1.1                          A bill for an act 
  1.2             relating to taxation; making technical corrections and 
  1.3             administrative changes to income and franchise, 
  1.4             property, sales and use, petroleum, deed, cigarette 
  1.5             and tobacco, liquor, MinnesotaCare, and other taxes; 
  1.6             making administrative and technical changes to 
  1.7             property tax refund and local government aid 
  1.8             provisions; clarifying abandoned personal property 
  1.9             sale procedures; providing that certain water service 
  1.10            connection fees be paid to the commissioner of health; 
  1.11            making technical changes to the Revenue Recapture Act; 
  1.12            amending Minnesota Statutes 2000, sections 144.3831, 
  1.13            subdivision 2; 270.06; 270A.03, subdivision 5; 
  1.14            273.072, subdivision 1; 273.1104, subdivision 2; 
  1.15            273.111, subdivision 4; 273.124, subdivision 13; 
  1.16            282.04, subdivision 2; 287.20, subdivision 9; 289A.12, 
  1.17            subdivision 3; 289A.50, subdivision 2a; 290.067, 
  1.18            subdivisions 2 and 2b; 290.0671, subdivisions 1 and 7; 
  1.19            290.0921, subdivision 3; 290.35, subdivision 2; 
  1.20            290A.04, subdivision 4; 295.50, subdivisions 3 and 15; 
  1.21            295.52, subdivision 4; 295.57, subdivision 1; 296A.16, 
  1.22            subdivision 2; 296A.21, subdivisions 1 and 4; 297A.01, 
  1.23            subdivision 3; 297A.25, subdivisions 3 and 11; 
  1.24            297F.16, subdivision 4; 297G.15, subdivision 4; 
  1.25            297G.16, subdivisions 5 and 7; and 477A.011, 
  1.26            subdivision 36; proposing coding for new law in 
  1.27            Minnesota Statutes, chapter 296A; repealing Minnesota 
  1.28            Statutes 2000, sections 290.095, subdivision 7; 
  1.29            290.23; 290.25; 290.31, subdivisions 2, 2a, 3, 4, 5, 
  1.30            and 19; 296A.16, subdivision 6; and 297B.032. 
  1.31  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.32                             ARTICLE 1 
  1.33                     INCOME AND FRANCHISE TAXES 
  1.34     Section 1.  Minnesota Statutes 2000, section 270A.03, 
  1.35  subdivision 5, is amended to read: 
  1.36     Subd. 5.  [DEBT.] "Debt" means a legal obligation of a 
  1.37  natural person to pay a fixed and certain amount of money, which 
  1.38  equals or exceeds $25 and which is due and payable to a claimant 
  2.1   agency.  The term includes criminal fines imposed under section 
  2.2   609.10 or 609.125 and restitution.  A debt may arise under a 
  2.3   contractual or statutory obligation, a court order, or other 
  2.4   legal obligation, but need not have been reduced to judgment.  
  2.5      A debt includes any legal obligation of a current recipient 
  2.6   of assistance which is based on overpayment of an assistance 
  2.7   grant where that payment is based on a client waiver or an 
  2.8   administrative or judicial finding of an intentional program 
  2.9   violation; or where the debt is owed to a program wherein the 
  2.10  debtor is not a client at the time notification is provided to 
  2.11  initiate recovery under this chapter and the debtor is not a 
  2.12  current recipient of food stamps, transitional child care, or 
  2.13  transitional medical assistance. 
  2.14     A debt does not include any legal obligation to pay a 
  2.15  claimant agency for medical care, including hospitalization if 
  2.16  the income of the debtor at the time when the medical care was 
  2.17  rendered does not exceed the following amount: 
  2.18     (1) for an unmarried debtor, an income of ~~$6,400~~ $8,800 or 
  2.19  less; 
  2.20     (2) for a debtor with one dependent, an income 
  2.21  of ~~$8,200~~ $11,270 or less; 
  2.22     (3) for a debtor with two dependents, an income 
  2.23  of ~~$9,700~~ $13,330 or less; 
  2.24     (4) for a debtor with three dependents, an income of 
  2.25  ~~$11,000~~ $15,120 or less; 
  2.26     (5) for a debtor with four dependents, an income 
  2.27  of ~~$11,600~~ $15,950 or less; and 
  2.28     (6) for a debtor with five or more dependents, an income of 
  2.29  ~~$12,100~~ $16,630 or less.  
  2.30     The income amounts in this subdivision shall be adjusted 
  2.31  for inflation for debts incurred in calendar years ~~1991~~ 2001 and 
  2.32  thereafter.  The dollar amount of each income level that applied 
  2.33  to debts incurred in the prior year shall be increased in the 
  2.34  same manner as provided in section ~~290.06, subdivision 2d, for~~ 
  2.35  ~~the expansion of the tax rate brackets~~ 1f of the Internal 
  2.36  Revenue Code of 1986, as amended through December 31, 2000, 
  3.1   except that for the purposes of this subdivision the percentage 
  3.2   increase shall be determined from the year starting September 1, 
  3.3   1999, and ending August 31, 2000, as the base year for adjusting 
  3.4   for inflation for debts incurred after December 31, 2000. 
  3.5      Debt also includes an agreement to pay a MinnesotaCare 
  3.6   premium, regardless of the dollar amount of the premium 
  3.7   authorized under section 256L.15, subdivision 1a. 
  3.8      <b>[EFFECTIVE DATE.]</b> This section is effective for debts 
  3.9   incurred after December 31, 2000. 
  3.10     Sec. 2.  Minnesota Statutes 2000, section 289A.12, 
  3.11  subdivision 3, is amended to read: 
  3.12     Subd. 3.  [RETURNS OR REPORTS BY PARTNERSHIPS, FIDUCIARIES, 
  3.13  AND S CORPORATIONS.] (a) Partnerships must file a return with 
  3.14  the commissioner for each taxable year.  The return must conform 
  3.15  to the requirements of section ~~290.31~~ 290.311, and must include 
  3.16  the names and addresses of the partners entitled to a 
  3.17  distributive share in their taxable net income, gain, loss, or 
  3.18  credit, and the amount of the distributive share to which each 
  3.19  is entitled.  A partnership required to file a return for a 
  3.20  partnership taxable year must furnish a copy of the information 
  3.21  required to be shown on the return to a person who is a partner 
  3.22  at any time during the taxable year, on or before the day on 
  3.23  which the return for the taxable year was filed. 
  3.24     (b) The fiduciary of an estate or trust making the return 
  3.25  required to be filed under section 289A.08, subdivision 2, for a 
  3.26  taxable year must give a beneficiary who receives a distribution 
  3.27  from the estate or trust with respect to the taxable year or to 
  3.28  whom any item with respect to the taxable year is allocated, a 
  3.29  statement containing the information required to be shown on the 
  3.30  return, on or before the date on which the return was filed. 
  3.31     (c) An S corporation must file a return with the 
  3.32  commissioner for a taxable year during which an election under 
  3.33  section 290.9725 is in effect, stating specifically the names 
  3.34  and addresses of the persons owning stock in the corporation at 
  3.35  any time during the taxable year, the number of shares of stock 
  3.36  owned by a shareholder at all times during the taxable year, the 
  4.1   shareholder's pro rata share of each item of the corporation for 
  4.2   the taxable year, and other information the commissioner 
  4.3   requires.  An S corporation required to file a return under this 
  4.4   paragraph for any taxable year must furnish a copy of the 
  4.5   information shown on the return to the person who is a 
  4.6   shareholder at any time during the taxable year, on or before 
  4.7   the day on which the return for the taxable year was filed. 
  4.8      (d) The partnership or S corporation return must be signed 
  4.9   by someone designated by the partnership or S corporation. 
  4.10     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
  4.11  beginning after December 31, 2000. 
  4.12     Sec. 3.  Minnesota Statutes 2000, section 290.067, 
  4.13  subdivision 2, is amended to read: 
  4.14     Subd. 2.  [LIMITATIONS.] The credit for expenses incurred 
  4.15  for the care of each dependent shall not exceed $720 in any 
  4.16  taxable year, and the total credit for all dependents of a 
  4.17  claimant shall not exceed $1,440 in a taxable year.  The maximum 
  4.18  total credit shall be reduced according to the amount of the 
  4.19  income of the claimant and a spouse, if any, as follows:  
  4.20     income up to ~~$13,350~~ $18,040, $720 maximum for one 
  4.21  dependent, $1,440 for all dependents; 
  4.22     income over ~~$13,350~~ $18,040, the maximum credit for one 
  4.23  dependent shall be reduced by $18 for every $350 of additional 
  4.24  income, $36 for all dependents. 
  4.25     The commissioner shall construct and make available to 
  4.26  taxpayers tables showing the amount of the credit at various 
  4.27  levels of income and expenses.  The tables shall follow the 
  4.28  schedule contained in this subdivision, except that the 
  4.29  commissioner may graduate the transitions between expenses and 
  4.30  income brackets.  
  4.31     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
  4.32  beginning after December 31, 1999. 
  4.33     Sec. 4.  Minnesota Statutes 2000, section 290.067, 
  4.34  subdivision 2b, is amended to read: 
  4.35     Subd. 2b.  [INFLATION ADJUSTMENT.] The dollar amount of the 
  4.36  income threshold at which the maximum credit begins to be 
  5.1   reduced under subdivision 2 must be adjusted for inflation.  The 
  5.2   commissioner shall ~~adjust the threshold amount by the percentage~~ 
  5.3   ~~determined under section 290.06, subdivision 2d, for the taxable~~ 
  5.4   ~~year.~~ make the inflation adjustments in accordance with section 
  5.5   1f of the Internal Revenue Code except that for the purposes of 
  5.6   this subdivision the percentage increase must be determined from 
  5.7   the year starting September 1, 1999, and ending August 31, 2000, 
  5.8   as the base year for adjusting for inflation for the tax year 
  5.9   beginning after December 31, 2000.  The determination of the 
  5.10  commissioner under this subdivision is not a rule under the 
  5.11  Administrative Procedures Act. 
  5.12     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
  5.13  beginning after December 31, 2000. 
  5.14     Sec. 5.  Minnesota Statutes 2000, section 290.0671, 
  5.15  subdivision 1, is amended to read: 
  5.16     Subdivision 1.  [CREDIT ALLOWED.] (a) An individual is 
  5.17  allowed a credit against the tax imposed by this chapter equal 
  5.18  to a percentage of earned income.  To receive a credit, a 
  5.19  taxpayer must be eligible for a credit under section 32 of the 
  5.20  Internal Revenue Code.  
  5.21     (b) For individuals with no qualifying children, the credit 
  5.22  equals 1.9125 percent of the first ~~$4,460~~ $4,620 of earned 
  5.23  income.  The credit is reduced by 1.9125 percent of earned 
  5.24  income or modified adjusted gross income, whichever is greater, 
  5.25  in excess of ~~$5,570~~ $5,770, but in no case is the credit less 
  5.26  than zero. 
  5.27     (c) For individuals with one qualifying child, the credit 
  5.28  equals 8.5 percent of the first ~~$6,680~~ $6,920 of earned income 
  5.29  and 8.5 percent of earned income over ~~$11,650~~ $12,080 but less 
  5.30  than ~~$12,990~~ $13,450. The credit is reduced by 5.73 percent of 
  5.31  earned income or modified adjusted gross income, whichever is 
  5.32  greater, in excess of ~~$14,560~~ $15,080, but in no case is the 
  5.33  credit less than zero. 
