amended 
        Minnesota estate, withholding tax, corporate franchise tax, or 
        income tax return conceding the accuracy of the federal 
        determination or a letter detailing how the federal 
        determination is incorrect or does not change the Minnesota 
        tax.  An amended Minnesota income tax return must be accompanied 
        by an amended property tax refund return, if necessary.  A 
        taxpayer filing an amended federal tax return must also file a 
        copy of the amended return with the commissioner of revenue 
        within 180 days after filing the amended return. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 6.  Minnesota Statutes 2004, section 289A.39, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [EXTENSIONS FOR SERVICE MEMBERS.] (a) The 
        limitations of time provided by this chapter, chapter 290 
        relating to income taxes, chapter 271 relating to the Tax Court 
        for filing returns, paying taxes, claiming refunds, commencing 
        action thereon, appealing to the Tax Court from orders relating 
        to income taxes, and the filing of petitions under chapter 278 
        that would otherwise be due May 15, 1996 prior to May 1 of the 
        year in which the taxes are payable, and appealing to the 
        Supreme Court from decisions of the Tax Court relating to income 
        taxes are extended, as provided in section 7508 of the Internal 
        Revenue Code. 
           (b) If a member of the National Guard or reserves is called 
        to active duty in the armed forces, the limitations of time 
        provided by this chapter and chapters 290 and 290A relating to 
        income taxes and claims for property tax refunds are extended by 
        the following period of time: 
           (1) in the case of an individual whose active service is in 
        the United States, six months; or 
           (2) in the case of an individual whose active service 
        includes service abroad, the period of initial service plus six 
        months. 
           Nothing in this paragraph reduces the time within which an 
        act is required or permitted under paragraph (a). 
           (c) If an individual entitled to the benefit of paragraph 
        (a) files a return during the period disregarded under paragraph 
        (a), interest must be paid on an overpayment or refundable 
        credit from the due date of the return, notwithstanding section 
        289A.56, subdivision 2.  
           (d) The provisions of this subdivision apply to the spouse 
        of an individual entitled to the benefits of this subdivision 
        with respect to a joint return filed by the spouses.  
           [EFFECTIVE DATE.] This section is effective for taxable 
        years beginning after December 31, 2002, and for property taxes 
        payable after 2003. 
           Sec. 7.  Minnesota Statutes 2004, section 289A.50, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [REFUND FORM.] On or before January 1, 2000, the 
        commissioner of revenue shall prepare and make available to 
        taxpayers a form for filing claims for refund of taxes paid in 
        excess of the amount due.  If the commissioner fails to prepare 
        a form under this subdivision by January 1, 2000, any claims for 
        refund made after January 1, 2000, and up to ten days after the 
        form is made available to taxpayers are deemed to be made in 
        compliance with the requirement of the form.  The commissioner 
        may require corporate franchise taxpayers claiming a refund of 
        corporate franchise taxes paid in excess of the amount lawfully 
        due to include on the claim for refund or amended return 
        information necessary for payment of the taxes paid in excess of 
        taxes lawfully due by electronic means. 
           [EFFECTIVE DATE.] This section is effective for claims for 
        refund filed after December 31, 2005. 
           Sec. 8.  Minnesota Statutes 2004, section 289A.60, 
        subdivision 6, is amended to read: 
           Subd. 6.  [PENALTY FOR FALSE OR FRAUDULENT RETURN, 
        EVASION.] (a) If a person files a false or fraudulent return, or 
        attempts in any manner to evade or defeat a tax or payment of 
        tax, there is imposed on the person a penalty equal to 50 
        percent of the tax, less amounts paid by the person on the basis 
        of the false or fraudulent return, due for the period to which 
        the return related.  
           (b) If a person files a false or fraudulent return that 
        includes a claim for refund, there is imposed on the person a 
        penalty equal to 50 percent of the portion of any refund claimed 
        that is attributable to fraud.  The penalty under this paragraph 
        is in addition to any penalty imposed under paragraph (a). 
           [EFFECTIVE DATE.] This section is effective for returns 
        filed after December 31, 2005. 
           Sec. 9.  Minnesota Statutes 2004, section 289A.60, 
        subdivision 12, is amended to read: 
           Subd. 12.  [PENALTIES RELATING TO PROPERTY TAX REFUNDS.] 
        (a) If the commissioner determines that a property tax refund 
        claim is or was excessive and was filed with fraudulent intent, 
        the claim must be disallowed in full.  If the claim has been 
        paid, the amount disallowed may be recovered by assessment and 
        collection. 
           (b) If it is determined that a property tax refund claim is 
        excessive and was negligently prepared, ten percent of the 
        corrected claim must be disallowed.  If the claim has been paid, 
        the amount disallowed must be recovered by assessment and 
        collection.  
           (c) (b) An owner who without reasonable cause fails to give 
        a certificate of rent constituting property tax to a renter, as 
        required by section 290A.19, paragraph (a), is liable to the 
        commissioner for a penalty of $100 for each failure. 
           (d) (c) If the owner or managing agent knowingly gives rent 
        certificates that report total rent constituting property taxes 
        in excess of the amount of actual rent constituting property 
        taxes paid on the rented part of a property, the owner or 
        managing agent is liable for a penalty equal to the greater of 
        (1) $100 or (2) 50 percent of the excess that is reported.  An 
        overstatement of rent constituting property taxes is presumed to 
        be knowingly made if it exceeds by ten percent or more the 
        actual rent constituting property taxes. 
           [EFFECTIVE DATE.] This section is effective for returns 
        filed after December 31, 2005. 
           Sec. 10.  Minnesota Statutes 2004, section 289A.60, 
        subdivision 13, is amended to read: 
           Subd. 13.  [PENALTIES FOR TAX RETURN PREPARERS.] (a) If an 
        understatement of liability with respect to a return or claim 
        for refund is due to a reckless disregard of laws and rules or 
        willful attempt in any manner to understate the liability for a 
        tax by a person who is a tax return preparer with respect to the 
        return or claim, the person shall pay to the commissioner a 
        penalty of $500.  If a part of a property tax refund claim is 
        excessive due to a reckless disregard or willful attempt in any 
        manner to overstate the claim for relief allowed under chapter 
        290A by a person who is a tax refund or return preparer, the 
        person shall pay to the commissioner a penalty of $500 with 
        respect to the claim.  These penalties may not be assessed 
        against the employer of a tax return preparer unless the 
        employer was actively involved in the reckless disregard or 
        willful attempt to understate the liability for a tax or to 
        overstate the claim for refund.  These penalties are income tax 
        liabilities and may be assessed at any time as provided in 
        section 289A.38, subdivision 5. 
           (b) A civil action in the name of the state of Minnesota 
        may be commenced to enjoin any person who is a tax return 
        preparer doing business in this state from further engaging in 
        any conduct described in paragraph (c).  An action under this 
        paragraph must be brought by the attorney general in the 
        district court for the judicial district of the tax return 
        preparer's residence or principal place of business, or in which 
        the taxpayer with respect to whose tax return the action is 
        brought resides.  The court may exercise its jurisdiction over 
        the action separate and apart from any other action brought by 
        the state of Minnesota against the tax return preparer or any 
        taxpayer. 
           (c) In an action under paragraph (b), if the court finds 
        that a tax return preparer has: 
           (1) engaged in any conduct subject to a civil penalty under 
        section 289A.60 or a criminal penalty under section 289A.63; 
           (2) misrepresented the preparer's eligibility to practice 
        before the Department of Revenue, or otherwise misrepresented 
        the preparer's experience or education as a tax return preparer; 
           (3) guaranteed the payment of any tax refund or the 
        allowance of any tax credit; or 
           (4) engaged in any other fraudulent or deceptive conduct 
        that substantially interferes with the proper administration of 
        state tax law, and injunctive relief is appropriate to prevent 
        the recurrence of that conduct, 
        the court may enjoin the person from further engaging in that 
        conduct. 
           (d) If the court finds that a tax return preparer has 
        continually or repeatedly engaged in conduct described in 
        paragraph (c), and that an injunction prohibiting that conduct 
        would not be sufficient to prevent the person's interference 
        with the proper administration of state tax laws, the court may 
        enjoin the person from acting as a tax return preparer.  The 
        court may not enjoin the employer of a tax return preparer for 
        conduct described in paragraph (c) engaged in by one or more of 
        the employer's employees unless the employer was also actively 
        involved in that conduct. 
           (e) For purposes of this subdivision, the term 
        "understatement of liability" means an understatement of the net 
        amount payable with respect to a tax imposed by state tax law, 
        or an overstatement of the net amount creditable or refundable 
        with respect to a tax.  The determination of whether or not 
        there is an understatement of liability must be made without 
        regard to any administrative or judicial action involving the 
        taxpayer.  For purposes of this subdivision, the amount 
        determined for underpayment of estimated tax under either 
        section 289A.25 or 289A.26 is not considered an understatement 
        of liability. 
           (f) For purposes of this subdivision, the term 
        "overstatement of claim" means an overstatement of the net 
        amount refundable with respect to a claim for property tax 
        relief provided by chapter 290A.  The determination of whether 
        or not there is an overstatement of a claim must be made without 
        regard to administrative or judicial action involving the 
        claimant. 
           (g) For purposes of this section, the term "tax refund or 
        return preparer" means an individual who prepares for 
        compensation, or who employs one or more individuals to prepare 
        for compensation, a return of tax, or a claim for refund of 
        tax.  The preparation of a substantial part of a return or claim 
        for refund is treated as if it were the preparation of the 
        entire return or claim for refund.  An individual is not 
        considered a tax return preparer merely because the individual: 
           (1) gives typing, reproducing, or other mechanical 
        assistance; 
           (2) prepares a return or claim for refund of the employer, 
        or an officer or employee of the employer, by whom the 
        individual is regularly and continuously employed; 
           (3) prepares a return or claim for refund of any person as 
        a fiduciary for that person; or 
           (4) prepares a claim for refund for a taxpayer in response 
        to a tax order issued to the taxpayer. 
           [EFFECTIVE DATE.] This section is effective for returns 
        filed after December 31, 2005. 
           Sec. 11.  Minnesota Statutes 2004, section 290.01, 
        subdivision 7b, is amended to read: 
           Subd. 7b.  [RESIDENT TRUST.] (a) Resident trust means a 
        trust, except a grantor type trust, which either (1) was created 
        by a will of a decedent who at death was domiciled in this state 
        or (2) is an irrevocable trust, the grantor of which was 
        domiciled in this state at the time the trust became 
        irrevocable.  For the purpose of this subdivision, a trust is 
        considered irrevocable to the extent the grantor is not treated 
        as the owner thereof under sections 671 to 678 of the Internal 
        Revenue Code.  The term "grantor type trust" means a trust where 
        the income or gains of the trust are taxable to the grantor or 
        others treated as substantial owners under sections 671 to 678 
        of the Internal Revenue Code.  This paragraph applies to trusts, 
        except grantor type trusts, that became irrevocable after 
        December 31, 1995, or are first administered in Minnesota after 
        December 31, 1995. 
           (b) This paragraph applies to trusts, except grantor type 
        trusts, that are not governed under paragraph (a).  A trust, 
        except a grantor type trust, is a resident trust only if two or 
        more of the following conditions are satisfied: 
           (i) a majority of the discretionary decisions of the 
        trustees relative to the investment of trust assets are made in 
        Minnesota; 
           (ii) a majority of the discretionary decisions of the 
        trustees relative to the distributions of trust income and 
        principal are made in Minnesota; 
           (iii) the official books and records of the trust, 
        consisting of the original minutes of trustee meetings and the 
        original trust instruments, are located in Minnesota. 
           (c) For purposes of paragraph (b), if the trustees delegate 
        decisions and actions to an agent or custodian, the actions and 
        decisions of the agent or custodian must not be taken into 
        account in determining whether the trust is administered in 
        Minnesota, if: 
           (i) the delegation was permitted under the trust agreement; 
           (ii) the trustees retain the power to revoke the delegation 
        on reasonable notice; and 
           (iii) the trustees monitor and evaluate the performance of 
        the agent or custodian on a regular basis as is reasonably 
        determined by the trustees. 
           [EFFECTIVE DATE.] This section is effective for taxable 
        years beginning after December 31, 2004. 
           Sec. 12.  Minnesota Statutes 2004, section 290.01, 
        subdivision 19a, is amended to read: 
           Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
        individuals, estates, and trusts, there shall be added to 
        federal taxable income: 
           (1)(i) interest income on obligations of any state other 
        than Minnesota or a political or governmental subdivision, 
        municipality, or governmental agency or instrumentality of any 
        state other than Minnesota exempt from federal income taxes 
        under the Internal Revenue Code or any other federal statute; 
        and 
           (ii) exempt-interest dividends as defined in section 
        852(b)(5) of the Internal Revenue Code, except the portion of 
        the exempt-interest dividends derived from interest income on 
        obligations of the state of Minnesota or its political or 
        governmental subdivisions, municipalities, governmental agencies 
        or instrumentalities, but only if the portion of the 
        exempt-interest dividends from such Minnesota sources paid to 
        all shareholders represents 95 percent or more of the 
        exempt-interest dividends that are paid by the regulated 
        investment company as defined in section 851(a) of the Internal 
        Revenue Code, or the fund of the regulated investment company as 
        defined in section 851(g) of the Internal Revenue Code, making 
        the payment; and 
           (iii) for the purposes of items (i) and (ii), interest on 
        obligations of an Indian tribal government described in section 
        7871(c) of the Internal Revenue Code shall be treated as 
        interest income on obligations of the state in which the tribe 
        is located; 
           (2) the amount of income taxes paid or accrued within the 
        taxable year under this chapter and income the amount of taxes 
        based on net income paid to any other state or to any province 
        or territory of Canada, to the extent allowed as a deduction 
        under section 63(d) of the Internal Revenue Code, but the 
        addition may not be more than the amount by which the itemized 
        deductions as allowed under section 63(d) of the Internal 
        Revenue Code exceeds the amount of the standard deduction as 
        defined in section 63(c) of the Internal Revenue Code.  For the 
        purpose of this paragraph, the disallowance of itemized 
        deductions under section 68 of the Internal Revenue Code of 
        1986, income tax is the last itemized deduction disallowed; 
           (3) the capital gain amount of a lump sum distribution to 
        which the special tax under section 1122(h)(3)(B)(ii) of the Tax 
        Reform Act of 1986, Public Law 99-514, applies; 
           (4) the amount of income taxes paid or accrued within the 
        taxable year under this chapter and income taxes based on net 
        income paid to any other state or any province or territory of 
        Canada, to the extent allowed as a deduction in determining 
        federal adjusted gross income.  For the purpose of this 
        paragraph, income taxes do not include the taxes imposed by 
        sections 290.0922, subdivision 1, paragraph (b), 290.9727, 
        290.9728, and 290.9729; 
           (5) the amount of expense, interest, or taxes disallowed 
        pursuant to section 290.10 other than expenses or interest used 
        in computing net interest income for the subtraction allowed 
        under subdivision 19b, clause (1); 
           (6) the amount of a partner's pro rata share of net income 
        which does not flow through to the partner because the 
        partnership elected to pay the tax on the income under section 
        6242(a)(2) of the Internal Revenue Code; and 
           (7) 80 percent of the depreciation deduction allowed under 
        section 168(k) of the Internal Revenue Code.  For purposes of 
        this clause, if the taxpayer has an activity that in the taxable 
        year generates a deduction for depreciation under section 168(k) 
        and the activity generates a loss for the taxable year that the 
        taxpayer is not allowed to claim for the taxable year, "the 
        depreciation allowed under section 168(k)" for the taxable year 
        is limited to excess of the depreciation claimed by the activity 
        under section 168(k) over the amount of the loss from the 
        activity that is not allowed in the taxable year.  In succeeding 
        taxable years when the losses not allowed in the taxable year 
        are allowed, the depreciation under section 168(k) is allowed. 
           [EFFECTIVE DATE.] This section is effective for tax years 
        beginning after December 31, 2004.  
