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

                            CHAPTER 183-H.F.No. 2235 
                  An act relating to unemployment insurance; modifying 
                  definitions; making technical, housekeeping, and 
                  policy changes; modifying penalty provisions; amending 
                  Minnesota Statutes 2002, sections 176.011, subdivision 
                  20; 268.035, subdivisions 3, 8a, 12a, 17, 20, 23a, 28, 
                  by adding a subdivision; 268.043; 268.044, 
                  subdivisions 2, 3, 4; 268.051, subdivisions 4, 7; 
                  268.0511; 268.053, subdivision 2; 268.057, as amended; 
                  268.058, as amended; 268.059, subdivision 3; 268.0625, 
                  as amended; 268.064, subdivisions 1, 3; 268.065, 
                  subdivisions 1, 2; 268.07, subdivisions 1, 3; 268.085, 
                  subdivisions 2, 12, 13a, 14; 268.095, subdivisions 4, 
                  6a; 268.101, subdivisions 2, 4; 268.103; 268.105, as 
                  amended; 268.115, subdivision 5; 268.125, subdivision 
                  5; 268.135, subdivisions 1, 2, 4; 268.145, subdivision 
                  1; 268.18, subdivisions 2b, 6; 268.182; 268.184; 
                  Minnesota Statutes 2003 Supplement, sections 268.035, 
                  subdivision 15; 268.042, subdivisions 1, 3; 268.044, 
                  subdivisions 1, 1a; 268.045; 268.047, subdivision 5; 
                  268.051, subdivisions 1, 1a, 3, 5, 6; 268.052, 
                  subdivisions 1, 2; 268.053, subdivisions 1, 3; 
                  268.059, subdivision 1; 268.063; 268.066; 268.067; 
                  268.0675; 268.07, subdivision 2; 268.085, subdivisions 
                  1, 3, 4, 5, 6; 268.095, subdivisions 1, 3; 268.101, 
                  subdivisions 3, 3a; 268.18, subdivisions 1, 2; 
                  268.186; 268.19, subdivision 2; proposing coding for 
                  new law in Minnesota Statutes, chapter 268. 
        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
           Section 1.  Minnesota Statutes 2002, section 176.011, 
        subdivision 20, is amended to read: 
           Subd. 20.  [AVERAGE WEEKLY WAGE.] The statewide average 
        weekly wage for any year means that wage determined by the 
        commissioner in the following manner:  On or before July 1 
        preceding the year in which the wage is to be applicable, the 
        total wages reported on tax wage detail reports to the 
        Department of Employment and Economic Security Development for 
        the preceding 12 months ending on December 31 of that year shall 
        be divided by the average monthly number of covered workers 
        (determined by dividing the total covered workers reported for 
        the year ending December 31 by 12).  The average annual wage 
        thus obtained shall be divided by 52 and the average weekly wage 
        thus determined rounded to the next highest dollar. 
           Sec. 2.  [268.032] [ELECTRONIC TRANSMISSION; WHEN ALLOWED; 
        SENDING TO LAST KNOWN ADDRESS REQUIRED.] 
           (a) If any required notice, determination, or decision 
        issued under this chapter provides that the commissioner may 
        send the notice, determination, or decision by mail or 
        electronic transmission, the commissioner may send the notice, 
        determination, or decision to an applicant or employer by 
        electronic transmission only if the applicant or employer has 
        affirmatively indicated that the applicant or employer would 
        prefer required notices, determinations, or decisions be sent by 
        electronic transmission rather than by mail.  An applicant or 
        employer may withdraw an indicated preference for electronic 
        transmission. 
           (b) If any required notice, determination, or decision 
        issued under this chapter is sent by mail to an applicant or an 
        employer, the notice, determination, or decision must be sent to 
        the last known address.  If any required notice, determination, 
        or decision issued under this chapter is sent by electronic 
        transmission, the notice, determination, or decision must be 
        sent to the last known electronic address of the applicant or 
        employer.  If any required notice, determination, or decision 
        issued under this chapter is sent by electronic transmission and 
        the commissioner is notified that the electronic address of the 
        applicant or employer is no longer in service, the commissioner 
        must then send the required notice, determination, or decision 
        by mail to the last known address. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 3.  [268.033] [COMPUTATION OF TIME.] 
           The computation of time provisions of section 645.151 apply 
        to this chapter. 
           Sec. 4.  Minnesota Statutes 2002, section 268.035, 
        subdivision 3, is amended to read: 
           Subd. 3.  [BACK PAY.] "Back pay" means a retroactive 
        payment of money by an employer to an employee or former 
        employee for lost wages as determined by an arbitration award, 
        administrative or judicial decision, or negotiated settlement.  
           Sec. 5.  Minnesota Statutes 2002, section 268.035, 
        subdivision 8a, is amended to read: 
           Subd. 8a.  [COMMISSIONER.] "Commissioner" means the 
        commissioner of employment and economic security development. 
           Sec. 6.  Minnesota Statutes 2002, section 268.035, 
        subdivision 12a, is amended to read: 
           Subd. 12a.  [DEPARTMENT.] "Department" means the Department 
        of Employment and Economic Security Development. 
           Sec. 7.  Minnesota Statutes 2002, section 268.035, is 
        amended by adding a subdivision to read: 
           Subd. 12b.  [ELECTRONIC TRANSMISSION.] "Electronic 
        transmission" means a communication sent by electronic, digital, 
        magnetic, wireless, optical, electromagnetic or similar 
        capabilities, and, when permitted by the commissioner, a 
        telephone communication. 
           Sec. 8.  Minnesota Statutes 2003 Supplement, section 
        268.035, subdivision 15, is amended to read: 
           Subd. 15.  [EMPLOYMENT.] "Employment" means service 
        performed by: 
           (1) an individual who is considered an employee under the 
        common law of employer-employee and not considered an 
        independent contractor; 
           (2) an officer of a corporation; 
           (3) a member of a limited liability company who has less 
        than a 25 percent ownership share and is considered an employee 
        under the common law of employer-employee; or 
           (4) an individual who performs services for a person for 
        compensation, as: 
           (i) an agent-driver or commission-driver engaged in 
        distributing meat products, vegetable products, fruit products, 
        beverages, or laundry or dry cleaning services; or 
           (ii) a traveling or city salesperson, other than as an 
        agent-driver or commission-driver, engaged full-time in the 
        solicitation on behalf of the person, of orders from 
        wholesalers, retailers, contractors, or operators of hotels, 
        restaurants, or other similar establishments for merchandise for 
        resale or supplies for use in their business operations. 
           This clause shall apply only if the contract of service 
        provides that substantially all of the services are to be 
        performed personally by the individual, and the services are 
        part of a continuing relationship with the person for whom the 
        services are performed, and the individual does not have a 
        substantial investment in facilities used in connection with the 
        performance of the services, other than facilities for 
        transportation. 
           [EFFECTIVE DATE.] This section is effective January 1, 2005.
           Sec. 9.  Minnesota Statutes 2002, section 268.035, 
        subdivision 17, is amended to read: 
           Subd. 17.  [FILING; FILED.] "Filing" or "filed" means the 
        delivery of any document to the commissioner or any of the 
        commissioner's agents, or the depositing of the document in the 
        United States mail properly addressed to the department with 
        postage prepaid, in which case the document shall be considered 
        filed on the day indicated by the cancellation mark of the 
        United States Postal Service. 
           If, where allowed, an application, protest, appeal, or 
        other required action is made by telephone or electronic 
        transmission, it shall be considered filed on the day received 
        by the department. 
           Sec. 10.  Minnesota Statutes 2002, section 268.035, 
        subdivision 20, is amended to read: 
           Subd. 20.  [NONCOVERED EMPLOYMENT.] "Noncovered employment" 
        means: 
           (1) employment for the United States government or an 
        instrumentality thereof, including military service; 
           (2) employment for a state, other than Minnesota, or a 
        political subdivision or instrumentality thereof; 
           (3) employment for a foreign government; 
           (4) employment for an instrumentality wholly owned by a 
        foreign government, if the employment is of a character similar 
        to that performed in foreign countries by employees of the 
        United States government or an instrumentality thereof and the 
        United States Secretary of State has certified that the foreign 
        government grants an equivalent exemption to similar employment 
        performed in the foreign country by employees of the United 
        States government and instrumentalities thereof; 
           (5) employment covered under United States Code, title 45, 
        section 351, the Railroad Unemployment Insurance Act; 
           (6) employment covered by a reciprocal arrangement between 
        the commissioner and another state or the federal government 
        which provides that all employment performed by an individual 
        for an employer during the period covered by the reciprocal 
        arrangement is considered performed entirely within another 
        state; 
           (7) employment for a church or convention or association of 
        churches, or an organization operated primarily for religious 
        purposes that is operated, supervised, controlled, or 
        principally supported by a church or convention or association 
        of churches described in United States Code, title 26, section 
        501(c)(3) of the federal Internal Revenue Code and exempt from 
        income tax under section 501(a); 
           (8) employment of a duly ordained or licensed minister of a 
        church in the exercise of a ministry or by a member of a 
        religious order in the exercise of duties required by the order, 
        for Minnesota or a political subdivision or an organization 
        described in United States Code, title 26, section 501(c)(3) of 
        the federal Internal Revenue Code and exempt from income tax 
        under section 501(a); 
           (9) employment of an individual receiving rehabilitation of 
        "sheltered" work in a facility conducted for the purpose of 
        carrying out a program of rehabilitation for individuals whose 
        earning capacity is impaired by age or physical or mental 
        deficiency or injury or a program providing "sheltered" work for 
        individuals who because of an impaired physical or mental 
        capacity cannot be readily absorbed in the competitive labor 
        market.  This clause applies only to services performed for 
        Minnesota or a political subdivision or an organization 
        described in United States Code, title 26, section 501(c)(3) of 
        the federal Internal Revenue Code and exempt from income tax 
        under section 501(a) in a facility certified by the 
        Rehabilitation Services Branch of the department or in a day 
        training or habilitation program licensed by the Department of 
        Human Services; 
           (10) employment of an individual receiving work relief or 
        work training as part of an unemployment work relief or work 
        training program assisted or financed in whole or in part by any 
        federal agency or an agency of a state or political subdivision 
        thereof.  This clause applies only to employment for Minnesota 
        or a political subdivision or an organization described in 
        United States Code, title 26, section 501(c)(3) of the federal 
        Internal Revenue Code and exempt from income tax under section 
        501(a).  This clause shall not apply to programs that require 
        unemployment benefit coverage for the participants; 
           (11) employment for Minnesota or a political subdivision as 
        an elected official, a member of a legislative body, or a member 
        of the judiciary; 
           (12) employment as a member of the Minnesota National Guard 
        or Air National Guard; 
           (13) employment for Minnesota, a political subdivision, or 
        instrumentality thereof, as an employee serving only on a 
        temporary basis in case of fire, flood, tornado, or similar 
        emergency; 
           (14) employment as an election official or election worker 
        for Minnesota or a political subdivision, but only if the 
        compensation for that employment was less than $1,000 in a 
        calendar year; 
           (15) employment for Minnesota that is a major policy making 
        or advisory position in the unclassified service, including 
        those positions established pursuant to section 43A.08, 
        subdivision 1a; 
           (16) employment for a political subdivision of Minnesota 
        that is a nontenured major policy making or advisory position; 
           (17) domestic employment in a private household, local 
        college club, or local chapter of a college fraternity or 
        sorority performed for a person, only if the wages paid in any 
        calendar quarter in either the current or preceding calendar 
        year to all individuals in domestic employment totaled less than 
        $1,000. 
           "Domestic employment" includes all service in the operation 
        and maintenance of a private household, for a local college 
        club, or local chapter of a college fraternity or sorority as 
        distinguished from service as an employee in the pursuit of an 
        employer's trade or business; 
           (18) employment of an individual by a son, daughter, or 
        spouse, and employment of a child under the age of 18 by the 
        child's father or mother; 
           (19) employment of an inmate of a custodial or penal 
        institution; 
           (20) employment for a school, college, or university by a 
        student who is enrolled and is regularly attending classes at 
        the school, college, or university; 
           (21) employment of an individual who is enrolled as a 
        student in a full-time program at a nonprofit or public 
        educational institution that maintains a regular faculty and 
        curriculum and has a regularly organized body of students in 
        attendance at the place where its educational activities are 
        carried on, taken for credit at the institution, that combines 
        academic instruction with work experience, if the employment is 
        an integral part of the program, and the institution has so 
        certified to the employer, except that this clause shall not 
        apply to employment in a program established for or on behalf of 
        an employer or group of employers; 
           (22) employment of university, college, or professional 
        school students in an internship or other training program with 
        the city of St. Paul or the city of Minneapolis pursuant to Laws 
        1990, chapter 570, article 6, section 3; 
           (23) employment for a hospital by a patient of the 
        hospital.  "Hospital" means an institution that has been 
        licensed by the Department of Health as a hospital; 
           (24) employment as a student nurse for a hospital or a 
        nurses' training school by an individual who is enrolled and is 
        regularly attending classes in an accredited nurses' training 
        school; 
           (25) employment as an intern for a hospital by an 
        individual who has completed a four-year course in an accredited 
        medical school; 
           (26) employment as an insurance salesperson, by other than 
        a corporate officer, if all the compensation for the employment 
        is solely by way of commission.  The word "insurance" shall 
        include an annuity and an optional annuity; 
           (27) employment as an officer of a township mutual 
        insurance company or farmer's mutual insurance company operating 
        pursuant to chapter 67A; 
           (28) employment of a corporate officer, if the officer owns 
        25 percent or more of the employer corporation, and employment 
        of a member of a limited liability company, if the member owns 
        25 percent or more of the employer limited liability company; 
           (29) employment as a real estate salesperson, by other than 
        a corporate officer, if all the compensation for the employment 
        is solely by way of commission; 
           (29) (30) employment as a direct seller as defined in 
        United States Code, title 26, section 3508; 
           (30) (31) employment of an individual under the age of 18 
        in the delivery or distribution of newspapers or shopping news, 
        not including delivery or distribution to any point for 
        subsequent delivery or distribution; 
           (31) (32) casual employment performed for an individual, 
        other than domestic employment under clause (17), that does not 
        promote or advance that employer's trade or business; 
           (32) (33) employment in "agricultural employment" unless 
        considered "covered agricultural employment" under subdivision 
        11; or 
           (33) (34) if employment during one-half or more of any pay 
        period was covered employment, all the employment for the pay 
        period shall be considered covered employment; but if during 
        more than one-half of any pay period the employment was 
        noncovered employment, then all of the employment for the pay 
        period shall be considered noncovered employment.  "Pay period" 
        means a period of not more than a calendar month for which a 
        payment or compensation is ordinarily made to the employee by 
        the employer. 
           [EFFECTIVE DATE.] This section is effective January 1, 2005.
           Sec. 11.  Minnesota Statutes 2002, section 268.035, 
        subdivision 23a, is amended to read: 
           Subd. 23a.  [SUITABLE EMPLOYMENT.] (a) Suitable employment 
        means employment in the applicant's labor market area that is 
        reasonably related to the applicant's qualifications.  In 
        determining whether any employment is suitable for an applicant, 
        the degree of risk involved to the health and safety, physical 
        fitness, prior training, experience, length of unemployment, 
        prospects for securing employment in the applicant's customary 
        occupation, and the distance of the employment from the 
        applicant's residence shall be considered.  
           (b) In determining what is suitable employment, primary 
        consideration shall be given to the temporary or permanent 
        nature of the applicant's separation from employment and whether 
        the applicant has favorable prospects of finding employment in 
        the applicant's usual or customary occupation at the applicant's 
        past wage level within a reasonable period of time. 
           If prospects are unfavorable, employment at lower skill or 
        wage levels is suitable if the applicant is reasonably suited 
        for the employment because of considering the applicant's 
        education, training, work experience, or and current physical 
        and mental ability.  
           The total compensation must be considered, including the 
        wage rate, hours of employment, method of payment, overtime 
        practices, bonuses, incentive payments, and fringe benefits. 
           (c) When potential employment is at a rate of pay lower 
        than the applicant's former rate, consideration must be given to 
        the length of the applicant's unemployment and the proportion of 
        difference in the rates.  Employment that may not be suitable 
        because of lower wages during the early weeks of the applicant's 
        unemployment may become suitable as the duration of unemployment 
        lengthens. 
           (d) For an applicant seasonally unemployed, suitable 
        employment includes temporary work in a lower skilled occupation 
        that pays average gross weekly wages equal to or more than 150 
        percent of the applicant's weekly unemployment benefit amount.  
           (e) If a majority of the applicant's wage credits were 
        earned from part-time employment, part-time employment in a 
        position with comparable skills and comparable hours that pays 
        average gross weekly wages equal to or more than 150 percent of 
        the applicant's weekly unemployment benefit amount shall be 
        considered suitable employment. 
           (f) To determine suitability of employment in terms of 
        shifts, the arrangement of hours in addition to the total number 
        of hours is to be considered.  Employment on a second, third, 
        rotating, or split shift is suitable employment if it is 
        customary in the occupation in the labor market area. 
           (g) Employment shall not be considered suitable if: 
           (1) the position offered is vacant because of a labor 
        dispute; 
           (2) the wages, hours, or other conditions of employment are 
        substantially less favorable than those prevailing for similar 
        employment in the labor market area; or 
           (3) as a condition of becoming employed, the applicant 
        would be required to join a company union or to resign from or 
        refrain from joining any bona fide labor organization. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004, 
        and applies to all determinations and decisions issued by the 
        department on or after August 1, 2004. 
           Sec. 12.  Minnesota Statutes 2002, section 268.035, 
        subdivision 28, is amended to read: 
           Subd. 28.  [WAGE DETAIL REPORT.] "Wage detail report" means 
        the report of wages paid and hours worked by on each employee in 
        covered employment required from an employer on a calendar 
        quarter basis under section 268.044.  An auxiliary report broken 
        down by business locations, when required by the commissioner, 
        shall contain the number of employees in covered employment for 
        each month, and the quarterly total wages for each location.  
        The auxiliary report may be made part of the wage detail report, 
        the tax report, or filed separately, as required by the 
        commissioner. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 13.  Minnesota Statutes 2003 Supplement, section 
        268.042, subdivision 1, is amended to read: 
           Subdivision 1.  [EMPLOYER FOR PART OF YEAR 
        REGISTRATION.] (a) Each employer shall, upon or before the 
        submission of its first wage detail report under section 
        268.044, register with the commissioner for a tax account or a 
        reimbursable account, by electronic transmission in a format 
        prescribed by the commissioner.  The employer must provide all 
        required information for registration. 
           (b) Except as provided in subdivision 3, any organization 
        or person that is or becomes an employer subject to the 
        Minnesota Unemployment Insurance Law within any calendar year 
        shall be considered to be subject to these sections this chapter 
        the entire calendar year.  