  5.34     (d) For individuals with two or more qualifying children, 
  5.35  the credit equals ten percent of the first ~~$9,390~~ $9,720 of 
  5.36  earned income and 20 percent of earned income 
  6.1   over ~~$14,350~~ $14,860 but less than ~~$16,230~~ $16,800.  The credit 
  6.2   is reduced by 10.3 percent of earned income or modified adjusted 
  6.3   gross income, whichever is greater, in excess 
  6.4   of ~~$17,280~~ $17,890, but in no case is the credit less than zero. 
  6.5      (e) For a nonresident or part-year resident, the credit 
  6.6   must be allocated based on the percentage calculated under 
  6.7   section 290.06, subdivision 2c, paragraph (e). 
  6.8      (f) For a person who was a resident for the entire tax year 
  6.9   and has earned income not subject to tax under this chapter, the 
  6.10  credit must be allocated based on the ratio of federal adjusted 
  6.11  gross income reduced by the earned income not subject to tax 
  6.12  under this chapter over federal adjusted gross income. 
  6.13     (g) The commissioner shall construct tables showing the 
  6.14  amount of the credit at various income levels and make them 
  6.15  available to taxpayers.  The tables shall follow the schedule 
  6.16  contained in this subdivision, except that the commissioner may 
  6.17  graduate the transition between income brackets. 
  6.18     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
  6.19  years beginning after December 31, 1999. 
  6.20     Sec. 6.  Minnesota Statutes 2000, section 290.0671, 
  6.21  subdivision 7, is amended to read: 
  6.22     Subd. 7.  [INFLATION ADJUSTMENT.] The earned income amounts 
  6.23  used to calculate the credit and the income thresholds at which 
  6.24  the maximum credit begins to be reduced in subdivision 1 must be 
  6.25  adjusted for inflation.  The commissioner shall ~~adjust the~~ 
  6.26  ~~earned income and threshold amounts by the percentage determined~~ 
  6.27  ~~under section 290.06, subdivision 2d, for the taxable year.~~ make 
  6.28  the inflation adjustments in accordance with section 1f of the 
  6.29  Internal Revenue Code except that for the purposes of this 
  6.30  subdivision the percentage increase shall be determined from the 
  6.31  year starting September 1, 1999, and ending August 31, 2000, as 
  6.32  the base year for adjusting for inflation for the tax year 
  6.33  beginning after December 31, 2000.  The determination of the 
  6.34  commissioner under this subdivision is not a rule under the 
  6.35  Administrative Procedures Act. 
  6.36     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
  7.1   beginning after December 31, 2000. 
  7.2      Sec. 7.  Minnesota Statutes 2000, section 290.0921, 
  7.3   subdivision 3, is amended to read: 
  7.4      Subd. 3.  [ALTERNATIVE MINIMUM TAXABLE INCOME.] 
  7.5   "Alternative minimum taxable income" is Minnesota net income as 
  7.6   defined in section 290.01, subdivision 19, and includes the 
  7.7   adjustments and tax preference items in sections 56, 57, 58, and 
  7.8   59(d), (e), (f), and (h) of the Internal Revenue Code.  If a 
  7.9   corporation files a separate company Minnesota tax return, the 
  7.10  minimum tax must be computed on a separate company basis.  If a 
  7.11  corporation is part of a tax group filing a unitary return, the 
  7.12  minimum tax must be computed on a unitary basis.  The following 
  7.13  adjustments must be made. 
  7.14     (1) For purposes of the depreciation adjustments under 
  7.15  section 56(a)(1) and 56(g)(4)(A) of the Internal Revenue Code, 
  7.16  the basis for depreciable property placed in service in a 
  7.17  taxable year beginning before January 1, 1990, is the adjusted 
  7.18  basis for federal income tax purposes, including any 
  7.19  modification made in a taxable year under section 290.01, 
  7.20  subdivision 19e, or Minnesota Statutes 1986, section 290.09, 
  7.21  subdivision 7, paragraph (c). 
  7.22     (2) For taxable years beginning after December 31, 2000, 
  7.23  the amount of any remaining modification made under section 
  7.24  290.01, subdivision 19e, or Minnesota Statutes 1986, section 
  7.25  290.09, subdivision 7, paragraph (c), not previously deducted is 
  7.26  a depreciation allowance in the first taxable year after 
  7.27  December 31, 2000. 
  7.28     (3) The alternative tax net operating loss deduction under 
  7.29  sections 56(a)(4) and 56(d) of the Internal Revenue Code does 
  7.30  not apply. 
  7.31     ~~(3)~~ (4) The special rule for certain dividends under 
  7.32  section 56(g)(4)(C)(ii) of the Internal Revenue Code does not 
  7.33  apply. 
  7.34     ~~(4)~~ (5) The special rule for dividends from section 936 
  7.35  companies under section 56(g)(4)(C)(iii) does not apply. 
  7.36     ~~(5)~~ (6) The tax preference for depletion under section 
  8.1   57(a)(1) of the Internal Revenue Code does not apply. 
  8.2      ~~(6)~~ (7) The tax preference for intangible drilling costs 
  8.3   under section 57(a)(2) of the Internal Revenue Code must be 
  8.4   calculated without regard to subparagraph (E) and the 
  8.5   subtraction under section 290.01, subdivision 19d, clause (4). 
  8.6      ~~(7)~~ (8) The tax preference for tax exempt interest under 
  8.7   section 57(a)(5) of the Internal Revenue Code does not apply.  
  8.8      ~~(8)~~ (9) The tax preference for charitable contributions of 
  8.9   appreciated property under section 57(a)(6) of the Internal 
  8.10  Revenue Code does not apply. 
  8.11     ~~(9)~~ (10) For purposes of calculating the tax preference for 
  8.12  accelerated depreciation or amortization on certain property 
  8.13  placed in service before January 1, 1987, under section 57(a)(7) 
  8.14  of the Internal Revenue Code, the deduction allowable for the 
  8.15  taxable year is the deduction allowed under section 290.01, 
  8.16  subdivision 19e. 
  8.17     (11) For taxable years beginning after December 31, 2000, 
  8.18  the amount of any remaining modification made under section 
  8.19  290.01, subdivision 19e, not previously deducted is a 
  8.20  depreciation or amortization allowance in the first taxable year 
  8.21  after December 31, 2000. 
  8.22     ~~(10)~~ (12) For purposes of calculating the adjustment for 
  8.23  adjusted current earnings in section 56(g) of the Internal 
  8.24  Revenue Code, the term "alternative minimum taxable income" as 
  8.25  it is used in section 56(g) of the Internal Revenue Code, means 
  8.26  alternative minimum taxable income as defined in this 
  8.27  subdivision, determined without regard to the adjustment for 
  8.28  adjusted current earnings in section 56(g) of the Internal 
  8.29  Revenue Code. 
  8.30     ~~(11)~~ (13) For purposes of determining the amount of 
  8.31  adjusted current earnings under section 56(g)(3) of the Internal 
  8.32  Revenue Code, no adjustment shall be made under section 56(g)(4) 
  8.33  of the Internal Revenue Code with respect to (i) the amount of 
  8.34  foreign dividend gross-up subtracted as provided in section 
  8.35  290.01, subdivision 19d, clause (1), (ii) the amount of refunds 
  8.36  of income, excise, or franchise taxes subtracted as provided in 
  9.1   section 290.01, subdivision 19d, clause (10), or (iii) the 
  9.2   amount of royalties, fees or other like income subtracted as 
  9.3   provided in section 290.01, subdivision 19d, clause (11). 
  9.4      Items of tax preference must not be reduced below zero as a 
  9.5   result of the modifications in this subdivision. 
  9.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
  9.7   following final enactment. 
  9.8      Sec. 8.  Minnesota Statutes 2000, section 290.35, 
  9.9   subdivision 2, is amended to read: 
  9.10     Subd. 2.  [APPORTIONMENT OF TAXABLE NET INCOME.] The 
  9.11  ~~commissioner~~ insurance company shall compute ~~therefrom the~~ its 
  9.12  taxable net income ~~of such companies~~ by assigning to this state 
  9.13  that proportion ~~thereof~~ of net income which the gross premiums 
  9.14  collected by them during the taxable year from old and new 
  9.15  business within this state bears to the total gross premiums 
  9.16  collected by them during that year from their entire old and new 
  9.17  business, including reinsurance premiums; provided, the 
  9.18  ~~commissioner~~ insurance company shall add to the taxable net 
  9.19  income ~~so~~ apportioned to this state the amount of any taxes on 
  9.20  premiums paid by the company by virtue of any law of this state 
  9.21  (other than the surcharge on premiums imposed by section 297I.10 
  9.22  and the surcharge imposed by section 168A.40, subdivision 3) 
  9.23  which shall have been deducted from gross income by the company 
  9.24  in arriving at its total net income. 
  9.25     (a) For purposes of determining the Minnesota apportionment 
  9.26  percentage, premiums from reinsurance contracts in connection 
  9.27  with property in or liability arising out of activity in, or in 
  9.28  connection with the lives or health of Minnesota residents shall 
  9.29  be assigned to Minnesota and premiums from reinsurance contracts 
  9.30  in connection with property in or liability arising out of 
  9.31  activity in, or in connection with the lives or health of 
  9.32  non-Minnesota residents shall be assigned outside of Minnesota. 
  9.33  Reinsurance premiums are presumed to be received for a Minnesota 
  9.34  risk and are assigned to Minnesota, if:  
  9.35     (1) the reinsurance contract is assumed for a company 
  9.36  domiciled in Minnesota; and 
 10.1      (2) the taxpayer, upon request of the commissioner, fails 
 10.2   to provide reliable records indicating the reinsured contract 
 10.3   covered non-Minnesota risks. 
 10.4   For purposes of this paragraph, "Minnesota risk" means coverage 
 10.5   in connection with property in or liability arising out of 
 10.6   activity in Minnesota, or in connection with the lives or health 
 10.7   of Minnesota residents. 
 10.8      (b) The apportionment method prescribed by paragraph (a) 
 10.9   shall be presumed to fairly and correctly determine the 
 10.10  taxpayer's taxable net income.  If the method prescribed in 
 10.11  paragraph (a) does not fairly reflect all or any part of taxable 
 10.12  net income, the taxpayer may petition for or the commissioner 
 10.13  may require the determination of taxable net income by use of 
 10.14  another method if that method fairly reflects taxable net 
 10.15  income.  A petition within the meaning of this section must be 
 10.16  filed by the taxpayer on such form as the commissioner shall 
 10.17  require. 
 10.18     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 10.19  following final enactment. 
 10.20     Sec. 9.  Minnesota Statutes 2000, section 290A.04, 
 10.21  subdivision 4, is amended to read: 
 10.22     Subd. 4.  [INFLATION ADJUSTMENT.] Beginning for property 
 10.23  tax refunds payable in calendar year 1996, the commissioner 
 10.24  shall annually adjust the dollar amounts of the income 
 10.25  thresholds and the maximum refunds under subdivisions 2 and 2a 
 10.26  for inflation.  The commissioner shall make the inflation 
 10.27  adjustments in accordance with section ~~290.06, subdivision 2d~~ 1f 
 10.28  of the Internal Revenue Code, except that for purposes of this 
 10.29  subdivision the percentage increase shall be determined from the 
 10.30  year ending on June 30, 1994, to the year ending on June 30 of 
 10.31  the year preceding that in which the refund is payable.  The 
 10.32  commissioner shall use the appropriate percentage increase to 
 10.33  annually adjust the income thresholds and maximum refunds under 
 10.34  subdivisions 2 and 2a for inflation without regard to whether or 
 10.35  not the income tax brackets are adjusted for inflation in that 
 10.36  year.  The commissioner shall round the thresholds and the 
 11.1   maximum amounts, as adjusted to the nearest $10 amount.  If the 
 11.2   amount ends in $5, the commissioner shall round it up to the 
 11.3   next $10 amount.  