           Sec. 13.  Minnesota Statutes 2004, section 290.01, 
        subdivision 19b, is amended to read: 
           Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE INCOME.] For 
        individuals, estates, and trusts, there shall be subtracted from 
        federal taxable income: 
           (1) net interest income on obligations of any authority, 
        commission, or instrumentality of the United States to the 
        extent includable in taxable income for federal income tax 
        purposes but exempt from state income tax under the laws of the 
        United States; 
           (2) if included in federal taxable income, the amount of 
        any overpayment of income tax to Minnesota or to any other 
        state, for any previous taxable year, whether the amount is 
        received as a refund or as a credit to another taxable year's 
        income tax liability; 
           (3) the amount paid to others, less the amount used to 
        claim the credit allowed under section 290.0674, not to exceed 
        $1,625 for each qualifying child in grades kindergarten to 6 and 
        $2,500 for each qualifying child in grades 7 to 12, for tuition, 
        textbooks, and transportation of each qualifying child in 
        attending an elementary or secondary school situated in 
        Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, 
        wherein a resident of this state may legally fulfill the state's 
        compulsory attendance laws, which is not operated for profit, 
        and which adheres to the provisions of the Civil Rights Act of 
        1964 and chapter 363A.  For the purposes of this clause, 
        "tuition" includes fees or tuition as defined in section 
        290.0674, subdivision 1, clause (1).  As used in this clause, 
        "textbooks" includes books and other instructional materials and 
        equipment purchased or leased for use in elementary and 
        secondary schools in teaching only those subjects legally and 
        commonly taught in public elementary and secondary schools in 
        this state.  Equipment expenses qualifying for deduction 
        includes expenses as defined and limited in section 290.0674, 
        subdivision 1, clause (3).  "Textbooks" does not include 
        instructional books and materials used in the teaching of 
        religious tenets, doctrines, or worship, the purpose of which is 
        to instill such tenets, doctrines, or worship, nor does it 
        include books or materials for, or transportation to, 
        extracurricular activities including sporting events, musical or 
        dramatic events, speech activities, driver's education, or 
        similar programs.  For purposes of the subtraction provided by 
        this clause, "qualifying child" has the meaning given in section 
        32(c)(3) of the Internal Revenue Code; 
           (4) income as provided under section 290.0802; 
           (5) to the extent included in federal adjusted gross 
        income, income realized on disposition of property exempt from 
        tax under section 290.491; 
           (6) to the extent included in federal taxable income, 
        postservice benefits for youth community service under section 
        124D.42 for volunteer service under United States Code, title 
        42, sections 12601 to 12604; 
           (7) to the extent not deducted in determining federal 
        taxable income by an individual who does not itemize deductions 
        for federal income tax purposes for the taxable year, an amount 
        equal to 50 percent of the excess of charitable contributions 
        allowable as a deduction for the taxable year under section 
        170(a) of the Internal Revenue Code over $500 ; 
           (8) (7) for taxable years beginning before January 1, 2008, 
        the amount of the federal small ethanol producer credit allowed 
        under section 40(a)(3) of the Internal Revenue Code which is 
        included in gross income under section 87 of the Internal 
        Revenue Code; 
           (9) (8) for individuals who are allowed a federal foreign 
        tax credit for taxes that do not qualify for a credit under 
        section 290.06, subdivision 22, an amount equal to the carryover 
        of subnational foreign taxes for the taxable year, but not to 
        exceed the total subnational foreign taxes reported in claiming 
        the foreign tax credit.  For purposes of this clause, "federal 
        foreign tax credit" means the credit allowed under section 27 of 
        the Internal Revenue Code, and "carryover of subnational foreign 
        taxes" equals the carryover allowed under section 904(c) of the 
        Internal Revenue Code minus national level foreign taxes to the 
        extent they exceed the federal foreign tax credit; 
           (10) (9) in each of the five tax years immediately 
        following the tax year in which an addition is required under 
        subdivision 19a, clause (7), or 19c, clause (15), in the case of 
        a shareholder of a corporation that is an S corporation, an 
        amount equal to one-fifth of the delayed depreciation.  For 
        purposes of this clause, "delayed depreciation" means the amount 
        of the addition made by the taxpayer under subdivision 19a, 
        clause (7), or subdivision 19c, clause (15), in the case of a 
        shareholder of an S corporation, minus the positive value of any 
        net operating loss under section 172 of the Internal Revenue 
        Code generated for the tax year of the addition.  The resulting 
        delayed depreciation cannot be less than zero; and 
           (11) (10) job opportunity building zone income as provided 
        under section 469.316. 
           [EFFECTIVE DATE.] The amendment to clause (9) is effective 
        retroactively for tax years beginning after December 31, 2001.  
        The rest of this section is effective for the tax years 
        beginning after December 31, 2004. 
           Sec. 14.  Minnesota Statutes 2004, section 290.01, 
        subdivision 19c, is amended to read: 
           Subd. 19c.  [CORPORATIONS; ADDITIONS TO FEDERAL TAXABLE 
        INCOME.] For corporations, there shall be added to federal 
        taxable income: 
           (1) the amount of any deduction taken for federal income 
        tax purposes for income, excise, or franchise taxes based on net 
        income or related minimum taxes, including but not limited to 
        the tax imposed under section 290.0922, paid by the corporation 
        to Minnesota, another state, a political subdivision of another 
        state, the District of Columbia, or any foreign country or 
        possession of the United States; 
           (2) interest not subject to federal tax upon obligations 
        of:  the United States, its possessions, its agencies, or its 
        instrumentalities; the state of Minnesota or any other state, 
        any of its political or governmental subdivisions, any of its 
        municipalities, or any of its governmental agencies or 
        instrumentalities; the District of Columbia; or Indian tribal 
        governments; 
           (3) exempt-interest dividends received as defined in 
        section 852(b)(5) of the Internal Revenue Code; 
           (4) the amount of any net operating loss deduction taken 
        for federal income tax purposes under section 172 or 832(c)(10) 
        of the Internal Revenue Code or operations loss deduction under 
        section 810 of the Internal Revenue Code; 
           (5) the amount of any special deductions taken for federal 
        income tax purposes under sections 241 to 247 of the Internal 
        Revenue Code; 
           (6) losses from the business of mining, as defined in 
        section 290.05, subdivision 1, clause (a), that are not subject 
        to Minnesota income tax; 
           (7) the amount of any capital losses deducted for federal 
        income tax purposes under sections 1211 and 1212 of the Internal 
        Revenue Code; 
           (8) the exempt foreign trade income of a foreign sales 
        corporation under sections 921(a) and 291 of the Internal 
        Revenue Code; 
           (9) the amount of percentage depletion deducted under 
        sections 611 through 614 and 291 of the Internal Revenue Code; 
           (10) for certified pollution control facilities placed in 
        service in a taxable year beginning before December 31, 1986, 
        and for which amortization deductions were elected under section 
        169 of the Internal Revenue Code of 1954, as amended through 
        December 31, 1985, the amount of the amortization deduction 
        allowed in computing federal taxable income for those 
        facilities; 
           (11) the amount of any deemed dividend from a foreign 
        operating corporation determined pursuant to section 290.17, 
        subdivision 4, paragraph (g); 
           (12) the amount of any environmental tax paid under section 
        59(a) of the Internal Revenue Code; 
           (13) the amount of a partner's pro rata share of net income 
        which does not flow through to the partner because the 
        partnership elected to pay the tax on the income under section 
        6242(a)(2) of the Internal Revenue Code; 
           (14) (13) the amount of net income excluded under section 
        114 of the Internal Revenue Code; 
           (15) (14) any increase in subpart F income, as defined in 
        section 952(a) of the Internal Revenue Code, for the taxable 
        year when subpart F income is calculated without regard to the 
        provisions of section 614 of Public Law 107-147; and 
           (16) (15) 80 percent of the depreciation deduction allowed 
        under section 168(k)(1)(A) and (k)(4)(A) of the Internal Revenue 
        Code.  For purposes of this clause, if the taxpayer has an 
        activity that in the taxable year generates a deduction for 
        depreciation under section 168(k)(1)(A) and (k)(4)(A) and the 
        activity generates a loss for the taxable year that the taxpayer 
        is not allowed to claim for the taxable year, "the depreciation 
        allowed under section 168(k)(1)(A) and (k)(4)(A)" for the 
        taxable year is limited to excess of the depreciation claimed by 
        the activity under section 168(k)(1)(A) and (k)(4)(A) over the 
        amount of the loss from the activity that is not allowed in the 
        taxable year.  In succeeding taxable years when the losses not 
        allowed in the taxable year are allowed, the depreciation under 
        section 168(k)(1)(A) and (k)(4)(A) is allowed. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 15.  Minnesota Statutes 2004, section 290.06, 
        subdivision 22, is amended to read: 
           Subd. 22.  [CREDIT FOR TAXES PAID TO ANOTHER STATE.] (a) A 
        taxpayer who is liable for taxes based on or measured by net 
        income to another state, as provided in paragraphs (b) through 
        (f), upon income allocated or apportioned to Minnesota, is 
        entitled to a credit for the tax paid to another state if the 
        tax is actually paid in the taxable year or a subsequent taxable 
        year.  A taxpayer who is a resident of this state pursuant to 
        section 290.01, subdivision 7, clause (2) paragraph (b), and who 
        is subject to income tax as a resident in the state of the 
        individual's domicile is not allowed this credit unless the 
        state of domicile does not allow a similar credit. 
           (b) For an individual, estate, or trust, the credit is 
        determined by multiplying the tax payable under this chapter by 
        the ratio derived by dividing the income subject to tax in the 
        other state that is also subject to tax in Minnesota while a 
        resident of Minnesota by the taxpayer's federal adjusted gross 
        income, as defined in section 62 of the Internal Revenue Code, 
        modified by the addition required by section 290.01, subdivision 
        19a, clause (1), and the subtraction allowed by section 290.01, 
        subdivision 19b, clause (1), to the extent the income is 
        allocated or assigned to Minnesota under sections 290.081 and 
        290.17.  
           (c) If the taxpayer is an athletic team that apportions all 
        of its income under section 290.17, subdivision 5, the credit is 
        determined by multiplying the tax payable under this chapter by 
        the ratio derived from dividing the total net income subject to 
        tax in the other state by the taxpayer's Minnesota taxable 
        income. 
           (d) The credit determined under paragraph (b) or (c) shall 
        not exceed the amount of tax so paid to the other state on the 
        gross income earned within the other state subject to tax under 
        this chapter, nor shall the allowance of the credit reduce the 
        taxes paid under this chapter to an amount less than what would 
        be assessed if such income amount was excluded from taxable net 
        income. 
           (e) In the case of the tax assessed on a lump sum 
        distribution under section 290.032, the credit allowed under 
        paragraph (a) is the tax assessed by the other state on the lump 
        sum distribution that is also subject to tax under section 
        290.032, and shall not exceed the tax assessed under section 
        290.032.  To the extent the total lump sum distribution defined 
        in section 290.032, subdivision 1, includes lump sum 
        distributions received in prior years or is all or in part an 
        annuity contract, the reduction to the tax on the lump sum 
        distribution allowed under section 290.032, subdivision 2, 
        includes tax paid to another state that is properly apportioned 
        to that distribution. 
           (f) If a Minnesota resident reported an item of income to 
        Minnesota and is assessed tax in such other state on that same 
        income after the Minnesota statute of limitations has expired, 
        the taxpayer shall receive a credit for that year under 
        paragraph (a), notwithstanding any statute of limitations to the 
        contrary.  The claim for the credit must be submitted within one 
        year from the date the taxes were paid to the other state.  The 
        taxpayer must submit sufficient proof to show entitlement to a 
        credit. 
           (g) For the purposes of this subdivision, a resident 
        shareholder of a corporation treated as an "S" corporation under 
        section 290.9725, must be considered to have paid a tax imposed 
        on the shareholder in an amount equal to the shareholder's pro 
        rata share of any net income tax paid by the S corporation to 
        another state.  For the purposes of the preceding sentence, the 
        term "net income tax" means any tax imposed on or measured by a 
        corporation's net income. 
           (h) For the purposes of this subdivision, a resident 
        partner of an entity taxed as a partnership under the Internal 
        Revenue Code must be considered to have paid a tax imposed on 
        the partner in an amount equal to the partner's pro rata share 
        of any net income tax paid by the partnership to another state.  
        For purposes of the preceding sentence, the term "net income" 
        tax means any tax imposed on or measured by a partnership's net 
        income. 
           (i) For the purposes of this subdivision, "another state": 
           (1) includes: 
           (i) the District of Columbia; and 
           (ii) a province or territory of Canada; but 
           (2) excludes Puerto Rico and the several territories 
        organized by Congress. 
           (j) The limitations on the credit in paragraphs (b), (c), 
        and (d), are imposed on a state by state basis. 
           (k) For a tax imposed by a province or territory of Canada, 
        the tax for purposes of this subdivision is the excess of the 
        tax over the amount of the foreign tax credit allowed under 
        section 27 of the Internal Revenue Code.  In determining the 
        amount of the foreign tax credit allowed, the net income taxes 
        imposed by Canada on the income are deducted first.  Any 
        remaining amount of the allowable foreign tax credit reduces the 
        provincial or territorial tax that qualifies for the credit 
        under this subdivision. 
           [EFFECTIVE DATE.] This section is effective for tax years 
        beginning after December 31, 2004. 
           Sec. 16.  Minnesota Statutes 2004, section 290.0671, 
        subdivision 1a, is amended to read: 
           Subd. 1a.  [DEFINITIONS.] For purposes of this section, the 
        terms "qualifying child," and "earned income," and "adjusted 
        gross income" have the meanings given in section 32(c) of the 
        Internal Revenue Code, and the term "adjusted gross income" has 
        the meaning given in section 62 of the Internal Revenue Code. 
           "Earned income of the lesser-earning spouse" has the 
        meaning given in section 290.0675, subdivision 1, paragraph (d). 
           [EFFECTIVE DATE.] This section is effective for taxable 
        years beginning after December 31, 2004. 
           Sec. 17.  Minnesota Statutes 2004, section 290.0674, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
        a credit against the tax imposed by this chapter in an amount 
        equal to 75 percent of the amount paid for education-related 
        expenses for a qualifying child in kindergarten through grade 
        12.  For purposes of this section, "education-related expenses" 
        means: 
           (1) fees or tuition for instruction by an instructor under 
        section 120A.22, subdivision 10, clause (1), (2), (3), (4), or 
        (5), or a member of the Minnesota Music Teachers Association, 
        and who is not a lineal ancestor or sibling of the dependent for 
        instruction outside the regular school day or school year, 
        including tutoring, driver's education offered as part of school 
        curriculum, regardless of whether it is taken from a public or 
        private entity or summer camps, in grade or age appropriate 
        curricula that supplement curricula and instruction available 
        during the regular school year, that assists a dependent to 
        improve knowledge of core curriculum areas or to expand 
        knowledge and skills under the graduation rule under section 
        120B.02, paragraph (e), clauses (1) to (7), (9), and (10) 
        required academic standards under section 120B.021, subdivision 
        1, and the elective standard under section 120B.022, subdivision 
        1, clause (2), and that do not include the teaching of religious 
        tenets, doctrines, or worship, the purpose of which is to 
        instill such tenets, doctrines, or worship; 
           (2) expenses for textbooks, including books and other 
        instructional materials and equipment purchased or leased for 
        use in elementary and secondary schools in teaching only those 
        subjects legally and commonly taught in public elementary and 
        secondary schools in this state.  "Textbooks" does not include 
        instructional books and materials used in the teaching of 
        religious tenets, doctrines, or worship, the purpose of which is 
        to instill such tenets, doctrines, or worship, nor does it 
        include books or materials for extracurricular activities 
        including sporting events, musical or dramatic events, speech 
        activities, driver's education, or similar programs; 
           (3) a maximum expense of $200 per family for personal 
        computer hardware, excluding single purpose processors, and 
        educational software that assists a dependent to improve 
        knowledge of core curriculum areas or to expand knowledge and 
        skills under the graduation rule under section 120B.02 required 
        academic standards under section 120B.021, subdivision 1, and 
        the elective standard under section 120B.022, subdivision 1, 
        clause (2), purchased for use in the taxpayer's home and not 
        used in a trade or business regardless of whether the computer 
        is required by the dependent's school; and 
           (4) the amount paid to others for transportation of a 
        qualifying child attending an elementary or secondary school 
        situated in Minnesota, North Dakota, South Dakota, Iowa, or 
        Wisconsin, wherein a resident of this state may legally fulfill 
        the state's compulsory attendance laws, which is not operated 
        for profit, and which adheres to the provisions of the Civil 
        Rights Act of 1964 and chapter 363A. 
           For purposes of this section, "qualifying child" has the 
        meaning given in section 32(c)(3) of the Internal Revenue Code. 
           [EFFECTIVE DATE.] This section is effective for tax years 
        beginning after December 31, 2004. 
           Sec. 18.  Minnesota Statutes 2004, section 290.92, 
        subdivision 4b, is amended to read: 
           Subd. 4b.  [WITHHOLDING BY PARTNERSHIPS.] (a) A partnership 
        shall deduct and withhold a tax as provided in paragraph (b) for 
        nonresident individual partners based on their distributive 
        shares of partnership income for a taxable year of the 
        partnership. 