           (c) Upon the termination of business, an employer that has 
        been assigned a tax account or reimbursable account shall notify 
        the commissioner by electronic transmission, in a format 
        prescribed by the commissioner, that the employer no longer has 
        employees and does not intend or expect to pay wages to any 
        employees in the next calendar year and into the foreseeable 
        future.  Upon such notification, the commissioner shall not 
        require the employer to file wage detail reports under section 
        268.044, subdivision 1, paragraph (d), commencing the calendar 
        quarter after the notice of termination was received by the 
        commissioner. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 14.  Minnesota Statutes 2003 Supplement, section 
        268.042, subdivision 3, is amended to read: 
           Subd. 3.  [ELECTION AGREEMENTS; TERMINATION TO HAVE 
        NONCOVERED EMPLOYMENT CONSIDERED COVERED EMPLOYMENT.] (a) Any 
        employer that has employment performed for it that does not 
        constitute covered is noncovered employment under section 
        268.035, subdivision 20, may file with the commissioner a 
        written, by electronic transmission in a format prescribed by 
        the commissioner, an election that all such employment, in one 
        or more distinct establishments or places of business, shall be 
        considered covered employment for not less than two calendar 
        years.  The commissioner shall have discretion on the approval 
        of any election.  Upon the written approval of the commissioner, 
        sent by mail or electronic transmission, the employment shall 
        constitute covered employment from and beginning the calendar 
        quarter after the date stated in the of approval or beginning a 
        later calendar quarter if requested by the employer.  The 
        employment shall cease to be considered covered employment as of 
        the first day of January of any calendar year only if at least 
        30 calendar days prior to the first day of January the employer 
        has filed with the commissioner, by electronic transmission in a 
        format prescribed by the commissioner, a written notice to that 
        effect.  
           (b) The commissioner must terminate any election agreement 
        under this subdivision upon 30 calendar days' notice sent by 
        mail or electronic transmission, if the employer fails to pay 
        all is delinquent on any taxes due or reimbursements due the 
        trust fund. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 15.  [268.0425] [ELECTRONIC TRANSACTION PRESUMPTION.] 
           If any electronic transaction is done under this chapter 
        using an identification number or code assigned an employer by 
        the commissioner, the transaction is presumed as done by that 
        employer unless a preponderance of the available evidence 
        demonstrates that it was not done by that employer. 
           Sec. 16.  Minnesota Statutes 2002, section 268.043, is 
        amended to read: 
           268.043 [DETERMINATIONS OF COVERAGE.] 
           (a) The commissioner, upon the commissioner's own motion or 
        upon application of an organization or person, shall determine 
        if that organization or person is an employer or whether 
        services performed for it constitute employment and covered 
        employment, or whether the compensation for services constitutes 
        wages, and shall notify the organization or person of the 
        determination.  The determination shall be final unless the 
        organization or person, within 30 calendar days after sending of 
        the determination by mail or electronic transmission, files an 
        appeal.  Proceedings on the appeal shall be conducted in 
        accordance with section 268.105. 
           (b) The commissioner may at any time upon the 
        commissioner's own motion correct any error of the department 
        resulting in an erroneous determination under this section.  A 
        corrected determination a protest.  Upon receipt of a protest, 
        the commissioner shall review all available evidence and 
        determine whether an error has been made.  The commissioner 
        shall send to the organization or person, by mail or electronic 
        transmission, an affirmation or redetermination.  The 
        affirmation or redetermination shall be final unless, within 30 
        calendar days after sending of the corrected determination 
        affirmation or redetermination to the organization or person by 
        mail or electronic transmission, an appeal is filed.  
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           (c) (b) No organization or person shall be initially 
        determined an employer, or that services performed for it were 
        in employment or covered employment, for periods more than four 
        years prior to the year in which the determination is made, 
        unless the commissioner finds that there was fraudulent action 
        to avoid liability under this chapter. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 17.  Minnesota Statutes 2003 Supplement, section 
        268.044, subdivision 1, is amended to read: 
           Subdivision 1.  [WAGE DETAIL REPORT.] (a) Each employer 
        that has employees in covered employment shall file submit a 
        quarterly wage detail report by electronic transmission, in a 
        manner and format prescribed by the commissioner.  The report 
        shall include for each employee in covered employment, the 
        employee's name, Social Security number, the total wages paid to 
        the employee, and total number of paid hours worked.  For 
        employees exempt from the definition of employee in section 
        177.23, subdivision 7, clause (6), the employer shall report 40 
        hours worked for each week any duties were performed by a 
        full-time employee and shall report a reasonable estimate of the 
        hours worked for each week duties were performed by a part-time 
        employee.  In addition, the wage detail report shall include the 
        number of employees employed on the 12th day of each calendar 
        month and, if required by the commissioner, the report shall be 
        broken down by business location and type of employment.  If the 
        information required is not filed submitted in a manner and 
        format prescribed by the commissioner, it shall not be 
        considered a wage detail report.  The report is due and must 
        be filed received by the commissioner on or before the last day 
        of the month following the end of the calendar quarter.  The 
        commissioner may delay the due date on a specific calendar 
        quarter in the event the department is unable to accept wage 
        detail reports electronically. 
           (b) The employer may report the wages paid to the nearest 
        next lower whole dollar amount. 
           (c) An employer need not include the name of the employee 
        or other required information on the wage detail report if 
        disclosure is specifically exempted from being reported by 
        federal law. 
           (d) A wage detail report must be submitted for each 
        calendar quarter even though no wages were paid, unless the 
        employer has notified the commissioner, under section 268.042, 
        subdivision 1, paragraph (c), of termination of business. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 18.  Minnesota Statutes 2003 Supplement, section 
        268.044, subdivision 1a, is amended to read: 
           Subd. 1a.  [ELECTRONIC TRANSMISSION OF REPORT REQUIRED.] 
        Each employer that has 50 or more employees to report for a 
        calendar quarter under subdivision 1 must file submit the 
        quarterly wage detail report by electronic transmission in a 
        format prescribed by the commissioner.  The commissioner shall 
        have the discretion to accept wage detail reports by magnetic 
        media in a format prescribed by the commissioner.  Wage detail 
        reports from an employer with 50 or more employees to report for 
        a calendar quarter that are filed submitted by any other means 
        or the commissioner may be returned return the report submitted 
        by other than electronic transmission to the employer, and 
        reports returned shall be considered as not filed submitted and 
        the penalties late fees under subdivision 2 may be imposed. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 19.  Minnesota Statutes 2002, section 268.044, 
        subdivision 2, is amended to read: 
           Subd. 2.  [FAILURE TO TIMELY FILE REPORT; LATE FEES.] (a) 
        Any employer who that fails to file submit the quarterly wage 
        detail report when due shall pay to the department, for each 
        month the report is delinquent, a penalty of one-half of one 
        percent of total wages paid that quarter. a late fee of $10 per 
        employee, computed based upon the highest of: 
           (1) the number of employees reported on the last wage 
        detail report submitted; 
           (2) the number of employees reported in the corresponding 
        quarter of the prior calendar year; or 
           (3) if no wage detail report has ever been submitted, the 
        number of employees listed at the time of employer registration. 
           The penalty late fee shall not be assessed waived if the 
        wage detail report is properly made and filed received within 30 
        calendar days after a demand for the report is mailed sent to 
        the employer's address of record employer by mail or electronic 
        transmission.  A late fee assessed an employer may not be waived 
        more than once each 12 months.  In no case shall The amount of 
        the penalty, if late fee assessed, shall not be less 
        than $25 $50.  Penalties 
           (b) If the wage detail report is not received in a manner 
        and format prescribed by the commissioner within 30 calendar 
        days after demand is sent under paragraph (a), the late fee 
        assessed under paragraph (a) shall double and a renewed demand 
        notice and notice of the increased late fee shall be sent to the 
        employer by mail or electronic transmission. 
           (c) Late fees due under this subdivision may be waived 
        compromised under section 268.067 where good cause for 
        late filing submission is found by the commissioner.  
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 20.  Minnesota Statutes 2002, section 268.044, 
        subdivision 3, is amended to read: 
           Subd. 3.  [MISSING OR ERRONEOUS INFORMATION.] Any employer 
        who files submits the wage detail report, but knowingly fails to 
        include any of the required employee information or knowingly 
        enters erroneous information, shall be subject to a penalty an 
        administrative service fee of $25 for each employee for whom the 
        information is missing or erroneous.  An administrative service 
        fee may be compromised under section 268.067 if the commissioner 
        determines that the failure or error by the employer was 
        inadvertent. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 21.  Minnesota Statutes 2002, section 268.044, 
        subdivision 4, is amended to read: 
           Subd. 4.  [PENALTIES FEES.] The penalties fees provided for 
        in subdivisions 2 and 3 are in addition to interest and other 
        penalties imposed by this chapter and shall be collected in the 
        same manner as delinquent taxes and shall be credited to the 
        contingent account. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 22.  Minnesota Statutes 2003 Supplement, section 
        268.045, is amended to read: 
           268.045 [EMPLOYER TAX OR REIMBURSABLE ACCOUNTS.] 
           (a) Subdivision 1.  [ACCOUNT FOR EACH EMPLOYER.] The 
        commissioner shall maintain a tax account for each taxpaying 
        employer and a reimbursable account for each nonprofit or 
        government employer that has elected to be liable for 
        reimbursements if that employer has employees in covered 
        employment in the current or the prior calendar year, except as 
        provided in this section.  The commissioner shall assess the tax 
        account of a taxpaying employer for all the taxes due under 
        section 268.051 and credit the tax account with all taxes paid.  
        The commissioner shall charge the reimbursable account of a 
        nonprofit or government employer that elects to make 
        reimbursements for any unemployment benefits determined 
        chargeable to the employer under section 268.047 and shall 
        credit the reimbursable account with the payments made. 
           (b) Subd. 2.  [COMMON PAYMASTER TAX ACCOUNT.] Two or more 
        related taxpaying corporations concurrently employing the same 
        employees and compensating those employees through a common 
        paymaster that is one of the corporations may apply to, by 
        electronic transmission, in a format prescribed by the 
        commissioner, to establish a common paymaster tax account that 
        shall be the tax account of the common paymaster 
        corporation.  The commissioner shall have discretion on approval 
        of a common paymaster tax account.  If approved, the separate 
        tax accounts shall be maintained, but the employees compensated 
        through the common paymaster shall be reported under section 
        268.044 as employees of the common paymaster corporation.  The 
        corporations using the common paymaster tax account shall be 
        jointly and severally liable for any unpaid taxes, penalties, 
        and interest owing amounts due under this chapter and section 
        116L.20 from the common paymaster tax account.  
           (c) Subd. 3.  [JOINT TAX ACCOUNT.] Two or more taxpaying 
        employers having 50 percent or more common ownership and 
        compensating employees through a single payer that is one of the 
        employers may apply to by electronic transmission in a format 
        prescribed by the commissioner for a merging combining of the 
        experience ratings of the employers into a single experience 
        rating and joint tax account.  The commissioner shall have 
        discretion on approval of a joint tax account. 
           If approved, the joint tax account shall be effective on 
        that date assigned by the commissioner and shall remain in 
        effect for not less than two calendar years, and continuing 
        unless written notice terminating the joint tax account is filed 
        with the commissioner by electronic transmission, in a format 
        prescribed by the commissioner.  The termination shall be 
        effective on January 1 next following the filing of the written 
        notice of termination. 
           The employers in the joint tax account shall be jointly and 
        severally liable for any unpaid taxes, penalties, and interest 
        owing amounts due under this chapter and section 116L.20 from 
        the joint tax account. 
           (d) Subd. 4.  [GROUP REIMBURSABLE ACCOUNT.] Two or more 
        nonprofit or government employers that have elected to be liable 
        for reimbursements may apply to the commissioner for the 
        establishment of a group reimbursable account for the purpose of 
        sharing the cost of unemployment benefits charged based upon 
        wage credits from all employers in the group.  The application, 
        filed by electronic transmission in a format prescribed by the 
        commissioner, shall identify and authorize a group 
        representative to act as the group's agent for the purposes of 
        the reimbursable account.  The commissioner shall have 
        discretion on approval of a group reimbursable account.  If 
        approved, the commissioner shall establish a group reimbursable 
        account for the employers effective as of the beginning of the 
        calendar year that the application is received.  The 
        reimbursable account shall remain in effect for not less than 
        two calendar years and thereafter until terminated at the 
        discretion of the commissioner or upon application by the group, 
        filed by electronic transmission in a format prescribed by the 
        commissioner, at least 30 calendar days prior to the end of the 
        two year period or 30 calendar days prior to January 1 of any 
        following calendar year.  Each nonprofit or government employer 
        in the group shall be jointly and severally liable for 
        reimbursements for all unemployment benefits paid based upon 
        wage credits from all employers in the group during the period 
        the group reimbursable account was in effect.  
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 23.  Minnesota Statutes 2003 Supplement, section 
        268.047, subdivision 5, is amended to read: 
           Subd. 5.  [NOTICE OF UNEMPLOYMENT BENEFITS PAID.] (a) The 
        commissioner shall notify each employer at least quarterly by 
        mail or electronic transmission of the unemployment benefits 
        paid each applicant that will be used in computing the future 
        tax rate of a taxpaying employer, or that have been charged to 
        the reimbursable account of a nonprofit or government employer 
        that has elected to be liable for reimbursements.  Unless a 
        protest is filed within 30 calendar days from the date of 
        sending of the notice, the notice shall be final and shall not 
        be subject to collateral attack by way of review of a tax rate 
        notice or application for a credit adjustment or refund. 
           (b) Upon receipt of a protest, the commissioner shall 
        review unemployment benefits to be used in computing the future 
        tax rate of a taxpaying employer or charged to the reimbursable 
        account of a nonprofit or government employer that has elected 
        to be liable for reimbursements and determine whether there has 
        been an error made.  The commissioner shall either affirm or 
        make a redetermination of the unemployment benefits paid to be 
        used in computing the future tax rate of a taxpaying employer or 
        charged to the reimbursable account of a nonprofit or government 
        employer that has elected to be liable for reimbursements, and a 
        notice of affirmation or redetermination shall be sent to the 
        employer by mail or electronic transmission. 
           (c) The affirmation or redetermination shall be final 
        unless the employer files an appeal within 30 calendar days 
        after the date the affirmation or redetermination was sent.  
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           (d) An employer may not collaterally attack, by way of a 
        protest to a notice of unemployment benefits paid, any prior 
        determination or decision holding that unemployment benefits 
        paid shall be used in computing the future tax rate of a 
        taxpaying employer or charged to the reimbursable account of a 
        nonprofit or government employer that has elected to be liable 
        for reimbursements which determination or decision has become 
        final. 
           (e) A notice under this subdivision shall not be subject to 
        protest or appeal.  The commissioner may at any time upon the 
        commissioner's own motion correct a clerical any error that 
        resulted in an incorrect notice under paragraph (a) and issue a 
        corrected notice. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 24.  Minnesota Statutes 2003 Supplement, section 
        268.051, subdivision 1, is amended to read: 
           Subdivision 1.  [PAYMENTS.] (a) Unemployment insurance 
        taxes and any additional assessments, fees, or surcharges shall 
        accrue and become payable by each employer for each calendar 
        year on the taxable wages that the employer paid wages to 
        employees in covered employment, except for:  
           (1) nonprofit organizations that elect to make 
        reimbursements as provided in section 268.053; and 
           (2) the state of Minnesota and political subdivisions that 
        make reimbursements, unless they elect to pay taxes as provided 
        in section 268.052.  
           Except as allowed under section 268.0511, each employer 
        shall pay taxes quarterly, at the employer's assigned tax rate, 
        on the taxable wages paid to each employee.  The commissioner 
        shall compute the tax due from the wage detail report required 
        under section 268.044 and notify the employer of the tax due.  
        The taxes and any additional assessments, fees, or surcharges 
        shall be paid to the trust fund and must be received by the 
        department on or before the last day of the month following the 
        end of the calendar quarter. 
           (b) The total payment due may be paid in an tax amount 
        computed, if not a whole dollar, shall be rounded down to the 
        nearest next lower whole dollar. 
           (c) When the total payment due for any calendar quarter is 
        less than $1, it shall be disregarded.  If for any reason the 
        wages on the wage detail report under section 268.044 are 
        adjusted for any quarter, the commissioner shall recompute the 
        taxes due for that quarter and assess the employer for any 
        amount due or credit the employer as appropriate. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 25.  Minnesota Statutes 2003 Supplement, section 
        268.051, subdivision 1a, is amended to read: 
           Subd. 1a.  [TAX REPORTS PAYMENTS BY ELECTRONIC PAYMENT 
        REQUIRED.] (a) Every employer, except those nonprofit and 
        government employers that have elected to make reimbursements, 
        shall submit a tax report on a form, or in a manner, prescribed 
        by the commissioner on or before the last day of the month 
        following the end of the calendar quarter, unless the employer 
        meets the requirements for submitting tax reports annually under 
        section 268.0511.  An employer that fails to submit a tax report 
        when due, or submits an incorrect tax report, shall be subject 
        to section 268.057, subdivision 1 that reports 500 or more 
        employees in any calendar quarter on the wage detail report 
        required under section 268.044 shall make any payments due under 
        this chapter and section 116L.20 by electronic payment. 
           (b) Each tax report shall include the total wages paid and 
        the taxable wages paid that quarter, the amount of tax due, and 
        any other information required by the commissioner.  All 
        third-party processors, paying quarterly taxes on behalf of a 
        client company, shall make any payments due under this chapter 
        and section 116L.20 by electronic payment. 
           (c) A tax report must be submitted for each calendar 
        quarter even though no wages were paid or no tax is 
        due. Regardless of paragraph (a) or (b), the commissioner shall 
        have discretion to accept payment by other means.  
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 26.  Minnesota Statutes 2003 Supplement, section 
        268.051, subdivision 3, is amended to read: 
           Subd. 3.  [COMPUTATION OF A TAXPAYING EMPLOYER'S EXPERIENCE 
        RATING.] (a) For each calendar year On or before each December 
        15, the commissioner shall compute an experience rating for each 
        taxpaying employer who has been subject to paying unemployment 
        taxes for at least the 12 calendar months ending on the prior to 
        July 1 of the prior June 30.  The experience rating computed 
        shall be applicable for the following calendar year.  
           (b) The experience rating shall be the ratio obtained by 
        dividing 125 percent of the total unemployment benefits required 
        under section 268.047 to be used in computing the employer's tax 
        rate during the 48 calendar months ending on the prior June 30 
        of the prior calendar year, by the employer's total taxable 
        payroll for that same period. 
           (c) For purposes of paragraph (b), only that taxable 
        payroll upon which taxes have been paid on or before September 
        30 of the prior calendar year may be used in computing an 
        employer's experience rating. 
           (d) (b) The experience rating shall be computed to the 
        nearest one-tenth one-hundredth of a percent, to a maximum of 
        8.9 8.90 percent.  
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 27.  Minnesota Statutes 2002, section 268.051, 
        subdivision 4, is amended to read: 
           Subd. 4.  [EXPERIENCE RATING TRANSFER.] (a) When a 
        taxpaying employer acquires the organization, trade or business 
        or substantially all the assets of another employer, and there 
        is 25 percent or more common ownership, directly or indirectly, 
        between the predecessor and successor, the experience rating of 
        the predecessor employer shall be transferred as of the date of 
        acquisition to the successor employer for the purpose of 
        computing a tax rate. 
           (b) When a taxpaying employer acquires a distinct severable 
        portion of the organization, trade, business, or assets that is 
        less than substantially all of the employing enterprises of 
        another employer, and there is 25 percent or more common 
        ownership, directly or indirectly, between the predecessor and 
        successor, the successor employer shall acquire the that 
        percentage of a predecessor's experience rating attributable to 
        the portion it acquired equal to that percentage of the 
        predecessor's employment positions it has obtained, and the 
        predecessor employer shall retain that percentage of the 
        experience rating attributable to the portion equal to that 
        percentage of the employment positions that it has retained, if 
        (1) the successor makes a written request to apply files an 
        application by electronic transmission, in a format prescribed 
        by the commissioner, for the transfer of a percentage of the 
        experience rating attributable to the severable portion acquired 
        from of the predecessor within 180 calendar days from the date 
        of acquisition, and (2) files an application within the time and 
        in the manner prescribed by the commissioner that furnishes 
        sufficient information to substantiate the severable portion 
        acquisition and to assign the appropriate portion percentage of 
        the experience rating.  