 11.4      The commissioner shall annually announce the adjusted 
 11.5   refund schedule at the same time provided under section 290.06.  
 11.6   The determination of the commissioner under this subdivision is 
 11.7   not a rule under the Administrative Procedure Act. 
 11.8      Sec. 10.  [REPEALER.] 
 11.9      Minnesota Statutes 2000, sections 290.095, subdivision 7; 
 11.10  290.23; 290.25; and 290.31, subdivisions 2, 2a, 3, 4, 5, and 19, 
 11.11  are repealed. 
 11.12     <b>[EFFECTIVE DATE.]</b> This section is effective for tax years 
 11.13  beginning after December 31, 2000. 
 11.14                             ARTICLE 2 
 11.15                           PROPERTY TAXES 
 11.16     Section 1.  Minnesota Statutes 2000, section 273.072, 
 11.17  subdivision 1, is amended to read: 
 11.18     Subdivision 1.  Any county and any city or town lying 
 11.19  wholly or partially within the county and constituting a 
 11.20  separate assessment district may, by agreement entered into 
 11.21  under section 471.59 ~~and approved by the commissioner of~~ 
 11.22  ~~revenue~~, provide for the assessment of property in the 
 11.23  municipality or town by the county assessor.  Any two or more 
 11.24  cities or towns constituting separate assessment districts~~,~~ 
 11.25  ~~whether their assessors are elective or appointive,~~ may enter 
 11.26  into an agreement under section 471.59 for the assessment of 
 11.27  property in the contracting units by the assessor of one of the 
 11.28  units or by an assessor who is jointly employed.  
 11.29     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 11.30  following final enactment. 
 11.31     Sec. 2.  Minnesota Statutes 2000, section 273.1104, 
 11.32  subdivision 2, is amended to read: 
 11.33     Subd. 2.  [NOTICE OF MARKET VALUE.] On or before May 1 in 
 11.34  each year, the commissioner shall send to each person subject to 
 11.35  the tax on unmined iron ores and to each taxing district 
 11.36  affected, a notice of the market value of the unmined ores as 
 12.1   determined by the commissioner ~~prior to adjustment under~~ 
 12.2   ~~subdivision 1~~.  Said notice shall be sent by mail directed to 
 12.3   such person at the address given in the report filed and the 
 12.4   assessor of such taxing district, but the validity of the tax 
 12.5   shall not be affected by the failure of the commissioner of 
 12.6   revenue to mail such notice or the failure of the person subject 
 12.7   to the tax to receive it. 
 12.8      On the first secular day following May 20, the commissioner 
 12.9   of revenue shall hold a hearing which may be adjourned from day 
 12.10  to day.  All relevant and material evidence having probative 
 12.11  value with respect to the issues shall be submitted at the 
 12.12  hearing and such hearing shall not be a "contested case" within 
 12.13  the meaning of section 14.02, subdivision 3.  Every person 
 12.14  subject to such tax may at such hearing present evidence and 
 12.15  argument on any matter bearing upon the validity or correctness 
 12.16  of the tax determined to be due, and the commissioner of revenue 
 12.17  shall review the determination of such tax. 
 12.18     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 12.19  following final enactment. 
 12.20     Sec. 3.  Minnesota Statutes 2000, section 273.111, 
 12.21  subdivision 4, is amended to read: 
 12.22     Subd. 4.  [DETERMINATION OF VALUE.] The value of any real 
 12.23  estate described in subdivision 3 shall upon timely application 
 12.24  by the owner, in the manner provided in subdivision 8, be 
 12.25  determined solely with reference to its appropriate agricultural 
 12.26  classification and value notwithstanding sections 272.03, 
 12.27  subdivision 8, and 273.11.  In determining the value for ad 
 12.28  valorem tax purposes, the assessor shall use sales data ~~obtained~~ 
 12.29  ~~from~~ for agricultural lands located outside the seven 
 12.30  metropolitan counties ~~but within the region used for computing~~ 
 12.31  ~~the range of values under section 273.11, subdivision 10.  The~~ 
 12.32  ~~sales shall have~~ having similar soil types, number of degree 
 12.33  days, and other similar agricultural characteristics ~~as~~ 
 12.34  ~~contained in section 273.11, subdivision 10~~.  Furthermore, the 
 12.35  assessor shall not consider any added values resulting from 
 12.36  nonagricultural factors. 
 13.1      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 13.2   following final enactment. 
 13.3      Sec. 4.  Minnesota Statutes 2000, section 273.124, 
 13.4   subdivision 13, is amended to read: 
 13.5      Subd. 13.  [HOMESTEAD APPLICATION.] (a) A person who meets 
 13.6   the homestead requirements under subdivision 1 must file a 
 13.7   homestead application with the county assessor to initially 
 13.8   obtain homestead classification. 
 13.9      (b) On or before January 2, 1993, each county assessor 
 13.10  shall mail a homestead application to the owner of each parcel 
 13.11  of property within the county which was classified as homestead 
 13.12  for the 1992 assessment year.  The format and contents of a 
 13.13  uniform homestead application shall be prescribed by the 
 13.14  commissioner of revenue.  The commissioner shall consult with 
 13.15  the chairs of the house and senate tax committees on the 
 13.16  contents of the homestead application form.  The application 
 13.17  must clearly inform the taxpayer that this application must be 
 13.18  signed by all owners who occupy the property or by the 
 13.19  qualifying relative and returned to the county assessor in order 
 13.20  for the property to continue receiving homestead treatment.  The 
 13.21  envelope containing the homestead application shall clearly 
 13.22  identify its contents and alert the taxpayer of its necessary 
 13.23  immediate response. 
 13.24     (c) Every property owner applying for homestead 
 13.25  classification must furnish to the county assessor the social 
 13.26  security number of each occupant who is listed as an owner of 
 13.27  the property on the deed of record, the name and address of each 
 13.28  owner who does not occupy the property, and the name and social 
 13.29  security number of each owner's spouse who occupies the 
 13.30  property.  The application must be signed by each owner who 
 13.31  occupies the property and by each owner's spouse who occupies 
 13.32  the property, or, in the case of property that qualifies as a 
 13.33  homestead under subdivision 1, paragraph (c), by the qualifying 
 13.34  relative. 
 13.35     If a property owner occupies a homestead, the property 
 13.36  owner's spouse may not claim another property as a homestead 
 14.1   unless the property owner and the property owner's spouse file 
 14.2   with the assessor an affidavit or other proof required by the 
 14.3   assessor stating that the property qualifies as a homestead 
 14.4   under subdivision 1, paragraph (e). 
 14.5      Owners or spouses occupying residences owned by their 
 14.6   spouses and previously occupied with the other spouse, either of 
 14.7   whom fail to include the other spouse's name and social security 
 14.8   number on the homestead application or provide the affidavits or 
 14.9   other proof requested, will be deemed to have elected to receive 
 14.10  only partial homestead treatment of their residence.  The 
 14.11  remainder of the residence will be classified as nonhomestead 
 14.12  residential.  When an owner or spouse's name and social security 
 14.13  number appear on homestead applications for two separate 
 14.14  residences and only one application is signed, the owner or 
 14.15  spouse will be deemed to have elected to homestead the residence 
 14.16  for which the application was signed. 
 14.17     The social security numbers or affidavits or other proofs 
 14.18  of the property owners and spouses are private data on 
 14.19  individuals as defined by section 13.02, subdivision 12, but, 
 14.20  notwithstanding that section, the private data may be disclosed 
 14.21  to the commissioner of revenue, or, for purposes of proceeding 
 14.22  under the Revenue Recapture Act to recover personal property 
 14.23  taxes owing, to the county treasurer. 
 14.24     (d) If residential real estate is occupied and used for 
 14.25  purposes of a homestead by a relative of the owner and qualifies 
 14.26  for a homestead under subdivision 1, paragraph (c), in order for 
 14.27  the property to receive homestead status, a homestead 
 14.28  application must be filed with the assessor.  The social 
 14.29  security number of each relative occupying the property and the 
 14.30  social security number of each owner who is related to an 
 14.31  occupant of the property shall be required on the homestead 
 14.32  application filed under this subdivision.  If a different 
 14.33  relative of the owner subsequently occupies the property, the 
 14.34  owner of the property must notify the assessor within 30 days of 
 14.35  the change in occupancy.  The social security number of a 
 14.36  relative occupying the property is private data on individuals 
 15.1   as defined by section 13.02, subdivision 12, but may be 
 15.2   disclosed to the commissioner of revenue.  
 15.3      (e) The homestead application shall also notify the 
 15.4   property owners that the application filed under this section 
 15.5   will not be mailed annually and that if the property is granted 
 15.6   homestead status for the 1993 assessment, or any assessment year 
 15.7   thereafter, that same property shall remain classified as 
 15.8   homestead until the property is sold or transferred to another 
 15.9   person, or the owners, the spouse of the owner, or the relatives 
 15.10  no longer use the property as their homestead.  Upon the sale or 
 15.11  transfer of the homestead property, a certificate of value must 
 15.12  be timely filed with the county auditor as provided under 
 15.13  section 272.115.  Failure to notify the assessor within 30 days 
 15.14  that the property has been sold, transferred, or that the owner, 
 15.15  the spouse of the owner, or the relative is no longer occupying 
 15.16  the property as a homestead, shall result in the penalty 
 15.17  provided under this subdivision and the property will lose its 
 15.18  current homestead status. 
 15.19     (f) If the homestead application is not returned within 30 
 15.20  days, the county will send a second application to the present 
 15.21  owners of record.  The notice of proposed property taxes 
 15.22  prepared under section 275.065, subdivision 3, shall reflect the 
 15.23  property's classification.  Beginning with assessment year 1993 
 15.24  for all properties, if a homestead application has not been 
 15.25  filed with the county by December 15, the assessor shall 
 15.26  classify the property as nonhomestead for the current assessment 
 15.27  year for taxes payable in the following year, provided that the 
 15.28  owner may be entitled to receive the homestead classification by 
 15.29  proper application under section 375.192. 
 15.30     (g) At the request of the commissioner, each county must 
 15.31  give the commissioner a list that includes the name and social 
 15.32  security number of each property owner and the property owner's 
 15.33  spouse occupying the property, or relative of a property owner, 
 15.34  applying for homestead classification under this subdivision.  
 15.35  The commissioner shall use the information provided on the lists 
 15.36  as appropriate under the law, including for the detection of 
 16.1   improper claims by owners, or relatives of owners, under chapter 
 16.2   290A.  
 16.3      (h) If the commissioner finds that a property owner may be 
 16.4   claiming a fraudulent homestead, the commissioner shall notify 
 16.5   the appropriate counties.  Within 90 days of the notification, 
 16.6   the county assessor shall investigate to determine if the 
 16.7   homestead classification was properly claimed.  If the property 
 16.8   owner does not qualify, the county assessor shall notify the 
 16.9   county auditor who will determine the amount of homestead 
 16.10  benefits that had been improperly allowed.  For the purpose of 
 16.11  this section, "homestead benefits" means the tax reduction 
 16.12  resulting from the classification as a homestead under section 
 16.13  273.13, the taconite homestead credit under section 273.135, the 
 16.14  education homestead and agricultural credits under section 
 16.15  273.1382, and the supplemental homestead credit under section 
 16.16  273.1391. 