           (b) The amount of tax withheld is determined by multiplying 
        the partner's distributive share allocable to Minnesota under 
        section 290.17, paid or credited during the taxable year by the 
        highest rate used to determine the income tax liability for an 
        individual under section 290.06, subdivision 2c, except that the 
        amount of tax withheld may be determined by the commissioner if 
        the partner submits a withholding exemption certificate under 
        subdivision 5. 
           (c) The commissioner may reduce or abate the tax withheld 
        under this subdivision if the partnership had reasonable cause 
        to believe that no tax was due under this section. 
           (d) Notwithstanding paragraph (a), a partnership is not 
        required to deduct and withhold tax for a nonresident partner if:
           (1) the partner elects to have the tax due paid as part of 
        the partnership's composite return under section 289A.08, 
        subdivision 7; 
           (2) the partner has Minnesota assignable federal adjusted 
        gross income from the partnership of less than $1,000; or 
           (3) the partnership is liquidated or terminated, the income 
        was generated by a transaction related to the termination or 
        liquidation, and no cash or other property was distributed in 
        the current or prior taxable year; or 
           (4) the distributive shares of partnership income are 
        attributable to: 
           (i) income required to be recognized because of discharge 
        of indebtedness; 
           (ii) income recognized because of a sale, exchange, or 
        other disposition of real estate, depreciable property, or 
        property described in section 179 of the Internal Revenue Code; 
        or 
           (iii) income recognized on the sale, exchange, or other 
        disposition of any property that has been the subject of a basis 
        reduction pursuant to section 108, 734, 743, 754, or 1017 of the 
        Internal Revenue Code 
        to the extent that the income does not include cash received or 
        receivable or, if there is cash received or receivable, to the 
        extent that the cash is required to be used to pay indebtedness 
        by the partnership or a secured debt on partnership property; or 
           (5) the partnership is a publicly traded partnership, as 
        defined in section 7704(b) of the Internal Revenue Code. 
           (e) For purposes of subdivision 6a, and sections 289A.09, 
        subdivision 2, 289A.20, subdivision 2, paragraph (c), 289A.50, 
        289A.56, 289A.60, and 289A.63, a partnership is considered an 
        employer.  
           (f) To the extent that income is exempt from withholding 
        under paragraph (d), clause (4), the commissioner has a lien in 
        an amount up to the amount that would be required to be withheld 
        with respect to the income of the partner attributable to the 
        partnership interest, but for the application of paragraph (d), 
        clause (4).  The lien arises under section 270.69 from the date 
        of assessment of the tax against the partner, and attaches to 
        that partner's share of the profits and any other money due or 
        to become due to that partner in respect of the partnership.  
        Notice of the lien may be sent by mail to the partnership, 
        without the necessity for recording the lien.  The notice has 
        the force and effect of a levy under section 270.70, and is 
        enforceable against the partnership in the manner provided by 
        that section.  Upon payment in full of the liability subsequent 
        to the notice of lien, the partnership must be notified that the 
        lien has been satisfied.  
           [EFFECTIVE DATE.] This section is effective for taxable 
        years beginning after December 31, 2004. 
           Sec. 19.  Minnesota Statutes 2004, section 291.005, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] Unless the context otherwise 
        clearly requires, the following terms used in this chapter shall 
        have the following meanings: 
           (1) "Federal gross estate" means the gross estate of a 
        decedent as valued and otherwise determined for federal estate 
        tax purposes by federal taxing authorities pursuant to the 
        provisions of the Internal Revenue Code. 
           (2) "Minnesota gross estate" means the federal gross estate 
        of a decedent after (a) excluding therefrom any property 
        included therein which has its situs outside Minnesota, and (b) 
        including therein any property omitted from the federal gross 
        estate which is includable therein, has its situs in Minnesota, 
        and was not disclosed to federal taxing authorities.  
           (3) "Personal representative" means the executor, 
        administrator or other person appointed by the court to 
        administer and dispose of the property of the decedent.  If 
        there is no executor, administrator or other person appointed, 
        qualified, and acting within this state, then any person in 
        actual or constructive possession of any property having a situs 
        in this state which is included in the federal gross estate of 
        the decedent shall be deemed to be a personal representative to 
        the extent of the property and the Minnesota estate tax due with 
        respect to the property. 
           (4) "Resident decedent" means an individual whose domicile 
        at the time of death was in Minnesota. 
           (5) "Nonresident decedent" means an individual whose 
        domicile at the time of death was not in Minnesota. 
           (6) "Situs of property" means, with respect to real 
        property, the state or country in which it is located; with 
        respect to tangible personal property, the state or country in 
        which it was normally kept or located at the time of the 
        decedent's death; and with respect to intangible personal 
        property, the state or country in which the decedent was 
        domiciled at death. 
           (7) "Commissioner" means the commissioner of revenue or any 
        person to whom the commissioner has delegated functions under 
        this chapter. 
           (8) "Internal Revenue Code" means the United States 
        Internal Revenue Code of 1986, as amended through December 31, 
        2002 April 15, 2005. 
           (9) "Minnesota adjusted taxable estate" means federal 
        adjusted taxable estate as defined by section 2011(b)(3) of the 
        Internal Revenue Code, increased by the amount of deduction for 
        state death taxes allowed under section 2058 of the Internal 
        Revenue Code. 
           [EFFECTIVE DATE.] The change to clause (8) is effective for 
        estates of decedents dying after January 31, 2003, and the new 
        clause (9) is effective for estates of decedents dying after 
        December 31, 2004. 
           Sec. 20.  Minnesota Statutes 2004, section 291.03, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TAX AMOUNT.] The tax imposed shall be an 
        amount equal to the proportion of the maximum credit for state 
        death taxes computed under section 2011 of the Internal Revenue 
        Code, as amended through December 31, 2000, for state death 
        taxes but using Minnesota adjusted taxable estate instead of 
        federal adjusted taxable estate, as the Minnesota gross estate 
        bears to the value of the federal gross estate.  The tax 
        determined under this paragraph shall not be greater than the 
        federal estate tax amount computed by applying the rates and 
        brackets under section 2001(c) of the Internal Revenue Code 
        after the allowance of to the Minnesota adjusted gross estate 
        and subtracting the federal credits credit allowed under section 
        2010 of the Internal Revenue Code of 1986, as amended through 
        December 31, 2000.  For the purposes of this section, expenses 
        which are deducted for federal income tax purposes under section 
        642(g) of the Internal Revenue Code as amended through December 
        31, 2002, are not allowable in computing the tax under this 
        chapter. 
           [EFFECTIVE DATE.] This section is effective for estates of 
        decedents dying after December 31, 2004. 
           Sec. 21.  [REPEALER.] 
           Minnesota Rules, parts 8093.2000; and 8093.3000, are 
        repealed effective the day following final enactment. 

                                   ARTICLE 7 
                              SALES AND USE TAXES 
           Section 1.  Minnesota Statutes 2004, section 289A.38, 
        subdivision 6, is amended to read: 
           Subd. 6.  [OMISSION IN EXCESS OF 25 PERCENT.] Additional 
        taxes may be assessed within 6-1/2 years after the due date of 
        the return or the date the return was filed, whichever is later, 
        if: 
           (1) the taxpayer omits from gross income an amount properly 
        includable in it that is in excess of 25 percent of the amount 
        of gross income stated in the return; 
           (2) the taxpayer omits from a sales, use, or withholding 
        tax return an amount of taxes in excess of 25 percent of the 
        taxes reported in the return; or 
           (3) the taxpayer omits from the gross estate assets in 
        excess of 25 percent of the gross estate reported in the return. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 289A.38, is 
        amended by adding a subdivision to read: 
           Subd. 15.  [PURCHASER FILED REFUND CLAIMS.] If a purchaser 
        refund claim is filed under section 289A.50, subdivision 2a, and 
        the basis for the claim is that the purchaser was improperly 
        charged tax on an improvement to real property or on the 
        purchase of nontaxable services, sales or use tax may be 
        assessed for the cost of materials used to make the real 
        property improvement or to perform the nontaxable service.  The 
        assessment may be made against the person making the improvement 
        to real property or the sale of nontaxable services, within the 
        period prescribed in subdivision 1, or within one year after the 
        date of the refund order, whichever is later. 
           [EFFECTIVE DATE.] This section is effective for purchaser 
        refund claims filed on or after July 1, 2005. 
           Sec. 3.  Minnesota Statutes 2004, section 289A.40, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BAD DEBT LOSS.] If a claim relates to an 
        overpayment because of a failure to deduct a loss due to a bad 
        debt or to a security becoming worthless, the claim is 
        considered timely if filed within seven years from the date 
        prescribed for the filing of the return.  A claim relating to an 
        overpayment of taxes under chapter 297A must be filed within 
        3-1/2 years from the date prescribed for filing the return, plus 
        any extensions granted for filing the return, but only if filed 
        within the extended time.  The refund or credit is limited to 
        the amount of overpayment attributable to the loss.  "Bad debt" 
        for purposes of this subdivision, has the same meaning as that 
        term is used in United States Code, title 26, section 166, 
        except that for a claim relating to an overpayment of taxes 
        under chapter 297A the following are excluded from the 
        calculation of bad debt:  financing charges or interest; sales 
        or use taxes charged on the purchase price; uncollectible 
        amounts on property that remain in the possession of the seller 
        until the full purchase price is paid; expenses incurred in 
        attempting to collect any debt; and repossessed property. 
           [EFFECTIVE DATE.] For claims relating to an overpayment of 
        taxes under chapter 297A, this section is effective for sales 
        and purchases made on or after January 1, 2004; for all other 
        bad debts or claims, this section is effective on or after July 
        1, 2003. 
           Sec. 4.  Minnesota Statutes 2004, section 289A.40, is 
        amended by adding a subdivision to read: 
           Subd. 5.  [PURCHASER FILED REFUND CLAIMS.] A claim for 
        refund of taxes paid on a transaction not subject to tax under 
        chapter 297A, where the purchaser may apply directly to the 
        commissioner under section 289A.50, subdivision 2a, must be 
        filed within 3-1/2 years from the 20th day of the month 
        following the month of the invoice date for the purchase. 
           [EFFECTIVE DATE.] This section is effective for claims 
        filed on or after the day following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 289A.40, is 
        amended by adding a subdivision to read: 
           Subd. 6.  [CAPITAL EQUIPMENT REFUND CLAIMS.] A claim for 
        refund for taxes paid under chapter 297A on capital equipment 
        must be filed within 3-1/2 years from the 20th day of the month 
        following the month of the invoice date for the purchase of the 
        capital equipment.  A claim for refund for taxes imposed on 
        capital equipment under section 297A.63 must be filed within 
        3-1/2 years from the date prescribed for filing the return, or 
        one year from the date of an order assessing tax under section 
        289A.37, subdivision 1, upon payment in full of the tax, 
        penalties, and interest shown on the order, whichever period 
        expires later. 
           [EFFECTIVE DATE.] This section is effective for claims 
        filed on or after the day following final enactment. 
           Sec. 6.  Minnesota Statutes 2004, section 297A.61, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SALE AND PURCHASE.] (a) "Sale" and "purchase" 
        include, but are not limited to, each of the transactions listed 
        in this subdivision. 
           (b) Sale and purchase include: 
           (1) any transfer of title or possession, or both, of 
        tangible personal property, whether absolutely or conditionally, 
        for a consideration in money or by exchange or barter; and 
           (2) the leasing of or the granting of a license to use or 
        consume, for a consideration in money or by exchange or barter, 
        tangible personal property, other than a manufactured home used 
        for residential purposes for a continuous period of 30 days or 
        more. 
           (c) Sale and purchase include the production, fabrication, 
        printing, or processing of tangible personal property for a 
        consideration for consumers who furnish either directly or 
        indirectly the materials used in the production, fabrication, 
        printing, or processing. 
           (d) Sale and purchase include the preparing for a 
        consideration of food.  Notwithstanding section 297A.67, 
        subdivision 2, taxable food includes, but is not limited to, the 
        following: 
           (1) prepared food sold by the retailer; 
           (2) soft drinks; 
           (3) candy; and 
           (4) dietary supplements; and 
           (5) all food sold through vending machines. 
           (e) A sale and a purchase includes the furnishing for a 
        consideration of electricity, gas, water, or steam for use or 
        consumption within this state. 
           (f) A sale and a purchase includes the transfer for a 
        consideration of prewritten computer software whether delivered 
        electronically, by load and leave, or otherwise.  
           (g) A sale and a purchase includes the furnishing for a 
        consideration of the following services: 
           (1) the privilege of admission to places of amusement, 
        recreational areas, or athletic events, and the making available 
        of amusement devices, tanning facilities, reducing salons, steam 
        baths, turkish baths, health clubs, and spas or athletic 
        facilities; 
           (2) lodging and related services by a hotel, rooming house, 
        resort, campground, motel, or trailer camp and the granting of 
        any similar license to use real property in a specific facility, 
        other than the renting or leasing of it for a continuous period 
        of 30 days or more under an enforceable written agreement that 
        may not be terminated without prior notice; 
           (3) nonresidential parking services, whether on a 
        contractual, hourly, or other periodic basis, except for parking 
        at a meter; 
           (4) the granting of membership in a club, association, or 
        other organization if: 
           (i) the club, association, or other organization makes 
        available for the use of its members sports and athletic 
        facilities, without regard to whether a separate charge is 
        assessed for use of the facilities; and 
           (ii) use of the sports and athletic facility is not made 
        available to the general public on the same basis as it is made 
        available to members.  
        Granting of membership means both onetime initiation fees and 
        periodic membership dues.  Sports and athletic facilities 
        include golf courses; tennis, racquetball, handball, and squash 
        courts; basketball and volleyball facilities; running tracks; 
        exercise equipment; swimming pools; and other similar athletic 
        or sports facilities; 
           (5) delivery of aggregate materials and concrete block by a 
        third party if the delivery would be subject to the sales tax if 
        provided by the seller of the aggregate material or concrete 
        block; and 
           (6) services as provided in this clause: 
           (i) laundry and dry cleaning services including cleaning, 
        pressing, repairing, altering, and storing clothes, linen 
        services and supply, cleaning and blocking hats, and carpet, 
        drapery, upholstery, and industrial cleaning.  Laundry and dry 
        cleaning services do not include services provided by coin 
        operated facilities operated by the customer; 
           (ii) motor vehicle washing, waxing, and cleaning services, 
        including services provided by coin operated facilities operated 
        by the customer, and rustproofing, undercoating, and towing of 
        motor vehicles; 
           (iii) building and residential cleaning, maintenance, and 
        disinfecting and exterminating services; 
           (iv) detective, security, burglar, fire alarm, and armored 
        car services; but not including services performed within the 
        jurisdiction they serve by off-duty licensed peace officers as 
        defined in section 626.84, subdivision 1, or services provided 
        by a nonprofit organization for monitoring and electronic 
        surveillance of persons placed on in-home detention pursuant to 
        court order or under the direction of the Minnesota Department 
        of Corrections; 
           (v) pet grooming services; 
           (vi) lawn care, fertilizing, mowing, spraying and sprigging 
        services; garden planting and maintenance; tree, bush, and shrub 
        pruning, bracing, spraying, and surgery; indoor plant care; 
        tree, bush, shrub, and stump removal; and tree trimming for 
        public utility lines.  Services performed under a construction 
        contract for the installation of shrubbery, plants, sod, trees, 
        bushes, and similar items are not taxable; 
           (vii) massages, except when provided by a licensed health 
        care facility or professional or upon written referral from a 
        licensed health care facility or professional for treatment of 
        illness, injury, or disease; and 
           (viii) the furnishing of lodging, board, and care services 
        for animals in kennels and other similar arrangements, but 
        excluding veterinary and horse boarding services. 
           In applying the provisions of this chapter, the terms 
        "tangible personal property" and "sales at retail" include 
        taxable services listed in clause (6), items (i) to (vi) and 
        (viii), and the provision of these taxable services, unless 
        specifically provided otherwise.  Services performed by an 
        employee for an employer are not taxable.  Services performed by 
        a partnership or association for another partnership or 
        association are not taxable if one of the entities owns or 
        controls more than 80 percent of the voting power of the equity 
        interest in the other entity.  Services performed between 
        members of an affiliated group of corporations are not taxable.  
        For purposes of the preceding sentence, "affiliated group of 
        corporations" includes those entities that would be classified 
        as members of an affiliated group under United States Code, 
        title 26, section 1504, and that are eligible to file a 
        consolidated tax return for federal income tax purposes. 
           (h) A sale and a purchase includes the furnishing for a 
        consideration of tangible personal property or taxable services 
        by the United States or any of its agencies or 
        instrumentalities, or the state of Minnesota, its agencies, 
        instrumentalities, or political subdivisions. 