           (c) The term "common ownership" for purposes of this 
        subdivision includes ownership by a spouse, parent, child, 
        brother, sister, aunt, uncle, niece, nephew, or first cousin, by 
        birth or by marriage. 
           (d) If the successor employer under paragraphs (a) and (b) 
        had an experience rating at the time of the acquisition, the 
        transferred experience rating of the predecessor shall be 
        combined with the successor's experience rating for purposes of 
        computing a tax rate. 
           (e) If there has been a transfer of an experience rating 
        under paragraph (a) or (b), employment with a predecessor 
        employer shall not be considered to have been terminated if 
        similar employment is offered by the successor employer and 
        accepted by the employee. 
           (f) The commissioner, upon the commissioner's own motion or 
        upon application of an employer shall determine if an employer 
        is a successor within the meaning of this subdivision and shall 
        send the determination to the employer by mail or electronic 
        transmission.  The determination shall be final unless a protest 
        is filed by the employer within 30 calendar days after sending 
        the determination.  Upon receipt of a protest, the commissioner 
        shall review all available evidence and determine whether an 
        error has been made.  The commissioner shall either affirm or 
        make a redetermination on whether the employer is a successor 
        within the meaning of this subdivision and send the employer, by 
        mail or electronic transmission, the affirmation or 
        redetermination.  The affirmation or redetermination shall be 
        final unless an appeal is filed by the employer within 30 
        calendar days after the sending of the determination affirmation 
        or redetermination.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105. 
           (g) The commissioner may, as the result of any 
        determination or decision regarding succession or nonsuccession, 
        recompute the tax rate of all employers affected by the 
        determination or decision for any year, including the year of 
        the acquisition and subsequent years, that is affected by the 
        transfer or nontransfer of part or all of the experience 
        rating.  This paragraph does not apply to rates that have become 
        final before the filing of a written request to apply an 
        application for the transfer of a severable portion of the 
        experience rating under paragraph (b). 
           (h) Should an employer not have been in operation long 
        enough to qualify for an experience rating under subdivision 3, 
        paragraph (a), the experience rating for purposes of this 
        subdivision shall consist of those factors that normally make up 
        an experience rating, without the 12-month minimum. 
           (i) If the commissioner finds that a transaction was done, 
        in whole or in part, to avoid an experience rating or the 
        transfer of an experience rating, the commissioner may transfer 
        all or part of the experience rating regardless of the 
        requirements or limitations of paragraph paragraphs (a) and (b). 
        This shall include the transferring of employees from the 
        payroll of an employer with a higher experience rating to the 
        payroll of an employer with a lower experience rating. 
           (j) Regardless of paragraph (a), if there is an acquisition 
        or merger of a publicly held corporation by or with another 
        publicly held corporation the experience ratings of the 
        corporations shall be combined as of the date of acquisition or 
        merger for the purpose of computing a tax rate. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 28.  Minnesota Statutes 2003 Supplement, section 
        268.051, subdivision 5, is amended to read: 
           Subd. 5.  [TAX RATE FOR NEW EMPLOYERS.] (a) Each new 
        taxpaying employer that does not qualify for an experience 
        rating under subdivision 3, except new employers in a high 
        experience rating industry, shall be assigned, for a calendar 
        year, a tax rate the higher of (1) one percent, or (2) the tax 
        rate computed, to the nearest one-hundredth of a percent, by 
        dividing the total amount of unemployment benefits paid all 
        applicants during the 48 calendar months ending on June 30 of 
        the prior calendar year by the total taxable wages of all 
        taxpaying employers during the same period, plus the applicable 
        base tax rate and any additional assessments under subdivision 
        2, paragraph (d).  
           (b) Each new taxpaying employer in a high experience rating 
        industry that does not qualify for an experience rating under 
        subdivision 3, shall be assigned, for a calendar year, a tax 
        rate of 8.0 8.00 percent, plus the applicable base tax rate and 
        any additional assessments under subdivision 2, paragraph (d).  
           An employer is considered to be in a high experience rating 
        industry if: 
           (1) the employer is engaged in residential, commercial, or 
        industrial construction, including general contractors; 
           (2) the employer is engaged in sand, gravel, or limestone 
        mining; 
           (3) the employer is engaged in the manufacturing of 
        concrete, concrete products, or asphalt; or 
           (4) the employer is engaged in road building, repair, or 
        resurfacing, including bridge and tunnels and residential and 
        commercial driveways and parking lots.  
           (c) The commissioner shall send to the new employer, by 
        mail or electronic transmission, notice of the tax rate 
        assigned.  An employer may protest the assignment of a tax rate 
        in accordance with the procedures in subdivision 6, paragraph 
        (c). 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 29.  Minnesota Statutes 2003 Supplement, section 
        268.051, subdivision 6, is amended to read: 
           Subd. 6.  [NOTICE OF TAX RATE.] (a) On or before each 
        December 15, the commissioner shall notify each employer by mail 
        or electronic transmission of the employer's tax rate, along 
        with any additional assessments, fees, or surcharges, as 
        determined for any the following calendar year.  The notice 
        shall contain the base tax rate and the factors used in 
        determining the employer's experience rating.  Unless a protest 
        of the tax rate is made, the assigned computed tax rate shall be 
        final except for fraud and shall be the rate at which taxes 
        shall be paid.  The tax rate shall not be subject to collateral 
        attack by way of claim for a credit adjustment or refund, or 
        otherwise.  
           (b) If the legislature, subsequent to the sending of the 
        tax rate, changes any of the factors used to determine the rate, 
        the earlier notice shall be void.  A new tax rate based on the 
        new factors shall be computed and sent to the employer.  
           (c) A review of an employer's tax rate may be obtained by 
        the employer filing, in a manner prescribed by the commissioner, 
        a protest within 30 calendar days from the date the tax rate 
        notice was sent to the employer.  Upon receipt of the protest, 
        the commissioner shall review the tax rate to determine whether 
        or not there has been any clerical error or error in computation 
        or assignment of the tax rate.  The commissioner shall either 
        affirm or make a redetermination of the rate and a notice of the 
        affirmation or redetermination shall be sent to the employer by 
        mail or electronic transmission.  The affirmation or 
        redetermination shall be final unless the employer files an 
        appeal within 30 calendar days after the date the affirmation or 
        redetermination was sent.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105.  
           (d) The commissioner may at any time upon the 
        commissioner's own motion correct any error in the computation 
        or the assignment of an employer's tax rate.  
           Sec. 30.  Minnesota Statutes 2002, section 268.051, 
        subdivision 7, is amended to read: 
           Subd. 7.  [TAX RATE BUYDOWN.] (a) Any taxpaying employer 
        who has been assigned a tax rate based upon an experience rating 
        may, upon the voluntary payment of an amount equivalent to any 
        portion or all of the unemployment benefits used in computing 
        the experience rating plus a surcharge of 25 percent, obtain a 
        cancellation of unemployment benefits used equal to the payment 
        made, less the surcharge.  Upon the payment, the commissioner 
        shall compute a new experience rating for the employer, 
        and determine compute a new tax rate.  
           (b) Voluntary payments may be made only during the 30 
        calendar day period immediately following the date of sending of 
        the notice of tax rate.  This period may be extended, upon a 
        showing of good cause, but in no event shall a voluntary payment 
        be allowed after by electronic payment and must be received 
        within 120 calendar days from the beginning of the calendar year 
        for which the tax rate is effective. 
           (c) Voluntary payments made within the time required will 
        not be refunded unless a request is made in writing within 30 
        calendar days after sending of the notice of the new tax rate. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 31.  Minnesota Statutes 2002, section 268.0511, is 
        amended to read: 
           268.0511 [ANNUAL PAYMENT OF SMALL LIABILITIES.] 
           (a) An employer may file tax reports and pay all taxes, 
        surcharges, and assessments due under this chapter and section 
        116L.20, except late fees under section 268.044, for any 
        calendar year on an annual basis if the employer: 
           (1) has an experience rating of zero for that calendar 
        year; 
           (2) had total taxable wages paid in the 12-month period 
        ending the prior June 30 of less than five times the state's 
        taxable wage base; and 
           (3) has no outstanding tax or assessment liability, 
        including penalties and interest delinquent amounts due under 
        this chapter or section 116L.20. 
           (b) Tax reports and taxes and assessments All amounts due 
        under this section for any calendar year shall be paid on or 
        before the following January 31. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 32.  Minnesota Statutes 2003 Supplement, section 
        268.052, subdivision 1, is amended to read: 
           Subdivision 1.  [PAYMENTS.] In lieu of taxes payable on a 
        quarterly basis, the state of Minnesota or its political 
        subdivisions shall reimburse the trust fund the amount of 
        unemployment benefits charged to its reimbursable account under 
        section 268.047.  Reimbursements in the amount of unemployment 
        benefits charged to the reimbursable account during a calendar 
        quarter shall be made must be received by the department on or 
        before the last day of the month following the month that the 
        notice of unemployment benefits paid is sent pursuant to section 
        268.047, subdivision 5.  Past due reimbursements shall be 
        subject to the same interest charges and collection procedures 
        that apply to past due taxes. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 33.  Minnesota Statutes 2003 Supplement, section 
        268.052, subdivision 2, is amended to read: 
           Subd. 2.  [ELECTION BY STATE OR POLITICAL SUBDIVISION TO BE 
        A TAXPAYING EMPLOYER.] (a) The state or political subdivision 
        excluding a school district may elect to be a taxpaying employer 
        for any calendar year if a notice of election is filed within 30 
        calendar days following January 1 of that calendar year.  Upon 
        election, the state or political subdivision shall be assigned 
        the new employer tax rate under section 268.051, subdivision 5, 
        for the calendar year of the election and until it qualifies for 
        an experience rating under section 268.051, subdivision 3. 
           (b) An election shall be for a minimum period of two 
        calendar years following the effective date of the election and 
        continue unless a notice terminating the election is filed not 
        later than 30 calendar days before the beginning of the calendar 
        year.  The termination shall be effective at the beginning of 
        the next calendar year.  Upon election, the commissioner shall 
        establish a reimbursable account for the state or political 
        subdivision.  A termination of election shall be allowed only if 
        the state or political subdivision has, since the beginning of 
        the experience rating period under section 268.051, subdivision 
        3, paid taxes and made voluntary payments under section 268.051, 
        subdivision 7, equal to or more than 125 percent of the 
        unemployment benefits used in computing the experience rating.  
        In addition, any unemployment benefits paid after the experience 
        rating period shall be transferred to the new reimbursable 
        account of the state or political subdivision.  If the amount of 
        taxes and voluntary payments paid since the beginning of the 
        experience rating period exceeds 125 percent of the amount of 
        unemployment benefits paid during the experience rating period, 
        that amount in excess shall be applied against any unemployment 
        benefits paid after the experience rating period. 
           (c) The method of payments to the trust fund under 
        subdivisions 3 and 4 shall apply to all taxes paid by or due 
        from the state or political subdivision that elects to be 
        taxpaying employers under this subdivision. 
           (d) The commissioner may allow A notice of election or a 
        notice terminating election to shall be filed by mail or 
        electronic transmission in a format prescribed by the 
        commissioner.  
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 34.  Minnesota Statutes 2003 Supplement, section 
        268.053, subdivision 1, is amended to read: 
           Subdivision 1.  [ELECTION.] (a) Any nonprofit organization 
        that has employees in covered employment shall pay taxes on a 
        quarterly basis pursuant to section 268.051 unless it elects to 
        make reimbursements to the trust fund the amount of unemployment 
        benefits charged to its reimbursable account under section 
        268.047. 
           The organization may elect to make reimbursements for a 
        period of not less than two calendar years beginning with the 
        date that the organization was determined to be an employer with 
        covered employment by filing a notice of election not later than 
        30 calendar days after the date of the determination. 
           (b) Any nonprofit organization that makes an election will 
        continue to be liable for reimbursements until it files a notice 
        terminating its election not later than 30 calendar days before 
        the beginning of the calendar year the termination is to be 
        effective.  
           (c) A nonprofit organization that has been making 
        reimbursements that files a notice of termination of election 
        shall be assigned the new employer tax rate under section 
        268.051, subdivision 5, for the calendar year of the termination 
        of election and until it qualifies for an experience rating 
        under section 268.051, subdivision 3. 
           (d) Any nonprofit organization that has been paying taxes 
        may elect to make reimbursements by filing no less than 30 
        calendar days before January 1 of any calendar year a notice of 
        election.  Upon election, the commissioner shall establish a 
        reimbursable account for the nonprofit organization.  An 
        election shall be allowed only if the nonprofit organization 
        has, since the beginning of the experience rating period under 
        section 268.051, subdivision 3, paid taxes and made voluntary 
        payments under section 268.051, subdivision 7, equal to or more 
        than 125 percent of the unemployment benefits used in computing 
        the experience rating.  In addition, any unemployment benefits 
        paid after the experience rating period shall be transferred to 
        the new reimbursable account of the nonprofit organization.  If 
        the amount of taxes and voluntary payments paid since the 
        beginning of the experience rating period exceeds 125 percent of 
        the amount of unemployment benefits paid during the experience 
        rating period, that amount in excess shall be applied against 
        any unemployment benefits paid after the experience rating 
        period.  The election shall not be terminable by the 
        organization for that and the next calendar year. 
           (e) The commissioner may for good cause extend the period 
        that a notice of election, or a notice of termination, must be 
        filed and may permit an election to be retroactive. 
           (f) The commissioner may allow A notice of election or 
        notice terminating election to shall be filed by mail or 
        electronic transmission in a format prescribed by the 
        commissioner. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 35.  Minnesota Statutes 2002, section 268.053, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DETERMINATION, PROTEST, AND APPEAL.] The 
        commissioner shall notify each nonprofit organization by mail or 
        electronic transmission of any determination of its status as an 
        employer with covered employment and of the effective date of 
        any election or termination of election.  The determinations 
        shall be final unless an appeal a protest is filed within 30 
        calendar days after sending of the determination.  Upon receipt 
        of a protest, the commissioner shall review all available 
        evidence and determine whether an error has been made.  The 
        commissioner shall send to the nonprofit organization, by mail 
        or electronic transmission, an affirmation or redetermination.  
        The affirmation or redetermination shall be final unless an 
        appeal is filed within 30 calendar days of sending the 
        affirmation or redetermination.  Proceedings on the appeal shall 
        be conducted in accordance with section 268.105. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 36.  Minnesota Statutes 2003 Supplement, section 
        268.053, subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENTS.] (a) Reimbursements, in the amount of 
        unemployment benefits charged to the reimbursable account, 
        during a calendar quarter, shall be made must be received by the 
        department on or before the last day of the month following the 
        month that the notice of unemployment benefits paid is sent 
        pursuant to section 268.047, subdivision 5.  
           (b) Past due reimbursements shall be subject to the same 
        interest charges and collection procedures that apply to past 
        due taxes. 
           (c) If any nonprofit organization is delinquent in making 
        reimbursements, the commissioner may terminate the 
        organization's election to make reimbursements as of the 
        beginning of the next calendar year, and the termination shall 
        be effective for that and the following calendar year.  A 
        nonprofit organization that has its election terminated under 
        this paragraph shall be assigned the new employer tax rate under 
        section 268.051, subdivision 5, until the organization qualifies 
        for an experience rating under section 268.051, subdivision 3. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005. 
           Sec. 37.  Minnesota Statutes 2002, section 268.057, as 
        amended by Laws 2003, First Special Session chapter 3, article 
        2, sections 6 and 20, is amended to read: 
           268.057 [COLLECTION OF TAXES.] 
           Subdivision 1.  [REPORTS; DELINQUENCIES; PENALTIES AMOUNT 
        COMPUTED PRESUMED CORRECT.] (a) Any employer who knowingly fails 
        to submit to the commissioner any tax report at the time the 
        report is required under section 268.051, subdivision 1a, or 
        268.0511 shall pay to the department a penalty of up to $25 or 
        an amount of 1-1/2 percent of taxes accrued for each month from 
        and after the due date until the tax report is properly 
        submitted, whichever is greater.  
           (b) If any employer required to submit tax reports fails to 
        do so, or submits, willfully or otherwise, an incorrect or false 
        tax report, the employer shall, on the demand of the 
        commissioner sent by mail or electronic transmission, submit the 
        tax report, or corrected report, within ten days and at the same 
        time pay the tax due.  If the employer fails within that time to 
        submit the tax report or corrected report and pay any tax due, 
        the commissioner shall make an estimated tax report from the 
        commissioner's own knowledge and from information the 
        commissioner may obtain and assess a tax on that basis.  That 
        assessed tax, plus any penalties and interest, shall be paid 
        within ten days after notice of the amount due has been sent by 
        mail or electronic transmission.  Any assessed tax because of 
        the failure of the employer to submit a tax report or corrected 
        tax report shall be prima facie correct and valid, and the 
        employer shall have the burden of establishing its incorrectness 
        or invalidity in any subsequent action or proceeding.  Whenever 
        the delinquent employer files a tax report or corrected tax 
        report, the commissioner may, on finding it substantially 
        correct, accept that report. 
           (c) If the commissioner finds that any part of any 
        employer's tax deficiency is due to fraud with intent to avoid 
        payment of taxes to the trust fund, 50 percent of the total 
        amount of the deficiency or $500, whichever is greater, shall be 
        assessed as a penalty against the employer and collected in 
        addition to the deficiency. 
           (d) The penalties provided for in paragraphs (a) and (c) 
        are in addition to interest and any other penalties and shall be 
        paid to the department and credited to the contingent account. 
           (e) An employer or officer or agent of an employer is 
        guilty of a gross misdemeanor, unless the tax or other payment 
        involved exceeds $500, in which case the person is guilty of a 
        felony, if the individual: 
           (1) in order to avoid becoming or remaining a subject 
        employer or to avoid or reduce any tax or other payment required 
        under this chapter: 
           (i) makes a false statement or representation knowing it to 
        be false; or 
           (ii) knowingly fails to disclose a material fact; or 
           (2) willfully fails or refuses to pay any taxes or other 
        payment at the time required. 
           Subd. 2.  [TAX OR PAYMENT IN LIEU OF TAX PRESUMED VALID.] 
        The tax and payment in lieu of tax Any amount due from an 
        employer, as assessed computed by the commissioner, including 
        any penalties, shall be presumed to be valid and correctly 
        determined and assessed, and the burden shall be upon the 
        employer to show its incorrectness or invalidity.  A statement 
        by the commissioner of the amount of the tax, payment in lieu of 
        tax, interest and penalties as determined or assessed by the 
        commissioner, due shall be admissible in evidence in any court 
        or administrative proceeding and shall be prima facie evidence 
        of the facts in the statement. 
           Subd. 2.  [PRIORITY OF PAYMENTS.] (a) Any payment received 
        from a taxpaying employer shall be applied in the following 
        order: 
           (1) unemployment insurance taxes; then 
           (2) special assessment for interest on any federal loan; 
        then 
           (3) workforce development fee; then 
           (4) interest on past due taxes; then 
           (5) penalties, late fees, administrative service fees, and 
        costs. 