 16.17     The county auditor shall send a notice to the person who 
 16.18  owned the affected property at the time the homestead 
 16.19  application related to the improper homestead was filed, 
 16.20  demanding reimbursement of the homestead benefits plus a penalty 
 16.21  equal to 100 percent of the homestead benefits.  The person 
 16.22  notified may appeal the county's determination by serving copies 
 16.23  of a petition for review with county officials as provided in 
 16.24  section 278.01 and filing proof of service as provided in 
 16.25  section 278.01 with the Minnesota tax court within 60 days of 
 16.26  the date of the notice from the county.  Procedurally, the 
 16.27  appeal is governed by the provisions in chapter 271 which apply 
 16.28  to the appeal of a property tax assessment or levy, but without 
 16.29  requiring any prepayment of the amount in controversy.  If the 
 16.30  amount of homestead benefits and penalty is not paid within 60 
 16.31  days, and if no appeal has been filed, the county auditor shall 
 16.32  certify the amount of taxes and penalty to the county 
 16.33  treasurer.  The county treasurer will add interest to the unpaid 
 16.34  homestead benefits and penalty amounts at the rate provided in 
 16.35  section 279.03 for real property taxes becoming delinquent in 
 16.36  the calendar year during which the amount remains unpaid.  
 17.1   Interest may be assessed for the period beginning 60 days after 
 17.2   demand for payment was made. 
 17.3      If the person notified is the current owner of the 
 17.4   property, the treasurer may add the total amount of homestead 
 17.5   benefits, penalty, interest, and costs to the ad valorem taxes 
 17.6   otherwise payable on the property by including the amounts on 
 17.7   the property tax statements under section 276.04, subdivision 
 17.8   3.  The amounts added under this paragraph to the ad valorem 
 17.9   taxes shall include interest accrued through December 31 of the 
 17.10  year preceding the taxes payable year for which the amounts are 
 17.11  first added.  These amounts, when added to the property tax 
 17.12  statement, become subject to all the laws for the enforcement of 
 17.13  real or personal property taxes for that year, and for any 
 17.14  subsequent year. 
 17.15     If the person notified is not the current owner of the 
 17.16  property, the treasurer may collect the amounts due under the 
 17.17  Revenue Recapture Act in chapter 270A, or use any of the powers 
 17.18  granted in sections 277.20 and 277.21 without exclusion, to 
 17.19  enforce payment of the homestead benefits, penalty, interest, 
 17.20  and costs, as if those amounts were delinquent tax obligations 
 17.21  of the person who owned the property at the time the application 
 17.22  related to the improperly allowed homestead was filed.  The 
 17.23  treasurer may relieve a prior owner of personal liability for 
 17.24  the homestead benefits, penalty, interest, and costs, and 
 17.25  instead extend those amounts on the tax lists against the 
 17.26  property as provided in this paragraph to the extent that the 
 17.27  current owner agrees in writing.  On all demands, billings, 
 17.28  property tax statements, and related correspondence, the county 
 17.29  must list and state separately the amounts of homestead 
 17.30  benefits, penalty, interest and costs being demanded, billed or 
 17.31  assessed. 
 17.32     (i) Any amount of homestead benefits recovered by the 
 17.33  county from the property owner shall be distributed to the 
 17.34  county, city or town, and school district where the property is 
 17.35  located in the same proportion that each taxing district's levy 
 17.36  was to the total of the three taxing districts' levy for the 
 18.1   current year.  Any amount recovered attributable to taconite 
 18.2   homestead credit shall be transmitted to the St. Louis county 
 18.3   auditor to be deposited in the taconite property tax relief 
 18.4   account.  Any amount recovered that is attributable to 
 18.5   supplemental homestead credit is to be transmitted to the 
 18.6   commissioner of revenue for deposit in the general fund of the 
 18.7   state treasury.  The total amount of penalty collected must be 
 18.8   deposited in the county general fund. 
 18.9      (j) If a property owner has applied for more than one 
 18.10  homestead and the county assessors cannot determine which 
 18.11  property should be classified as homestead, the county assessors 
 18.12  will refer the information to the commissioner.  The 
 18.13  commissioner shall make the determination and notify the 
 18.14  counties within 60 days. 
 18.15     (k) In addition to lists of homestead properties, the 
 18.16  commissioner may ask the counties to furnish lists of all 
 18.17  properties and the record owners.  The social security numbers 
 18.18  and federal identification numbers that are maintained by a 
 18.19  county or city assessor for property tax administration 
 18.20  purposes, and that may appear on the lists retain their 
 18.21  classification as private or nonpublic data; but may be viewed, 
 18.22  accessed, and used by the county auditor or treasurer of the 
 18.23  same county for the limited purpose of assisting the 
 18.24  commissioner in the preparation of microdata samples under 
 18.25  section 270.0681. 
 18.26     <b>[EFFECTIVE DATE.]</b> This section is effective for homestead 
 18.27  applications submitted on or after the day following final 
 18.28  enactment. 
 18.29     Sec. 5.  Minnesota Statutes 2000, section 282.04, 
 18.30  subdivision 2, is amended to read: 
 18.31     Subd. 2.  [RIGHTS BEFORE SALE; IMPROVEMENTS, INSURANCE, 
 18.32  DEMOLITION.] Before the sale of a parcel of forfeited land the 
 18.33  county auditor may, with the approval of the county board of 
 18.34  commissioners, provide for the repair and improvement of any 
 18.35  building or structure located upon the parcel, and may provide 
 18.36  for maintenance of tax-forfeited lands, if it is determined by 
 19.1   the county board that such repairs, improvements, or maintenance 
 19.2   are necessary for the operation, use, preservation and safety of 
 19.3   the building or structure.  If so authorized by the county 
 19.4   board, the county auditor may insure the building or structure 
 19.5   against loss or damage resulting from fire or windstorm, may 
 19.6   purchase workers' compensation insurance to insure the county 
 19.7   against claims for injury to the persons employed in the 
 19.8   building or structure by the county, and may insure the county, 
 19.9   its officers and employees against claims for injuries to 
 19.10  persons or property because of the management, use or operation 
 19.11  of the building or structure.  The county auditor may, with the 
 19.12  approval of the county board, provide for the demolition of the 
 19.13  building or structure, which has been determined by the county 
 19.14  board to be within the purview of section 299F.10, and for the 
 19.15  sale of salvaged materials from the building or structure.  The 
 19.16  county auditor, with the approval of the county board, may 
 19.17  provide for the sale of abandoned personal property ~~under either~~ 
 19.18  ~~chapter 345 or 566, as appropriate~~.  The sale may be made by the 
 19.19  sheriff using the procedures for the sale of abandoned property 
 19.20  in section 345.15 or by the county auditor using the procedures 
 19.21  for the sale of abandoned property in section 504B.271.  The net 
 19.22  proceeds from any sale of the personal property, salvaged 
 19.23  materials, timber or other products, or leases made under this 
 19.24  law must be deposited in the forfeited tax sale fund and must be 
 19.25  distributed in the same manner as if the parcel had been sold. 
 19.26     The county auditor, with the approval of the county board, 
 19.27  may provide for the demolition of any structure on tax-forfeited 
 19.28  lands, if in the opinion of the county board, the county 
 19.29  auditor, and the land commissioner, if there is one, the sale of 
 19.30  the land with the structure on it, or the continued existence of 
 19.31  the structure by reason of age, dilapidated condition or 
 19.32  excessive size as compared with nearby structures, will result 
 19.33  in a material lessening of net tax capacities of real estate in 
 19.34  the vicinity of the tax-forfeited lands, or if the demolition of 
 19.35  the structure or structures will aid in disposing of the 
 19.36  tax-forfeited property. 
 20.1      Before the sale of a parcel of forfeited land located in an 
 20.2   urban area, the county auditor may with the approval of the 
 20.3   county board provide for the grading of the land by filling or 
 20.4   the removal of any surplus material from it.  If the physical 
 20.5   condition of forfeited lands is such that a reasonable grading 
 20.6   of the lands is necessary for the protection and preservation of 
 20.7   the property of any adjoining owner, the adjoining property 
 20.8   owner or owners may apply to the county board to have the 
 20.9   grading done.  If, after considering the application, the county 
 20.10  board believes that the grading will enhance the value of the 
 20.11  forfeited lands commensurate with the cost involved, it may 
 20.12  approve it, and the work must be performed under the supervision 
 20.13  of the county or city engineer, as the case may be, and the 
 20.14  expense paid from the forfeited tax sale fund. 
 20.15     Sec. 6.  Minnesota Statutes 2000, section 477A.011, 
 20.16  subdivision 36, is amended to read: 
 20.17     Subd. 36.  [CITY AID BASE.] (a) Except as provided in 
 20.18  paragraphs (b) to (n), "city aid base" means, for each city, the 
 20.19  sum of the local government aid and equalization aid it was 
 20.20  originally certified to receive in calendar year 1993 under 
 20.21  Minnesota Statutes 1992, section 477A.013, subdivisions 3 and 5, 
 20.22  and the amount of disparity reduction aid it received in 
 20.23  calendar year 1993 under Minnesota Statutes 1992, section 
 20.24  273.1398, subdivision 3. 
 20.25     (b) For aids payable in 1996 and thereafter, a city that in 
 20.26  1992 or 1993 transferred an amount from governmental funds to 
 20.27  its sewer and water fund, which amount exceeded its net levy for 
 20.28  taxes payable in the year in which the transfer occurred, has a 
 20.29  "city aid base" equal to the sum of (i) its city aid base, as 
 20.30  calculated under paragraph (a), and (ii) one-half of the 
 20.31  difference between its city aid distribution under section 
 20.32  477A.013, subdivision 9, for aids payable in 1995 and its city 
 20.33  aid base for aids payable in 1995. 
 20.34     (c) The city aid base for any city with a population less 
 20.35  than 500 is increased by $40,000 for aids payable in calendar 
 20.36  year 1995 and thereafter, and the maximum amount of total aid it 
 21.1   may receive under section 477A.013, subdivision 9, paragraph 
 21.2   (c), is also increased by $40,000 for aids payable in calendar 
 21.3   year 1995 only, provided that: 
 21.4      (i) the average total tax capacity rate for taxes payable 
 21.5   in 1995 exceeds 200 percent; 
 21.6      (ii) the city portion of the tax capacity rate exceeds 100 
 21.7   percent; and 
 21.8      (iii) its city aid base is less than $60 per capita. 
 21.9      (d) The city aid base for a city is increased by $20,000 in 
 21.10  1998 and thereafter and the maximum amount of total aid it may 
 21.11  receive under section 477A.013, subdivision 9, paragraph (c), is 
 21.12  also increased by $20,000 in calendar year 1998 only, provided 
 21.13  that: 
 21.14     (i) the city has a population in 1994 of 2,500 or more; 
 21.15     (ii) the city is located in a county, outside of the 
 21.16  metropolitan area, which contains a city of the first class; 
 21.17     (iii) the city's net tax capacity used in calculating its 
 21.18  1996 aid under section 477A.013 is less than $400 per capita; 
 21.19  and 
 21.20     (iv) at least four percent of the total net tax capacity, 
 21.21  for taxes payable in 1996, of property located in the city is 
 21.22  classified as railroad property. 
 21.23     (e) The city aid base for a city is increased by $200,000 
 21.24  in 1999 and thereafter and the maximum amount of total aid it 
 21.25  may receive under section 477A.013, subdivision 9, paragraph 
 21.26  (c), is also increased by $200,000 in calendar year 1999 only, 
 21.27  provided that: 
 21.28     (i) the city was incorporated as a statutory city after 
 21.29  December 1, 1993; 
 21.30     (ii) its city aid base does not exceed $5,600; and 
 21.31     (iii) the city had a population in 1996 of 5,000 or more. 
 21.32     (f) The city aid base for a city is increased by $450,000 
 21.33  in 1999 to 2008 and the maximum amount of total aid it may 
 21.34  receive under section 477A.013, subdivision 9, paragraph (c), is 
 21.35  also increased by $450,000 in calendar year 1999 only, provided 
 21.36  that: 
 22.1      (i) the city had a population in 1996 of at least 50,000; 
 22.2      (ii) its population had increased by at least 40 percent in 
 22.3   the ten-year period ending in 1996; and 
 22.4      (iii) its city's net tax capacity for aids payable in 1998 
 22.5   is less than $700 per capita. 