           (i) A sale and a purchase includes the furnishing for a 
        consideration of telecommunications services, including cable 
        television services and direct satellite services.  
        Telecommunications services are taxed to the extent allowed 
        under federal law.  
           (j) A sale and a purchase includes the furnishing for a 
        consideration of installation if the installation charges would 
        be subject to the sales tax if the installation were provided by 
        the seller of the item being installed. 
           (k) A sale and a purchase includes the rental of a vehicle 
        by a motor vehicle dealer to a customer when (1) the vehicle is 
        rented by the customer for a consideration, or (2) the motor 
        vehicle dealer is reimbursed pursuant to a service contract as 
        defined in section 65B.29, subdivision 1, clause (1). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2004, section 297A.61, 
        subdivision 4, is amended to read: 
           Subd. 4.  [RETAIL SALE.] (a) A "retail sale" means any 
        sale, lease, or rental for any purpose, other than resale, 
        sublease, or subrent of items by the purchaser in the normal 
        course of business as defined in subdivision 21.  
           (b) A sale of property used by the owner only by leasing it 
        to others or by holding it in an effort to lease it, and put to 
        no use by the owner other than resale after the lease or effort 
        to lease, is a sale of property for resale.  
           (c) A sale of master computer software that is purchased 
        and used to make copies for sale or lease is a sale of property 
        for resale.  
           (d) A sale of building materials, supplies, and equipment 
        to owners, contractors, subcontractors, or builders for the 
        erection of buildings or the alteration, repair, or improvement 
        of real property is a retail sale in whatever quantity sold, 
        whether the sale is for purposes of resale in the form of real 
        property or otherwise.  
           (e) A sale of carpeting, linoleum, or similar floor 
        covering to a person who provides for installation of the floor 
        covering is a retail sale and not a sale for resale since a sale 
        of floor covering which includes installation is a contract for 
        the improvement of real property. 
           (f) A sale of shrubbery, plants, sod, trees, and similar 
        items to a person who provides for installation of the items is 
        a retail sale and not a sale for resale since a sale of 
        shrubbery, plants, sod, trees, and similar items that includes 
        installation is a contract for the improvement of real property. 
           (g) A sale of tangible personal property that is awarded as 
        prizes is a retail sale and is not considered a sale of property 
        for resale. 
           (h) A sale of tangible personal property utilized or 
        employed in the furnishing or providing of services under 
        subdivision 3, paragraph (g), clause (1), including, but not 
        limited to, property given as promotional items, is a retail 
        sale and is not considered a sale of property for resale. 
           (i) A sale of tangible personal property used in conducting 
        lawful gambling under chapter 349 or the state lottery under 
        chapter 349A, including, but not limited to, property given as 
        promotional items, is a retail sale and is not considered a sale 
        of property for resale. 
           (j) A sale of machines, equipment, or devices that are used 
        to furnish, provide, or dispense goods or services, including, 
        but not limited to, coin-operated devices, is a retail sale and 
        is not considered a sale of property for resale. 
           (k) In the case of a lease, a retail sale occurs when an 
        obligation to make a lease payment becomes due under the terms 
        of the agreement or the trade practices of the lessor. 
           (l) In the case of a conditional sales contract, a retail 
        sale occurs upon the transfer of title or possession of the 
        tangible personal property. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  Minnesota Statutes 2004, section 297A.64, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EXEMPTIONS.] (a) The tax and the fee imposed by 
        this section do not apply to a lease or rental of (1) a vehicle 
        to be used by the lessee to provide a licensed taxi service; (2) 
        a hearse or limousine used in connection with a burial or 
        funeral service; or (3) a van designed or adapted primarily for 
        transporting property rather than passengers.  The tax and the 
        fee imposed under this section do not apply when the lease or 
        rental of a vehicle is exempt from the tax imposed under section 
        297A.62, subdivision 1. 
           (b) The lessor may elect not to charge the fee imposed in 
        subdivision 2 if in the previous calendar year the lessor had no 
        more than 20 vehicles available for lease that would have been 
        subject to tax under this section, or no more than $50,000 in 
        gross receipts that would have been subject to tax under this 
        section.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 9.  Minnesota Statutes 2004, section 297A.668, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ APPLICABILITY.] The provisions of this 
        section apply regardless of the characterization of a product as 
        tangible personal property, a digital good, or a service; but do 
        not apply to telecommunications services, or the sales of motor 
        vehicles, watercraft, aircraft, modular homes, manufactured 
        homes, or mobile homes.  These provisions only apply to 
        determine a seller's obligation to pay or collect and remit a 
        sales or use tax with respect to the seller's sale of a 
        product.  These provisions do not affect the obligation of a 
        seller as purchaser to remit tax on the use of the product. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 10.  Minnesota Statutes 2004, section 297A.668, 
        subdivision 5, is amended to read: 
           Subd. 5.  [TRANSPORTATION EQUIPMENT.] (a) The retail sale, 
        including lease or rental, of transportation equipment shall be 
        sourced the same as a retail sale in accordance with the 
        provisions of subdivision 2, notwithstanding the exclusion of 
        lease or rental in subdivision 2. 
           (b) "Transportation equipment" means any of the following: 
           (1) locomotives and railcars that are utilized for the 
        carriage of persons or property in interstate commerce; and/or 
           (2) trucks and truck-tractors with a gross vehicle weight 
        rating (GVWR) of 10,001 pounds or greater, trailers, 
        semitrailers, or passenger buses that are: 
           (i) registered through the international registration plan; 
        and 
           (ii) operated under authority of a carrier authorized and 
        certified by the United States Department of Transportation or 
        another federal authority to engage in the carriage of persons 
        or property in interstate commerce; 
           (3) aircraft that are operated by air carriers authorized 
        and certificated by the United States Department of 
        Transportation or another federal or a foreign authority to 
        engage in the carriage of persons or property in interstate 
        commerce; or 
           (4) containers designed for use on and component parts 
        attached or secured on the transportation equipment described in 
        items (1) through (3).  
           [EFFECTIVE DATE.] This section is effective for sales and 
        purchases made on or after January 1, 2004. 
           Sec. 11.  Minnesota Statutes 2004, section 297A.67, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FOOD AND FOOD INGREDIENTS.] Except as otherwise 
        provided in this subdivision, food and food ingredients are 
        exempt.  For purposes of this subdivision, "food" and "food 
        ingredients" mean substances, whether in liquid, concentrated, 
        solid, frozen, dried, or dehydrated form, that are sold for 
        ingestion or chewing by humans and are consumed for their taste 
        or nutritional value.  Food and food ingredients exempt under 
        this subdivision do not include candy, soft drinks, food sold 
        through vending machines, dietary supplements, and prepared 
        foods.  Food and food ingredients do not include alcoholic 
        beverages, dietary supplements, and tobacco.  For purposes of 
        this subdivision, "alcoholic beverages" means beverages that are 
        suitable for human consumption and contain one-half of one 
        percent or more of alcohol by volume.  For purposes of this 
        subdivision, "tobacco" means cigarettes, cigars, chewing or pipe 
        tobacco, or any other item that contains tobacco.  For purposes 
        of this subdivision, "dietary supplements" means any product, 
        other than tobacco, intended to supplement the diet that: 
           (1) contains one or more of the following dietary 
        ingredients: 
           (i) a vitamin; 
           (ii) a mineral; 
           (iii) an herb or other botanical; 
           (iv) an amino acid; 
           (v) a dietary substance for use by humans to supplement the 
        diet by increasing the total dietary intake; and 
           (vi) a concentrate, metabolite, constituent, extract, or 
        combination of any ingredient described in items (i) to (v); 
           (2) is intended for ingestion in tablet, capsule, powder, 
        softgel, gelcap, or liquid form, or if not intended for 
        ingestion in such form, is not represented as conventional food 
        and is not represented for use as a sole item of a meal or of 
        the diet; and 
           (3) is required to be labeled as a dietary supplement, 
        identifiable by the supplement facts box found on the label and 
        as required pursuant to Code of Federal Regulations, title 21, 
        section 101.36. 
           [EFFECTIVE DATE.] This section is effective for sales made 
        on or after the day following final enactment. 
           Sec. 12.  Minnesota Statutes 2004, section 297A.67, 
        subdivision 7, is amended to read: 
           Subd. 7.  [MEDICINES DRUGS; MEDICAL DEVICES.] 
        (a) Prescribed Sales of the following drugs and medical devices 
        are exempt: 
           (1) drugs and medicine, and insulin, intended for internal 
        or external use, in the cure, mitigation, treatment, or 
        prevention of illness or disease in human beings are exempt.  
        "Prescribed drugs and medicine" includes use, including 
        over-the-counter drugs or medicine prescribed by a licensed 
        health care professional. 
           (b) Nonprescription medicines consisting principally 
        (determined by the weight of all ingredients) of analgesics that 
        are approved by the United States Food and Drug Administration 
        for internal use by human beings are exempt.  For purposes of 
        this subdivision, "principally" means greater than 50 percent 
        analgesics by weight.  
           (c) Prescription glasses, hospital beds, fever 
        thermometers, reusable; 
           (2) single-use finger-pricking devices for the extraction 
        of blood, blood glucose monitoring machines, and 
        other single-use devices and single-use diagnostic agents used 
        in diagnosing, monitoring, or treating diabetes, and therapeutic 
        and; 
           (3) insulin and medical oxygen for human use, regardless of 
        whether prescribed or sold over the counter; 
           (4) prosthetic devices are exempt.  "Therapeutic devices" 
        means devices that are attached or applied to the human body to 
        cure, heal, or alleviate injury, illness, or disease, either 
        directly or by administering a curative agent.  "Prosthetic 
        devices" means devices that replace injured, diseased, or 
        missing parts of the human body, either temporarily or 
        permanently; 
           (5) durable medical equipment for home use only; 
           (6) mobility enhancing equipment; and 
           (7) prescription corrective eyeglasses. 
           (b) For purposes of this subdivision: 
           (1) "Drug" means a compound, substance, or preparation, and 
        any component of a compound, substance, or preparation, other 
        than food and food ingredients, dietary supplements, or 
        alcoholic beverages that is: 
           (i) recognized in the official United States Pharmacopoeia, 
        official Homeopathic Pharmacopoeia of the United States, or 
        official National Formulary, and supplement to any of them; 
           (ii) intended for use in the diagnosis, cure, mitigation, 
        treatment, or prevention of disease; or 
           (iii) intended to affect the structure or any function of 
        the body. 
           (2) "Durable medical equipment" means equipment, including 
        repair and replacement parts, but not including mobility 
        enhancing equipment, that: 
           (i) can withstand repeated use; 
           (ii) is primarily and customarily used to serve a medical 
        purpose; 
           (iii) generally is not useful to a person in the absence of 
        illness or injury; and 
           (iv) is not worn in or on the body. 
           (3) "Mobility enhancing equipment" means equipment, 
        including repair and replacement parts, but not including 
        durable medical equipment, that: 
           (i) is primarily and customarily used to provide or 
        increase the ability to move from one place to another and that 
        is appropriate for use either in a home or a motor vehicle; 
           (ii) is not generally used by persons with normal mobility; 
        and 
           (iii) does not include any motor vehicle or equipment on a 
        motor vehicle normally provided by a motor vehicle manufacturer. 
           (4) "Over-the-counter drug" means a drug that contains a 
        label that identifies the product as a drug as required by Code 
        of Federal Regulations, title 21, section 201.66.  The label 
        must include a "drug facts" panel or a statement of the active 
        ingredients with a list of those ingredients contained in the 
        compound, substance, or preparation.  Over-the-counter drugs do 
        not include grooming and hygiene products, regardless of whether 
        they otherwise meet the definition.  "Grooming and hygiene 
        products" are soaps, cleaning solutions, shampoo, toothpaste, 
        mouthwash, antiperspirants, and suntan lotions and sunscreens. 
           (5) "Prescribed" and "prescription" means a direction in 
        the form of an order, formula, or recipe issued in any form of 
        oral, written, electronic, or other means of transmission by a 
        duly licensed health care professional. 
           (6) "Prosthetic device" means a replacement, corrective, or 
        supportive device, including repair and replacement parts, worn 
        on or in the body to: 
           (i) artificially replace a missing portion of the body; 
           (ii) prevent or correct physical deformity or malfunction; 
        or 
           (iii) support a weak or deformed portion of the body. 
        Prosthetic device does not include corrective eyeglasses. 
           [EFFECTIVE DATE.] This section is effective for sales and 
        purchases made after June 30, 2005. 
           Sec. 13.  Minnesota Statutes 2004, section 297A.67, 
        subdivision 9, is amended to read: 
           Subd. 9.  [BABY PRODUCTS.] (a) Products such as lotion, 
        creams, ointments, oil, powder, or shampoo, and other articles 
        designed for application to the hair or skin of babies are 
        exempt. 
           (b) Baby bottles and nipples, pacifiers, teething rings, 
        thumb sucking preventatives, and infant syringes are exempt. 
           [EFFECTIVE DATE.] This section is effective for sales and 
        purchases made after June 30, 2005. 
           Sec. 14.  Minnesota Statutes 2004, section 297A.68, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MATERIALS CONSUMED IN INDUSTRIAL PRODUCTION.] 
        (a) Materials stored, used, or consumed in industrial production 
        of personal property intended to be sold ultimately at retail 
        are exempt, whether or not the item so used becomes an 
        ingredient or constituent part of the property produced.  
        Materials that qualify for this exemption include, but are not 
        limited to, the following: 
           (1) chemicals, including chemicals used for cleaning food 
        processing machinery and equipment; 
           (2) materials, including chemicals, fuels, and electricity 
        purchased by persons engaged in industrial production to treat 
        waste generated as a result of the production process; 
           (3) fuels, electricity, gas, and steam used or consumed in 
        the production process, except that electricity, gas, or steam 
        used for space heating, cooling, or lighting is exempt if (i) it 
        is in excess of the average climate control or lighting for the 
        production area, and (ii) it is necessary to produce that 
        particular product; 
           (4) petroleum products and lubricants; 
           (5) packaging materials, including returnable containers 
        used in packaging food and beverage products; 
           (6) accessory tools, equipment, and other items that are 
        separate detachable units with an ordinary useful life of less 
        than 12 months used in producing a direct effect upon the 
        product; and 
           (7) the following materials, tools, and equipment used in 
        metalcasting:  crucibles, thermocouple protection sheaths and 
        tubes, stalk tubes, refractory materials, molten metal filters 
        and filter boxes, degassing lances, and base blocks. 
           (b) This exemption does not include: 
           (1) machinery, equipment, implements, tools, accessories, 
        appliances, contrivances and furniture and fixtures, except 
        those listed in paragraph (a), clause (6); and 
           (2) petroleum and special fuels used in producing or 
        generating power for propelling ready-mixed concrete trucks on 
        the public highways of this state. 
           (c) Industrial production includes, but is not limited to, 
        research, development, design or production of any tangible 
        personal property, manufacturing, processing (other than by 
        restaurants and consumers) of agricultural products (whether 
        vegetable or animal), commercial fishing, refining, smelting, 
        reducing, brewing, distilling, printing, mining, quarrying, 
        lumbering, generating electricity, the production of road 
        building materials, and the research, development, design, or 
        production of computer software.  Industrial production does not 
        include painting, cleaning, repairing or similar processing of 
        property except as part of the original manufacturing process.  
           (d) Industrial production does not include the furnishing 
        of services listed in section 297A.61, subdivision 3, paragraph 
        (g), clause (6), items (i) to (vi) and (viii). 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 15.  Minnesota Statutes 2004, section 297A.68, 
        subdivision 5, is amended to read: 
           Subd. 5.  [CAPITAL EQUIPMENT.] (a) Capital equipment is 
        exempt.  The tax must be imposed and collected as if the rate 
        under section 297A.62, subdivision 1, applied, and then refunded 
        in the manner provided in section 297A.75. 
           "Capital equipment" means machinery and equipment purchased 
        or leased, and used in this state by the purchaser or lessee 
        primarily for manufacturing, fabricating, mining, or refining 
        tangible personal property to be sold ultimately at retail if 
        the machinery and equipment are essential to the integrated 
        production process of manufacturing, fabricating, mining, or 
        refining.  Capital equipment also includes machinery and 
        equipment used primarily to electronically transmit results 
        retrieved by a customer of an on-line computerized data 
        retrieval system. 