           (b) Paragraph (a) shall be the priority used for all 
        payments received from a taxpaying employer, regardless of how 
        the employer may designate the payment to be applied, except 
        when: 
           (1) there is an outstanding lien and the employer 
        designates that the payment made should be applied to satisfy 
        the lien; 
           (2) the payment is for back pay withheld from an applicant 
        pursuant to section 268.085, subdivision 6, paragraph (b); 
           (3) the payment is specifically designated by the employer 
        to be applied to an outstanding overpayment of unemployment 
        benefits of an applicant; 
           (4) a court or administrative order directs that the 
        payment be applied to a specific obligation; 
           (5) a preexisting payment plan provides for the application 
        of payment; or 
           (6) the commissioner, under the compromise authority of 
        section 268.067, agrees to apply the payment to a different 
        priority. 
           Subd. 3.  [CONFESSION OF JUDGMENT ESTIMATING THE TAX 
        DUE.] (a) Any tax report or other form that is required to be 
        filed with the commissioner concerning taxes or reimbursements 
        due, shall contain a written declaration that it is made under 
        the penalties for willfully making a false report and shall 
        contain a confession of judgment for the amount of the tax or 
        reimbursements shown due thereon to the extent not timely paid 
        together with any interest and penalty due under this chapter. 
           (b) The commissioner may, within six years after the report 
        or other form is filed, regardless of section 541.09, enter 
        judgment on any confession of judgment after 20 calendar days' 
        notice served upon the employer by mail.  The judgment shall be 
        entered by the court administrator of any county upon the filing 
        of a photocopy of the confession of judgment along with a 
        statement of the commissioner that the tax or payment in lieu of 
        tax has not been paid.  Only if an employer fails to make all 
        necessary records available for an audit pursuant to section 
        268.186, paragraph (b), and the commissioner has reason to 
        believe the employer has not reported all the required wages on 
        the quarterly wage detail reports under section 268.044, may the 
        commissioner then estimate the amount of tax due and assess the 
        employer the estimated amount due. 
           Subd. 4.  [COSTS.] Any person that fails to pay any taxes, 
        reimbursements, or unemployment benefit overpayment, including 
        interest and penalties, amount when due under this chapter is 
        liable for any filing fees, recording fees, sheriff fees, costs 
        incurred by referral to any public or private collection agency, 
        or litigation costs, including attorney fees, incurred in the 
        collection of the amounts due.  
           If any check or money order, in tendered payment of any 
        amount due, is not honored when presented to a financial 
        institution for payment, a fee of $25 shall be assessed.  
           Costs and fees collected under this subdivision shall be 
        credited to the administration account to be used by the 
        commissioner to ensure integrity in the administration of the 
        unemployment insurance program. 
           Subd. 5.  [INTEREST ON AMOUNTS PAST DUE TAXES.] If 
        any taxes, reimbursements, fees, assessments, surcharges, or any 
        penalties amounts due from an employer under this chapter or 
        section 268.184 116L.20, except late fees under section 268.044, 
        are not paid received on the date due the unpaid balance shall 
        bear interest at the rate of one and one-half percent per month 
        or any part thereof.  Any payments received by mail postmarked 
        on a day following the date due shall be considered to have been 
        paid on the due date if there is substantial evidence that the 
        payment was actually deposited in the United States mail 
        properly addressed to the department with postage prepaid 
        thereon on or before the due date.  Interest assessed, if not a 
        whole dollar amount, shall be rounded down to the next lower 
        whole dollar.  Interest collected shall be credited to the 
        contingent account.  Interest may be waived compromised under 
        section 268.067. 
           Subd. 6.  [INTEREST ON JUDGMENTS.] Regardless of section 
        549.09, if judgment is entered upon any past due tax or 
        reimbursements amounts from an employer under this chapter or 
        section 116L.20, the unpaid judgment shall bear interest at the 
        rate specified in subdivision 5 until the date of payment.  
           Subd. 7.  [CREDIT ADJUSTMENTS, REFUNDS.] (a) If an employer 
        makes an application for a credit adjustment of any amount 
        paid as taxes or interest thereon under this chapter or section 
        116L.20 within four years of the year that the payment was made, 
        in a manner and format prescribed by the commissioner, and the 
        commissioner determines that the payment or any portion was 
        erroneous, the commissioner shall make an adjustment and issue a 
        credit without interest.  If a credit cannot be used, the 
        commissioner shall refund, without interest, the amount 
        erroneously paid.  The commissioner, on the commissioner's own 
        motion, may make a credit adjustment or refund under this 
        subdivision. 
           Any refund returned to the commissioner shall be considered 
        unclaimed property under chapter 345. 
           (b) If a credit adjustment or refund is denied in whole or 
        in part, a notice of denial shall be sent to the employer by 
        mail or electronic transmission.  Within 30 calendar days after 
        sending of the notice of denial, the employer may appeal protest.
           Upon receipt of a timely protest, the commissioner shall 
        review the denial and either affirm the denial or redetermine 
        the credit adjustment or refund.  The affirmation of denial or 
        redetermination of the credit adjustment or refund, sent by mail 
        or electronic transmission, shall be final unless an employer 
        files an appeal within 30 calendar days after sending.  
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           Subd. 10.  [PRIORITIES UNDER LEGAL DISSOLUTIONS OR 
        DISTRIBUTIONS.] In the event of any distribution of an 
        employer's assets pursuant to an order of any court, including 
        any receivership, assignment for benefit of creditors, 
        adjudicated insolvency, or similar proceeding, taxes then or 
        thereafter due shall be paid in full prior to all other claims 
        except claims for wages of not more than $1,000 per former 
        employee, earned within six months of the commencement of the 
        proceedings.  In the event of an employer's adjudication in 
        bankruptcy under federal law, taxes then or thereafter due shall 
        be entitled to the priority provided in that law for taxes due 
        any state. 
           [EFFECTIVE DATE.] This section is effective July 1, 2005.  
        Subdivision 5 does not apply to late tax report penalties issued 
        prior to July 1, 2005. 
           Sec. 38.  Minnesota Statutes 2002, section 268.058, as 
        amended by Laws 2003, First Special Session chapter 3, article 
        2, section 20, is amended to read: 
           268.058 [LIEN, LEVY, SETOFF, AND CIVIL ACTION.] 
           Subdivision 1.  [LIEN.] (a) Any taxes, unemployment benefit 
        overpayments, or reimbursements due including interest, 
        penalties, and costs amount due under this chapter or section 
        116L.20, from an applicant or an employer, shall become a lien 
        upon all the property, within this state, both real and 
        personal, of the person liable, from the date of assessment.  
        The term "date of assessment" means the date the obligation was 
        due. 
           (b) The lien is not enforceable against any purchaser, 
        mortgagee, pledgee, holder of a Uniform Commercial Code security 
        interest, mechanic's lien, or judgment lien creditor, until a 
        notice of lien has been filed with the county recorder of the 
        county where the property is situated, or in the case of 
        personal property belonging to a nonresident person in the 
        Office of the Secretary of State.  When the notice of lien is 
        filed with the county recorder, the fee for filing and indexing 
        shall be as provided in sections 272.483 and 272.484.  
           (c) Notices of liens, lien renewals, and lien releases, 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 into the computerized 
        filing system of the secretary of state.  The secretary of state 
        shall, on any notice filed with that office, transmit the notice 
        electronically to the appropriate county recorder.  The filing 
        officer, whether the county recorder or the secretary of state, 
        shall endorse and index a printout of the notice as if the 
        notice had been mailed or delivered.  
           (d) County recorders and the secretary of state shall enter 
        information on lien notices, renewals, and releases 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 into 
        the central database before the close of the working day 
        following the day of the original data entry by the commissioner.
           (e) The lien imposed on personal property, even though 
        properly filed, is not enforceable against a purchaser of 
        tangible personal property purchased at retail or personal 
        property listed as exempt in sections 550.37, 550.38, and 550.39.
           (f) A notice of lien filed has priority over any security 
        interest arising under chapter 336, article 9, that is perfected 
        prior in time to the lien imposed by this subdivision, but only 
        if:  
           (1) the perfected security interest secures property not in 
        existence at the time the notice of lien is filed; and 
           (2) the property comes into existence after the 45th 
        calendar day following the day the notice of lien is filed, or 
        after the secured party has actual notice or knowledge of the 
        lien filing, whichever is earlier. 
           (g) The lien shall be enforceable from the time the lien 
        arises and for ten years from the date of filing the notice of 
        lien.  A notice of lien may be renewed before expiration for an 
        additional ten years.  
           (h) The lien shall be enforceable by levy under subdivision 
        2 or by judgment lien foreclosure under chapter 550.  
           (i) The lien may be imposed upon property defined as 
        homestead property in chapter 510 but may be enforced only upon 
        the sale, transfer, or conveyance of the homestead property. 
           (j) The commissioner may sell and assign to a third party 
        the commissioner's right of redemption in specific real property 
        for liens filed under this subdivision.  The assignee shall be 
        limited to the same rights of redemption as the commissioner, 
        except that in a bankruptcy proceeding, the assignee does not 
        obtain the commissioner's priority.  Any proceeds from the sale 
        of the right of redemption shall be credited to the contingent 
        account.  Any sale shall be by written agreement signed by an 
        attorney who is a classified employee of the department 
        designated by the commissioner for that purpose. 
           Subd. 2.  [LEVY.] (a) If any tax, reimbursements, or 
        unemployment benefit overpayment, including interest, penalties, 
        and costs amount due under this chapter or section 116L.20, from 
        an applicant or an employer, is not paid when due, the amount 
        may be collected by the commissioner by direct levy upon all 
        property and rights of property of the person liable for the 
        amount due except that exempt from execution under section 
        550.37.  The term "levy" includes the power of distraint and 
        seizure by any means.  
           (b) In addition to a direct levy, the commissioner may 
        issue a warrant to the sheriff of any county who shall proceed 
        within 60 calendar days to levy upon the property or rights to 
        property of the delinquent person within the county, except that 
        exempt under section 550.37.  The sheriff shall sell that 
        property necessary to satisfy the total amount due, together 
        with the commissioner's and sheriff's costs.  The sales shall be 
        governed by the law applicable to sales of like property on 
        execution of a judgment.  
           (c) Notice and demand for payment of the total amount due 
        shall be mailed to the delinquent person at least ten calendar 
        days prior to action being taken under paragraphs (a) and (b). 
           (d) If the commissioner has reason to believe that 
        collection of the amount due is in jeopardy, notice and demand 
        for immediate payment may be made.  If the total amount due is 
        not paid, the commissioner may proceed to collect by direct levy 
        or issue a warrant without regard to the ten calendar day period.
           (e) In executing the levy, the commissioner shall have all 
        of the powers provided in chapter 550 or any other law that 
        provides for execution against property in this state.  The sale 
        of property levied upon and the time and manner of redemption 
        shall be as provided in chapter 550.  The seal of the court 
        shall not be required.  The levy may be made whether or not the 
        commissioner has commenced a legal action for collection. 
           (f) Where any assessment has been made by the commissioner, 
        the property seized for collection of the total amount due shall 
        not be sold until any determination of liability has become 
        final.  No sale shall be made unless a portion of the amount due 
        remains unpaid for a period of more than 30 calendar days after 
        the determination of liability becomes final.  Seized property 
        may be sold at any time if:  
           (1) the delinquent person consents in writing to the sale; 
        or 
           (2) the commissioner determines that the property is 
        perishable or may become greatly reduced in price or value by 
        keeping, or that the property cannot be kept without great 
        expense.  
           (g) Where a levy has been made to collect the amount due 
        and the property seized is properly included in a formal 
        proceeding commenced under sections 524.3-401 to 524.3-505 and 
        maintained under full supervision of the court, the property 
        shall not be sold until the probate proceedings are completed or 
        until the court orders.  
           (h) The property seized shall be returned if the owner: 
           (1) gives a surety bond equal to the appraised value of the 
        owner's interest in the property, as determined by the 
        commissioner, or 
           (2) deposits with the commissioner security in a form and 
        amount the commissioner considers necessary to insure payment of 
        the liability. 
           (i) If a levy or sale would irreparably injure rights in 
        property that the court determines superior to rights of the 
        state, the court may grant an injunction to prohibit the 
        enforcement of the levy or to prohibit the sale. 
           (j) Any person who fails or refuses to surrender without 
        reasonable cause any property or rights to property subject to 
        levy shall be personally liable in an amount equal to the value 
        of the property or rights not so surrendered, but not exceeding 
        the amount due.  
           (k) If the commissioner has seized the property of any 
        individual, that individual 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 
        upon terms and conditions the court considers equitable. 
           (l) Any person in control or possession of property or 
        rights to property upon which a levy has been made who 
        surrenders the property or rights to property, or who pays the 
        amount due shall be discharged from any obligation or liability 
        to the person liable for the amount due with respect to the 
        property or rights to property.  
           (m) The notice of any levy may be served personally or by 
        mail. 
           (n) The commissioner may release the levy upon all or part 
        of the property or rights to property levied upon if the 
        commissioner determines that the release will facilitate the 
        collection of the liability, but the release shall not prevent 
        any subsequent levy.  If the commissioner determines that 
        property has been wrongfully levied upon, the commissioner shall 
        return:  
           (1) the specific property levied upon, at any time; or 
           (2) an amount of money equal to the amount of money levied 
        upon, at any time before the expiration of nine months from the 
        date of levy. 
           (o) Regardless of section 52.12, a levy upon a person'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 person 
        to the financial institution.  A claim by the financial 
        institution that it exercised its right to setoff prior to the 
        levy must be substantiated by evidence of the date of the 
        setoff, and verified by an affidavit from a corporate officer of 
        the financial institution.  For purposes of determining the 
        priority of any levy under this subdivision, the levy shall be 
        treated as if it were an execution under chapter 550.  
           Subd. 3.  [RIGHT OF SETOFF.] (a) Upon certification by the 
        commissioner to the commissioner of finance, or to any state 
        agency that disburses its own funds, that a person, applicant, 
        or employer has a liability under this chapter, including 
        interest, penalties, and costs or section 116L.20, and that the 
        state has purchased personal services, supplies, contract 
        services, or property from that person, the commissioner of 
        finance or the state agency shall set off and pay to the 
        commissioner an amount sufficient to satisfy the unpaid 
        liability from funds appropriated for payment of the obligation 
        of the state otherwise due the person.  No amount shall be set 
        off from any funds exempt under section 550.37 or funds due an 
        individual who receives assistance under chapter 256. 
           (b) All funds, whether general or dedicated, shall be 
        subject to setoff.  
           Regardless of any law to the contrary, the commissioner 
        shall have first priority to setoff from any funds otherwise due 
        from the department to a delinquent person. 
           Subd. 4.  [COLLECTION BY CIVIL ACTION.] (a) Any delinquent 
        taxes, reimbursements, or unemployment benefit overpayment, 
        including interest, penalties, or costs amount due under this 
        chapter or section 116L.20, from an applicant or employer, may 
        be collected by civil action in the name of the state of 
        Minnesota.  Civil actions brought under this subdivision shall 
        be heard as provided under section 16D.14.  In any action, 
        judgment shall be entered in default for the relief demanded in 
        the complaint without proof, together with costs and 
        disbursements, upon the filing of an affidavit of default. 
           (b) Any person that is not a resident of this state and any 
        resident person removed from this state, shall be considered to 
        appoint the secretary of state as its agent for the acceptance 
        of process in any civil action.  The commissioner shall file 
        process with the secretary of state, together with a payment of 
        a fee of $15 and that service shall be considered sufficient 
        service and shall have the same force and validity as if served 
        personally within this state.  Notice of the service of process, 
        together with a copy of the process, shall be sent by certified 
        mail to the person's last known address.  An affidavit of 
        compliance with this subdivision, and a copy of the notice of 
        service shall be appended to the original of the process and 
        filed in the court.  
           (c) No court filing fees, docketing fees, or release of 
        judgment fees may be assessed against the state for actions 
        pursuant to this subdivision. 
           Subd. 5.  [INJUNCTION FORBIDDEN.] No injunction or other 
        legal action to prevent the determination, assessment, or 
        collection of any tax, reimbursements, or unemployment benefit 
        overpayment, including interest, penalties, and costs amounts 
        due under this chapter or section 116L.20, from an applicant or 
        employer, shall be allowed.  
           Sec. 39.  Minnesota Statutes 2003 Supplement, section 
        268.059, subdivision 1, is amended to read: 
           Subdivision 1.  [NOTICE.] The commissioner may give notice 
        to any employer that an employee owes delinquent taxes, 
        reimbursements, or overpaid unemployment benefits, including 
        penalties, interest, and costs any amounts due under this 
        chapter or section 116L.20, and that the obligation to the trust 
        fund should be withheld from the employee's wages.  The 
        commissioner may proceed only if the tax, reimbursements, or 
        unemployment benefit overpayment amount due is uncontested or if 
        the time for any appeal has expired.  The commissioner shall not 
        proceed until 30 calendar days after mailing sending to the 
        debtor employee, at the debtor's last known address by mail or 
        electronic transmission, a written notice of intent to garnish 
        wages and exemption notice.  That notice shall list: 
           (1) the amount of taxes, reimbursements, overpaid 
        unemployment benefits, interest, penalties, or costs due from 
        the debtor; 
           (2) demand for immediate payment; and 
           (3) the intention to serve a garnishment notice on the 
        debtor's employer. 
           The notice shall expire 180 calendar days after it has been 
        mailed sent to the debtor provided that the notice may be 
        renewed by mailing sending a new notice that is in accordance 
        with this section.  The renewed notice shall have the effect of 
        reinstating the priority of the original notice.  The exemption 
        notice shall be in substantially the same form as in section 
        571.72.  The notice shall inform the debtor of the right to 
        claim exemptions contained in section 550.37, subdivision 14.  
        If no written claim of exemption is received by the commissioner 
        within 30 calendar days after mailing sending of the notice, the 
        commissioner may proceed with the garnishment.  The notice to 
        the debtor's employer may be served by mail or electronic 
        transmission and shall be in substantially the same form as in 
        section 571.75.  
           Sec. 40.  Minnesota Statutes 2002, section 268.059, 
        subdivision 3, is amended to read: 
           Subd. 3.  [DISCHARGE OR DISCIPLINE PROHIBITED.] (a) If the 
        employee ceases to be employed by the employer before the full 
        amount set forth on the garnishment notice plus accrued interest 
        has been withheld, the employer shall immediately notify the 
        commissioner in writing or by electronic transmission, as 
        prescribed by the commissioner, of the termination date of the 
        employee and the total amount withheld.  No employer may 
        discharge or discipline any employee because the commissioner 
        has proceeded under this section.  If an employer discharges an 
        employee in violation of this section, the employee shall have 
        the same remedy as provided in section 571.927, subdivision 2. 
           (b) This section shall apply if the employer is the state 
        of Minnesota or any political subdivision. 
           (c) The commissioner shall refund to the employee any 
        excess amounts withheld from the employee. 
           (d) An employer that fails or refuses to comply with this 
        section shall be jointly and severally liable for the total 
        amount due from the employee.  Any amount due from the employer 
        under this paragraph may be collected in accordance with section 
        268.058 the same manner as any other amounts due from an 
        employer under this chapter. 
           Sec. 41.  Minnesota Statutes 2002, section 268.0625, as 
        amended by Laws 2003, First Special Session chapter 3, article 
        2, section 20, is amended to read: 
           268.0625 [REVOCATIONS OF BUSINESS LICENSES.] 
