1.1                          A bill for an act 
  1.2             relating to the revenue recapture act; providing 
  1.3             procedures to ensure compliance by claimant agencies 
  1.4             with the requirements of the act; imposing powers and 
  1.5             duties on the taxpayer's rights advocate and on 
  1.6             administrative law judges; amending Minnesota Statutes 
  1.7             1994, sections 14.50; 14.61; 14.62, by adding a 
  1.8             subdivision; 270.273, subdivisions 1, 2, and by adding 
  1.9             a subdivision; 270A.04, subdivision 2; 270A.06; and 
  1.10            270A.11. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1994, section 14.50, is 
  1.13  amended to read: 
  1.14     14.50 [HEARINGS BEFORE ADMINISTRATIVE LAW JUDGE.] 
  1.15     Subdivision 1.  [GENERALLY.] All hearings of state agencies 
  1.16  required to be conducted under this chapter shall be conducted 
  1.17  by an administrative law judge assigned by the chief 
  1.18  administrative law judge.  All hearings required to be conducted 
  1.19  under chapter 176 shall be conducted by a compensation judge 
  1.20  assigned by the chief administrative law judge.  In assigning 
  1.21  administrative law judges or compensation judges to conduct such 
  1.22  hearings, the chief administrative law judge shall attempt to 
  1.23  utilize personnel having expertise in the subject to be dealt 
  1.24  with in the hearing.  Only administrative law judges learned in 
  1.25  the law shall be assigned to contested case hearings.  Only 
  1.26  compensation judges shall be assigned to workers' compensation 
  1.27  matters.  It shall be the duty of the administrative law judge 
  1.28  to:  (1) advise an agency as to the location at which and time 
  2.1   during which a hearing should be held so as to allow for 
  2.2   participation by all affected interests; (2) conduct only 
  2.3   hearings for which proper notice has been given; (3) see to it 
  2.4   that all hearings are conducted in a fair and impartial manner.  
  2.5   Except in the case of workers' compensation hearings involving 
  2.6   claims for compensation it shall also be the duty of the 
  2.7   administrative law judge to make a report on each proposed 
  2.8   agency action in which the administrative law judge functioned 
  2.9   in an official capacity, stating findings of fact and 
  2.10  conclusions and, except as provided in subdivision 2, 
  2.11  recommendations, taking notice of the degree to which the agency 
  2.12  has (i) documented its statutory authority to take the proposed 
  2.13  action, (ii) fulfilled all relevant substantive and procedural 
  2.14  requirements of law or rule, and (iii) in rulemaking 
  2.15  proceedings, demonstrated the need for and reasonableness of its 
  2.16  proposed action with an affirmative presentation of facts.  
  2.17     Subd. 2.  [REVENUE RECAPTURE ACT HEARINGS.] In addition to 
  2.18  the requirements of subdivision 1, in the case of revenue 
  2.19  recapture hearings under section 270A.09, the report of the 
  2.20  administrative law judge shall contain a decision and order, 
  2.21  which constitute the final decision in the contested case.  A 
  2.22  copy of the decision and order shall be served upon the claimant 
  2.23  agency and upon each party by first class mail, and upon the 
  2.24  taxpayer's rights advocate.  Fees and expenses must be awarded 
  2.25  as provided in sections 15.471 to 15.475.  The provisions for 
  2.26  judicial review under sections 14.63 to 14.68 apply to decisions 
  2.27  of the administrative law judge under this subdivision. 
  2.28     Sec. 2.  Minnesota Statutes 1994, section 14.61, is amended 
  2.29  to read: 
  2.30     14.61 [AGENCY DECISION IN CONTESTED CASE.] 
  2.31     In all contested cases the decision of the officials of the 
  2.32  agency who are to render the final decision shall not be made 
  2.33  until the report of the administrative law judge as required by 
  2.34  sections 14.48 to 14.56, has been made available to parties to 
  2.35  the proceeding for at least ten days and an opportunity has been 
  2.36  afforded to each party adversely affected to file exceptions and 
  3.1   present argument to a majority of the officials who are to 
  3.2   render the decision.  This section does not apply to a revenue 
  3.3   recapture contested case under section 14.50, subdivision 2. 