           (b) Capital equipment includes, but is not limited to: 
           (1) machinery and equipment used to operate, control, or 
        regulate the production equipment; 
           (2) machinery and equipment used for research and 
        development, design, quality control, and testing activities; 
           (3) environmental control devices that are used to maintain 
        conditions such as temperature, humidity, light, or air pressure 
        when those conditions are essential to and are part of the 
        production process; 
           (4) materials and supplies used to construct and install 
        machinery or equipment; 
           (5) repair and replacement parts, including accessories, 
        whether purchased as spare parts, repair parts, or as upgrades 
        or modifications to machinery or equipment; 
           (6) materials used for foundations that support machinery 
        or equipment; 
           (7) materials used to construct and install special purpose 
        buildings used in the production process; 
           (8) ready-mixed concrete equipment in which the ready-mixed 
        concrete is mixed as part of the delivery process regardless if 
        mounted on a chassis, repair parts for ready-mixed concrete 
        trucks, and leases of ready-mixed concrete trucks; and 
           (9) machinery or equipment used for research, development, 
        design, or production of computer software.  
           (c) Capital equipment does not include the following: 
           (1) motor vehicles taxed under chapter 297B; 
           (2) machinery or equipment used to receive or store raw 
        materials; 
           (3) building materials, except for materials included in 
        paragraph (b), clauses (6) and (7); 
           (4) machinery or equipment used for nonproduction purposes, 
        including, but not limited to, the following:  plant security, 
        fire prevention, first aid, and hospital stations; support 
        operations or administration; pollution control; and plant 
        cleaning, disposal of scrap and waste, plant communications, 
        space heating, cooling, lighting, or safety; 
           (5) farm machinery and aquaculture production equipment as 
        defined by section 297A.61, subdivisions 12 and 13; 
           (6) machinery or equipment purchased and installed by a 
        contractor as part of an improvement to real property; or 
           (7) machinery and equipment used by restaurants in the 
        furnishing, preparing, or serving of prepared foods as defined 
        in section 297A.61, subdivision 31; 
           (8) machinery and equipment used to furnish the services 
        listed in section 297A.61, subdivision 3, paragraph (g), clause 
        (6), items (i) to (vi) and (viii); or 
           (9) any other item that is not essential to the integrated 
        process of manufacturing, fabricating, mining, or refining. 
           (d) For purposes of this subdivision: 
           (1) "Equipment" means independent devices or tools separate 
        from machinery but essential to an integrated production 
        process, including computers and computer software, used in 
        operating, controlling, or regulating machinery and equipment; 
        and any subunit or assembly comprising a component of any 
        machinery or accessory or attachment parts of machinery, such as 
        tools, dies, jigs, patterns, and molds.  
           (2) "Fabricating" means to make, build, create, produce, or 
        assemble components or property to work in a new or different 
        manner. 
           (3) "Integrated production process" means a process or 
        series of operations through which tangible personal property is 
        manufactured, fabricated, mined, or refined.  For purposes of 
        this clause, (i) manufacturing begins with the removal of raw 
        materials from inventory and ends when the last process prior to 
        loading for shipment has been completed; (ii) fabricating begins 
        with the removal from storage or inventory of the property to be 
        assembled, processed, altered, or modified and ends with the 
        creation or production of the new or changed product; (iii) 
        mining begins with the removal of overburden from the site of 
        the ores, minerals, stone, peat deposit, or surface materials 
        and ends when the last process before stockpiling is completed; 
        and (iv) refining begins with the removal from inventory or 
        storage of a natural resource and ends with the conversion of 
        the item to its completed form. 
           (4) "Machinery" means mechanical, electronic, or electrical 
        devices, including computers and computer software, that are 
        purchased or constructed to be used for the activities set forth 
        in paragraph (a), beginning with the removal of raw materials 
        from inventory through completion of the product, including 
        packaging of the product. 
           (5) "Machinery and equipment used for pollution control" 
        means machinery and equipment used solely to eliminate, prevent, 
        or reduce pollution resulting from an activity described in 
        paragraph (a).  
           (6) "Manufacturing" means an operation or series of 
        operations where raw materials are changed in form, composition, 
        or condition by machinery and equipment and which results in the 
        production of a new article of tangible personal property.  For 
        purposes of this subdivision, "manufacturing" includes the 
        generation of electricity or steam to be sold at retail. 
           (7) "Mining" means the extraction of minerals, ores, stone, 
        or peat. 
           (8) "On-line data retrieval system" means a system whose 
        cumulation of information is equally available and accessible to 
        all its customers. 
           (9) "Primarily" means machinery and equipment used 50 
        percent or more of the time in an activity described in 
        paragraph (a). 
           (10) "Refining" means the process of converting a natural 
        resource to an intermediate or finished product, including the 
        treatment of water to be sold at retail. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 16.  Minnesota Statutes 2004, section 297A.68, 
        subdivision 28, is amended to read: 
           Subd. 28.  [MEDICAL SUPPLIES.] Medical supplies purchased 
        by a licensed health care facility or licensed health care 
        professional to provide medical treatment to residents or 
        patients are exempt.  The exemption does not apply to durable 
        medical equipment or components of durable medical equipment, 
        laboratory supplies, radiological supplies, and other items used 
        in providing medical services.  For purposes of this 
        subdivision, "medical supplies" means adhesive and nonadhesive 
        bandages, gauze pads and strips, cotton applicators, 
        antiseptics, nonprescription drugs, eye solution, and other 
        similar supplies used directly on the resident or patient in 
        providing medical services. 
           [EFFECTIVE DATE.] This section is effective for sales and 
        purchases made after June 30, 2005. 
           Sec. 17.  Minnesota Statutes 2004, section 297A.68, 
        subdivision 39, is amended to read: 
           Subd. 39.  [PREEXISTING BIDS OR CONTRACTS.] (a) The sale of 
        tangible personal property or services is exempt from tax or a 
        tax rate increase for a period of six months from the effective 
        date of the law change that results in the imposition of the tax 
        or the tax rate increase under this chapter if: 
           (1) the act imposing the tax or increasing the tax rate 
        does not have transitional effective date language for existing 
        construction contracts and construction bids; and 
           (2) the requirements of paragraph (b) are met. 
           (b) A sale is tax exempt under paragraph (a) if it meets 
        the requirements of either clause (1) or (2): 
           (1) For a construction contract: 
           (i) the goods or services sold must be used for the 
        performance of a bona fide written lump sum or fixed price 
        construction contract; 
           (ii) the contract must be entered into before the date the 
        goods or services become subject to the sales tax or the tax 
        rate was increased; 
           (iii) the contract must not provide for allocation of 
        future taxes; and 
           (iv) for each qualifying contract the contractor must give 
        the seller documentation of the contract on which an exemption 
        is to be claimed. 
           (2) For a construction bid: 
           (i) the goods or services sold must be used pursuant to an 
        obligation of a bid or bids; 
           (ii) the bid or bids must be submitted and accepted before 
        the date the goods or services became subject to the sales 
        tax or the tax rate was increased; 
           (iii) the bid or bids must not be able to be withdrawn, 
        modified, or changed without forfeiting a bond; and 
           (iv) for each qualifying bid, the contractor must give the 
        seller documentation of the bid on which an exemption is to be 
        claimed. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 18.  Minnesota Statutes 2004, section 297A.71, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CHAIR LIFTS, RAMPS, ELEVATORS.] Chair lifts, 
        ramps, and Elevators and building materials used to install or 
        construct them chair lifts, ramps, and elevators are exempt, if 
        they are authorized by a physician and installed in or attached 
        to the owner's homestead.  The tax must be imposed and collected 
        as if the rate under section 297A.62, subdivision 1, applied and 
        then refunded in the manner provided in section 297A.75. 
           [EFFECTIVE DATE.] This section is effective for sales and 
        purchases made after June 30, 2005. 
           Sec. 19.  Minnesota Statutes 2004, section 297A.75, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [TAX COLLECTED.] The tax on the gross 
        receipts from the sale of the following exempt items must be 
        imposed and collected as if the sale were taxable and the rate 
        under section 297A.62, subdivision 1, applied.  The exempt items 
        include: 
           (1) capital equipment exempt under section 297A.68, 
        subdivision 5; 
           (2) building materials for an agricultural processing 
        facility exempt under section 297A.71, subdivision 13; 
           (3) building materials for mineral production facilities 
        exempt under section 297A.71, subdivision 14; 
           (4) building materials for correctional facilities under 
        section 297A.71, subdivision 3; 
           (5) building materials used in a residence for disabled 
        veterans exempt under section 297A.71, subdivision 11; 
           (6) chair lifts, ramps, elevators, and associated building 
        materials exempt under section 297A.71, subdivision 12; 
           (7) building materials for the Long Lake Conservation 
        Center exempt under section 297A.71, subdivision 17; 
           (8) materials, supplies, fixtures, furnishings, and 
        equipment for a county law enforcement and family service center 
        under section 297A.71, subdivision 26; and 
           (9) materials and supplies for qualified low-income housing 
        under section 297A.71, subdivision 23. 
           [EFFECTIVE DATE.] This section is effective for sales and 
        purchases made after June 30, 2005. 
           Sec. 20.  Minnesota Statutes 2004, section 297A.87, 
        subdivision 2, is amended to read: 
           Subd. 2.  [SELLER'S PERMIT OR ALTERNATE STATEMENT.] (a) The 
        operator of an event under subdivision 1 shall obtain one of the 
        following from a person who wishes to do business as a seller at 
        the event: 
           (1) evidence that the person holds a valid seller's permit 
        under section 297A.84; or 
           (2) a written statement that the person is not offering for 
        sale any item that is taxable under this chapter; or 
           (3) a written statement that this is the only selling event 
        that the person will be participating in for that calendar year, 
        that the person will be participating for three or fewer days, 
        and that the person will make less than $500 in total sales in 
        the calendar year.  The written statement shall include the 
        person's name, address, and telephone number. 
           (b) The operator shall require the evidence or statement as 
        a prerequisite to participating in the event as a seller. 
           [EFFECTIVE DATE.] This section is effective for selling 
        events occurring after June 15, 2005. 
           Sec. 21.  Minnesota Statutes 2004, section 297A.87, 
        subdivision 3, is amended to read: 
           Subd. 3.  [OCCASIONAL SALE PROVISIONS NOT APPLICABLE UNDER 
        LIMITED CIRCUMSTANCES.] The isolated and occasional 
        sale provisions provision under section 297A.67, subdivision 23, 
        or applies, provided that the seller only participates for three 
        or fewer days in one event per calendar year, makes $500 or less 
        in sales in the calendar year, and provides the written 
        statement required in subdivision 2, paragraph (a), clause (3).  
        The isolated and occasional sales provision under section 
        297A.68, subdivision 25, do does not apply to a seller at an 
        event under this section. 
           [EFFECTIVE DATE.] This section is effective for selling 
        events occurring after June 15, 2005. 
           Sec. 22.  Minnesota Statutes 2004, section 297A.99, 
        subdivision 4, is amended to read: 
           Subd. 4.  [TAX BASE.] (a) The tax applies to sales taxable 
        under this chapter that occur within the political subdivision. 
           (b) Taxable goods or services are subject to a political 
        subdivision's sales tax, if they are performed either: 
           (1) within the political subdivision, or 
           (2) partly within and partly without the political 
        subdivision and more of the service is performed within the 
        political subdivision, based on the cost of performance sourced 
        to the political subdivision pursuant to section 297A.668. 
           [EFFECTIVE DATE.] This section is effective for sales made 
        on or after January 1, 2004. 
           Sec. 23.  [REPEALER.] 
           Minnesota Rules, parts 8130.0110, subpart 4; 8130.0200, 
        subparts 5 and 6; 8130.0400, subpart 9; 8130.1200, subparts 5 
        and 6; 8130.2900; 8130.3100, subpart 1; 8130.4000, subparts 1 
        and 2; 8130.4200, subpart 1; 8130.4400, subpart 3; 8130.5200; 
        8130.5600, subpart 3; 8130.5800, subpart 5; 8130.7300, subpart 
        5; and 8130.8800, subpart 4, are repealed. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 

                                   ARTICLE 8 
                                 SPECIAL TAXES 
           Section 1.  Minnesota Statutes 2004, section 287.04, is 
        amended to read: 
           287.04 [EXEMPTIONS.] 
           The tax imposed by section 287.035 does not apply to:  
           (a) A decree of marriage dissolution or an instrument made 
        pursuant to it.  
           (b) A mortgage given to correct a misdescription of the 
        mortgaged property. 
           (c) A mortgage or other instrument that adds additional 
        security for the same debt for which mortgage registry tax has 
        been paid.  
           (d) A contract for the conveyance of any interest in real 
        property, including a contract for deed. 
           (e) A mortgage secured by real property subject to the 
        minerals production tax of sections 298.24 to 298.28. 
           (f) The principal amount of a mortgage loan made under a 
        low and moderate income or other affordable housing program, if 
        the mortgagee is a federal, state, or local government agency. 
           (g) Mortgages granted by fraternal benefit societies 
        subject to section 64B.24. 
           (h) A mortgage amendment or extension, as defined in 
        section 287.01. 
           (i) An agricultural mortgage if the proceeds of the loan 
        secured by the mortgage are used to acquire or improve real 
        property classified under section 273.13, subdivision 23, 
        paragraph (a), or (b), clause (1), (2), or (3). 
           (j) A mortgage on an armory building as set forth in 
        section 193.147. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 295.60, 
        subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENT.] (a) Each furrier shall make estimated 
        payments of the taxes for the calendar year in quarterly 
        installments to the commissioner by April 15, July 15, October 
        15, and January 15 of the following calendar year. 
           (b) Estimated tax payments are not required if: 
           (1) the tax for the current calendar year is less than 
        $500; or 
           (2) the tax for the previous calendar year is less than 
        $500, if the taxpayer had a tax liability and was doing business 
        the entire year. 
           (c) Underpayment of estimated installments bear interest at 
        the rate specified in section 270.75, from the due date of the 
        payment until paid or until the due date of the annual return, 
        whichever comes first.  An underpayment of an estimated 
        installment is the difference between the amount paid and the 
        lesser of (1) 90 percent of one-quarter of the tax for the 
        calendar year the tax for the actual gross revenues received 
        during the quarter, or (2) one-quarter of the total tax for the 
        previous calendar year if the taxpayer had a tax liability and 
        was doing business the entire year. 
           [EFFECTIVE DATE.] This section is effective for gross 
        revenues received after December 31, 2004. 
           Sec. 3.  Minnesota Statutes 2004, section 296A.22, is 
        amended by adding a subdivision to read: 
           Subd. 9.  [ABATEMENT OF PENALTY.] (a) The commissioner may 
        by written order abate any penalty imposed under this section, 
        if in the commissioner's opinion there is reasonable cause to do 
        so. 
           (b) A request for abatement of penalty must be filed with 
        the commissioner within 60 days of the date the notice stating 
        that a penalty has been imposed was mailed to the taxpayer's 
        last known address. 
           (c) If the commissioner issues an order denying a request 
        for abatement of penalty, the taxpayer may file an 
        administrative appeal as provided in section 296A.25 or appeal 
        to Tax Court as provided in section 271.06.  If the commissioner 
        does not issue an order on the abatement request within 60 days 
        from the date the request is received, the taxpayer may appeal 
        to Tax Court as provided in section 271.06. 
           [EFFECTIVE DATE.] This section is effective for penalties 
        imposed on or after the day following final enactment. 
           Sec. 4.  Minnesota Statutes 2004, section 297E.01, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DISTRIBUTOR.] "Distributor" means a distributor 
        as defined in section 349.12, subdivision 11, or a person or 
        linked bingo game provider who markets, sells, or provides 
        gambling product to a person or entity for resale or use at the 
        retail level.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 5.  Minnesota Statutes 2004, section 297E.01, 
        subdivision 7, is amended to read: 
           Subd. 7.  [GAMBLING PRODUCT.] "Gambling product" means 
        bingo hard cards, bingo paper, or sheets, or linked bingo paper 
        sheets; pull-tabs; tipboards; paddletickets and paddleticket 
        cards; raffle tickets; or any other ticket, card, board, 
        placard, device, or token that represents a chance, for which 
        consideration is paid, to win a prize.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 6.  Minnesota Statutes 2004, section 297E.01, is 
        amended by adding a subdivision to read: 
           Subd. 9a.  [LINKED BINGO GAME.] "Linked bingo game" means a 
        bingo game played at two or more locations where licensed 
        organizations are authorized to conduct bingo, when there is a 
        common prize pool and a common selection of numbers or symbols 
        conducted at one location, and when the results of the selection 
        are transmitted to all participating locations by satellite, 
        telephone, or other means by a linked bingo game provider. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 7.  Minnesota Statutes 2004, section 297E.01, is 
        amended by adding a subdivision to read: 
           Subd. 9b.  [LINKED BINGO GAME PROVIDER.] "Linked bingo game 
        provider" means any person who provides the means to link bingo 
        prizes in a linked bingo game, who provides linked bingo paper 
        sheets to the participating organizations, who provides linked 
        bingo prize management, and who provides the linked bingo game 
        system. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 8.  Minnesota Statutes 2004, section 297E.06, 
        subdivision 2, is amended to read: 
           Subd. 2.  [BUSINESS RECORDS.] An organization shall 
        maintain records supporting the gambling activity reported to 
        the commissioner.  Records include, but are not limited to, the 
        following items:  
           (1) all winning and unsold tickets, cards, or stubs for 
        pull-tab, tipboard, paddlewheel, and raffle games; 
           (2) all reports and statements, including checker's 
        records, for each bingo occasion; 
           (3) all cash journals and ledgers, deposit slips, register 
        tapes, and bank statements supporting gambling activity 
        receipts; 
           (4) all invoices that represent purchases of gambling 
        product; 
           (5) all canceled checks or copies of substitute checks as 
        defined in Public Law 108-100, section 3, check recorders, 
        journals and ledgers, vouchers, invoices, bank statements, and 
        other documents supporting gambling activity expenditures; and 
           (6) all organizational meeting minutes.  