           Subdivision 1.  [NOTICE OF DEBT TO LICENSING AUTHORITY.] 
        The state of Minnesota or a political subdivision may not issue, 
        transfer, or renew, and must revoke a license for the conduct of 
        any profession, trade, or business, if the commissioner notifies 
        the licensing authority that the licensee, applicant, or 
        employer owes delinquent taxes, reimbursements, or unemployment 
        benefit overpayments, including interest, penalties, and 
        costs any amount due under this chapter or section 116L.20, of 
        $500 or more.  A licensing authority that has received such a 
        notice may issue, transfer, renew, or not revoke the license 
        only if the licensing authority has received a copy of the debt 
        clearance certificate issued by the commissioner. 
           Subd. 2.  [DEBT CLEARANCE CERTIFICATE.] The commissioner 
        may issue a debt clearance certificate only if:  
           (1) the licensee has fully paid any delinquent taxes, 
        reimbursements, or unemployment benefit overpayments, including 
        interest, penalties, and costs amounts due under this chapter or 
        section 116L.20; or 
           (2) the licensee has entered into an agreement to pay the 
        total amount due and is current with all the terms of that 
        agreement. 
           Subd. 3.  [DEFINITION.] For the purposes of this section, 
        "licensee" means:  
           (1) an individual if the license is issued to or in the 
        name of an individual, or the corporation, limited liability 
        company, or partnership if the license is issued to or in the 
        name of a corporation, limited liability company, or 
        partnership; or 
           (2) an officer of a corporation, manager of a limited 
        liability company, or a member of a partnership, or an 
        individual who is liable for the delinquent taxes, 
        reimbursements, or unemployment benefit overpayments amounts due 
        under this chapter or section 116L.20, either for the entity 
        that the license is at issue or for another entity that the 
        liability was incurred, or personally as a licensee.  "Licensee" 
        includes both the transferor and the transferee of the license 
        and any holder of a license. 
           Subd. 4.  [NOTICE AND RIGHT TO HEARING.] At least 30 
        calendar days before the commissioner notifies a licensing 
        authority, a notice of action under this section shall be mailed 
        sent to the licensee by mail or electronic transmission.  If the 
        licensee disputes the action, the licensee must appeal within 30 
        calendar days after the mailing sending of the notice to 
        the licensee's last known address licensee.  The only issue on 
        any appeal is whether the commissioner has complied with the 
        requirements of this section.  Proceedings on the appeal shall 
        be conducted in accordance with section 268.105. 
           Subd. 5.  [LICENSING AUTHORITY; DUTIES.] Upon request, the 
        licensing authority shall provide the commissioner with a list 
        of all licensees, including the name, address, business name and 
        address, Social Security number, and business identification 
        number.  The commissioner may request a list of the licensees no 
        more than once each calendar year.  Regardless of section 
        268.19, the commissioner may release information necessary to 
        accomplish this section. 
           Sec. 42.  Minnesota Statutes 2003 Supplement, section 
        268.063, is amended to read: 
           268.063 [PERSONAL LIABILITY.] 
           (a) Any officer, director, or employee of a corporation or 
        any manager, governor, member, or employee of a limited 
        liability company who 
           (1) either individually or jointly with others, have or 
        should have had control of, supervision over, or responsibility 
        for the filing of the tax reports or paying the amounts due 
        under this chapter or section 116L.20, and 
           (2) willfully knowingly fails to file the tax reports or 
        pay the amounts due, shall be personally liable for taxes or 
        reimbursements, including interest, penalties, and costs the 
        amount due in the event the employer does not pay. 
           For purposes of this section, "willfulness knowingly" means 
        that the facts demonstrate that the responsible party individual 
        used or allowed the use of corporate or company assets to pay 
        other creditors knowing that the amounts due under this chapter 
        were unpaid.  An evil motive or intent to defraud is not 
        necessary.  
           (b) Any partner of a limited liability partnership, or 
        professional limited liability partnership, shall be jointly and 
        severally liable for taxes or reimbursements, including 
        interest, penalties, and costs any amount due under this chapter 
        or section 116L.20 in the event the employer does not pay.  
           (c) Any personal representative of the estate of a decedent 
        or fiduciary who voluntarily distributes the assets without 
        reserving a sufficient amount to pay the taxes, reimbursements, 
        interest, and penalties amount due shall be personally liable 
        for the deficiency. 
           (d) The personal liability of any individual shall survive 
        dissolution, reorganization, receivership, or assignment for the 
        benefit of creditors.  For the purposes of this section, all 
        wages paid by the employer shall be considered earned from the 
        individual determined to be personally liable. 
           (e) The commissioner shall make an initial a determination 
        as to personal liability.  The determination shall be final 
        unless the individual found to be personally liable, within 30 
        calendar days after mailing of sending, by mail or electronic 
        transmission, a notice of determination to the individual's last 
        known address, files a protest.  Upon receipt of the protest, 
        the commissioner shall reexamine the personal liability 
        determination and either affirm or redetermine the assessment of 
        personal liability and a notice of the affirmation or 
        redetermination shall be mailed to the individual's last known 
        address sent to the individual by mail or electronic 
        transmission.  The affirmation or redetermination shall become 
        final unless an appeal is filed within 30 calendar days after 
        the date of mailing sending.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105.  
           Sec. 43.  Minnesota Statutes 2002, section 268.064, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [ACQUISITION OF ORGANIZATION, TRADE, 
        BUSINESS, OR ASSETS.] Any person who acquires all or part of the 
        organization, trade, business or assets from an employer, is 
        jointly and severally liable, in an amount not to exceed the 
        reasonable value of that part of the organization, trade, 
        business or assets acquired, for the taxes any amounts due and 
        unpaid by the employer.  The amount of liability shall, in 
        addition, be a lien against the property or assets acquired and 
        shall be prior to all other unrecorded liens.  This section does 
        not apply to sales in the normal course of the employer's 
        business. 
           Sec. 44.  Minnesota Statutes 2002, section 268.064, 
        subdivision 3, is amended to read: 
           Subd. 3.  [STATEMENT OF AMOUNT DUE.] Prior to the date of 
        acquisition, the commissioner shall furnish the acquiring person 
        with a statement of the taxes amounts due and unpaid under this 
        chapter or section 116L.20 upon the written request of the 
        potential acquiring person and the written release of the 
        obligor.  No release is required after the date of acquisition. 
           Sec. 45.  Minnesota Statutes 2002, section 268.065, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [SUBCONTRACTORS.] A contractor who 
        contracts with any subcontractor shall guarantee the payment of 
        all the taxes, interest, penalties, and collection costs amounts 
        that are due or become due from the subcontractor with respect 
        to taxable wages paid on the contract by: 
           (1) withholding sufficient money on the contract; or 
           (2) requiring the subcontractor to provide a sufficient 
        bond guaranteeing the payment of all taxes, interest, penalties, 
        and collection costs amounts that may become due.  
           The contractor may make a written request for verification 
        that the subcontractor has paid the taxes due 60 calendar days 
        after the due date for filing the tax wage detail report that 
        includes the final wages paid for employment performed under the 
        contract.  If the subcontractor has paid the taxes amounts due 
        for the period covered by the contract, the commissioner may 
        release the contractor from its liability. 
           The words "contractor" and "subcontractor" include 
        individuals, partnerships, firms, or corporations, or other 
        association of persons engaged in the construction industry. 
           Sec. 46.  Minnesota Statutes 2002, section 268.065, 
        subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYEE LEASING FIRMS.] A person whose work 
        force consists of 50 percent or more of workers provided by 
        employee leasing firms, is jointly and severally liable for the 
        unpaid taxes, penalties, interest, and collection costs amounts 
        that are due under this chapter or section 116L.20 on the wages 
        paid on the contract with the employee leasing firm.  "Employee 
        leasing firm" means an employer that provides its employees to 
        other persons without severing its employer-employee 
        relationship with the worker for the services performed for the 
        lessee. 
           Sec. 47.  Minnesota Statutes 2003 Supplement, section 
        268.066, is amended to read: 
           268.066 [CANCELLATION OF DELINQUENT TAXES AMOUNTS DUE FROM 
        AN EMPLOYER.] 
           (a) The commissioner shall cancel as uncollectible any 
        taxes, reimbursements, penalties, or the interest or costs 
        thereon amounts due from an employer under this chapter or 
        section 116L.20, which remain unpaid six years after the amounts 
        have been first determined due and payable, except where the 
        delinquent amounts are secured by a notice of lien, a judgment, 
        are in the process of garnishment, or are under a payment plan. 
           (b) The commissioner may cancel at any time as 
        uncollectible any taxes, reimbursements, penalties, or the 
        interest or costs thereon amount due, or any portion of an 
        amount due, from an employer under this chapter or section 
        116L.20, that the commissioner determines (1) are uncollectible 
        due to death or bankruptcy, (2) the Minnesota Collection 
        Enterprise under section 16D.04 was unable to collect, or (3) 
        the commissioner determines that it is not in the public 
        interest to pursue collection of the amount due. 
           Sec. 48.  Minnesota Statutes 2003 Supplement, section 
        268.067, is amended to read: 
           268.067 [COMPROMISE.] 
           (a) The commissioner may compromise in whole or in part any 
        action, determination, or decision that affects only an employer 
        and not an applicant, and that has occurred during the prior 24 
        months.  This paragraph may apply if it is determined by a court 
        of law, or a confession of judgment, that an applicant, while 
        employed, wrongfully took from the employer $500 or more in 
        money or property. 
           (b) The commissioner may at any time compromise delinquent 
        any amount due from an employer taxes, reimbursements, interest, 
        penalties, and costs under this chapter or section 116L.20. 
           (c) Any compromise involving an amount over $2,500 shall be 
        authorized by written order signed by an attorney who is a 
        classified an employee of the department designated by the 
        commissioner for that purpose. 
           (d) Any compromise order must set out all the terms and the 
        reason for the order and must be in the best interest of the 
        state of Minnesota. 
           Sec. 49.  Minnesota Statutes 2003 Supplement, section 
        268.0675, is amended to read: 
           268.0675 [NO ELECTION OF REMEDY.] 
           Use of any remedy under this chapter for the collection of 
        any delinquent taxes, reimbursements, or unemployment benefit 
        overpayment, including penalties, interest, and costs, amount 
        due from an employer or an applicant shall not constitute an 
        election of remedy to the exclusion of any other available 
        remedy. 
           Sec. 50.  Minnesota Statutes 2002, section 268.07, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [APPLICATION FOR UNEMPLOYMENT BENEFITS; 
        DETERMINATION OF BENEFIT ACCOUNT.] (a) An application for 
        unemployment benefits may be filed in person, by mail, by 
        telephone, or by electronic transmission as the commissioner 
        shall require.  The applicant must be unemployed at the time the 
        application is filed and must provide all requested information 
        in the manner required.  If the applicant is not unemployed at 
        the time of the application or fails to provide all requested 
        information, the communication shall not be considered an 
        application for unemployment benefits. 
           (b) The commissioner shall examine each application for 
        unemployment benefits to determine the base period and the 
        benefit year, and based upon all the covered employment in the 
        base period the commissioner shall determine the weekly 
        unemployment benefit amount available, if any, and the maximum 
        amount of unemployment benefits available, if any.  The 
        determination shall be known as the determination of benefit 
        account.  A determination of benefit account shall be sent to 
        the applicant and all base period employers, by mail or 
        electronic transmission. 
           (c) If a base period employer did not provide wage 
        information for the applicant as provided for in section 
        268.044, or provided erroneous information, the commissioner 
        shall may accept an applicant certification as to wage credits, 
        based upon the applicant's records, and issue a determination of 
        benefit account. 
           (d) The commissioner may, at any time within 24 months from 
        the establishment of a benefit account, reconsider any 
        determination of benefit account and make an amended 
        determination if the commissioner finds that the determination 
        was incorrect for any reason.  An amended determination shall be 
        promptly sent to the applicant and all base period employers, by 
        mail or electronic transmission. 
           If an amended determination of benefit account reduces the 
        weekly unemployment benefit amount or maximum amount of 
        unemployment benefits available, any unemployment benefits that 
        have been paid greater than the applicant was entitled is 
        considered an overpayment of unemployment benefits under section 
        268.18, subdivision 1. 
           Sec. 51.  Minnesota Statutes 2003 Supplement, section 
        268.07, subdivision 2, is amended to read: 
           Subd. 2.  [BENEFIT ACCOUNT REQUIREMENTS AND WEEKLY 
        UNEMPLOYMENT BENEFIT AMOUNT AND MAXIMUM AMOUNT OF UNEMPLOYMENT 
        BENEFITS.] (a) To establish a benefit account, an applicant must 
        have: 
           (1) high quarter wage credits of at least $1,000; and 
           (2) wage credits, in other than the high quarter, of at 
        least $250.  
           (b) If an applicant has established a benefit account, the 
        weekly unemployment benefit amount available during the benefit 
        year shall be the higher of: 
           (1) 50 percent of the applicant's average weekly wage 
        during the base period, to a maximum of 66-2/3 percent of the 
        state's average weekly wage; or 
           (2) 50 percent of the applicant's average weekly wage 
        during the high quarter, to a maximum of 45 percent of the 
        state's average weekly wage. 
           The applicant's average weekly wage under clause (1) shall 
        be computed by dividing the total wage credits by 52.  The 
        applicant's average weekly wage under clause (2) shall be 
        computed by dividing the high quarter wage credits by 13.  
           (c) The state's maximum weekly unemployment benefit amount 
        and an applicant's weekly unemployment benefit amount and 
        maximum amount of unemployment benefits available shall be 
        rounded down to the next lowest lower whole dollar.  The state's 
        maximum weekly benefit amount, computed in accordance with 
        section 268.035, subdivision 23, shall apply to a benefit 
        account established effective on or after the first Sunday in 
        August.  Once established, an applicant's weekly unemployment 
        benefit amount shall not be affected by the first Sunday in 
        August change in the state's maximum weekly unemployment benefit 
        amount.  
           (d) The maximum amount of unemployment benefits available 
        on any benefit account shall be the lower of: 
           (1) 33-1/3 percent of the applicant's total wage credits; 
        or 
           (2) 26 times the applicant's weekly unemployment benefit 
        amount.  
           Sec. 52.  Minnesota Statutes 2002, section 268.07, 
        subdivision 3, is amended to read: 
           Subd. 3.  [SECOND BENEFIT ACCOUNT REQUIREMENTS.] To 
        establish a second benefit account following the expiration of a 
        benefit year on a prior benefit account, an applicant must have 
        sufficient wage credits to establish a benefit account under 
        subdivision 2 and must have performed services in covered 
        employment after the effective date of the prior benefit 
        account.  The wages paid for that employment must equal not less 
        than eight times the weekly unemployment benefit amount of the 
        prior benefit account.  A benefit account established 
        sufficiently in advance of anticipated loss of employment to 
        make the limitations of this subdivision ineffective shall not 
        be allowed.  The purpose of this subdivision is to prevent an 
        applicant from establishing more than one benefit account as a 
        result of one loss of employment. 
           Sec. 53.  Minnesota Statutes 2003 Supplement, section 
        268.085, subdivision 1, is amended to read: 
           Subdivision 1.  [ELIGIBILITY CONDITIONS.] An applicant 
        shall be eligible to receive unemployment benefits for any week 
        if: 
           (1) the applicant has an active benefit account and has 
        filed a continued biweekly request for unemployment benefits for 
        that week pursuant to section 268.086; 
           (2) the applicant was able to work and was available for 
        suitable employment, and was actively seeking suitable 
        employment.  The applicant's weekly unemployment benefit amount 
        shall be reduced one-fifth for each day the applicant is unable 
        to work or is unavailable for suitable employment.  If the 
        computation of the reduced unemployment benefits is not a whole 
        dollar, it shall be rounded down to the next lower whole dollar. 
           This clause shall not apply to an applicant who is in 
        reemployment assistance training. 
           This clause shall not apply, or each day the applicant is 
        on jury duty; 
           (3) the applicant has served a waiting period of one week 
        that the applicant is otherwise entitled to some amount of 
        unemployment benefits.  This clause shall not apply if the 
        applicant would have been entitled to federal disaster 
        unemployment assistance because of a disaster in Minnesota, but 
        for the applicant's establishment of a benefit account under 
        section 268.07; and 
           (4) the applicant has been participating in reemployment 
        assistance services, such as job search and resume writing 
        classes, if the applicant has been determined in need of 
        reemployment assistance services by the commissioner, unless 
        there is good cause for the applicant's failure to participate. 
           Sec. 54.  Minnesota Statutes 2002, section 268.085, 
        subdivision 2, is amended to read: 
           Subd. 2.  [NOT ELIGIBLE.] An applicant shall not be 
        eligible to receive unemployment benefits for any week: 
           (1) that occurs before the effective date of a benefit 
        account; 
           (2) that occurs in a period when the applicant is a student 
        in attendance at, or on vacation from a secondary school 
        including the period between academic years or terms; 
           (3) that the applicant is incarcerated or performing court 
        ordered community service.  The applicant's weekly unemployment 
        benefit amount shall be reduced by one-fifth for each day the 
        applicant is incarcerated or performing court ordered community 
        service.  If the computation of the reduced unemployment 
        benefits is not a whole dollar, it shall be rounded down to the 
        next lower whole dollar; 
           (4) that the applicant fails or refuses to provide 
        information on an issue of eligibility required under section 
        268.101, subdivision 1, paragraph (a), or an issue of 
        disqualification required under section 268.101, subdivision 1, 
        paragraph (d); 
           (5) that the applicant is performing services 32 hours or 
        more, in employment, covered employment, noncovered employment, 
        or self-employment regardless of the amount of any earnings; or 
           (6) with respect to which the applicant is receiving, has 
        received, or has filed an application for unemployment benefits 
        under any federal law or the law of any other state.  If the 
        appropriate agency finally determines that the applicant is not 
        entitled to the unemployment benefits, this clause shall not 
        apply. 
           Sec. 55.  Minnesota Statutes 2003 Supplement, section 
        268.085, subdivision 3, is amended to read: 
           Subd. 3.  [PAYMENTS THAT DELAY UNEMPLOYMENT BENEFITS.] (a) 
        An applicant shall not be eligible to receive unemployment 
        benefits for any week with respect to which the applicant is 
        receiving, has received, or has filed for payment, equal to or 
        in excess of the applicant's weekly unemployment benefit amount, 
        in the form of: 
           (1) severance pay, bonus pay, vacation pay, sick pay, and 
        any other money payments, except earnings under subdivision 5, 
        and back pay under subdivision 6, paid by an employer because 
        of, upon, or after separation from employment, but only if the 
        money payment is considered wages at the time of payment under 
        section 268.035, subdivision 29, or United States Code, title 
        26, section 3121, clause (2), of the Federal Insurance 
        Contribution Act.  This clause shall apply to all the weeks of 
        payment and shall be applied to the period immediately following 
        the last day of employment.  The number of weeks of payment 
        shall be determined as follows: 
           (i) if the payments are made periodically, the total of the 
        payments to be received shall be divided by the applicant's last 
        level of regular weekly pay from the employer; or 
           (ii) if the payment is made in a lump sum, that sum shall 
        be divided by the applicant's last level of regular weekly pay 
        from the employer.  This clause shall not apply to vacation pay 
        paid by an employer upon permanent separation from employment; 
           (2) pension, retirement, or annuity payments from any plan 
        contributed to by a base period employer including the United 
        States government, except Social Security benefits which are 
        provided for in subdivision 4.  The base period employer 
        contributed to the plan if the contribution is excluded from the 
        definition of wages under section 268.035, subdivision 29, 
        clause (1), or United States Code, title 26, section 3121, 
        clause (2), of the Federal Insurance Contribution Act. 