 22.6      (g) Beginning in ~~2002~~ 2004, the city aid base for a city is 
 22.7   equal to the sum of its city aid base in ~~2001~~ 2003 and the 
 22.8   amount of additional aid it was certified to receive under 
 22.9   section 477A.06 in ~~2001~~ 2003.  For ~~2002~~ 2004 only, the maximum 
 22.10  amount of total aid a city may receive under section 477A.013, 
 22.11  subdivision 9, paragraph (c), is also increased by the amount it 
 22.12  was certified to receive under section 477A.06 in ~~2001~~ 2003. 
 22.13     (h) The city aid base for a city is increased by $150,000 
 22.14  for aids payable in 2000 and thereafter, and the maximum amount 
 22.15  of total aid it may receive under section 477A.013, subdivision 
 22.16  9, paragraph (c), is also increased by $150,000 in calendar year 
 22.17  2000 only, provided that: 
 22.18     (1) the city has a population that is greater than 1,000 
 22.19  and less than 2,500; 
 22.20     (2) its commercial and industrial percentage for aids 
 22.21  payable in 1999 is greater than 45 percent; and 
 22.22     (3) the total market value of all commercial and industrial 
 22.23  property in the city for assessment year 1999 is at least 15 
 22.24  percent less than the total market value of all commercial and 
 22.25  industrial property in the city for assessment year 1998. 
 22.26     (i) The city aid base for a city is increased by $200,000 
 22.27  in 2000 and thereafter, and the maximum amount of total aid it 
 22.28  may receive under section 477A.013, subdivision 9, paragraph 
 22.29  (c), is also increased by $200,000 in calendar year 2000 only, 
 22.30  provided that: 
 22.31     (1) the city had a population in 1997 of 2,500 or more; 
 22.32     (2) the net tax capacity of the city used in calculating 
 22.33  its 1999 aid under section 477A.013 is less than $650 per 
 22.34  capita; 
 22.35     (3) the pre-1940 housing percentage of the city used in 
 22.36  calculating 1999 aid under section 477A.013 is greater than 12 
 23.1   percent; 
 23.2      (4) the 1999 local government aid of the city under section 
 23.3   477A.013 is less than 20 percent of the amount that the formula 
 23.4   aid of the city would have been if the need increase percentage 
 23.5   was 100 percent; and 
 23.6      (5) the city aid base of the city used in calculating aid 
 23.7   under section 477A.013 is less than $7 per capita. 
 23.8      (j) The city aid base for a city is increased by $225,000 
 23.9   in calendar years 2000 to 2002 and the maximum amount of total 
 23.10  aid it may receive under section 477A.013, subdivision 9, 
 23.11  paragraph (c), is also increased by $225,000 in calendar year 
 23.12  2000 only, provided that: 
 23.13     (1) the city had a population of at least 5,000; 
 23.14     (2) its population had increased by at least 50 percent in 
 23.15  the ten-year period ending in 1997; 
 23.16     (3) the city is located outside of the Minneapolis-St. Paul 
 23.17  metropolitan statistical area as defined by the United States 
 23.18  Bureau of the Census; and 
 23.19     (4) the city received less than $30 per capita in aid under 
 23.20  section 477A.013, subdivision 9, for aids payable in 1999. 
 23.21     (k) The city aid base for a city is increased by $102,000 
 23.22  in 2000 and thereafter, and the maximum amount of total aid it 
 23.23  may receive under section 477A.013, subdivision 9, paragraph 
 23.24  (c), is also increased by $102,000 in calendar year 2000 only, 
 23.25  provided that: 
 23.26     (1) the city has a population in 1997 of 2,000 or more; 
 23.27     (2) the net tax capacity of the city used in calculating 
 23.28  its 1999 aid under section 477A.013 is less than $455 per 
 23.29  capita; 
 23.30     (3) the net levy of the city used in calculating 1999 aid 
 23.31  under section 477A.013 is greater than $195 per capita; and 
 23.32     (4) the 1999 local government aid of the city under section 
 23.33  477A.013 is less than 38 percent of the amount that the formula 
 23.34  aid of the city would have been if the need increase percentage 
 23.35  was 100 percent. 
 23.36     (l) The city aid base for a city is increased by $32,000 in 
 24.1   2001 and thereafter, and the maximum amount of total aid it may 
 24.2   receive under section 477A.013, subdivision 9, paragraph (c), is 
 24.3   also increased by $32,000 in calendar year 2001 only, provided 
 24.4   that: 
 24.5      (1) the city has a population in 1998 that is greater than 
 24.6   200 but less than 500; 
 24.7      (2) the city's revenue need used in calculating aids 
 24.8   payable in 2000 was greater than $200 per capita; 
 24.9      (3) the city net tax capacity for the city used in 
 24.10  calculating aids available in 2000 was equal to or less than 
 24.11  $200 per capita; 
 24.12     (4) the city aid base of the city used in calculating aid 
 24.13  under section 477A.013 is less than $65 per capita; and 
 24.14     (5) the city's formula aid for aids payable in 2000 was 
 24.15  greater than zero. 
 24.16     (m) The city aid base for a city is increased by $7,200 in 
 24.17  2001 and thereafter, and the maximum amount of total aid it may 
 24.18  receive under section 477A.013, subdivision 9, paragraph (c), is 
 24.19  also increased by $7,200 in calendar year 2001 only, provided 
 24.20  that: 
 24.21     (1) the city had a population in 1998 that is greater than 
 24.22  200 but less than 500; 
 24.23     (2) the city's commercial industrial percentage used in 
 24.24  calculating aids payable in 2000 was less than ten percent; 
 24.25     (3) more than 25 percent of the city's population was 60 
 24.26  years old or older according to the 1990 census; 
 24.27     (4) the city aid base of the city used in calculating aid 
 24.28  under section 477A.013 is less than $15 per capita; and 
 24.29     (5) the city's formula aid for aids payable in 2000 was 
 24.30  greater than zero. 
 24.31     (n) The city aid base for a city is increased by $45,000 in 
 24.32  2001 and thereafter, and the maximum amount of total aid it may 
 24.33  receive under section 477A.013, subdivision 9, paragraph (c), is 
 24.34  also increased by $45,000 in calendar year 2001 only, provided 
 24.35  that: 
 24.36     (1) the net tax capacity of the city used in calculating 
 25.1   its 2000 aid under section 477A.013 is less than $810 per 
 25.2   capita; 
 25.3      (2) the population of the city declined more than two 
 25.4   percent between 1988 and 1998; 
 25.5      (3) the net levy of the city used in calculating 2000 aid 
 25.6   under section 477A.013 is greater than $240 per capita; and 
 25.7      (4) the city received less than $36 per capita in aid under 
 25.8   section 477A.013, subdivision 9, for aids payable in 2000. 
 25.9                              ARTICLE 3 
 25.10                        SALES AND USE TAXES 
 25.11     Section 1.  Minnesota Statutes 2000, section 289A.50, 
 25.12  subdivision 2a, is amended to read: 
 25.13     Subd. 2a.  [REFUND OF SALES TAX TO PURCHASERS.] If a vendor 
 25.14  has collected from a purchaser a tax on a transaction that is 
 25.15  not subject to the tax imposed by chapter 297A, the purchaser 
 25.16  may apply directly to the commissioner for a refund under this 
 25.17  section if: 
 25.18     (a) the purchaser is currently registered to collect and 
 25.19  remit the sales ~~and~~ tax or to remit the use tax; and 
 25.20     (b) the amount of the refund applied for exceeds $500. 
 25.21     The purchaser may not file more than two applications for 
 25.22  refund under this subdivision in a calendar year. 
 25.23     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 25.24  following final enactment. 
 25.25     Sec. 2.  Minnesota Statutes 2000, section 297A.01, 
 25.26  subdivision 3, is amended to read: 
 25.27     Subd. 3.  A "sale" and a "purchase" includes, but is not 
 25.28  limited to, each of the following transactions: 
 25.29     (a) Any transfer of title or possession, or both, of 
 25.30  tangible personal property, whether absolutely or conditionally, 
 25.31  and the leasing of or the granting of a license to use or 
 25.32  consume tangible personal property other than manufactured homes 
 25.33  used for residential purposes for a continuous period of 30 days 
 25.34  or more, for a consideration in money or by exchange or barter; 
 25.35     (b) The production, fabrication, printing, or processing of 
 25.36  tangible personal property for a consideration for consumers who 
 26.1   furnish either directly or indirectly the materials used in the 
 26.2   production, fabrication, printing, or processing; 
 26.3      (c) The furnishing, preparing, or serving for a 
 26.4   consideration of food, meals, or drinks.  "Sale" or "purchase" 
 26.5   does not include: 
 26.6      (1) meals or drinks served to patients, inmates, or persons 
 26.7   residing at hospitals, sanitariums, nursing homes, senior 
 26.8   citizens homes, and correctional, detention, and detoxification 
 26.9   facilities; 
 26.10     (2) meals or drinks purchased for and served exclusively to 
 26.11  individuals who are 60 years of age or over and their spouses or 
 26.12  to the handicapped and their spouses by governmental agencies, 
 26.13  nonprofit organizations, agencies, or churches or pursuant to 
 26.14  any program funded in whole or part through 42 USCA sections 
 26.15  3001 through 3045, wherever delivered, prepared or served; or 
 26.16     (3) meals and lunches served at public and private schools, 
 26.17  universities, or colleges. 
 26.18  Notwithstanding section 297A.25, subdivision 2, taxable food or 
 26.19  meals include, but are not limited to, the following:  
 26.20     (i) food or drinks sold by the retailer for immediate 
 26.21  consumption on the retailer's premises.  Food and drinks sold 
 26.22  within a building or grounds which require an admission charge 
 26.23  for entrance are presumed to be sold for consumption on the 
 26.24  premises; 
 26.25     (ii) food or drinks prepared by the retailer for immediate 
 26.26  consumption either on or off the retailer's premises.  For 
 26.27  purposes of this subdivision, "food or drinks prepared for 
 26.28  immediate consumption" includes any food product upon which an 
 26.29  act of preparation including, but not limited to, cooking, 
 26.30  mixing, sandwich making, blending, heating, or pouring has been 
 26.31  performed by the retailer so the food product may be immediately 
 26.32  consumed by the purchaser; 
 26.33     (iii) ice cream, ice milk, frozen yogurt products, or 
 26.34  frozen novelties sold in single or individual servings including 
 26.35  cones, sundaes, and snow cones.  For purposes of this 
 26.36  subdivision, "single or individual servings" does not include 
 27.1   products when sold in bulk containers or bulk packaging; 
 27.2      (iv) soft drinks and other beverages including all 
 27.3   carbonated and noncarbonated beverages or drinks sold in liquid 
 27.4   form except nonalcoholic beverages or drinks which contain milk 
 27.5   or milk products, nonalcoholic beverages or drinks containing 15 
 27.6   or more percent fruit juice, and noncarbonated and 
 27.7   noneffervescent bottled water sold in individual containers of 
 27.8   one-half gallon or more in size; 
 27.9      (v) gum, candy, and candy products, except when sold for 
 27.10  fundraising purposes by a nonprofit organization that provides 
 27.11  educational and social activities primarily for young people 18 
 27.12  years of age and under; 
 27.13     (vi) ice; 
 27.14     (vii) all food sold from vending machines; 
 27.15     (viii) all food for immediate consumption sold from 
 27.16  concession stands and vehicles; 
 27.17     (ix) party trays; 
 27.18     (x) all meals and single servings of packaged snack food 
 27.19  sold in restaurants and bars; and 
 27.20     (xi) bakery products: 
 27.21     (A) prepared by the retailer for consumption on the 
 27.22  retailer's premises; 
 27.23     (B) sold at a place that charges admission; 
 27.24     (C) sold from vending machines; or 
 27.25     (D) sold in single or individual servings from concession 
 27.26  stands, vehicles, bars, and restaurants.  For purposes of this 
 27.27  subdivision, "single or individual servings" does not include 
 27.28  products when sold in bulk containers or bulk packaging.  