           All records required to be kept by this section must be 
        preserved by the organization for at least 3-1/2 years and may 
        be inspected by the commissioner of revenue at any reasonable 
        time without notice or a search warrant.  
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 9.  Minnesota Statutes 2004, section 297E.07, is 
        amended to read: 
           297E.07 [INSPECTION RIGHTS.] 
           At any reasonable time, without notice and without a search 
        warrant, the commissioner may enter a place of business of a 
        manufacturer, distributor, or organization, or linked bingo game 
        provider; any site from which pull-tabs or tipboards or other 
        gambling equipment or gambling product are being manufactured, 
        stored, or sold; or any site at which lawful gambling is being 
        conducted, and inspect the premises, books, records, and other 
        documents required to be kept under this chapter to determine 
        whether or not this chapter is being fully complied with.  If 
        the commissioner is denied free access to or is hindered or 
        interfered with in making an inspection of the place of 
        business, books, or records, the permit of the distributor may 
        be revoked by the commissioner, and the license of the 
        manufacturer, the distributor, or the organization, or linked 
        bingo game provider may be revoked by the board. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 10.  Minnesota Statutes 2004, section 297F.08, 
        subdivision 12, is amended to read: 
           Subd. 12.  [CIGARETTES IN INTERSTATE COMMERCE.] (a) A 
        person may not transport or cause to be transported from this 
        state cigarettes for sale in another state without first 
        affixing to the cigarettes the stamp required by the state in 
        which the cigarettes are to be sold or paying any other excise 
        tax on the cigarettes imposed by the state in which the 
        cigarettes are to be sold. 
           (b) A person may not affix to cigarettes the stamp required 
        by another state or pay any other excise tax on the cigarettes 
        imposed by another state if the other state prohibits stamps 
        from being affixed to the cigarettes, prohibits the payment of 
        any other excise tax on the cigarettes, or prohibits the sale of 
        the cigarettes. 
           (c) Not later than 15 days after the end of each calendar 
        quarter, a person who transports or causes to be transported 
        from this state cigarettes for sale in another state shall 
        submit to the commissioner a report identifying the quantity and 
        style of each brand of the cigarettes transported or caused to 
        be transported in the preceding calendar quarter, and the name 
        and address of each recipient of the cigarettes.  This reporting 
        requirement only applies to cigarettes manufactured by companies 
        that are not original or subsequent participating manufacturers 
        in the Master Settlement Agreement with other states. 
           (d) For purposes of this section, "person" has the meaning 
        given in section 297F.01, subdivision 12.  Person does not 
        include any common or contract carrier, or public warehouse that 
        is not owned, in whole or in part, directly or indirectly by 
        such person, and does not include a manufacturer that has 
        entered into is an original or subsequent participating 
        manufacturer in the Master Settlement Agreement with other 
        states. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 11.  Minnesota Statutes 2004, section 297F.08, is 
        amended by adding a subdivision to read: 
           Subd. 13.  [BOND.] The commissioner may require the 
        furnishing of a corporate surety bond or a certified check in an 
        amount suitable to guarantee payment of the tax stamps purchased 
        by a distributor.  The bond or certified check may be required 
        when the commissioner determines that a distributor is (1) 
        delinquent in the filing of any return required under this 
        chapter, or (2) delinquent in the payment of any uncontested tax 
        liability under this chapter.  The distributor shall furnish the 
        bond or certified check for a period of two years, after which, 
        if the distributor has not been delinquent in the filing of any 
        returns required under this chapter, or delinquent in the paying 
        of any tax under this chapter, a bond or certified check is no 
        longer required.  The commissioner at any time may apply the 
        bond or certified check to any unpaid taxes or fees, including 
        interest and penalties, owed to the department by the 
        distributor. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 12.  Minnesota Statutes 2004, section 297F.09, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [MONTHLY RETURN; CIGARETTE DISTRIBUTOR.] On 
        or before the 18th day of each calendar month, a distributor 
        with a place of business in this state shall file a return with 
        the commissioner showing the quantity of cigarettes manufactured 
        or brought in from outside the state or purchased during the 
        preceding calendar month and the quantity of cigarettes sold or 
        otherwise disposed of in this state and outside this state 
        during that month.  A licensed distributor outside this state 
        shall in like manner file a return showing the quantity of 
        cigarettes shipped or transported into this state during the 
        preceding calendar month.  Returns must be made in the form and 
        manner prescribed by the commissioner and must contain any other 
        information required by the commissioner.  The return must be 
        accompanied by a remittance for the full unpaid tax liability 
        shown by it.  The return for the May liability and 85 percent of 
        the estimated June liability is due on the date payment of the 
        tax is due.  For distributors subject to the accelerated tax 
        payment requirements in subdivision 10, the return for the May 
        liability is due two business days before June 30th of the year 
        and the return for the June liability is due on or before August 
        18th of the year. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 13.  Minnesota Statutes 2004, section 297F.09, 
        subdivision 2, is amended to read: 
           Subd. 2.  [MONTHLY RETURN; TOBACCO PRODUCTS DISTRIBUTOR.] 
        On or before the 18th day of each calendar month, a distributor 
        with a place of business in this state shall file a return with 
        the commissioner showing the quantity and wholesale sales price 
        of each tobacco product: 
           (1) brought, or caused to be brought, into this state for 
        sale; and 
           (2) made, manufactured, or fabricated in this state for 
        sale in this state, during the preceding calendar month.  
        Every licensed distributor outside this state shall in like 
        manner file a return showing the quantity and wholesale sales 
        price of each tobacco product shipped or transported to 
        retailers in this state to be sold by those retailers, during 
        the preceding calendar month.  Returns must be made in the form 
        and manner prescribed by the commissioner and must contain any 
        other information required by the commissioner.  The return must 
        be accompanied by a remittance for the full tax liability 
        shown.  The return for the May liability and 85 percent of the 
        estimated June liability is due on the date payment of the tax 
        is due.  For distributors subject to the accelerated tax payment 
        requirements in subdivision 10, the return for the May liability 
        is due two business days before June 30th of the year and the 
        return for the June liability is due on or before August 18th of 
        the year. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 14.  Minnesota Statutes 2004, section 297F.14, 
        subdivision 4, is amended to read: 
           Subd. 4.  [BAD DEBT.] The commissioner may adopt rules 
        providing a refund of the tax paid under this chapter if the tax 
        paid qualifies as a bad debt under section 166(a) of the 
        Internal Revenue Code.  For any reporting period, a taxpayer may 
        offset against taxes payable under this chapter the amount of 
        taxes previously paid under this chapter that is attributable to 
        a bad debt.  The taxes must have been included in a transaction 
        the consideration for which was a debt owed to the taxpayer and 
        which became uncollectible, but only in proportion to the 
        portion of debt that became uncollectible.  To qualify for 
        offset under this subdivision, the debt must have qualified as a 
        bad debt under section 166(a) of the Internal Revenue Code.  The 
        taxpayer may claim the offset within the time period prescribed 
        in section 297F.17, subdivision 6.  If the taxpayer is no longer 
        liable for taxes imposed under this chapter, the commissioner 
        shall refund to the taxpayer the amount of the taxes 
        attributable to the bad debt.  Any recovery of the tax claimed 
        as a refund or credit must be reported to the commissioner on 
        the tax return for the month in which the recovery is made.  If 
        the taxpayer is no longer required to file returns under this 
        chapter, the taxpayer must reimburse the commissioner for tax 
        recovered in the month following the recovery. 
           [EFFECTIVE DATE.] This section is effective for claims 
        filed on or after July 1, 2005. 
           Sec. 15.  Minnesota Statutes 2004, section 297G.09, is 
        amended by adding a subdivision to read: 
           Subd. 10.  [QUARTERLY AND ANNUAL PAYMENTS AND RETURNS.] (a) 
        If a manufacturer, wholesaler, brewer, or importer has an 
        average liquor tax liability equal to or less than $500 per 
        month in any quarter of a calendar year, and has substantially 
        complied with the state tax laws during the preceding four 
        calendar quarters, the manufacturer, wholesaler, brewer, or 
        importer may request authorization to file and pay the taxes 
        quarterly in subsequent calendar quarters.  The authorization 
        remains in effect during the period in which the manufacturer's, 
        wholesaler's, brewer's, or importer's quarterly returns reflect 
        liquor tax liabilities of less than $1,500 and there is 
        continued compliance with state tax laws. 
           (b) If a manufacturer, wholesaler, brewer, or importer has 
        an average liquor tax liability equal to or less than $100 per 
        month during a calendar year, and has substantially complied 
        with the state tax laws during that period, the manufacturer, 
        wholesaler, brewer, or importer may request authorization to 
        file and pay the taxes annually in subsequent years.  The 
        authorization remains in effect during the period in which the 
        manufacturer's, wholesaler's, brewer's, or importer's annual 
        returns reflect liquor tax liabilities of less than $1,200 and 
        there is continued compliance with state tax laws. 
           (c) The commissioner may also grant quarterly or annual 
        filing and payment authorizations to manufacturers, wholesalers, 
        brewers, or importers if the commissioner concludes that the 
        manufacturer's, wholesaler's, brewer's, or importer's future tax 
        liabilities will be less than the monthly totals identified in 
        paragraphs (a) and (b).  An authorization granted under this 
        paragraph is subject to the same conditions as an authorization 
        granted under paragraphs (a) and (b). 
           (d) The annual tax return and payments must be filed and 
        paid on or before the 18th day of January following the calendar 
        year.  The quarterly returns and payments must be filed and paid 
        on or before April 18 for the quarter ending March 31, on or 
        before July 18 for the quarter ending June 30, on or before 
        October 18 for the quarter ending September 30, and on or before 
        January 18 for the quarter ending December 31. 
           [EFFECTIVE DATE.] This section is effective for tax returns 
        and payments due on or after January 1, 2006. 
           Sec. 16.  Minnesota Statutes 2004, section 297I.01, is 
        amended by adding a subdivision to read: 
           Subd. 13a.  [REINSURANCE.] "Reinsurance" is insurance 
        whereby an insurance company, for a consideration, agrees to 
        indemnify another insurance company against all or part of the 
        loss which the latter may sustain under the policy or policies 
        which it has issued. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 17.  Minnesota Statutes 2004, section 297I.05, 
        subdivision 5, is amended to read: 
           Subd. 5.  [HEALTH MAINTENANCE ORGANIZATIONS, NONPROFIT 
        HEALTH SERVICE PLAN CORPORATIONS, AND COMMUNITY INTEGRATED 
        SERVICE NETWORKS.] (a) Health maintenance organizations, 
        community integrated service networks, and nonprofit health care 
        service plan corporations are exempt from the tax imposed under 
        this section for premiums received in calendar years 2001 to 
        2003. 
           (b) For calendar years after 2003, A tax is imposed on 
        health maintenance organizations, community integrated service 
        networks, and nonprofit health care service plan corporations.  
        The rate of tax is equal to one percent of gross premiums less 
        return premiums on all direct business received by the 
        organization, network, or corporation or its agents in 
        Minnesota, in cash or otherwise, in the calendar year. 
           (c) In approving the premium rates as required in sections 
        62L.08, subdivision 8, and 62A.65, subdivision 3, the 
        commissioners of health and commerce shall ensure that any 
        exemption from tax as described in paragraph (a) is reflected in 
        the premium rate. 
           (d) (b) The commissioner shall deposit all revenues, 
        including penalties and interest, collected under this chapter 
        from health maintenance organizations, community integrated 
        service networks, and nonprofit health service plan corporations 
        in the health care access fund.  Refunds of overpayments of tax 
        imposed by this subdivision must be paid from the health care 
        access fund.  There is annually appropriated from the health 
        care access fund to the commissioner the amount necessary to 
        make any refunds of the tax imposed under this subdivision. 
           [EFFECTIVE DATE.] This section is effective January 1, 2005.
           Sec. 18.  Minnesota Statutes 2004, section 298.24, 
        subdivision 1, is amended to read: 
           Subdivision 1.  (a) For concentrate produced in 2001, 2002, 
        and 2003, there is imposed upon taconite and iron sulphides, and 
        upon the mining and quarrying thereof, and upon the production 
        of iron ore concentrate therefrom, and upon the concentrate so 
        produced, a tax of $2.103 per gross ton of merchantable iron ore 
        concentrate produced therefrom.  
           (b) For concentrates produced in 2004 and subsequent years, 
        the tax rate shall be equal to the preceding year's tax rate 
        plus an amount equal to the preceding year's tax rate multiplied 
        by the percentage increase in the implicit price deflator from 
        the fourth quarter of the second preceding year to the fourth 
        quarter of the preceding year.  "Implicit price deflator" means 
        the implicit price deflator for the gross domestic product 
        prepared by the Bureau of Economic Analysis of the United States 
        Department of Commerce.  
           (c) On concentrates produced in 1997 and thereafter, an 
        additional tax is imposed equal to three cents per gross ton of 
        merchantable iron ore concentrate for each one percent that the 
        iron content of the product exceeds 72 percent, when dried at 
        212 degrees Fahrenheit. 
           (d) The tax shall be imposed on the average of the 
        production for the current year and the previous two years.  The 
        rate of the tax imposed will be the current year's tax rate.  
        This clause shall not apply in the case of the closing of a 
        taconite facility if the property taxes on the facility would be 
        higher if this clause and section 298.25 were not applicable.  
           (e) If the tax or any part of the tax imposed by this 
        subdivision is held to be unconstitutional, a tax of $2.103 per 
        gross ton of merchantable iron ore concentrate produced shall be 
        imposed.  
           (f) Consistent with the intent of this subdivision to 
        impose a tax based upon the weight of merchantable iron ore 
        concentrate, the commissioner of revenue may indirectly 
        determine the weight of merchantable iron ore concentrate 
        included in fluxed pellets by subtracting the weight of the 
        limestone, dolomite, or olivine derivatives or other basic flux 
        additives included in the pellets from the weight of the 
        pellets.  For purposes of this paragraph, "fluxed pellets" are 
        pellets produced in a process in which limestone, dolomite, 
        olivine, or other basic flux additives are combined with 
        merchantable iron ore concentrate.  No subtraction from the 
        weight of the pellets shall be allowed for binders, mineral and 
        chemical additives other than basic flux additives, or moisture. 
           (g)(1) Notwithstanding any other provision of this 
        subdivision, for the first two years of a plant's commercial 
        production of direct reduced ore, no tax is imposed under this 
        section.  As used in this paragraph, "commercial production" is 
        production of more than 50,000 tons of direct reduced ore in the 
        current year or in any prior year, "noncommercial production" is 
        production of 50,000 tons or less of direct reduced ore in any 
        year, and "direct reduced ore" is ore that results in a product 
        that has an iron content of at least 75 percent.  For the third 
        year of a plant's commercial production of direct reduced ore, 
        the rate to be applied to direct reduced ore is 25 percent of 
        the rate otherwise determined under this subdivision.  For the 
        fourth such commercial production year, the rate is 50 percent 
        of the rate otherwise determined under this subdivision; for the 
        fifth such commercial production year, the rate is 75 percent of 
        the rate otherwise determined under this subdivision; and for 
        all subsequent commercial production years, the full rate is 
        imposed. 
           (2) Subject to clause (1), production of direct reduced ore 
        in this state is subject to the tax imposed by this section, but 
        if that production is not produced by a producer of taconite or 
        iron sulfides, the production of taconite or iron sulfides 
        consumed in the production of direct reduced iron in this state 
        is not subject to the tax imposed by this section on taconite or 
        iron sulfides. 