           If the applicant receives a lump sum pension payment, that 
        sum shall be divided by the applicant's last level of regular 
        weekly pay to determine the number of weeks of payment.  The 
        number of weeks of payment shall be applied to the period 
        immediately following the last day of employment.  An applicant 
        shall not be considered to have received the lump sum payment if 
        the applicant immediately deposits that payment in a qualified 
        pension plan or account; or 
           (3) holiday pay. 
           (b) If the payment is less than the applicant's weekly 
        unemployment benefit amount, unemployment benefits shall be 
        reduced by the amount of the payment.  If the computation of 
        reduced unemployment benefits is not a whole dollar, it shall be 
        rounded down to the next lowest lower whole dollar. 
           Sec. 56.  Minnesota Statutes 2003 Supplement, section 
        268.085, subdivision 4, is amended to read: 
           Subd. 4.  [SOCIAL SECURITY BENEFITS.] (a) Any applicant 
        aged 62 or over shall be required to state when filing an 
        application for unemployment benefits and when filing continued 
        biweekly requests for unemployment benefits whether the 
        applicant is receiving, has filed for, or intends to file for, 
        primary Social Security old age or disability benefits for any 
        week during the benefit year. 
           (b) There shall be deducted from an applicant's weekly 
        unemployment benefit amount 50 percent of the weekly equivalent 
        of the primary Social Security old age or disability benefit the 
        applicant has received, has filed for, or intends to file for, 
        with respect to that week. 
           (c) Regardless of paragraph (b), An applicant shall be 
        ineligible for unemployment benefits for any week with respect 
        to which the applicant who is receiving, has received, or has 
        filed for primary Social Security disability benefits. 
        This paragraph shall not apply if for any week during the 
        benefit year shall be determined unable to work and unavailable 
        for suitable employment for that week, unless: 
           (1) the Social Security Administration approved the 
        collecting of primary Social Security disability benefits each 
        month the applicant was employed during the base period.; or 
           (2) the applicant provides a statement from an appropriate 
        health care professional who is aware of the applicant's Social 
        Security disability claim and the basis for that claim, 
        certifying that the applicant is able to work and available for 
        suitable employment. 
           If an applicant meets the requirements of clause (1) or 
        (2), then there shall be deducted from the applicant's weekly 
        unemployment benefit amount 50 percent of the weekly equivalent 
        of the primary Social Security disability benefits the applicant 
        is receiving, has received, or has filed for, with respect to 
        that week; provided, however, that if the Social Security 
        Administration determines that an individual is not entitled to 
        receive primary Social Security disability benefits for any week 
        the applicant has applied for those benefits, the 50 percent 
        deduction shall not apply to that week. 
           (d) (c) Information from the Social Security Administration 
        shall be considered conclusive, absent specific evidence showing 
        that the information was erroneous. 
           (e) Any applicant who receives primary Social Security old 
        age or disability benefits for periods that the applicant has 
        been paid unemployment benefits shall be considered overpaid 
        those unemployment benefits under section 268.18, subdivision 
        1 (d) If the computation of the reduced unemployment benefits is 
        not a whole dollar, it shall be rounded down to the next lower 
        whole dollar. 
           (e) This subdivision does not apply to Social Security 
        survivor benefits. 
           Sec. 57.  Minnesota Statutes 2003 Supplement, section 
        268.085, subdivision 5, is amended to read: 
           Subd. 5.  [DEDUCTIBLE EARNINGS.] (a) If the applicant has 
        earnings with respect to any week, from employment, covered 
        employment, noncovered employment, self-employment, or volunteer 
        work, equal to or in excess of the applicant's weekly 
        unemployment benefit amount, the applicant shall be ineligible 
        for unemployment benefits for that week. 
           (b) If the applicant has earnings, with respect to any 
        week, that is less than the applicant's weekly unemployment 
        benefit amount, from employment, covered employment, noncovered 
        employment, self-employment, or volunteer work, that amount over 
        the following shall be deducted from the weekly unemployment 
        benefit amount: 
           (1) 25 percent of earnings or $50, whichever is higher; and 
           (2) $200 for earnings from service in the National Guard or 
        a United States military reserve unit. 
           The resulting unemployment benefit, if not a whole dollar, 
        shall be rounded down to the next lower whole dollar. 
           (c) No deduction shall be made from an applicant's weekly 
        unemployment benefit amount for earnings from service as a 
        volunteer firefighter or volunteer ambulance service personnel.  
        No deduction shall be made for jury duty pay.  
           (d) The applicant may report deductible earnings on 
        continued biweekly requests for unemployment benefits at the 
        nearest next lower whole dollar amount. 
           (e) Earnings shall not include any money considered a 
        deductible payment under subdivision 3, but shall include all 
        other money considered wages and any other money considered 
        earned income under state and federal law for income tax 
        purposes. 
           Sec. 58.  Minnesota Statutes 2003 Supplement, section 
        268.085, subdivision 6, is amended to read: 
           Subd. 6.  [RECEIPT OF BACK PAY.] (a) Back pay received by 
        an applicant with respect to any week occurring in the 104 weeks 
        prior to the payment of the back pay shall be deducted from 
        unemployment benefits paid for that week. 
           If an arbitration award, administrative or judicial 
        decision, or negotiated settlement that provides for the back 
        pay does not specify the period is not paid with respect to 
        which it is paid a specific period, the back pay shall be 
        applied to the period immediately following the last day of 
        employment. 
           (b) If the back pay is reduced by the amount of 
        unemployment benefits that have been paid, the amount of back 
        pay withheld shall be: 
           (1) paid by the employer to the trust fund within 30 
        calendar days and subject to the same collection procedures that 
        apply to past due taxes; 
           (2) applied to unemployment benefit overpayments resulting 
        from the payment of the back pay; and 
           (3) credited to the maximum amount of unemployment benefits 
        available to the applicant in a benefit year that includes the 
        weeks for which back pay was deducted. 
           (c) Unemployment benefits paid the applicant shall be 
        removed from the computation of the tax rate for taxpaying 
        employers and removed from the reimbursable account for 
        nonprofit and government employers that have elected to be 
        liable for reimbursements in the calendar quarter the trust fund 
        receives payment.  
           (d) Payments to the trust fund under this subdivision shall 
        be considered as made by the applicant.  
           Sec. 59.  Minnesota Statutes 2002, section 268.085, 
        subdivision 12, is amended to read: 
           Subd. 12.  [ALIENS.] (a) An alien shall be ineligible for 
        unemployment benefits for any week the alien is not authorized 
        to work in the United States under federal law.  Information 
        from the Immigration and Naturalization Service shall be 
        considered conclusive, absent specific evidence that the 
        information was erroneous.  Pursuant to the existing agreement 
        between the United States and Canada, this paragraph shall not 
        apply to an applicant who is a Canadian citizen and has returned 
        to and is living in Canada each week unemployment benefits are 
        requested. 
           (b) Unemployment benefits shall not be paid on the basis of 
        wage credits earned by an alien unless the alien (1) was 
        lawfully admitted for permanent residence at the time of the 
        employment, (2) was lawfully present for the purposes of the 
        employment, or (3) was permanently residing in the United States 
        under color of law at the time of the employment. 
           (c) Any information required of applicants applying for 
        unemployment benefits to determine eligibility because of their 
        alien status shall be required from all applicants. 
           Sec. 60.  Minnesota Statutes 2002, section 268.085, 
        subdivision 13a, is amended to read: 
           Subd. 13a.  [LEAVE OF ABSENCE.] (a) An applicant on a 
        voluntary leave of absence shall be ineligible for unemployment 
        benefits for the duration of the leave of absence.  An applicant 
        on an involuntary leave of absence shall not be ineligible under 
        this subdivision. 
           A leave of absence is voluntary when work that the 
        applicant can then perform is available with the applicant's 
        employer but the applicant chooses not to work.  A medical leave 
        of absence shall not be presumed to be voluntary. 
           (b) A period of vacation requested by the applicant, paid 
        or unpaid, shall be considered a voluntary leave of absence.  A 
        vacation period assigned by an employer under:  (1) a uniform 
        vacation shutdown; (2) a collective bargaining agreement; or (3) 
        an established employer policy, shall not be considered a 
        voluntary an involuntary leave of absence. 
           (c) A voluntary leave of absence shall not be considered a 
        quit or and an involuntary leave of absence shall not be 
        considered a discharge from employment for purposes of section 
        268.095. 
           (d) An applicant who is on a paid leave of absence, whether 
        the leave of absence is voluntary or involuntary, shall be 
        ineligible for unemployment benefits for the duration of the 
        leave. 
           (e) This subdivision shall apply to a leave of absence from 
        a base period employer, an employer during the period between 
        the end of the base period and the effective date of the benefit 
        account, or an employer during the benefit year. 
           Sec. 61.  Minnesota Statutes 2002, section 268.085, 
        subdivision 14, is amended to read: 
           Subd. 14.  [ABLE TO WORK DEFINED.] "Able to work" means an 
        applicant has the physical and mental ability to perform (1) the 
        usual duties of the applicant's usual occupation or of 
        comparable (2) the usual duties of work that is gainful 
        employment engaged in by others as a means of livelihood. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004, 
        and applies to all determinations and decisions issued on or 
        after that date. 
           Sec. 62.  Minnesota Statutes 2003 Supplement, section 
        268.095, subdivision 1, is amended to read: 
           Subdivision 1.  [QUIT.] An applicant who quit employment 
        shall be ineligible for all unemployment benefits except when: 
           (1) the applicant quit the employment because of a good 
        reason caused by the employer as defined in subdivision 3; 
           (2) the applicant quit the employment to accept other 
        covered employment that provided substantially better terms and 
        conditions of employment, but the applicant did not work long 
        enough at the other second employment to have sufficient 
        subsequent earnings to satisfy the disqualification that would 
        otherwise be imposed under subdivision 10 for quitting the first 
        employment; 
           (3) the applicant quit the employment within 30 calendar 
        days of beginning the employment because the employment was 
        unsuitable for the applicant; 
           (4) the employment was unsuitable for the applicant and the 
        applicant quit to enter reemployment assistance training; 
           (5) the employment was part time and the applicant also had 
        full-time employment in the base period, that from which 
        full-time employment the applicant separated from because of 
        nondisqualifying reasons, and the wage credits from the 
        full-time employment are sufficient to meet the minimum 
        requirements to establish a benefit account under section 
        268.07; 
           (6) the applicant quit because the employer notified the 
        applicant that the applicant was going to be laid off due to 
        lack of work within 30 calendar days.  An applicant who quit 
        employment within 30 calendar days of a notified date of layoff 
        due to lack of work shall be ineligible for unemployment 
        benefits through the end of the week that includes the scheduled 
        date of layoff; 
           (7) the applicant quit the employment because the 
        applicant's serious illness or injury made it medically 
        necessary that the applicant quit, provided that the applicant 
        inform the employer of the serious illness or injury and request 
        accommodation and no reasonable accommodation is made available. 
           If the applicant's serious illness is chemical dependency, 
        this exception shall not apply if the applicant was previously 
        diagnosed as chemically dependent or had treatment for chemical 
        dependency, and since that diagnosis or treatment has failed to 
        make consistent efforts to control the chemical dependency; or 
           (8) domestic abuse of the applicant or the applicant's 
        minor child, necessitated the applicant's quitting the 
        employment.  Domestic abuse shall be shown by one or more of the 
        following: 
           (i) a court order for protection or other documentation of 
        equitable relief issued by a court; 
           (ii) a police record documenting the domestic abuse; 
           (iii) documentation that the perpetrator of the domestic 
        abuse has been convicted of the offense of domestic abuse; 
           (iv) medical documentation of domestic abuse; or 
           (v) written statement that the applicant or the applicant's 
        minor child is a victim of domestic abuse, provided by a social 
        worker, member of the clergy, shelter worker, attorney at law, 
        or other professional who has assisted the applicant in dealing 
        with the domestic abuse. 
           Domestic abuse for purposes of this clause shall be defined 
        under section 518B.01. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004, 
        and applies to all determinations and decisions issued by the 
        department on or after that date. 
           Sec. 63.  Minnesota Statutes 2003 Supplement, section 
        268.095, subdivision 3, is amended to read: 
           Subd. 3.  [GOOD REASON CAUSED BY THE EMPLOYER DEFINED.] (a) 
        A good reason caused by the employer for quitting is a reason:  
           (1) that is directly related to the employment and for 
        which the employer is responsible; and 
           (2) that is adverse to the worker; and 
           (2) (3) that is significant and would compel an average, 
        reasonable worker to quit and become unemployed rather than 
        remaining in the employment. 
           (b) The analysis required in paragraph (a) must be applied 
        to the specific facts of each case.  
           (c) If an applicant was subjected to adverse working 
        conditions by the employer, the applicant must complain to the 
        employer and give the employer a reasonable opportunity to 
        correct the adverse working conditions before that may be 
        considered a good reason caused by the employer for quitting. 
           (c) (d) A substantial adverse change in the wages, hours, 
        or other terms of reason for quitting employment by the employer 
        shall not be considered a good reason caused by the employer for 
        quitting unless the change if the reason for quitting occurred 
        because of the applicant's employment misconduct. 
           (d) (e) Notification of discharge in the future, including 
        a layoff due to lack of work, shall not be considered a good 
        reason caused by the employer for quitting. 
           (e) (f) An applicant has a good reason caused by the 
        employer for quitting if it results from sexual harassment of 
        which the employer was aware, or should have been aware, and the 
        employer failed to take timely and appropriate action.  Sexual 
        harassment means unwelcome sexual advances, requests for sexual 
        favors, sexually motivated physical contact or other conduct or 
        communication of a sexual nature when:  
           (1) the applicant's submission to the conduct or 
        communication is made a term or condition of the employment; 
           (2) the applicant's submission to or rejection of the 
        conduct or communication is the basis for decisions affecting 
        employment; or 
           (3) the conduct or communication has the purpose or effect 
        of substantially interfering with an applicant's work 
        performance or creating an intimidating, hostile, or offensive 
        working environment. 
           (f) (g) The definition of a good reason caused by the 
        employer for quitting employment provided by this subdivision 
        shall be exclusive and no other definition shall apply.  
           [EFFECTIVE DATE.] This section is effective August 1, 2004, 
        and applies to all determinations and decisions issued by the 
        department on or after that date. 
           Sec. 64.  Minnesota Statutes 2002, section 268.095, 
        subdivision 4, is amended to read: 
           Subd. 4.  [DISCHARGE.] An applicant who was discharged from 
        employment by an employer shall not be ineligible for any 
        unemployment benefits except when: 
           (1) the applicant was discharged because of employment 
        misconduct as defined in subdivision 6; or 
           (2) the applicant was discharged because of aggravated 
        employment misconduct as defined in subdivision 6a.  
           Sec. 65.  Minnesota Statutes 2002, section 268.095, 
        subdivision 6a, is amended to read: 
           Subd. 6a.  [AGGRAVATED EMPLOYMENT MISCONDUCT DEFINED.] (a) 
        For the purpose of this section, "aggravated employment 
        misconduct" means: 
           (1) the commission of any act, on the job or off the job, 
        that would amount to a gross misdemeanor or felony if the act 
        substantially interfered with the employment or adversely 
        affected had a significant adverse effect on the employment; or 
           (2) for an employee of a facility as defined in section 
        626.5572, aggravated employment misconduct includes an act of 
        patient or resident abuse, financial exploitation, or recurring 
        or serious neglect, as defined in section 626.5572 and 
        applicable rules. 
           (b) If an applicant is convicted of a gross misdemeanor or 
        felony for the same act for which the applicant was discharged, 
        it is aggravated employment misconduct if the act substantially 
        interfered with the employment or had a significant adverse 
        effect on the employment. 
           (c) The definition of aggravated employment misconduct 
        provided by this subdivision shall be exclusive and no other 
        definition shall apply. 
           Sec. 66.  Minnesota Statutes 2002, section 268.101, 
        subdivision 2, is amended to read: 
           Subd. 2.  [DISQUALIFICATION DETERMINATION.] (a) The 
        commissioner shall determine any issue of disqualification 
        raised by information required from an applicant under 
        subdivision 1, paragraph (a) or (c), and mail send to the 
        applicant and employer at the last known address, by mail or 
        electronic transmission, a determination of disqualification or 
        a determination of nondisqualification, as is appropriate.  The 
        determination shall state the effect on the employer under 
        section 268.047.  A determination shall be made pursuant to this 
        paragraph even if a notified employer has not raised the issue 
        of disqualification. 
           (b) The commissioner shall determine any issue of 
        disqualification raised by an employer and mail send to the 
        applicant and that employer at the last known address, by mail 
        or electronic transmission, a determination of disqualification 
        or a determination of nondisqualification as is appropriate.  
        The determination shall state the effect on the employer under 
        section 268.047.  
           If a base period employer: 
           (1) was not the applicant's most recent employer prior to 
        the application for unemployment benefits; 
           (2) did not employ the applicant during the six calendar 
        months prior to the application for unemployment benefits; and 
           (3) did not raise an issue of disqualification within ten 
        calendar days of notification under subdivision 1, paragraph 
        (b); 
        then any exception under section 268.047, subdivisions 2 and 3, 
        shall begin the Sunday two weeks following the week that the 
        issue of disqualification was raised by the employer. 
           (c) If any time within 24 months from the establishment of 
        a benefit account the commissioner finds that an applicant 
        failed to report any employment, loss of employment, or offers 
        of employment that were required to be provided by the applicant 
        under this section, the commissioner shall determine any issue 
        of disqualification on that loss of employment or offer of 
        employment and mail send to the applicant and involved employer 
        at the last known address, by mail or electronic transmission, a 
        determination of disqualification or a determination of 
        nondisqualification, as is appropriate.  The determination shall 
        state the effect on the employer under section 268.047. 
           This paragraph shall not prevent the imposition of any 
        penalty under section 268.18, subdivision 2, or 268.182. 
           (d) An issue of disqualification shall be determined based 
        upon that information required of an applicant, any information 
        that may be obtained from an applicant or employer, and 
        information from any other source, without regard to any common 
        law burden of proof.  
           (e) A determination of disqualification or a determination 
        of nondisqualification shall be final unless an appeal is filed 
        by the applicant or notified employer within 30 calendar days 
        after mailing sending.  The determination shall contain a 
        prominent statement indicating the consequences of not appealing.
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           (f) An issue of disqualification for purposes of this 
        section shall include any reason for no longer working for an 
        employer other than a layoff due to lack of work, any question 
        of a disqualification from unemployment benefits under section 
        268.095, any question of an exception to disqualification under 
        section 268.095, any question of effect on an employer under 
        section 268.047, and any question of an otherwise imposed 
        disqualification that an applicant has satisfied under section 
        268.095, subdivision 10.  
           (g) Regardless of the requirements of this subdivision, the 
        commissioner is not required to mail send to an applicant a 
        determination where the applicant has satisfied any otherwise 
        potential disqualification under section 268.095, subdivision 10.
           Sec. 67.  Minnesota Statutes 2003 Supplement, section 
        268.101, subdivision 3, is amended to read: 
           Subd. 3.  [ELIGIBILITY DETERMINATION.] (a) The commissioner 
        shall determine any issue of eligibility raised by an 
        employer, whether timely or untimely, and mail send to the 
        applicant and that employer at the last known address, by mail 
        or electronic transmission, a determination of eligibility or a 
        determination of ineligibility, as is appropriate. 