 27.29     For purposes of this subdivision, "premises" means the 
 27.30  total space and facilities, including buildings, grounds, and 
 27.31  parking lots that are made available or that are available for 
 27.32  use by the retailer or customer for the purpose of sale or 
 27.33  consumption of prepared food and drinks.  The premises of a 
 27.34  caterer is the place where the catered food or drinks are 
 27.35  served; 
 27.36     (d) The granting of the privilege of admission to places of 
 28.1   amusement, recreational areas, or athletic events, except a 
 28.2   world championship football game sponsored by the national 
 28.3   football league, and the privilege of having access to and the 
 28.4   use of amusement devices, tanning facilities, reducing salons, 
 28.5   steam baths, turkish baths, health clubs, and spas or athletic 
 28.6   facilities; 
 28.7      (e) The furnishing for a consideration of lodging and 
 28.8   related services by a hotel, rooming house, tourist court, motel 
 28.9   or trailer camp and of the granting of any similar license to 
 28.10  use real property other than the renting or leasing thereof for 
 28.11  a continuous period of 30 days or more; 
 28.12     (f) The furnishing for a consideration of electricity, gas, 
 28.13  water, or steam for use or consumption within this state, or 
 28.14  local exchange telephone service, intrastate toll service, and 
 28.15  interstate toll service, if that service originates from and is 
 28.16  charged to a telephone located in this state.  Telephone service 
 28.17  does not include services purchased with prepaid telephone 
 28.18  calling cards.  Telephone service includes paging services and 
 28.19  private communication service, as defined in United States Code, 
 28.20  title 26, section 4252(d), as amended through December 31, 1991, 
 28.21  except for private communication service purchased by an agent 
 28.22  acting on behalf of the state lottery.  The furnishing for a 
 28.23  consideration of access to telephone services by a hotel to its 
 28.24  guests is a sale under this clause.  Sales by municipal 
 28.25  corporations in a proprietary capacity are included in the 
 28.26  provisions of this clause.  The furnishing of water and sewer 
 28.27  services for residential use shall not be considered a sale.  
 28.28  The sale of natural gas to be used as a fuel in vehicles 
 28.29  propelled by natural gas shall not be considered a sale for the 
 28.30  purposes of this section; 
 28.31     (g) The furnishing for a consideration of cable television 
 28.32  services, including charges for basic service, charges for 
 28.33  premium service, and any other charges for any other 
 28.34  pay-per-view, monthly, or similar television services; 
 28.35     (h) The furnishing for a consideration of parking services, 
 28.36  whether on a contractual, hourly, or other periodic basis, 
 29.1   except for parking at a meter; 
 29.2      (i) The furnishing for a consideration of services listed 
 29.3   in this paragraph: 
 29.4      (i) laundry and dry cleaning services including cleaning, 
 29.5   pressing, repairing, altering, and storing clothes, linen 
 29.6   services and supply, cleaning and blocking hats, and carpet, 
 29.7   drapery, upholstery, and industrial cleaning.  Laundry and dry 
 29.8   cleaning services do not include services provided by coin 
 29.9   operated facilities operated by the customer; 
 29.10     (ii) motor vehicle washing, waxing, and cleaning services, 
 29.11  including services provided by coin-operated facilities operated 
 29.12  by the customer, and rustproofing, undercoating, and towing of 
 29.13  motor vehicles; 
 29.14     (iii) building and residential cleaning, maintenance, and 
 29.15  disinfecting and exterminating services; 
 29.16     (iv) detective services, security services, burglar, fire 
 29.17  alarm, and armored car services; but not including services 
 29.18  performed within the jurisdiction they serve by off-duty 
 29.19  licensed peace officers as defined in section 626.84, 
 29.20  subdivision 1, or services provided by a nonprofit organization 
 29.21  for monitoring and electronic surveillance of persons placed on 
 29.22  in-home detention pursuant to court order or under the direction 
 29.23  of the Minnesota department of corrections; 
 29.24     (v) pet grooming services; 
 29.25     (vi) lawn care, fertilizing, mowing, spraying and sprigging 
 29.26  services; garden planting and maintenance; tree, bush, and shrub 
 29.27  pruning, bracing, spraying, and surgery; indoor plant care; 
 29.28  tree, bush, shrub and stump removal; and tree trimming for 
 29.29  public utility lines.  Services performed under a construction 
 29.30  contract for the installation of shrubbery, plants, sod, trees, 
 29.31  bushes, and similar items are not taxable; 
 29.32     (vii) massages, except when provided by a licensed health 
 29.33  care facility or professional or upon written referral from a 
 29.34  licensed health care facility or professional for treatment of 
 29.35  illness, injury, or disease; and 
 29.36     (viii) the furnishing for consideration of lodging, board 
 30.1   and care services for animals in kennels and other similar 
 30.2   arrangements, but excluding veterinary and horse boarding 
 30.3   services. 
 30.4   The services listed in this paragraph are taxable under section 
 30.5   297A.02 if the service is performed wholly within Minnesota or 
 30.6   if the service is performed partly within and partly without 
 30.7   Minnesota and the greater proportion of the service is performed 
 30.8   in Minnesota, based on the cost of performance.  In applying the 
 30.9   provisions of this chapter, the terms "tangible personal 
 30.10  property" and "sales at retail" include taxable services and the 
 30.11  provision of taxable services, unless specifically provided 
 30.12  otherwise.  Services performed by an employee for an employer 
 30.13  are not taxable under this paragraph.  Services performed by a 
 30.14  partnership or association for another partnership or 
 30.15  association are not taxable under this paragraph if one of the 
 30.16  entities owns or controls more than 80 percent of the voting 
 30.17  power of the equity interest in the other entity.  Services 
 30.18  performed between members of an affiliated group of corporations 
 30.19  are not taxable.  For purposes of this section, "affiliated 
 30.20  group of corporations" includes those entities that would be 
 30.21  classified as a member of an affiliated group under United 
 30.22  States Code, title 26, section 1504, as amended through December 
 30.23  31, 1987, and who are eligible to file a consolidated tax return 
 30.24  for federal income tax purposes; 
 30.25     (j) A "sale" and a "purchase" includes the transfer of 
 30.26  computer software, meaning information and directions that 
 30.27  dictate the function performed by data processing equipment.  A 
 30.28  "sale" and a "purchase" does not include the design, 
 30.29  development, writing, translation, fabrication, lease, or 
 30.30  transfer for a consideration of title or possession of a custom 
 30.31  computer program; and 
 30.32     (k) The granting of membership in a club, association, or 
 30.33  other organization if: 
 30.34     (1) the club, association, or other organization makes 
 30.35  available for the use of its members sports and athletic 
 30.36  facilities (without regard to whether a separate charge is 
 31.1   assessed for use of the facilities); and 
 31.2      (2) use of the sports and athletic facilities is not made 
 31.3   available to the general public on the same basis as it is made 
 31.4   available to members.  
 31.5   Granting of membership includes both one-time initiation fees 
 31.6   and periodic membership dues.  Sports and athletic facilities 
 31.7   include golf courses, tennis, racquetball, handball and squash 
 31.8   courts, basketball and volleyball facilities, running tracks, 
 31.9   exercise equipment, swimming pools, and other similar athletic 
 31.10  or sports facilities.  The provisions of this paragraph do not 
 31.11  apply to camps or other recreation facilities owned and operated 
 31.12  by an exempt organization under section 501(c)(3) of the 
 31.13  Internal Revenue Code of 1986, as amended through December 31, 
 31.14  1992, for educational and social activities for young people 
 31.15  primarily age 18 and under.  
 31.16     <b>[EFFECTIVE DATE; INSTRUCTION TO REVISOR.]</b> This section is 
 31.17  effective the day following final enactment.  In the next 
 31.18  edition of Minnesota Statutes, the revisor of statutes shall 
 31.19  codify the amendment in this section in Minnesota Statutes, 
 31.20  section 297A.61, subdivision 3. 
 31.21     Sec. 3.  Minnesota Statutes 2000, section 297A.25, 
 31.22  subdivision 3, is amended to read: 
 31.23     Subd. 3.  [MEDICINES; MEDICAL DEVICES.] The gross receipts 
 31.24  from the sale of and storage, use, or consumption of prescribed 
 31.25  drugs, prescribed medicine and insulin, intended for use, 
 31.26  internal or external, in the cure, mitigation, treatment or 
 31.27  prevention of illness or disease in human beings are exempt, 
 31.28  together with prescription glasses, fever thermometers, 
 31.29  therapeutic, and prosthetic devices.  "Prescribed drugs" or 
 31.30  "prescribed medicine" includes over-the-counter drugs or 
 31.31  medicine prescribed by a licensed ~~physician~~ health care 
 31.32  professional.  "Therapeutic devices" includes reusable finger 
 31.33  pricking devices for the extraction of blood, blood glucose 
 31.34  monitoring machines, and other diagnostic agents used in 
 31.35  diagnosing, monitoring, or treating diabetes.  Nonprescription 
 31.36  analgesics consisting principally (determined by the weight of 
 32.1   all ingredients) of acetaminophen, acetylsalicylic acid, 
 32.2   ibuprofen, ketoprofen, naproxen, and other nonprescription 
 32.3   analgesics that are approved by the United States Food and Drug 
 32.4   Administration for internal use by human beings, or a 
 32.5   combination thereof, are exempt. 
 32.6      Medical supplies purchased by a licensed health care 
 32.7   facility or licensed health care professional to provide medical 
 32.8   treatment to residents or patients are exempt.  The exemption 
 32.9   does not apply to medical equipment or components of medical 
 32.10  equipment, laboratory supplies, radiological supplies, and other 
 32.11  items used in providing medical services.  For purposes of this 
 32.12  subdivision, "medical supplies" means adhesive and nonadhesive 
 32.13  bandages, gauze pads and strips, cotton applicators, 
 32.14  antiseptics, nonprescription drugs, eye solution, and other 
 32.15  similar supplies used directly on the resident or patient in 
 32.16  providing medical services. 
 32.17     <b>[EFFECTIVE DATE; INSTRUCTION TO REVISOR.]</b> This section is 
 32.18  effective the day following final enactment.  In the next 
 32.19  edition of Minnesota Statutes, the revisor of statutes shall 
 32.20  codify the amendment in this section in Minnesota Statutes, 
 32.21  section 297A.67, subdivision 6. 
 32.22     Sec. 4.  Minnesota Statutes 2000, section 297A.25, 
 32.23  subdivision 11, is amended to read: 
 32.24     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
 32.25  all sales, including sales in which title is retained by a 
 32.26  seller or a vendor or is assigned to a third party under an 
 32.27  installment sale or lease purchase agreement under section 
 32.28  465.71, of tangible personal property to, and all storage, use 
 32.29  or consumption of such property by, the United States and its 
 32.30  agencies and instrumentalities, the University of Minnesota, 
 32.31  state universities, community colleges, technical colleges, 
 32.32  state academies, the Perpich center for arts education, an 
 32.33  instrumentality of a political subdivision that is accredited as 
 32.34  an optional/special function school by the North Central 
 32.35  Association of Colleges and Schools, school districts, public 
 32.36  libraries, public library systems, multicounty, multitype 
 33.1   library systems as defined in section 134.001, county law 
 33.2   libraries under chapter 134A, state agency libraries, the state 
 33.3   library under section 480.09, and the legislative reference 
 33.4   library are exempt. 