           (3) Notwithstanding any other provision of this 
        subdivision, no tax is imposed on direct reduced ore under this 
        section during the facility's noncommercial production of direct 
        reduced ore.  The taconite or iron sulphides consumed in the 
        noncommercial production of direct reduced ore is subject to the 
        tax imposed by this section on taconite and iron sulphides.  
        Three-year average production of direct reduced ore does not 
        include production of direct reduced ore in any noncommercial 
        year.  Three-year average production for a direct reduced ore 
        facility that has noncommercial production is the average of the 
        commercial production of direct reduced ore for the current year 
        and the previous two commercial years.  
           [EFFECTIVE DATE.] This section is effective for direct 
        reduced ore produced after the day following final enactment. 
           Sec. 19.  Minnesota Statutes 2004, section 473.843, 
        subdivision 5, is amended to read: 
           Subd. 5.  [PENALTIES; ENFORCEMENT.] The audit, penalty, and 
        enforcement provisions applicable to corporate franchise taxes 
        imposed under chapter 290 apply to the fees imposed under this 
        section.  The commissioner of revenue shall administer the 
        provisions.  
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 20.  [REPEALER.] 
           Minnesota Statutes 2004, section 297E.12, subdivision 10, 
        is repealed effective the day following final enactment. 

                                   ARTICLE 9
                                 MISCELLANEOUS 
           Section 1.  Minnesota Statutes 2004, section 16D.10, is 
        amended to read: 
           16D.10 [CASE REVIEWER.] 
           Subdivision 1.  [DUTIES.] The commissioner shall make a 
        case reviewer available to debtors.  The reviewer must be 
        available to answer a debtor's questions concerning the 
        collection process and to review the collection activity taken.  
        If the reviewer reasonably believes that the particular action 
        being taken is unreasonable or unfair, the reviewer may make 
        recommendations to the commissioner in regard to the collection 
        action.  
           Subd. 2.  [AUTHORITY TO ISSUE DEBTOR ASSISTANCE ORDER.] On 
        application filed by a debtor with the case reviewer, in the 
        form, manner, and in the time prescribed by the commissioner, 
        and after thorough investigation, the case reviewer may issue a 
        debtor assistance order if, in the determination of the case 
        reviewer, the manner in which the state debt collection laws are 
        being administered is creating or will create an unjust and 
        inequitable result for the debtor.  Debtor assistance orders are 
        governed by the provisions relating to taxpayer assistance 
        orders under section 270.273. 
           Subd. 3.  [TRANSFER OF DUTIES TO TAXPAYER RIGHTS ADVOCATE.] 
        All duties and authority of the case reviewer under subdivisions 
        1 and 2 are transferred to the taxpayer rights advocate. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 2.  Minnesota Statutes 2004, section 270.30, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SCOPE.] (a) This section applies to a 
        person who offers, provides, or facilitates the provision of 
        refund anticipation loans, as part of or in connection with the 
        provision of tax preparation services. 
           (b) This section does not apply to: 
           (1) a tax preparer who provides tax preparation services 
        for fewer than six clients in a calendar year; 
           (2) the provision by a person of tax preparation services 
        to a spouse, parent, grandparent, child, or sibling; and 
           (3) the provision of services by an employee for an 
        employer. 
           Sec. 3.  Minnesota Statutes 2004, section 270.30, 
        subdivision 5, is amended to read: 
           Subd. 5.  [ITEMIZED BILL REQUIRED.] A tax preparer must 
        provide an itemized statement of the charges for services, at 
        least separately stating the charges for: 
           (1) return preparation; and 
           (2) electronic filing; and 
           (3) providing or facilitating a refund anticipation loan. 
           Sec. 4.  Minnesota Statutes 2004, section 270.30, 
        subdivision 6, is amended to read: 
           Subd. 6.  [ENFORCEMENT; PENALTIES.] The commissioner may 
        impose an administrative penalty of not more than $1,000 per 
        violation of subdivision 3, 4, or 5.  The commissioner may 
        terminate a tax preparer's authority to transmit returns 
        electronically to the state, if the commissioner determines the 
        tax preparer engaged in a pattern and practice of violating this 
        section.  Imposition of a penalty under this subdivision is 
        subject to the contested case procedure under chapter 14.  The 
        commissioner shall collect the penalty in the same manner as the 
        income tax.  Penalties imposed under this subdivision are public 
        data. 
           Sec. 5.  Minnesota Statutes 2004, section 270.30, is 
        amended by adding a subdivision to read: 
           Subd. 6a.  [EXCHANGE OF DATA; STATE BOARD OF 
        ACCOUNTANCY.] The State Board of Accountancy shall refer to the 
        commissioner complaints it receives about tax preparers who are 
        not subject to the jurisdiction of the State Board of 
        Accountancy and who are alleged to have violated the provisions 
        of subdivisions 3 to 5.  
           Sec. 6.  Minnesota Statutes 2004, section 270.30, is 
        amended by adding a subdivision to read: 
           Subd. 6b.  [EXCHANGE OF DATA; LAWYERS BOARD OF PROFESSIONAL 
        RESPONSIBILITY.] The Lawyers Board of Professional 
        Responsibility may refer to the commissioner complaints it 
        receives about tax preparers who are not subject to its 
        jurisdiction and who are alleged to have violated the provisions 
        of subdivisions 3 to 5. 
           Sec. 7.  Minnesota Statutes 2004, section 270.30, is 
        amended by adding a subdivision to read: 
           Subd. 6c.  [EXCHANGE OF DATA; COMMISSIONER.] The 
        commissioner shall refer complaints about tax preparers who are 
        alleged to have violated the provisions of subdivisions 3 to 5 
        to: 
           (1) the State Board of Accountancy, if the tax preparer is 
        under its jurisdiction; and 
           (2) the Lawyers Board of Professional Responsibility, if 
        the tax preparer is under its jurisdiction. 
           Sec. 8.  Minnesota Statutes 2004, section 270.30, is 
        amended by adding a subdivision to read: 
           Subd. 6d.  [DATA PRIVATE.] Information exchanged on 
        individuals under subdivisions 6a to 6c are private data under 
        section 13.02, subdivision 12, until such time as a penalty is 
        imposed as provided in section 326A.08 or by the Lawyers Board 
        of Professional Responsibility. 
           Sec. 9.  Minnesota Statutes 2004, section 270.30, 
        subdivision 8, is amended to read: 
           Subd. 8.  [EXEMPTIONS; ENFORCEMENT PROVISIONS.] (a) The 
        provisions of subdivisions 6 and 7 this section, except for 
        subdivision 4, do not apply to: 
           (1) an attorney admitted to practice under section 481.01; 
           (2) a certified public accountant holding a certificate 
        under section 326A.04 or a person issued a permit to practice 
        under section 326A.05 or other person who is subject to the 
        jurisdiction of the State Board of Accountancy; 
           (3) a person designated as a registered accounting 
        practitioner under Minnesota Rules, part 1105.6600, or a 
        registered accounting practitioner firm issued a permit under 
        Minnesota Rules, part 1105.7100; 
           (4) an enrolled agent who has passed the special enrollment 
        examination administered by the Internal Revenue Service; and 
           (5) (4) any fiduciary, or the regular employees of a 
        fiduciary, while acting on behalf of the fiduciary estate, the 
        testator, trustor, grantor, or beneficiaries of them; 
           (5) a tax preparer who provides tax preparation services 
        for fewer than six clients in a calendar year; 
           (6) tax preparation services to a spouse, parent, 
        grandparent, child, or sibling of the tax preparer; and 
           (7) the preparation by an employee of the tax return of the 
        employee's employer. 
           Sec. 10.  [270.301] [PUBLICATION OF NAMES OF TAX PREPARERS 
        SUBJECT TO PENALTIES.] 
           Subdivision 1.  [PUBLICATION OF LIST.] Notwithstanding any 
        other law, the commissioner must publish as provided in this 
        section a list or lists of tax preparers subject to penalties. 
           Subd. 2.  [REQUIRED AND EXCLUDED TAX PREPARERS.] (a) 
        Subject to the limitations of paragraph (b), the commissioner 
        must publish lists of tax preparers who have been convicted 
        under section 289A.63. 
           (b) For the purposes of this section, tax preparers are not 
        subject to publication if: 
           (1) an administrative or court action contesting the 
        penalty has been filed or served and is unresolved at the time 
        when notice would be given under subdivision 3; 
           (2) an appeal period to contest the penalty has not 
        expired; or 
           (3) the commissioner has been notified that the tax 
        preparer is deceased. 
           Subd. 3.  [NOTICE TO TAX PREPARER.] (a) At least 30 days 
        before publishing the name of a tax preparer subject to penalty, 
        the commissioner shall mail a written notice to the tax 
        preparer, detailing the amount and nature of each penalty and 
        the intended publication of the information listed in 
        subdivision 4 related to the penalty.  The notice must be mailed 
        by first class and certified mail addressed to the last known 
        address of the tax preparer.  The notice must include 
        information regarding the exceptions listed in subdivision 2, 
        paragraph (b), and must state that the tax preparer's 
        information will not be published if the tax preparer provides 
        information establishing that subdivision 2, paragraph (b), 
        prohibits publication of the tax preparer's name. 
           (b) Thirty days after the notice is mailed and if the tax 
        preparer has not proved to the commissioner that subdivision 2, 
        paragraph (b), prohibits publication, the commissioner may 
        publish in a list of tax preparers subject to penalty the 
        information about the tax preparer that is listed in subdivision 
        4. 
           Subd. 4.  [FORM OF LIST.] The list may be published by any 
        medium or method.  The list must contain the name, associated 
        business name or names, address or addresses, and violation or 
        violations for which a penalty was imposed of each tax preparer 
        subject to penalty. 
           Subd. 5.  [REMOVAL FROM LIST.] The commissioner shall 
        remove the name of a tax preparer from the list of tax preparers 
        published under this section: 
           (1) when the commissioner determines that the name was 
        included on the list in error; 
           (2) within 90 days after the preparer has fully paid all 
        fines imposed, served any suspension, and demonstrated to the 
        satisfaction of the commissioner that the preparer has 
        successfully completed any remedial actions required by the 
        commissioner, the State Board of Accountancy, or the Lawyers 
        Board of Professional Responsibility; or 
           (3) when the commissioner has been notified that the tax 
        preparer is deceased. 
           Subd. 6.  [NAMES PUBLISHED IN ERROR.] If the commissioner 
        publishes a name under subdivision 1 in error, the tax preparer 
        whose name was erroneously published has a right to request a 
        retraction and apology.  If the tax preparer so requests, the 
        commissioner shall publish a retraction and apology 
        acknowledging that the tax preparer's name was published in 
        error.  The retraction and apology must appear in the same 
        medium and the same format as the original list that contained 
        the name listed in error. 
           Subd. 7.  [PAYMENT OF DAMAGES.] Actions against the 
        commissioner of revenue or the state of Minnesota arising out of 
        the implementation of this program must be brought under section 
        270.276. 
           [EFFECTIVE DATE.] The provision of this section requiring 
        the commissioner to publish the names of tax preparers applies 
        only to publishing the names of those tax preparers who commit a 
        crime under section 289A.63 on or after August 1, 2005. 
           Sec. 11.  Minnesota Statutes 2004, section 270.65, is 
        amended to read: 
           270.65 [DATE OF ASSESSMENT; DEFINITION.] 
           For purposes of taxes administered by the commissioner, the 
        term "date of assessment" means the date a liability reported on 
        a return was entered into the records of the commissioner or the 
        date a return should have been filed, whichever is later; or, in 
        the case of taxes determined by the commissioner, "date of 
        assessment" means the date of the order assessing taxes or date 
        of the return made by the commissioner; or, in the case of an 
        amended return filed by the taxpayer, the assessment date is the 
        date additional liability reported on the return, if any, was 
        entered into the records of the commissioner; or, in the case of 
        a consent agreement signed by the taxpayer under section 270.67, 
        subdivision 3, the assessment date is the notice date shown on 
        the agreement; or, in the case of a check from a taxpayer that 
        is dishonored and results in an erroneous refund being given to 
        the taxpayer, remittance of the check is deemed to be an 
        assessment and the "date of assessment" is the date the check 
        was received by the commissioner. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 12.  Minnesota Statutes 2004, section 270.67, 
        subdivision 4, is amended to read: 
           Subd. 4.  [OFFER-IN-COMPROMISE AND INSTALLMENT PAYMENT 
        PROGRAM.] (a) In implementing the authority provided in 
        subdivision 2 or in sections 8.30 and 16D.15 to accept offers of 
        installment payments or offers-in-compromise of tax liabilities, 
        the commissioner of revenue shall prescribe guidelines for 
        employees of the Department of Revenue to determine whether an 
        offer-in-compromise or an offer to make installment payments is 
        adequate and should be accepted to resolve a dispute.  In 
        prescribing the guidelines, the commissioner shall develop and 
        publish schedules of national and local allowances designed to 
        provide that taxpayers entering into a compromise or payment 
        agreement have an adequate means to provide for basic living 
        expenses.  The guidelines must provide that the taxpayer's 
        ownership interest in a motor vehicle, to the extent of the 
        value allowed in section 550.37, will not be considered as an 
        asset; in the case of an offer related to a joint tax liability 
        of spouses, that value of two motor vehicles must be excluded.  
        The guidelines must provide that employees of the department 
        shall determine, on the basis of the facts and circumstances of 
        each taxpayer, whether the use of the schedules is appropriate 
        and that employees must not use the schedules to the extent the 
        use would result in the taxpayer not having adequate means to 
        provide for basic living expenses.  The guidelines must provide 
        that: 
           (1) an employee of the department shall not reject an 
        offer-in-compromise or an offer to make installment payments 
        from a low-income taxpayer solely on the basis of the amount of 
        the offer; and 
           (2) in the case of an offer-in-compromise which relates 
        only to issues of liability of the taxpayer: 
           (i) the offer must not be rejected solely because the 
        commissioner is unable to locate the taxpayer's return or return 
        information for verification of the liability; and 
           (ii) the taxpayer shall not be required to provide an 
        audited, reviewed, or compiled financial statement. 
           (b) The commissioner shall establish procedures: 
           (1) that require presentation of a counteroffer or a 
        written rejection of the offer by the commissioner if the amount 
        offered by the taxpayer in an offer-in-compromise or an offer to 
        make installment payments is not accepted by the commissioner; 
           (2) for an administrative review of any written rejection 
        of a proposed offer-in-compromise or installment agreement made 
        by a taxpayer under this section before the rejection is 
        communicated to the taxpayer; 
           (3) that allow a taxpayer to request reconsideration of any 
        written rejection of the offer or agreement to the commissioner 
        of revenue to determine whether the rejection is reasonable and 
        appropriate under the circumstances; and 
           (4) that provide for notification to the taxpayer when an 
        offer-in-compromise has been accepted, and issuance of 
        certificates of release of any liens imposed under section 
        270.69 related to the liability which is the subject of the 
        compromise. 
           (c) Each compromise proposal must be accompanied by a 
        nonrefundable payment of $250.  If the compromise proposal is 
        accepted, the payment must be applied to the accepted compromise 
        amount.  If the compromise is rejected, the payment must be 
        applied to the outstanding tax debts of the taxpayer pursuant to 
        section 270.652.  In cases of financial hardship, upon 
        presentation of information establishing an inability to make 
        the $250 payment, the commissioner may waive this requirement. 
           [EFFECTIVE DATE.] This section is effective for offers in 
        compromise submitted after August 31, 2005. 
           Sec. 13.  Minnesota Statutes 2004, section 270.69, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PERIOD OF LIMITATIONS.] The lien imposed by this 
        section shall, notwithstanding any other provision of law to the 
        contrary, be enforceable from the time the lien arises and for 
        ten years from the date of filing the notice of lien, which must 
        be filed by the commissioner within five years after the date of 
        assessment of the tax or final administrative or judicial 
        determination of the assessment.  A notice of lien filed in one 
        county may be transcribed to the secretary of state or to any 
        other county within ten years after the date of its filing, but 
        the transcription shall not extend the period during which the 
        lien is enforceable.  A notice of lien may be renewed by the 
        commissioner before the expiration of the ten-year period for an 
        additional ten years.  The taxpayer must receive written notice 
        of the renewal. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 14.  Minnesota Statutes 2004, section 270A.03, 
        subdivision 5, is amended to read: 
           Subd. 5.  [DEBT.] "Debt" means a legal obligation of a 
        natural person to pay a fixed and certain amount of money, which 
        equals or exceeds $25 and which is due and payable to a claimant 
        agency.  The term includes criminal fines imposed under section 
        609.10 or 609.125, fines imposed for petty misdemeanors as 
        defined in section 609.02, subdivision 4a, and restitution.  The 
        term also includes the co-payment for the appointment of a 
        district public defender imposed under section 611.17, paragraph 
        (c).  A debt may arise under a contractual or statutory 
        obligation, a court order, or other legal obligation, but need 
        not have been reduced to judgment.  