           (b) The commissioner shall determine any issue of 
        eligibility raised by information obtained from an applicant and 
        mail send to the applicant at the last known address, by mail or 
        electronic transmission, a determination of eligibility or a 
        determination of ineligibility, as is appropriate.  A 
        determination shall be made pursuant to this paragraph even if a 
        notified employer has not raised the issue of eligibility.  
           (c) If any time within 24 months from the establishment of 
        a benefit account the commissioner finds the applicant failed to 
        provide, on an application for unemployment benefits or on a 
        continued biweekly request for unemployment benefits, requested 
        information on an issue of eligibility, the commissioner shall 
        determine the issue of eligibility and mail send to the 
        applicant at the last known address, by mail or electronic 
        transmission, a determination of eligibility or a determination 
        of ineligibility, as is appropriate. 
           This paragraph shall not prevent the imposition of a 
        penalty under section 268.18, subdivision 2, or 268.182.  
           (d) A determination of eligibility or determination of 
        ineligibility shall be final unless an appeal is filed by the 
        applicant or notified employer within 30 calendar days after 
        mailing sending.  The determination shall contain a prominent 
        statement indicating the consequences of not appealing.  
        Proceedings on the appeal shall be conducted in accordance with 
        section 268.105. 
           (e) An issue of eligibility for purposes of this section 
        shall include any question regarding the denial or allowing of 
        unemployment benefits under sections 268.085, 268.086, 268.115, 
        268.125, 268.135, and 268.155. 
           (f) Only if an employer raised the issue of eligibility 
        shall the employer be:  (1) mailed sent the determination of 
        eligibility or a determination of ineligibility, or (2) 
        considered an involved employer for purposes of an appeal under 
        section 268.105.  
           Sec. 68.  Minnesota Statutes 2003 Supplement, section 
        268.101, subdivision 3a, is amended to read: 
           Subd. 3a.  [DIRECT HEARING.] Regardless of any provision of 
        the Minnesota Unemployment Insurance Law, the commissioner or an 
        unemployment law judge or a senior unemployment review judge 
        may, prior to a determination being made under this chapter, 
        refer any issue of disqualification, any issue of eligibility, 
        or any other issue under sections 268.035 to 268.23 this 
        chapter, directly for hearing in accordance with section 
        268.105, subdivision 1.  The status of the issue shall be the 
        same as if a determination had been made and an appeal filed. 
           Sec. 69.  Minnesota Statutes 2002, section 268.101, 
        subdivision 4, is amended to read: 
           Subd. 4.  [AMENDED DETERMINATION.] Unless an appeal has 
        been filed, the commissioner, on the commissioner's own motion, 
        may reconsider a determination of disqualification or 
        nondisqualification or a determination of eligibility or 
        ineligibility that has not become final and issue an amended 
        determination.  Any amended determination shall be mailed sent 
        to the applicant and any involved employer at the last known 
        address by mail or electronic transmission.  Any amended 
        determination shall be final unless an appeal is filed by the 
        applicant or notified employer within 30 calendar days 
        after mailing sending.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105. 
           Sec. 70.  Minnesota Statutes 2002, section 268.103, is 
        amended to read: 
           268.103 [APPEALS BY TELEPHONE; ELECTRONIC TRANSMISSION.] 
           Subdivision 1.  [IN COMMISSIONER'S DISCRETION.] (a) Unless 
        the statutory provision providing for an appeal requires that 
        the appeal be in writing, The commissioner shall have the 
        discretion to allow an appeal to be made filed by telephone or 
        by electronic transmission.  If the commissioner allows an 
        appeal to be made filed by telephone or by electronic 
        transmission, that shall be clearly set out on the determination 
        or decision subject to appeal. 
           (b) The commissioner may restrict the manner, format, and 
        conditions under which an appeal by telephone or electronic 
        transmission may be made filed.  Any restrictions as to days, 
        hours, telephone number, electronic transmission address, or 
        other conditions, shall be clearly set out on the determination 
        or decision subject to appeal. 
           (c) All information requested by the commissioner when an 
        appeal is made by telephone or filed by electronic transmission 
        must be supplied or the communication will shall not constitute 
        an appeal. 
           Subd. 2.  [APPEAL IN WRITING BY MAIL.] (a) The commissioner 
        must allow an appeal may to be made in writing filed by mail 
        even if an appeal by telephone or by electronic transmission is 
        allowed. 
           (b) A written statement delivered or mailed to the 
        department that could reasonably be interpreted to mean that an 
        involved applicant or employer is in disagreement with a 
        specific determination or decision shall be considered an 
        appeal.  No specific words need be used for the written 
        statement to be considered an appeal. 
           Subd. 3.  [EXCLUSIVE MEANS OF APPEAL.] A written appeal, or 
        if allowed an appeal by telephone or electronic transmission, 
        shall be the only manner of appeal. 
           Subd. 4.  [PROTESTS BY TELEPHONE AND ELECTRONIC 
        TRANSMISSION.] This section shall apply to the filing of 
        protests to those determinations and notices that require a 
        protest and affirmation procedure prior to an appeal. 
           Sec. 71.  Minnesota Statutes 2002, section 268.105, as 
        amended by Laws 2003, First Special Session chapter 3, article 
        2, section 15, is amended to read: 
           268.105 [HEARINGS; APPEALS.] 
           Subdivision 1.  [EVIDENTIARY HEARING BY AN UNEMPLOYMENT LAW 
        JUDGE.] (a) Upon a timely appeal having been filed, the 
        department shall send a notice of appeal to all involved parties 
        that an appeal has been filed, that a de novo due process 
        evidentiary hearing will be scheduled, and that the parties have 
        certain rights and responsibilities regarding the hearing.  The 
        department shall set a time and place for a de novo due process 
        evidentiary hearing and mail send notice to any involved 
        applicant and any involved employer, by mail or electronic 
        transmission, not less than ten calendar days prior to the date 
        of the hearing. 
           (b) The evidentiary hearing shall be conducted by an 
        unemployment law judge without regard to any common law burden 
        of proof as an evidence gathering inquiry and not an adversarial 
        proceeding.  The unemployment law judge shall ensure that all 
        relevant facts are clearly and fully developed.  The 
        commissioner department shall adopt rules on evidentiary 
        hearings.  The rules need not conform to common law or statutory 
        rules of evidence and other technical rules of procedure.  The 
        department shall have discretion regarding the method by which 
        the evidentiary hearing is conducted.  A report of any employee 
        of the department, except a determination, made in the regular 
        course of the employee's duties, shall be competent evidence of 
        the facts contained in it. 
           (c) After the conclusion of the hearing, upon the evidence 
        obtained, the unemployment law judge shall make written findings 
        of fact and decision and mail send those, by mail or electronic 
        transmission, to all involved parties.  The unemployment law 
        judge's decision is the final department decision unless a 
        further appeal is filed pursuant to subdivision 2. 
           (d) The commissioner shall designate classified Only 
        employees of the department shall serve as unemployment law 
        judges to conduct evidentiary hearings on appeals.  The 
        commissioner or authorized representative A senior unemployment 
        review judge may personally hear or transfer to another 
        unemployment law judge any proceedings pending before an 
        unemployment law judge.  Any proceedings removed to the 
        commissioner or authorized representative a senior unemployment 
        review judge shall be heard in accordance with this subdivision. 
           Subd. 2.  [COMMISSIONER DE NOVO REVIEW BY A SENIOR 
        UNEMPLOYMENT REVIEW JUDGE.] (a) Within 30 calendar days after 
        mailing of the unemployment law judge's decision Except as 
        provided under subdivision 2a, any involved applicant or 
        involved employer may appeal a decision of an unemployment law 
        judge and obtain a de novo review by the commissioner or an 
        authorized representative a senior unemployment review judge by 
        filing with a senior unemployment review judge an appeal within 
        30 calendar days after the sending of the unemployment law 
        judge's decision.  The commissioner A senior unemployment review 
        judge within the same period of time may, on the commissioner's 
        a senior unemployment review judge's own motion, order a de novo 
        review of any decision of an unemployment law judge.  
           (b) The authorized representative of the commissioner A 
        senior unemployment review judge shall be an attorney who is a 
        classified an employee of the department.  The authority to act 
        on behalf of the commissioner under this section shall be by 
        specific written delegation filed with the secretary of state. 
           (c) Upon de novo review, the commissioner a senior 
        unemployment review judge shall, on the basis of that evidence 
        submitted at the evidentiary hearing under subdivision 1, make 
        findings of fact and decision, or remand the matter back to an 
        unemployment law judge for the taking of additional evidence and 
        the making of new findings and decision based on all the 
        evidence.  The commissioner A senior unemployment review judge 
        shall, independent of the findings of fact and decision of the 
        unemployment law judge, examine the evidence and make those 
        findings of fact as the evidence, in the judgment of 
        the commissioner senior unemployment review judge require, and 
        make that decision as the facts found by the commissioner senior 
        unemployment review judge require.  
           (d) The commissioner A senior unemployment review judge may 
        conduct a de novo review without argument by any involved party, 
        or the commissioner a senior unemployment review judge may allow 
        written argument.  The commissioner A senior unemployment review 
        judge shall not, except for purposes of deciding whether to 
        remand a matter to an unemployment law judge for a further 
        evidentiary hearing, consider any evidence that was not 
        submitted at the hearing before the unemployment law judge.  
           (e) The commissioner senior unemployment review judge shall 
        send, by mail or electronic transmission, to any involved party 
        the commissioner's senior unemployment review judge's findings 
        of fact and decision.  The decision of the commissioner senior 
        unemployment review judge is the final department decision of 
        the department.  Unless judicial review is sought under 
        subdivision 7, the decision of the commissioner senior 
        unemployment review judge shall become final 30 calendar days 
        after mailing sending. 
           Subd. 2a.  [ORDERS BY A SENIOR UNEMPLOYMENT REVIEW 
        JUDGE.] (a) If an applicant or employer files an appeal in a 
        matter where an unemployment law judge affirmed a determination 
        issued under section 268.101, and there is no dispute regarding 
        the determinative facts, a senior unemployment review judge 
        shall have the discretion to decline to conduct a de novo 
        review.  If de novo review is declined, the senior unemployment 
        review judge shall issue an order adopting the unemployment law 
        judge's findings of fact and decision. 
           (b) If an involved party fails, without good cause, to 
        appear and participate at the evidentiary hearing conducted by 
        an unemployment law judge under subdivision 1, and that party 
        files an appeal, a senior unemployment review judge shall have 
        the discretion to decline to conduct a de novo review.  If de 
        novo review is declined, the senior unemployment review judge 
        shall issue an order dismissing the appeal. 
           Submission of a written statement shall not constitute an 
        appearance and participation at an evidentiary hearing for 
        purposes of this paragraph. 
           All involved parties must be notified of this paragraph 
        with the notice of appeal and notice of hearing provided for 
        under subdivision 1.  The senior unemployment review judge shall 
        allow for the submission of a written argument on the issue of 
        good cause before dismissing an appeal under this paragraph.  
           "Good cause" for purposes of this paragraph is a compelling 
        reason that would have prevented a reasonable person acting with 
        due diligence from appearing and participating at the 
        evidentiary hearing. 
           (c) The senior unemployment review judge shall send to any 
        involved party the order issued under this subdivision.  The 
        order may be sent by mail or electronic transmission.  Unless 
        judicial review is sought under subdivision 7, the order of a 
        senior unemployment review judge becomes final 30 calendar days 
        after sending. 
           Subd. 3.  [WITHDRAWAL OF APPEAL.] (a) Any appeal that is 
        pending a decision before an unemployment law judge or the 
        commissioner a senior unemployment review judge may be withdrawn 
        by the appealing person, or an authorized representative of that 
        person, upon filing of a notice of withdrawal. 
           (b) The appeal shall, by written order, be dismissed if a 
        notice of withdrawal is filed, unless the commissioner an 
        unemployment law judge or a senior unemployment review judge, by 
        written order, directs that further adjudication is required for 
        a proper result. 
           (c) A notice of withdrawal may be filed by mail, by 
        telephone, or if the commissioner allows, by electronic 
        transmission. 
           Subd. 3a.  [DECISIONS.] (a) If an unemployment law judge's 
        decision or the commissioner's a senior unemployment review 
        judge's decision or order allows unemployment benefits to an 
        applicant, the unemployment benefits shall be paid regardless of 
        any appeal period or any appeal having been filed. 
           (b) If an unemployment law judge's decision modifies or 
        reverses a determination allowing unemployment benefits to an 
        applicant, any benefits paid pursuant to the determination is 
        considered an overpayment of those unemployment benefits under 
        section 268.18, subdivision 1. 
           (c) If a commissioner's senior unemployment review judge's 
        decision modifies or reverses an unemployment law judge's 
        decision allowing unemployment benefits to an applicant, any 
        unemployment benefits paid pursuant to the unemployment law 
        judge's decision is considered an overpayment of those 
        unemployment benefits under section 268.18, subdivision 1. 
           (d) If the commissioner a senior unemployment review judge 
        affirms an unemployment law judge's decision on an issue of 
        disqualification that allows unemployment benefits to an 
        applicant, and the commissioner's senior unemployment review 
        judge's decision, if finally or order is reversed by the 
        Minnesota Court of Appeals or the Supreme Court of 
        Minnesota, shall not result in a disqualification of the 
        applicant shall not be disqualified from unemployment benefits 
        under section 268.095, subdivision 10.  
           (e) If the commissioner a senior unemployment review judge, 
        pursuant to subdivision 2, remands a matter to an unemployment 
        law judge for the taking of additional evidence, the prior 
        unemployment law judge's decision shall continue to be enforced 
        until new findings of fact and decision are made by an 
        unemployment law judge. 
           Subd. 4.  [TESTIMONIAL POWERS.] The An unemployment law 
        judge, the commissioner, or authorized representative, and a 
        senior unemployment review judge may administer oaths and 
        affirmations, take depositions, and issue subpoenas to compel 
        the attendance of witnesses and the production of documents and 
        other personal property considered necessary as evidence in 
        connection with the subject matter of an evidentiary hearing.  
        The subpoenas shall be enforceable through the district court in 
        the district that the subpoena is issued.  Witnesses subpoenaed, 
        other than an involved applicant or involved employer or 
        officers and employees of an involved employer, shall be paid by 
        the commissioner department the same witness fees as in a civil 
        action in district court.  
           Subd. 5.  [USE OF INFORMATION EVIDENCE; DATA PRIVACY.] (a) 
        All testimony at any evidentiary hearing conducted pursuant to 
        subdivision 1 shall be recorded.  A copy of any recorded 
        testimony and exhibits offered or received into evidence at the 
        hearing shall, upon request, or upon directive of the 
        commissioner a senior unemployment review judge, be furnished to 
        a party at no cost during the time period for filing an appeal 
        to the commissioner a senior unemployment review judge or while 
        such an appeal is pending.  If requested, the commissioner 
        department shall make available a device for listening to the 
        recording if an appeal is pending before the commissioner a 
        senior unemployment review judge under subdivision 2. 
           (b) Regardless of any provision of law to the contrary, if 
        recorded testimony and exhibits received into evidence at the 
        evidentiary hearing are not requested during the time period for 
        filing an appeal to the commissioner a senior unemployment 
        review judge, or while such an appeal is pending, that testimony 
        and other evidence shall later be made available to an involved 
        party only pursuant to a court order.  A subpoena shall not be 
        considered a court order. 
           (c) Testimony obtained under subdivision 1, may not be used 
        or considered for any purpose, including impeachment, in any 
        civil, administrative, or contractual proceeding, except by a 
        local, state, or federal human rights agency with enforcement 
        powers, unless the proceeding is initiated by the department. 
           (d) Subd. 5a.  [NO COLLATERAL ESTOPPEL.] No findings of 
        fact or decision or order issued by an unemployment law judge or 
        the commissioner a senior unemployment review judge may be held 
        conclusive or binding or used as evidence in any separate or 
        subsequent action in any other forum, be it contractual, 
        administrative, or judicial, except proceedings provided for 
        under this chapter, regardless of whether the action involves 
        the same or related parties or involves the same facts. 
           Subd. 6.  [REPRESENTATION; FEES.] (a) In any proceeding 
        under subdivision 1 or, 2, or 2a, an applicant or involved 
        employer may be represented by any agent.  
           (b) Except for services provided by an attorney-at-law, an 
        applicant shall not be charged fees, costs, or disbursements of 
        any kind in a proceeding before an unemployment law judge, the 
        commissioner a senior unemployment review judge, the Minnesota 
        Court of Appeals, or Supreme Court of Minnesota. 
           Subd. 7.  [JUDICIAL REVIEW.] (a) The Minnesota Court of 
        Appeals shall, by writ of certiorari to the commissioner 
        department, review the senior unemployment review judge's 
        decision of the commissioner under subdivision 2 or order under 
        subdivision 2a, provided a petition for the writ is filed with 
        the court and a copy is served upon the senior unemployment 
        review judge or the commissioner and any other involved party 
        within 30 calendar days of the mailing sending of the 
        commissioner's senior unemployment review judge's decision under 
        subdivision 2 or order under subdivision 2a.  
           (b) Any employer petitioning for a writ of certiorari shall 
        pay to the court the required filing fee and upon the service of 
        the writ shall furnish a cost bond to the commissioner 
        department in accordance with the Rules of Civil Appellate 
        Procedure.  If the employer requests a written transcript of the 
        testimony received at the evidentiary hearing conducted pursuant 
        to subdivision 1, the employer shall pay to the commissioner 
        department the cost of preparing the transcript.  That money 
        shall be credited to the administration account. 
           (c) Upon issuance by the Minnesota Court of Appeals of a 
        writ of certiorari as a result of an applicant's petition, the 
        commissioner department shall furnish to the applicant at no 
        cost a written transcript of the any testimony received at the 
        evidentiary hearing conducted pursuant to subdivision 1, and, if 
        requested, a copy of all exhibits entered into evidence.  No 
        filing fee or cost bond shall be required of an applicant 
        petitioning the Minnesota Court of Appeals for a writ of 
        certiorari.  
           (d) The commissioner department shall be considered the 
        primary responding party to any judicial action involving the 
        commissioner's a senior unemployment review judge's decision or 
        order.  The commissioner department may be represented by an 
        attorney who is an employee of the department designated by the 
        commissioner for that purpose. 
           [EFFECTIVE DATE.] This section is effective August 1, 2004, 
        and applies to all decisions issued by the department on or 
        after that date. 
           Sec. 72.  Minnesota Statutes 2002, section 268.115, 
        subdivision 5, is amended to read: 
           Subd. 5.  [MAXIMUM AMOUNT OF EXTENDED UNEMPLOYMENT 
        BENEFITS.] The maximum amount of extended unemployment benefits 
        available to an applicant shall be 50 percent of the maximum 
        amount of regular unemployment benefits available in the benefit 
        year, rounded down to the next lower whole dollar.  If the total 
        rate of unemployment computed under subdivision 1, clause 
        (2)(ii), equaled or exceeded eight percent, the maximum amount 
        of extended unemployment benefits available shall be 80 percent 
        of the maximum amount of regular unemployment benefits available 
        in the benefit year.  