  3.4      Sec. 3.  Minnesota Statutes 1994, section 14.62, is amended 
  3.5   by adding a subdivision to read: 
  3.6      Subd. 4.  [APPLICABILITY.] This section does not apply to a 
  3.7   revenue recapture contested case under section 14.50, 
  3.8   subdivision 2. 
  3.9      Sec. 4.  Minnesota Statutes 1994, section 270.273, 
  3.10  subdivision 1, is amended to read: 
  3.11     Subdivision 1.  [AUTHORITY TO ISSUE.] On application filed 
  3.12  by a taxpayer with the department of revenue taxpayer's rights 
  3.13  advocate, in the form, manner, and in the time prescribed by the 
  3.14  commissioner, and after thorough investigation, the taxpayer's 
  3.15  rights advocate may issue a taxpayer assistance order if, in the 
  3.16  determination of the taxpayer's rights advocate, the manner in 
  3.17  which the state tax laws or the revenue recapture act are being 
  3.18  administered is creating or will create an unjust and 
  3.19  inequitable result for the taxpayer. 
  3.20     Sec. 5.  Minnesota Statutes 1994, section 270.273, 
  3.21  subdivision 2, is amended to read: 
  3.22     Subd. 2.  [TERMS OF A TAXPAYER ASSISTANCE ORDER.] (a) A 
  3.23  taxpayer assistance order may require the department to release 
  3.24  property of the taxpayer levied on, cease any action, or refrain 
  3.25  from taking any action to enforce the state tax laws against the 
  3.26  taxpayer, until the issue or issues giving rise to the order 
  3.27  have been resolved. 
  3.28     (b) A taxpayer assistance order may require the department 
  3.29  to refuse to assist under chapter 270A in the collection of a 
  3.30  debt owed to a claimant agency.  
  3.31     Sec. 6.  Minnesota Statutes 1994, section 270.273, is 
  3.32  amended by adding a subdivision to read: 
  3.33     Subd. 7.  [REVENUE RECAPTURE ACT; AUTHORITY.] (a) The 
  3.34  taxpayer's rights advocate may investigate a claimant agency's 
  3.35  compliance with chapter 270A.  The investigation may be 
  3.36  initiated by a taxpayer's application under subdivision 1, or by 
  4.1   independent action of the taxpayer's rights advocate under 
  4.2   subdivision 5.  The investigation may examine compliance with 
  4.3   (1) requirements of determining a debtor or a debt under section 
  4.4   270A.03; (2) requirements for submission by the agency under 
  4.5   section 270A.04; (3) notification to the commissioner of revenue 
  4.6   under section 270A.07; (4) payment of refunds incorrectly 
  4.7   transferred to a claimant agency and interest under section 
  4.8   270A.07; and (5) notice to debtor and hearing requirements under 
  4.9   section 270A.09.  The investigation may be made with respect to 
  4.10  a specific submission of a debt by a claimant agency, or may be 
  4.11  a general review of debts submitted by a claimant agency. 
  4.12     (b) If the taxpayer's rights advocate determines that the 
  4.13  claimant agency has not complied with chapter 270A with respect 
  4.14  to a debtor, the taxpayer's rights advocate may issue a taxpayer 
  4.15  assistance order under subdivision 2, paragraph (b).  A copy of 
  4.16  the order must be served on the debtor and on the claimant 
  4.17  agency.  
  4.18     (c) If the taxpayer's rights advocate finds substantial 
  4.19  noncompliance with chapter 270A with respect to one or more 
  4.20  debtors, the taxpayer's rights advocate may make a finding of 
  4.21  substantial noncompliance by the claimant agency, and may order 
  4.22  the claimant agency to meet specific conditions to qualify for 
  4.23  continued participation in revenue recapture under chapter 
  4.24  270A.  The order must be served on the claimant agency by first 
  4.25  class mail.  The order may require the agency (1) to give the 
  4.26  taxpayer's rights advocate prior notice of taking specific 
  4.27  actions under chapter 270A; (2) to allow prior review by the 
  4.28  taxpayer's rights advocate before taking action under chapter 
  4.29  270A; (3) to document compliance with chapter 270A; and (4) to 
  4.30  provide personnel training.  