           A debt includes any legal obligation of a current recipient 
        of assistance which is based on overpayment of an assistance 
        grant where that payment is based on a client waiver or an 
        administrative or judicial finding of an intentional program 
        violation; or where the debt is owed to a program wherein the 
        debtor is not a client at the time notification is provided to 
        initiate recovery under this chapter and the debtor is not a 
        current recipient of food support, transitional child care, or 
        transitional medical assistance. 
           A debt does not include any legal obligation to pay a 
        claimant agency for medical care, including hospitalization if 
        the income of the debtor at the time when the medical care was 
        rendered does not exceed the following amount: 
           (1) for an unmarried debtor, an income of $8,800 or less; 
           (2) for a debtor with one dependent, an income of $11,270 
        or less; 
           (3) for a debtor with two dependents, an income of $13,330 
        or less; 
           (4) for a debtor with three dependents, an income of 
        $15,120 or less; 
           (5) for a debtor with four dependents, an income of $15,950 
        or less; and 
           (6) for a debtor with five or more dependents, an income of 
        $16,630 or less.  
           The income amounts in this subdivision shall be adjusted 
        for inflation for debts incurred in calendar years 2001 and 
        thereafter.  The dollar amount of each income level that applied 
        to debts incurred in the prior year shall be increased in the 
        same manner as provided in section 1(f) of the Internal Revenue 
        Code of 1986, as amended through December 31, 2000, except that 
        for the purposes of this subdivision the percentage increase 
        shall be determined from the year starting September 1, 1999, 
        and ending August 31, 2000, as the base year for adjusting for 
        inflation for debts incurred after December 31, 2000. 
           Debt also includes an agreement to pay a MinnesotaCare 
        premium, regardless of the dollar amount of the premium 
        authorized under section 256L.15, subdivision 1a. 
           Sec. 15.  Minnesota Statutes 2004, section 289A.08, 
        subdivision 16, is amended to read: 
           Subd. 16.  [TAX REFUND OR RETURN PREPARERS; ELECTRONIC 
        FILING; PAPER FILING FEE IMPOSED.] (a) A "tax refund or return 
        preparer," as defined in section 289A.60, subdivision 13, 
        paragraph (g) (h), who prepared more than 500 100 Minnesota 
        individual income tax returns for the prior calendar year must 
        file all Minnesota individual income tax returns prepared for 
        the current calendar year by electronic means. 
           (b) For tax returns prepared for the tax year beginning in 
        2001, the "500" in paragraph (a) is reduced to 250. 
           (c) For tax returns prepared for tax years beginning after 
        December 31, 2001, the "500" in paragraph (a) is reduced to 100. 
           (d) Paragraph (a) does not apply to a return if the 
        taxpayer has indicated on the return that the taxpayer did not 
        want the return filed by electronic means. 
           (e) (c) For each return that is not filed electronically by 
        a tax refund or return preparer under this subdivision, 
        including returns filed under paragraph (d) (b), a paper filing 
        fee of $5 is imposed upon the preparer.  The fee is collected 
        from the preparer in the same manner as income tax.  The fee 
        does not apply to returns that the commissioner requires to be 
        filed in paper form. 
           Sec. 16.  Minnesota Statutes 2004, section 289A.37, 
        subdivision 5, is amended to read: 
           Subd. 5.  [SUFFICIENCY OF NOTICE.] An order of assessment, 
        sent postage prepaid by United States mail to the taxpayer at 
        the taxpayer's last known address, or sent by electronic mail to 
        the taxpayer's last known electronic mailing address as provided 
        for in section 325L.08, is sufficient even if the taxpayer is 
        deceased or is under a legal disability, or, in the case of a 
        corporation, has terminated its existence, unless the department 
        has been provided with a new address by a party authorized to 
        receive notices of assessment. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 17.  Minnesota Statutes 2004, section 289A.60, 
        subdivision 2a, is amended to read: 
           Subd. 2a.  [PENALTIES FOR EXTENDED DELINQUENCY.] (a) If an 
        individual income tax is not paid within 180 days after the date 
        of filing of a return or, in the case of taxes assessed by the 
        commissioner, within 180 days after the assessment date or, if 
        appealed, within 180 days after final resolution of the appeal, 
        an extended delinquency penalty of five percent of the tax 
        remaining unpaid is added to the amount due.  
           (b) If a corporate franchise, fiduciary income, mining 
        company, estate, partnership, S corporation, or nonresident 
        entertainer tax return is not filed within 30 days after written 
        demand for the filing of a delinquent return, an extended 
        delinquency penalty of five percent of the tax not paid prior to 
        the demand is added to the tax, or in the case of an individual 
        income tax return, a minimum penalty of $100 or the five percent 
        penalty is imposed, whichever amount is greater. 
           [EFFECTIVE DATE.] This section is effective for returns 
        originally due on or after August 1, 2005. 
           Sec. 18.  Minnesota Statutes 2004, section 289A.60, 
        subdivision 11, is amended to read: 
           Subd. 11.  [PENALTIES RELATING TO INFORMATION REPORTS, 
        WITHHOLDING.] (a) When a person required under section 289A.09, 
        subdivision 2, to give a statement to an employee or payee and a 
        duplicate statement to the commissioner, or to give a 
        reconciliation of the statements and quarterly returns to the 
        commissioner, gives a false or fraudulent statement to an 
        employee or payee or a false or fraudulent duplicate statement 
        or reconciliation of statements and quarterly returns to the 
        commissioner, or fails to give a statement or the reconciliation 
        in the manner, when due, and showing the information required by 
        section 289A.09, subdivision 2, or rules prescribed by the 
        commissioner under that section, that person is liable for a 
        penalty of $50 for an act or failure to act.  The total amount 
        imposed on the delinquent person for failures during a calendar 
        year must not exceed $25,000.  
           (b) In addition to any other penalty provided by law, an 
        employee who gives a withholding exemption certificate or a 
        residency affidavit to an employer that the employee has reason 
        to know contains a materially incorrect statement decreases the 
        amount withheld under section 290.92 and as of the time the 
        certificate or affidavit was given to the employer there was no 
        reasonable basis for the statements in the certificate or 
        affidavit is liable to the commissioner of revenue for a penalty 
        of $500 for each instance.  
           (c) In addition to any other penalty provided by law, an 
        employer who fails to submit a copy of a withholding exemption 
        certificate or a residency affidavit required by section 290.92, 
        subdivision 5a, clause (1)(a), (1)(b), or (2) is liable to the 
        commissioner of revenue for a penalty of $50 for each instance.  
           (d) An employer or payor who fails to file an application 
        for a withholding account number, as required by section 290.92, 
        subdivision 24, is liable to the commissioner for a penalty of 
        $100.  
           [EFFECTIVE DATE.] This section is effective for 
        certificates and affidavits given to employers after December 
        31, 2005. 
           Sec. 19.  Minnesota Statutes 2004, section 289A.60, 
        subdivision 13, is amended to read: 
           Subd. 13.  [PENALTIES FOR TAX RETURN PREPARERS.] (a) If an 
        understatement of liability with respect to a return or claim 
        for refund is due to a willful attempt in any manner to 
        understate the liability for a tax by a person who is a tax 
        return preparer with respect to the return or claim, the person 
        shall pay to the commissioner a penalty of $500.  If a part of a 
        property tax refund claim is excessive due to a willful attempt 
        in any manner to overstate the claim for relief allowed under 
        chapter 290A by a person who is a tax refund or return preparer, 
        the person shall pay to the commissioner a penalty of $500 with 
        respect to the claim.  These penalties may not be assessed 
        against the employer of a tax return preparer unless the 
        employer was actively involved in the willful attempt to 
        understate the liability for a tax or to overstate the claim for 
        refund.  These penalties are income tax liabilities and may be 
        assessed at any time as provided in section 289A.38, subdivision 
        5. 
           (b) A civil action in the name of the state of Minnesota 
        may be commenced to enjoin any person who is a tax return 
        preparer doing business in this state from further engaging in 
        any conduct described in paragraph (c).  An action under this 
        paragraph must be brought by the attorney general in the 
        district court for the judicial district of the tax return 
        preparer's residence or principal place of business, or in which 
        the taxpayer with respect to whose tax return the action is 
        brought resides.  The court may exercise its jurisdiction over 
        the action separate and apart from any other action brought by 
        the state of Minnesota against the tax return preparer or any 
        taxpayer. 
           (c) In an action under paragraph (b), if the court finds 
        that a tax return preparer has: 
           (1) engaged in any conduct subject to a civil penalty under 
        section 289A.60 or a criminal penalty under section 289A.63; 
           (2) misrepresented the preparer's eligibility to practice 
        before the Department of Revenue, or otherwise misrepresented 
        the preparer's experience or education as a tax return preparer; 
           (3) guaranteed the payment of any tax refund or the 
        allowance of any tax credit; or 
           (4) engaged in any other fraudulent or deceptive conduct 
        that substantially interferes with the proper administration of 
        state tax law, and injunctive relief is appropriate to prevent 
        the recurrence of that conduct, 
        the court may enjoin the person from further engaging in that 
        conduct. 
           (d) If the court finds that a tax return preparer has 
        continually or repeatedly engaged in conduct described in 
        paragraph (c), and that an injunction prohibiting that conduct 
        would not be sufficient to prevent the person's interference 
        with the proper administration of state tax laws, the court may 
        enjoin the person from acting as a tax return preparer.  The 
        court may not enjoin the employer of a tax return preparer for 
        conduct described in paragraph (c) engaged in by one or more of 
        the employer's employees unless the employer was also actively 
        involved in that conduct. 
           (e) The commissioner may terminate or suspend a tax 
        preparer's authority to transmit returns electronically to the 
        state, if the commissioner determines that the tax preparer has 
        engaged in a pattern and practice of conduct in violation of 
        paragraph (a) of this subdivision or has been convicted under 
        section 289A.63. 
           (f) For purposes of this subdivision, the term 
        "understatement of liability" means an understatement of the net 
        amount payable with respect to a tax imposed by state tax law, 
        or an overstatement of the net amount creditable or refundable 
        with respect to a tax.  The determination of whether or not 
        there is an understatement of liability must be made without 
        regard to any administrative or judicial action involving the 
        taxpayer.  For purposes of this subdivision, the amount 
        determined for underpayment of estimated tax under either 
        section 289A.25 or 289A.26 is not considered an understatement 
        of liability. 
           (f) (g) For purposes of this subdivision, the term 
        "overstatement of claim" means an overstatement of the net 
        amount refundable with respect to a claim for property tax 
        relief provided by chapter 290A.  The determination of whether 
        or not there is an overstatement of a claim must be made without 
        regard to administrative or judicial action involving the 
        claimant. 
           (g) (h) For purposes of this section, the term "tax refund 
        or return preparer" means an individual who prepares for 
        compensation, or who employs one or more individuals to prepare 
        for compensation, a return of tax, or a claim for refund of 
        tax.  The preparation of a substantial part of a return or claim 
        for refund is treated as if it were the preparation of the 
        entire return or claim for refund.  An individual is not 
        considered a tax return preparer merely because the individual: 
           (1) gives typing, reproducing, or other mechanical 
        assistance; 
           (2) prepares a return or claim for refund of the employer, 
        or an officer or employee of the employer, by whom the 
        individual is regularly and continuously employed; 
           (3) prepares a return or claim for refund of any person as 
        a fiduciary for that person; or 
           (4) prepares a claim for refund for a taxpayer in response 
        to a tax order issued to the taxpayer. 
           Sec. 20.  Minnesota Statutes 2004, section 290.92, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] (1)  [WAGES.] For purposes 
        of this section, the term "wages" means the same as that term is 
        defined in section 3401(a) and (f) of the Internal Revenue Code. 
           (2)  [PAYROLL PERIOD.] For purposes of this section the 
        term "payroll period" means a period for which a payment of 
        wages is ordinarily made to the employee by the employee's 
        employer, and the term "miscellaneous payroll period" means a 
        payroll period other than a daily, weekly, biweekly, 
        semimonthly, monthly, quarterly, semiannual, or annual payroll 
        period. 
           (3)  [EMPLOYEE.] For purposes of this section the term 
        "employee" means any resident individual performing services for 
        an employer, either within or without, or both within and 
        without the state of Minnesota, and every nonresident individual 
        performing services within the state of Minnesota, the 
        performance of which services constitute, establish, and 
        determine the relationship between the parties as that of 
        employer and employee.  As used in the preceding sentence, the 
        term "employee" includes an officer of a corporation, and an 
        officer, employee, or elected official of the United States, a 
        state, or any political subdivision thereof, or the District of 
        Columbia, or any agency or instrumentality of any one or more of 
        the foregoing. 
           (4)  [EMPLOYER.] For purposes of this section the term 
        "employer" means any person, including individuals, fiduciaries, 
        estates, trusts, partnerships, limited liability companies, and 
        corporations transacting business in or deriving any income from 
        sources within the state of Minnesota for whom an individual 
        performs or performed any service, of whatever nature, as the 
        employee of such person, except that if the person for whom the 
        individual performs or performed the services does not have 
        legal control of the payment of the wages for such services, the 
        term "employer," except for purposes of paragraph (1), means the 
        person having legal control of the payment of such wages.  As 
        used in the preceding sentence, the term "employer" includes any 
        corporation, individual, estate, trust, or organization which is 
        exempt from taxation under section 290.05 and further includes, 
        but is not limited to, officers of corporations who have legal 
        control, either individually or jointly with another or others, 
        of the payment of the wages. 
           (5)  [NUMBER OF WITHHOLDING EXEMPTIONS CLAIMED.] For 
        purposes of this section, the term "number of withholding 
        exemptions claimed" means the number of withholding exemptions 
        claimed in a withholding exemption certificate in effect under 
        subdivision 5, except that if no such certificate is in effect, 
        the number of withholding exemptions claimed shall be considered 
        to be zero. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Sec. 21.  Minnesota Statutes 2004, section 325D.33, 
        subdivision 6, is amended to read: 
           Subd. 6.  [VIOLATIONS.] If the commissioner determines that 
        a distributor is violating any provision of this chapter, the 
        commissioner must give the distributor a written warning 
        explaining the violation and an explanation of what must be done 
        to comply with this chapter.  Within ten days of issuance of the 
        warning, the distributor must notify the commissioner that the 
        distributor has complied with the commissioner's recommendation 
        or request that the commissioner set the issue for a hearing 
        pursuant to chapter 14.  If a hearing is requested, the hearing 
        shall be scheduled within 20 days of the request and the 
        recommendation of the administrative law judge shall be issued 
        within five working days of the close of the hearing.  The 
        commissioner's final determination shall be issued within five 
        working days of the receipt of the administrative law judge's 
        recommendation.  If the commissioner's final determination is 
        adverse to the distributor and the distributor does not comply 
        within ten days of receipt of the commissioner's final 
        determination, the commissioner may order the distributor to 
        immediately cease the stamping of cigarettes.  As soon as 
        practicable after the order, the commissioner must remove the 
        meter and any unapplied cigarette stamps from the premises of 
        the distributor. 
           If within ten days of issuance of the written warning the 
        distributor has not complied with the commissioner's 
        recommendation or requested a hearing, the commissioner may 
        order the distributor to immediately cease the stamping of 
        cigarettes and remove the meter and unapplied stamps from the 
        distributor's premises. 
           If, within any 12-month period, the commissioner has issued 
        three written warnings to any distributor, even if the 
        distributor has complied within ten days, the commissioner shall 
        notify the distributor of the commissioner's intent to revoke 
        the distributor's license for a continuing course of conduct 
        contrary to this chapter.  For purposes of this paragraph, a 
        written warning that was ultimately resolved by removal of the 
        warning by the commissioner is not deemed to be a warning.  The 
        commissioner must notify the distributor of the date and time of 
        a hearing pursuant to chapter 14 at least 20 days before the 
        hearing is held.  The hearing must provide an opportunity for 
        the distributor to show cause why the license should not be 
        revoked.  If the commissioner revokes a distributor's license, 
        the commissioner shall not issue a new license to that 
        distributor for 180 days. 
           [EFFECTIVE DATE.] This section is effective the day 
        following final enactment. 
           Presented to the governor May 31, 2005 
           Signed by the governor June 2, 2005, 11:50 a.m.