 33.5      As used in this subdivision, "school districts" means 
 33.6   public school entities and districts of every kind and nature 
 33.7   organized under the laws of the state of Minnesota, including, 
 33.8   without limitation, school districts, intermediate school 
 33.9   districts, education districts, service cooperatives, secondary 
 33.10  vocational cooperative centers, special education cooperatives, 
 33.11  joint purchasing cooperatives, telecommunication cooperatives, 
 33.12  regional management information centers, and any instrumentality 
 33.13  of a school district, as defined in section 471.59. 
 33.14     Sales exempted by this subdivision include sales under 
 33.15  section 297A.01, subdivision 3, paragraph (f).  
 33.16     Sales to hospitals and nursing homes owned and operated by 
 33.17  political subdivisions of the state of tangible personal 
 33.18  property and taxable services used at or by the hospitals and 
 33.19  nursing homes are exempt under this subdivision.  
 33.20     Sales of supplies and equipment used in the operation of an 
 33.21  ambulance service owned and operated by a political subdivision 
 33.22  of the state are exempt under this subdivision provided that the 
 33.23  supplies and equipment are used in the course of providing 
 33.24  medical care.  Sales to a political subdivision of repair and 
 33.25  replacement parts for emergency rescue vehicles and fire trucks 
 33.26  and apparatus are exempt under this subdivision.  
 33.27     Sales to a political subdivision of machinery and 
 33.28  equipment, except for motor vehicles, used directly for mixed 
 33.29  municipal solid waste management services at a solid waste 
 33.30  disposal facility as defined in section 115A.03, subdivision 10, 
 33.31  are exempt under this subdivision.  
 33.32     Sales to political subdivisions of chore and homemaking 
 33.33  services to be provided to elderly or disabled individuals are 
 33.34  exempt. 
 33.35     Sales to a town of gravel and of machinery, equipment, and 
 33.36  accessories, except motor vehicles, used exclusively for road 
 34.1   and bridge maintenance, and leases of motor vehicles exempt from 
 34.2   tax under section 297B.03, clause (10), are exempt. 
 34.3      Sales of telephone services to the department of 
 34.4   administration that are used to provide telecommunications 
 34.5   services through the intertechnologies revolving fund are exempt 
 34.6   under this subdivision. 
 34.7      This exemption shall not apply to building, construction or 
 34.8   reconstruction materials purchased by a contractor or a 
 34.9   subcontractor as a part of a lump-sum contract or similar type 
 34.10  of contract with a guaranteed maximum price covering both labor 
 34.11  and materials for use in the construction, alteration, or repair 
 34.12  of a building or facility.  This exemption does not apply to 
 34.13  construction materials purchased by tax exempt entities or their 
 34.14  contractors to be used in constructing buildings or facilities 
 34.15  which will not be used principally by the tax exempt entities. 
 34.16     This exemption does not apply to the leasing of a motor 
 34.17  vehicle as defined in section 297B.01, subdivision 5, except for 
 34.18  leases entered into by the United States or its agencies or 
 34.19  instrumentalities. 
 34.20     The tax imposed on sales to political subdivisions of the 
 34.21  state under this section applies to all political subdivisions 
 34.22  other than those explicitly exempted under this subdivision, 
 34.23  notwithstanding section 115A.69, subdivision 6, 116A.25, 
 34.24  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
 34.25  469.127, 473.448, 473.545, or 473.608 or any other law to the 
 34.26  contrary enacted before 1992. 
 34.27     Sales exempted by this subdivision include sales made to 
 34.28  other states or political subdivisions of other states, if the 
 34.29  sale would be exempt from taxation if it occurred in that state, 
 34.30  but do not include sales under section 297A.01, subdivision 3, 
 34.31  paragraphs (c) and (e). 
 34.32     <b>[EFFECTIVE DATE; INSTRUCTION TO REVISOR.]</b> This section is 
 34.33  effective the day following final enactment.  In the next 
 34.34  edition of Minnesota Statutes, the revisor of statutes shall 
 34.35  codify the amendment in this section in Minnesota Statutes, 
 34.36  section 297A.70, section 1. 
 35.1      Sec. 5.  [REPEALER.] 
 35.2      Minnesota Statutes 2000, section 297B.032, is repealed. 
 35.3      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 35.4   following final enactment. 
 35.5                              ARTICLE 4 
 35.6                            SPECIAL TAXES 
 35.7      Section 1.  Minnesota Statutes 2000, section 287.20, 
 35.8   subdivision 9, is amended to read: 
 35.9      Subd. 9.  [REORGANIZATION.] "Reorganization" means the 
 35.10  transfer of substantially all of the assets of a corporation, a 
 35.11  limited liability company, or a partnership not in the usual or 
 35.12  regular course of business if at the time of the transfer the 
 35.13  transfer qualifies as:  (i) a corporate reorganization under 
 35.14  section 368(a) of the Internal Revenue Code of 1986, as amended 
 35.15  through December 31, 2000; or (ii) a transfer pursuant to the 
 35.16  continuation of an existing partnership under section 708 of the 
 35.17  Internal Revenue Code of 1986, as amended through December 31, 
 35.18  2000. 
 35.19     <b>[EFFECTIVE DATE.]</b> This section is effective for taxable 
 35.20  deeds recorded or registered on or after July 1, 2001. 
 35.21     Sec. 2.  Minnesota Statutes 2000, section 295.50, 
 35.22  subdivision 3, is amended to read: 
 35.23     Subd. 3.  [GROSS REVENUES.] "Gross revenues" are total 
 35.24  amounts received in money or otherwise by: 
 35.25     (1) a hospital for patient services; 
 35.26     (2) a surgical center for patient services; 
 35.27     (3) a health care provider, other than a staff model health 
 35.28  carrier, for patient services; 
 35.29     (4) a wholesale drug distributor for sale or distribution 
 35.30  of legend drugs that are delivered in Minnesota by the wholesale 
 35.31  drug distributor, by common carrier, or by mail, unless the 
 35.32  legend drugs are delivered to another wholesale drug distributor 
 35.33  who sells legend drugs exclusively at wholesale.  Legend drugs 
 35.34  do not include nutritional products as defined in Minnesota 
 35.35  Rules, part 9505.0325; and 
 35.36     (5) a staff model health plan company as gross premiums for 
 36.1   enrollees, copayments, deductibles, coinsurance, and fees for 
 36.2   patient services ~~covered under its contracts with groups and~~ 
 36.3   ~~enrollees~~. 
 36.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 36.5   following final enactment. 
 36.6      Sec. 3.  Minnesota Statutes 2000, section 295.50, 
 36.7   subdivision 15, is amended to read: 
 36.8      Subd. 15.  [LEGEND DRUG.] "Legend drug" means a ~~legend~~ drug 
 36.9   ~~as defined in section 151.01, subdivision 17~~ that is required by 
 36.10  federal law to bear one of the following statements:  "Caution: 
 36.11  Federal law prohibits dispensing without prescription" or "Rx 
 36.12  only". 
 36.13     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 36.14  following final enactment. 
 36.15     Sec. 4.  Minnesota Statutes 2000, section 295.52, 
 36.16  subdivision 4, is amended to read: 
 36.17     Subd. 4.  [USE TAX; PRESCRIPTION DRUGS.] (a) A person that 
 36.18  receives prescription drugs for resale or use in Minnesota, 
 36.19  other than from a wholesale drug distributor that ~~paid the~~ is 
 36.20  subject to tax under subdivision 3, is subject to a tax equal to 
 36.21  the price paid to the wholesale drug distributor multiplied by 
 36.22  the tax percentage specified in this section.  Liability for the 
 36.23  tax is incurred when prescription drugs are received or 
 36.24  delivered in Minnesota by the person. 
 36.25     (b) A person that receives prescription drugs for use in 
 36.26  Minnesota from a nonresident pharmacy required to be registered 
 36.27  under section 151.19 is subject to a tax equal to the price paid 
 36.28  by the nonresident pharmacy to the wholesale drug distributor or 
 36.29  the price received by the nonresident pharmacy, whichever is 
 36.30  lower, multiplied by the tax percentage specified in this 
 36.31  section.  Liability for the tax is incurred when prescription 
 36.32  drugs are received in Minnesota by the person.  
 36.33     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 36.34  following final enactment. 
 36.35     Sec. 5.  Minnesota Statutes 2000, section 295.57, 
 36.36  subdivision 1, is amended to read: 
 37.1      Subdivision 1.  [APPLICATION OF OTHER CHAPTERS.] Unless 
 37.2   specifically provided otherwise by sections 295.50 to 295.59, 
 37.3   the enforcement, interest, ~~and penalty provisions under chapter~~ 
 37.4   ~~294,~~ appeal ~~provisions in sections 289A.43 and 289A.65~~, criminal 
 37.5   penalties ~~in section 289A.63~~, and refunds provisions in ~~section~~ 
 37.6   ~~289A.50~~ chapter 289A, civil penalty provisions applicable to 
 37.7   withholding and sales taxes under section 289A.60, and 
 37.8   collection and rulemaking provisions under chapter 270, apply to 
 37.9   ~~a liability for the~~ taxes imposed under sections 295.50 to 
 37.10  295.59. 
 37.11     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 37.12  following final enactment. 
 37.13     Sec. 6.  Minnesota Statutes 2000, section 296A.16, 
 37.14  subdivision 2, is amended to read: 
 37.15     Subd. 2.  [FUEL USED IN OTHER VEHICLE; CLAIM FOR REFUND.] 
 37.16  Any person who ~~shall buy~~ buys and ~~use~~ uses gasoline for a 
 37.17  qualifying purpose other than use in motor vehicles, snowmobiles 
 37.18  except as provided in clause (2), or motorboats, or special fuel 
 37.19  for a qualifying purpose other than use in licensed motor 
 37.20  vehicles, and who ~~shall have~~ paid the tax directly or indirectly 
 37.21  through the amount of the tax being included in the price of the 
 37.22  gasoline or special fuel, or otherwise, shall be reimbursed and 
 37.23  repaid the amount of the tax paid upon filing with the 
 37.24  commissioner a claim for refund in the form and manner 
 37.25  prescribed by the commissioner, and containing the information 
 37.26  the commissioner shall require.  By signing any such claim which 
 37.27  is false or fraudulent, the applicant shall be subject to the 
 37.28  penalties provided in this chapter for knowingly making a false 
 37.29  claim.  The claim shall set forth the total amount of the 
 37.30  gasoline so purchased and used by the applicant other than in 
 37.31  motor vehicles, or special fuel purchased and used by the 
 37.32  applicant other than in licensed motor vehicles, and shall state 
 37.33  when and for what purpose it was used.  When a claim contains an 
 37.34  error in computation or preparation, the commissioner is 
 37.35  authorized to adjust the claim in accordance with the evidence 
 37.36  shown on the claim or other information available to the 
 38.1   commissioner.  The commissioner, on being satisfied that the 
 38.2   claimant is entitled to the payments, shall approve the claim 
 38.3   and transmit it to the commissioner of finance.  The words 
 38.4   "gasoline" or "special fuel" as used in this subdivision do not 
 38.5   include aviation gasoline or special fuel for aircraft.  