           Sec. 73.  Minnesota Statutes 2002, section 268.125, 
        subdivision 5, is amended to read: 
           Subd. 5.  [MAXIMUM AMOUNT OF UNEMPLOYMENT BENEFITS.] The 
        maximum amount of additional unemployment benefits available in 
        the applicant's benefit year shall be one-half of the 
        applicant's maximum amount of regular unemployment benefits 
        available under section 268.07, subdivision 2, rounded down to 
        the next lower whole dollar.  Extended unemployment benefits 
        paid and unemployment benefits paid under any federal law other 
        than regular unemployment benefits shall be deducted from the 
        maximum amount of additional unemployment benefits available. 
           Sec. 74.  Minnesota Statutes 2002, section 268.135, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [DEFINITIONS.] For purposes of this section:
           (1) "Affected employee" means an employee who was 
        continuously employed as a member of the affected group, for at 
        least six months, on a full-time basis, prior to submission of 
        the shared work plan. 
           (2) "Affected group" means five or more employees 
        designated by the employer to participate in a shared work plan. 
           (3) "Shared work plan" or "plan" means an employer's 
        written plan, submitted in a manner and format prescribed by the 
        commissioner, under which a group of employees whose normal 
        weekly hours of work are reduced, in order to prevent employees 
        from being laid off due to lack of work. 
           (4) "Normal weekly hours of work" means the number of hours 
        in a week that the employee normally would work for the shared 
        work employer or 40 hours, whichever is less. 
           Sec. 75.  Minnesota Statutes 2002, section 268.135, 
        subdivision 2, is amended to read: 
           Subd. 2.  [PARTICIPATION.] (a) An employer wishing to 
        participate in the shared work benefit program shall submit a 
        written shared work plan to the commissioner in a manner and 
        format prescribed for approval.  The commissioner may approve a 
        shared work plan only if it: 
           (1) specifies the employees in the affected group; 
           (2) applies to only one affected group; 
           (3) includes a certified statement by the employer that 
        each employee specified in the affected group is an affected 
        employee; 
           (4) includes a certified statement by the employer that for 
        the duration of the plan the reduction in normal weekly hours of 
        work of the employees in the affected group is instead of 
        layoffs that otherwise would result in at least as large a 
        reduction in the total normal weekly hours of work; 
           (5) specifies an expiration date that is no more than one 
        year from the date the employer submits the plan for approval; 
           (6) specifies that fringe benefits, such as health and 
        retirement, available to the employees in the affected group are 
        not reduced beyond the percentage of reduction in hours of work; 
        and 
           (7) is approved in writing by the collective bargaining 
        agent for each collective bargaining agreement that covers any 
        employee in the affected group. 
           (b) The commissioner shall set the beginning and ending 
        dates of an approved shared work plan. 
           (c) The commissioner shall mail send to the employer a 
        written determination, by mail or electronic transmission, 
        approving or disapproving the plan within 15 calendar days of 
        its receipt.  Determinations are final. 
           (d) Disapproval of a plan may be reconsidered at the 
        discretion of the commissioner.  Approval of a shared work plan 
        may be revoked if the approval was based, in whole or in part, 
        upon information that was false or misleading. 
           Sec. 76.  Minnesota Statutes 2002, section 268.135, 
        subdivision 4, is amended to read: 
           Subd. 4.  [WEEKLY BENEFIT AMOUNT.] (a) An applicant who is 
        eligible for shared work benefits shall be paid an amount equal 
        to the regular weekly unemployment benefit amount multiplied by 
        the nearest full percentage of reduction of the applicant's 
        regular weekly hours of work as set in the plan.  The benefit 
        payment, if not a whole dollar shall be rounded down to the next 
        lower whole dollar. 
           (b) The deductible earnings provisions of section 268.085, 
        subdivision 5, shall not apply to earnings from the shared work 
        employer of an applicant eligible for shared work benefits 
        unless the resulting amount would be less than the regular 
        weekly unemployment benefit amount the applicant would otherwise 
        be eligible for without regard to shared work benefits. 
           (c) An applicant shall not be eligible for shared work 
        benefits for any week that employment is performed for the 
        shared work employer in excess of the reduced hours set forth in 
        the plan. 
           Sec. 77.  Minnesota Statutes 2002, section 268.145, 
        subdivision 1, is amended to read: 
           Subdivision 1.  [NOTIFICATION.] (a) Upon filing an 
        application for unemployment benefits, the applicant shall be 
        informed that: 
           (1) unemployment benefits are subject to federal and state 
        income tax; 
           (2) there are requirements for filing estimated tax 
        payments; 
           (3) the applicant may elect to have federal income tax 
        withheld from unemployment benefits; 
           (4) if the applicant elects to have federal income tax 
        withheld, the applicant may, in addition, elect to have 
        Minnesota state income tax withheld; and 
           (5) at any time during the benefit year the applicant may 
        change a prior election. 
           (b) If an applicant elects to have federal income tax 
        withheld, the commissioner shall deduct ten percent for federal 
        income tax, rounded down to the nearest next lower whole dollar. 
        If an applicant also elects to have Minnesota state income tax 
        withheld, the commissioner shall make an additional five percent 
        deduction for state income tax, rounded down to the next lower 
        whole dollar.  Any amounts deducted or offset pursuant to 
        sections 268.155, 268.156, 268.18, and 268.184 have priority 
        over any amounts deducted under this section.  Federal income 
        tax withholding has priority over state income tax withholding. 
           (c) An election to have income tax withheld shall not be 
        retroactive and shall only apply to unemployment benefits paid 
        after the election. 
           Sec. 78.  Minnesota Statutes 2003 Supplement, section 
        268.18, subdivision 1, is amended to read: 
           Subdivision 1.  [NONFRAUD OVERPAYMENT.] (a) Any applicant 
        who (1) by reason of the applicant's own mistake, or (2) because 
        of an error by any employee of the department, or (3) because of 
        a determination, redetermination, or amended determination 
        issued pursuant to section 268.07 or 268.101, or (4) because of 
        an appeal decision under section 268.105, has received any 
        unemployment benefits that the applicant was not entitled to, 
        shall promptly repay the unemployment benefits to the trust 
        fund. The commissioner shall, as soon as the overpayment is 
        discovered, determine the amount due and notify the applicant in 
        writing to repay the unemployment benefits. 
           (b) Unless the applicant files an appeal within 30 calendar 
        days after the mailing sending of the determination of 
        overpayment to the applicant's last known address applicant by 
        mail or electronic transmission, the determination shall become 
        final.  Proceedings on the appeal shall be conducted in 
        accordance with section 268.105.  An applicant may not 
        collaterally attack, by way of an appeal to an overpayment 
        determination, any prior determination issued pursuant to 
        section 268.07 or 268.101, or decision issued pursuant to 
        section 268.105, that has become final. 
           (c) If the applicant fails to repay the unemployment 
        benefits determined overpaid under this subdivision, the 
        commissioner may offset from any future unemployment benefits 
        otherwise payable the amount of the overpayment.  Except when 
        the overpayment resulted because the applicant failed to report 
        deductible earnings or deductible or benefit delaying payments, 
        no single offset shall exceed 50 percent of the amount of the 
        payment from which the offset is made.  The overpayment may also 
        be collected by the same methods as delinquent taxes payments 
        from an employer.  A determination of overpayment shall state 
        the methods of collection the commissioner may use to recover 
        the overpayment.  
           (d) If an applicant has been overpaid unemployment benefits 
        under the law of another state, due to a reason other than 
        fraud, and that state certifies that the applicant is liable 
        under its law to repay the unemployment benefits and requests 
        the commissioner to recover the overpayment, the commissioner 
        may offset from future unemployment benefits otherwise payable 
        the amount of overpayment, except that no single offset shall 
        exceed 50 percent of the amount of the payment from which the 
        offset is made.  
           (e) If under paragraph (c) or (d) the reduced unemployment 
        benefits as a result of a 50 percent offset is not a whole 
        dollar amount, it shall be rounded down to the next lower whole 
        dollar. 
           (f) Unemployment benefits paid for weeks more than three 
        years prior to the discovery of overpayment under this 
        subdivision are not overpaid unemployment benefits. 
           Sec. 79.  Minnesota Statutes 2003 Supplement, section 
        268.18, subdivision 2, is amended to read: 
           Subd. 2.  [OVERPAYMENT DUE TO FRAUD.] (a) Any applicant who 
        receives unemployment benefits by intentionally misrepresenting, 
        misstating, or failing to disclose any material fact, or who 
        makes a false statement or representation without a good faith 
        belief as to the correctness of the statement or representation, 
        has committed fraud.  After the discovery of facts indicating 
        fraud, the commissioner shall make a written determination that 
        the applicant obtained unemployment benefits by fraud and that 
        the applicant must promptly repay the unemployment benefits to 
        the trust fund.  In addition, the commissioner shall assess a 
        penalty equal to 25 percent of the amount fraudulently 
        obtained.  If the applicant had a prior overpayment due to 
        fraud, the commissioner shall, on the present overpayment, 
        assess a penalty equal to 50 percent of the amount fraudulently 
        obtained.  This penalty is in addition to penalties under 
        section 268.182. 
           (b) Unless the applicant files an appeal within 30 calendar 
        days after the mailing sending of the determination of 
        overpayment by fraud to the applicant's last known address 
        applicant by mail or electronic transmission, the determination 
        shall become final.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105.  
           (c) If the applicant fails to repay the unemployment 
        benefits, penalty, and interest assessed, the commissioner shall 
        offset from future unemployment benefits otherwise payable the 
        total amount of overpayment due.  The total due may also be 
        collected by the same methods as delinquent taxes payments from 
        an employer.  A determination of overpayment by fraud shall 
        state the methods of collection the commissioner may use to 
        recover the overpayment.  Money received in repayment of 
        fraudulently obtained unemployment benefits, penalties, and 
        interest shall first be applied to the unemployment benefits 
        overpaid, then to the penalty amount due, then to any interest 
        due.  Payments made toward penalty and interest shall be 
        credited to the contingent account. 
           (d) If an applicant has been overpaid unemployment benefits 
        under the law of another state because of fraud and that state 
        certifies that the applicant is liable to repay the unemployment 
        benefits and requests the commissioner to recover the 
        overpayment, the commissioner may offset from future 
        unemployment benefits otherwise payable the amount of 
        overpayment.  
           (e) A determination of overpayment by fraud may only be 
        made at any time within four years of the effective date of the 
        benefit account from which the unemployment benefits were 
        fraudulently obtained.  
           Sec. 80.  Minnesota Statutes 2002, section 268.18, 
        subdivision 2b, is amended to read: 
           Subd. 2b.  [INTEREST.] (a) On any unemployment benefits 
        fraudulently obtained, and any penalty amounts assessed under 
        subdivision 2, the commissioner may assess interest at the rate 
        of 1-1/2 percent per month on any amount that remains unpaid 30 
        calendar days after the date of the determination of overpayment 
        by fraud.  A determination of overpayment by fraud shall state 
        that interest shall be assessed. 
           (b) If this subdivision became effective after the date of 
        the determination, or the determination did not state that 
        interest shall be assessed, interest shall be assessed beginning 
        30 calendar days after written notification, by mail or 
        electronic transmission, to the applicant. 
           Sec. 81.  Minnesota Statutes 2002, section 268.18, 
        subdivision 6, is amended to read: 
           Subd. 6.  [COLLECTION OF OVERPAYMENTS.] (a) The 
        commissioner may not compromise the amount that has been 
        determined overpaid under this section including penalties and 
        interest.  
           (b) The commissioner shall have discretion regarding the 
        use of any method of recovery of any overpayment under 
        subdivision 1.  Regardless of any law to the contrary, the 
        commissioner shall not be required to refer any amount 
        determined overpaid under subdivision 1 to a public or private 
        collection agency, including agencies of this state.  
           (c) Amounts determined overpaid under subdivision 1 shall 
        not be considered a "debt" to the state of Minnesota for 
        purposes of any reporting requirements to the commissioner of 
        finance. 
           (d) A pending appeal under section 268.105 shall not toll 
        suspend the assessment of interest, penalties, or collection of 
        an overpayment under this section. 
           (e) Section 16A.626 applies to the repayment by an 
        applicant of any overpayment, penalty, or interest under this 
        section. 
           Sec. 82.  Minnesota Statutes 2002, section 268.182, is 
        amended to read: 
           268.182 [APPLICANT'S FALSE REPRESENTATIONS; CONCEALMENT OF 
        FACTS; PENALTY.] 
           (a) Subdivision 1.  [CRIMINAL PENALTIES.] Whoever obtains, 
        or attempts to obtain, or aids or abets any individual to obtain 
        by means of an intentional false statement or representation, by 
        intentional concealment of a material fact, or by impersonation 
        or other fraudulent means, unemployment benefits that the 
        individual is not entitled or unemployment benefits greater than 
        the individual is entitled under this chapter, or under the law 
        of any state or of the federal government, either personally or 
        for any other individual, is guilty of theft and shall be 
        sentenced pursuant to section 609.52.  
           (b) Subd. 2.  [ADMINISTRATIVE PENALTIES.] Any individual 
        who intentionally makes a false statement or representation, who 
        intentionally fails to disclose a material fact, or who makes a 
        false statement or representation without a good faith belief as 
        to the correctness of the statement or representation, in order 
        to obtain or in an attempt to obtain unemployment benefits may 
        be assessed, in addition to any other penalties, an 
        administrative penalty of denial of unemployment benefits for 
        one to 52 weeks that the individual would otherwise be entitled 
        to unemployment benefits.  A denial shall not apply to any week 
        more than two years after the week that the penalty was 
        determined.  A written determination of denial shall be mailed 
        sent to the individual's last known address individual by mail 
        or electronic transmission.  Unless an appeal is filed within 30 
        calendar days of mailing sending, the determination shall be 
        final.  Proceeding on the appeal shall be conducted in 
        accordance with section 268.105.  
           Sec. 83.  Minnesota Statutes 2002, section 268.184, is 
        amended to read: 
           268.184 [EMPLOYER MISCONDUCT; PENALTY.] 
           Subdivision 1.  [ADMINISTRATIVE PENALTIES.] (a) If the 
        commissioner finds that any employer or any employee, officer, 
        or agent of any employer, is in collusion with any applicant for 
        the purpose of assisting the applicant to receive unemployment 
        benefits illegally fraudulently, the employer shall be penalized 
        $500 or the amount of unemployment benefits determined to be 
        overpaid, whichever is greater. 
           (b) If the commissioner finds that any employer or any 
        employee, officer, or agent of an employer has made (1) a false 
        statement or representation knowing it to be false, or (2) has 
        made a false statement or representation without a good faith 
        belief as to correctness of the statement or representation, or 
        (3) who knowingly fails to disclose a material fact, to prevent 
        or reduce the payment of unemployment benefits to any applicant 
        or to reduce or prevent the effects of unemployment benefits 
        paid on its tax or reimbursable account avoid any payment 
        required from an employer under this chapter or section 116L.20, 
        the employer shall be penalized $500, or 50 percent of the 
        reduced unemployment benefits or payment required, whichever is 
        greater. 
           (c) If the commissioner finds that an employer failed or 
        refused to honor a subpoena issued under section 268.105, 
        subdivision 4, or section 268.188, the employer shall be 
        penalized $500 and any costs of enforcing the subpoena, 
        including attorney fees. 
           (d) Penalties under this section shall be in addition to 
        any other penalties and subject to the same collection 
        procedures that apply to past due taxes.  Penalties shall be 
        paid to the department within 30 calendar days of assessment and 
        credited to the contingent account. 
           (d) (e) The assessment of the penalty shall be final unless 
        the employer files an appeal within 30 calendar days after the 
        sending of notice of the penalty to the employer by mail or 
        electronic transmission.  Proceedings on the appeal shall be 
        conducted in accordance with section 268.105. 
           (e) Subd. 2.  [CRIMINAL PENALTIES.] Any employer or any 
        officer or agent of an employer or any other individual who 
        makes a false statement or representation knowing it to be 
        false, or who knowingly fails to disclose a material fact to 
        avoid or reduce any payment required from an employer under this 
        chapter or section 116L.20, or to prevent or reduce the payment 
        of unemployment benefits to any applicant, is guilty of a gross 
        misdemeanor unless the unemployment benefit underpayment exceeds 
        $500, in that case the individual is guilty of a felony.  
           Sec. 84.  Minnesota Statutes 2003 Supplement, section 
        268.186, is amended to read: 
           268.186 [RECORDS; AUDITS.] 
           (a) Each employer shall keep true and accurate records for 
        the periods of time and containing the information the 
        commissioner may require.  For the purpose of administering this 
        chapter, the commissioner has the power to audit, examine, or 
        cause to be supplied or copied, any books, correspondence, 
        papers, records, or memoranda that are relevant, whether the 
        books, correspondence, papers, records, or memoranda are the 
        property of or in the possession of the employer or any other 
        person at any reasonable time and as often as may be necessary. 
           (b) Any employer that refuses to allow an audit of its 
        records by the department, or that fails to make all necessary 
        records available for audit in Minnesota upon request of the 
        commissioner, may be assessed an administrative penalty of 
        $500.  The penalty collected shall be credited to the 
        administration account to be used by the commissioner to ensure 
        integrity in the administration of the unemployment insurance 
        program. 
           (c) The commissioner may make summaries, compilations, 
        photographs, duplications, or reproductions of any records, or 
        reports that the commissioner considers advisable for the 
        preservation of the information contained therein.  Any 
        summaries, compilations, photographs, duplications, or 
        reproductions shall be admissible in any proceeding under this 
        chapter.  The commissioner may duplicate records, reports, 
        summaries, compilations, instructions, determinations, or any 
        other written or recorded matter pertaining to the 
        administration of this chapter. 
           (c) (d) Regardless of any law to the contrary, the 
        commissioner may provide for the destruction of any records, 
        reports, or reproductions thereof, or other papers, that are 
        more than two years old, and that are no longer necessary for 
        determining employer liability or an applicant's unemployment 
        benefit rights or for the administration of this chapter, 
        including any required audit.  In addition, the commissioner may 
        provide for the destruction or disposition of any record, 
        report, or other paper from which the information has been 
        electronically captured and stored, or that has been 
        photographed, duplicated, or reproduced.  
           Sec. 85.  Minnesota Statutes 2003 Supplement, section 
        268.19, subdivision 2, is amended to read: 
           Subd. 2.  [EMPLOYER INFORMATION; ABSOLUTE PRIVILEGE.] (a) 
        Regardless of any provision of law to the contrary, an employer 
        may provide the commissioner with information on an applicant so 
        that the commissioner can determine an applicant's entitlement 
        to unemployment benefits under the Minnesota Unemployment 
        Insurance Law. 
           (b) The commissioner may disseminate any employer's name 
        and address and the name and address of any employer's 
        unemployment insurance processing agent in order to administer 
        the Minnesota unemployment insurance program. 
           (c) Information obtained pursuant to the Minnesota 
        Unemployment Insurance Law, in order to determine an applicant's 
        entitlement to unemployment benefits, shall be absolutely 
        privileged and shall not be made the subject matter or the basis 
        for any civil proceeding, administrative, or judicial.  
           Sec. 86.  [REVISOR'S INSTRUCTION.] 
           The revisor of statutes shall renumber Minnesota Statutes, 
        section 268.022, as Minnesota Statutes, section 116L.20. 
           The revisor of statutes shall change the terms "evinces" 
        and "demonstrates" to "displays clearly" wherever they appear in 
        Minnesota Statutes, chapter 268. 
           Presented to the governor May 7, 2004 
           Signed by the governor May 10, 2004, 9:03 p.m.

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