  4.31     (d) If the taxpayer's rights advocate determines that the 
  4.32  claimant agency has not met conditions of an order under 
  4.33  paragraph (c) the taxpayer's rights advocate may suspend the 
  4.34  agency's participation in revenue recapture.  The suspension may 
  4.35  be for any period of not less than one year.  
  4.36     (e) The agency may petition the taxpayer's rights advocate 
  5.1   for reentry into the revenue recapture program at the expiration 
  5.2   of the suspension period.  On receiving the petition, the 
  5.3   taxpayer's rights advocate shall investigate and determine 
  5.4   whether the agency has in place procedures to ensure compliance 
  5.5   with the requirements of chapter 270A.  If the taxpayer's rights 
  5.6   advocate determines that proper procedures are in place, the 
  5.7   taxpayer's rights advocate may authorize reentry of the agency 
  5.8   into the revenue recapture program, subject to any conditions 
  5.9   the taxpayer's rights advocate determines are necessary to 
  5.10  monitor compliance.  If the taxpayer's rights advocate 
  5.11  determines that the agency's compliance with the requirements of 
  5.12  chapter 270A cannot be ensured, the taxpayer's rights advocate 
  5.13  may extend the suspension, make further requirements to ensure 
  5.14  compliance, or terminate the agency from participation in the 
  5.15  program.  
  5.16     (f) Any actions of the taxpayer's rights advocate under 
  5.17  this subdivision are subject to the contested case procedures 
  5.18  established in the state administrative procedure act.  The 
  5.19  provisions of section 14.50, subdivision 2, apply to hearings 
  5.20  under this section. 
  5.21     Sec. 7.  Minnesota Statutes 1994, section 270A.04, 
  5.22  subdivision 2, is amended to read: 
  5.23     Subd. 2.  [REQUIREMENTS FOR SUBMISSION.] Any debt owed to a 
  5.24  claimant agency must not be submitted by the agency for 
  5.25  collection under the procedure established by sections 270A.01 
  5.26  to 270A.12 if (a) there is a written payment agreement between 
  5.27  the debtor and the claimant agency in which revenue recapture is 
  5.28  prohibited and the debtor is complying with the agreement, (b) 
  5.29  the collection attempt would result in a loss of federal funds, 
  5.30  ~~or~~ (c) the agency is unable to supply the department with the 
  5.31  necessary identifying information required by subdivision 3 or 
  5.32  rules promulgated by the commissioner, ~~or~~ (d) the debt is barred 
  5.33  by section 541.05, or (e) the agency is barred from submission 
  5.34  of debts under section 270.273. 
  5.35     Sec. 8.  Minnesota Statutes 1994, section 270A.06, is 
  5.36  amended to read: 
  6.1      270A.06 [COLLECTION OF DEBTS THROUGH SETOFF.] 
  6.2      Subject to the limitations of sections 270A.01 to 270A.12 
  6.3   and 270.273, the department shall, upon request by a claimant 
  6.4   agency, render assistance in the collection of any debt owing to 
  6.5   the agency.  This assistance shall be provided by use of a 
  6.6   procedure in which the sum of the refund due the debtor is 
  6.7   applied to the amount due and owing from the debtor to the 
  6.8   claimant agency.  
  6.9      Sec. 9.  Minnesota Statutes 1994, section 270A.11, is 
  6.10  amended to read: 
  6.11     270A.11 [DATA PRIVACY.] 
  6.12     Private and confidential data on individuals may be 
  6.13  exchanged among the department, the taxpayer's rights advocate, 
  6.14  the claimant agency, and the debtor as necessary to accomplish 
  6.15  and effectuate the intent of sections 270.273 and 270A.01 to 
  6.16  270A.12, as provided by section 13.05, subdivision 4, clause 
  6.17  (b).  The department may disclose to the claimant agency only 
  6.18  the debtor's name, address, social security number and the 
  6.19  amount of the refund, and in the case of a joint return, the 
  6.20  name of the debtor's spouse.  Any person employed by, or 
  6.21  formerly employed by, a claimant agency who discloses any such 
  6.22  information for any other purpose, shall be subject to the civil 
  6.23  and criminal penalties of section 270B.18.