 38.6   Gasoline or special fuel bought and used for a "qualifying 
 38.7   purpose" means: 
 38.8      (1) Gasoline or special fuel used in carrying on a trade or 
 38.9   business, used on a farm situated in Minnesota, and used for a 
 38.10  farming purpose.  "Farm" and "farming purpose" have the meanings 
 38.11  given them in section 6420(c)(2), (3), and (4) of the Internal 
 38.12  Revenue Code of 1986, as amended through December 31, 1997. 
 38.13     (2) Gasoline or special fuel used for off-highway business 
 38.14  use.  "Off-highway business use" means any use off the public 
 38.15  highway by a person in that person's trade, business, or 
 38.16  activity for the production of income.  Off-highway business use 
 38.17  includes: 
 38.18     (i) use of a passenger snowmobile off the public highways 
 38.19  as part of the operations of a resort as defined in section 
 38.20  157.15, subdivision 11; and 
 38.21     (ii) use of gasoline or special fuel to operate a power 
 38.22  takeoff unit on a vehicle, but not including fuel consumed 
 38.23  during idling time.  
 38.24  Off-highway business use does not include: 
 38.25     (i) use as a fuel in a motor vehicle which, at the time of 
 38.26  use, is registered or is required to be registered for highway 
 38.27  use under the laws of any state or foreign country; or 
 38.28     (ii) use of a licensed motor vehicle fuel tank in lieu of a 
 38.29  separate storage tank for storing fuel to be used for a 
 38.30  qualifying purpose, as defined in this section.  Fuel purchased 
 38.31  to be used for a qualifying purpose cannot be placed in the fuel 
 38.32  tank of a licensed motor vehicle and must be stored in a 
 38.33  separate supply tank. 
 38.34     (3) Gasoline or special fuel placed in the fuel tanks of 
 38.35  new motor vehicles, manufactured in Minnesota, and shipped by 
 38.36  interstate carrier to destinations in other states or foreign 
 39.1   countries.  
 39.2      ~~By July 1, 1998, the commissioner shall adopt rules that~~ 
 39.3   ~~determine the rates and percentages necessary to develop~~ 
 39.4   ~~formulas for calculating the refund under clause (2), item (ii).~~ 
 39.5      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 39.6   following final enactment. 
 39.7      Sec. 7.  [296A.201] [ASSESSMENTS.] 
 39.8      Subdivision 1.  [GENERAL RULE.] The commissioner may make 
 39.9   determinations, corrections, and assessments with respect to any 
 39.10  tax or fee under this chapter, including interest, additions to 
 39.11  taxes and fees, and assessable penalties. 
 39.12     Subd. 2.  [COMMISSIONER FILED RETURNS.] If a taxpayer fails 
 39.13  to file a required return, the commissioner, from information in 
 39.14  the commissioner's possession or obtainable by the commissioner, 
 39.15  may make a return for the taxpayer.  The return is prima facie 
 39.16  correct and valid.  The commissioner may use statistical or 
 39.17  other sampling techniques consistent with generally accepted 
 39.18  auditing standards in examining returns or records and making 
 39.19  assessments. 
 39.20     Subd. 3.  [ORDER OF ASSESSMENT; NOTICE AND DEMAND TO 
 39.21  TAXPAYER.] (a) If a return has been filed and the commissioner 
 39.22  determines that the tax or fee disclosed by the return is 
 39.23  different than the tax or fee determined by the examination, the 
 39.24  commissioner shall send an order of assessment to the taxpayer.  
 39.25  If no return has been filed, the commissioner may make a return 
 39.26  for the taxpayer under subdivision 2 or may send an order of 
 39.27  assessment under this subdivision.  The order must explain the 
 39.28  basis for the assessment and must explain the taxpayer's appeal 
 39.29  rights.  An order of assessment is final when made but may be 
 39.30  reconsidered by the commissioner under section 296A.25. 
 39.31     (b) Penalties under this chapter are not imposed and no 
 39.32  collection action can be taken, including the filing of liens 
 39.33  under section 270.69, if the amount shown on the order is paid 
 39.34  to the commissioner: 
 39.35     (1) within 60 days after notice of the amount and demand 
 39.36  for its payment have been mailed to the taxpayer by the 
 40.1   commissioner; or 
 40.2      (2) if an administrative appeal is filed under this 
 40.3   chapter, or a tax court appeal is filed under chapter 271, 
 40.4   within 60 days following final determination of the appeal if 
 40.5   the appeal is based upon a constitutional challenge to the tax 
 40.6   or fee, and if not, when the decision of the tax court is made. 
 40.7      Subd. 4.  [ERRONEOUS REFUNDS OR CREDITS.] An erroneous 
 40.8   refund or credit is considered an underpayment of tax or fee on 
 40.9   the date made.  An assessment of a deficiency arising out of an 
 40.10  erroneous refund may be made at any time within two years from 
 40.11  the making of the refund.  If part of the refund was induced by 
 40.12  fraud or misrepresentation of a material fact, the assessment 
 40.13  may be made at any time. 
 40.14     Subd. 5.  [ASSESSMENT PRESUMED VALID.] A return or 
 40.15  assessment of tax or fee made by the commissioner is prima facie 
 40.16  correct and valid.  The taxpayer has the burden of establishing 
 40.17  its incorrectness or invalidity in any related action or 
 40.18  proceeding. 
 40.19     Subd. 6.  [AGGREGATE REFUND OR ASSESSMENT.] The 
 40.20  commissioner, on examining returns of a taxpayer for more than 
 40.21  one year or period, may issue one order covering the period 
 40.22  under examination that reflects the aggregate refund or 
 40.23  additional tax or fee due. 
 40.24     Subd. 7.  [SUFFICIENCY OF NOTICE.] An order of assessment, 
 40.25  sent postage prepaid by United States mail to the taxpayer at 
 40.26  the taxpayer's last known address, is sufficient even if the 
 40.27  taxpayer is deceased or is under a legal disability, or, in the 
 40.28  case of a corporation, even if the corporation has terminated 
 40.29  its existence, unless the department has been provided with a 
 40.30  new address by a party authorized to receive notices of 
 40.31  assessment. 
 40.32     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 40.33  following final enactment. 
 40.34     Sec. 8.  Minnesota Statutes 2000, section 296A.21, 
 40.35  subdivision 1, is amended to read: 
 40.36     Subdivision 1.  [GENERAL ~~RULE~~ RULES.] (a) The commissioner 
 41.1   shall make determinations, corrections, ~~and~~ assessments, and 
 41.2   refunds with respect to taxes and fees under this chapter, 
 41.3   including interest, additions to taxes, and assessable 
 41.4   penalties.  Except as otherwise provided in this section, the 
 41.5   amount of taxes assessable must be assessed within 3-1/2 years 
 41.6   after the date the return is filed. 
 41.7      (b) A claim for a refund of an overpayment of state tax or 
 41.8   fees must be filed within 3-1/2 years from the date prescribed 
 41.9   for filing the return, plus any extension of time granted for 
 41.10  filing the return, but only if filed within the extended time; 
 41.11  or the claim must be filed within one year from the date of an 
 41.12  order assessing tax or fees, or from the date of a return filed 
 41.13  by the commissioner, upon payment in full of the tax, fees, 
 41.14  penalties, and interest shown on the order or return, whichever 
 41.15  period expires later. 
 41.16     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 41.17  following final enactment. 
 41.18     Sec. 9.  Minnesota Statutes 2000, section 296A.21, 
 41.19  subdivision 4, is amended to read: 
 41.20     Subd. 4.  [TIME LIMIT FOR ~~REPAYMENT~~ CERTAIN REFUNDS.] ~~No~~ 
 41.21  ~~repayment~~ Notwithstanding subdivision 1, paragraph (b), no 
 41.22  refund under section 296A.16, subdivision 2, shall be made 
 41.23  unless the claim for refund and invoice ~~shall be~~ are filed with 
 41.24  the commissioner within one year from the date of purchase.  ~~The~~ 
 41.25  ~~postmark on the envelope in which a written claim is mailed~~ 
 41.26  ~~shall determine its date of filing.~~ 
 41.27     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 41.28  following final enactment. 
 41.29     Sec. 10.  Minnesota Statutes 2000, section 297F.16, 
 41.30  subdivision 4, is amended to read: 
 41.31     Subd. 4.  [ERRONEOUS REFUNDS ~~OR CREDITS~~.] An erroneous 
 41.32  refund ~~or credit~~ is considered an underpayment of tax on the 
 41.33  date made.  An assessment of a deficiency arising out of an 
 41.34  erroneous refund ~~or credit~~ must be made within ~~3-1/2 years from~~ 
 41.35  ~~the date prescribed for filing the return, plus any extension of~~ 
 41.36  ~~time granted for filing the return, but only if filed within the~~ 
 42.1   ~~extended time, or two years from the time the tax is paid in~~ 
 42.2   ~~full, whichever period expires later~~ two years from the making 
 42.3   of the refund.  If part of the refund was induced by fraud or 
 42.4   misrepresentation of a material fact, the assessment may be made 
 42.5   at any time. 
 42.6      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 42.7   following final enactment. 
 42.8      Sec. 11.  Minnesota Statutes 2000, section 297G.15, 
 42.9   subdivision 4, is amended to read: 
 42.10     Subd. 4.  [ERRONEOUS REFUNDS ~~OR CREDITS~~.] An erroneous 
 42.11  refund ~~or credit~~ is considered an underpayment of tax on the 
 42.12  date made.  An assessment of a deficiency arising out of an 
 42.13  erroneous refund ~~or credit~~ must be made within ~~3-1/2 years from~~ 
 42.14  ~~the date prescribed for filing the return, plus any extension of~~ 
 42.15  ~~time granted for filing the return, but only if filed within the~~ 
 42.16  ~~extended time, or two years from the time the tax is paid in~~ 
 42.17  ~~full, whichever period expires later~~ two years from the making 
 42.18  of the refund.  If part of the refund was induced by fraud or 
 42.19  misrepresentation of a material fact, the assessment may be made 
 42.20  at any time. 
 42.21     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 42.22  following final enactment. 
 42.23     Sec. 12.  Minnesota Statutes 2000, section 297G.16, 
 42.24  subdivision 5, is amended to read: 
 42.25     Subd. 5.  [TIME LIMIT FOR REFUNDS.] Unless otherwise 
 42.26  provided in this chapter, a claim for a refund of an overpayment 
 42.27  of tax must be filed within 3-1/2 years from the date prescribed 
 42.28  for filing the return, plus any extension of time granted for 
 42.29  filing the return, but only if filed within the extended time, 
 42.30  ~~or two years from the time the tax is paid in full, whichever~~ 
 42.31  ~~period expires later.  Claimants under this section are subject~~ 
 42.32  ~~to the notice requirements of section 289A.38, subdivision 7~~ or 
 42.33  within one year from the date of an order assessing tax or from 
 42.34  the date of a return filed by the commissioner, upon payment in 
 42.35  full of the tax, penalties, and interest shown on the order or 
 42.36  return made by the commissioner, whichever period expires later. 
 43.1      <b>[EFFECTIVE DATE.]</b> This section is effective for returns 
 43.2   becoming due or orders assessing tax issued on or after the day 
 43.3   following final enactment. 
 43.4      Sec. 13.  Minnesota Statutes 2000, section 297G.16, 
 43.5   subdivision 7, is amended to read: 
 43.6      Subd. 7.  [TIME LIMIT FOR A BAD DEBT DEDUCTION.] Claims for 
 43.7   refund must be filed with the commissioner within one year of 
 43.8   the filing of the taxpayer's income tax return containing the 
 43.9   bad debt deduction that is being claimed.  Claimants under this 
 43.10  subdivision are subject to the notice requirements of section 
 43.11  289A.38, subdivision 7. 
 43.12     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 43.13  following final enactment. 
 43.14     Sec. 14.  [REPEALER.] 
 43.15     Minnesota Statutes 2000, section 296A.16, subdivision 6, is 
 43.16  repealed. 
 43.17     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 43.18  following final enactment. 
 43.19                             ARTICLE 5 
 43.20                           MISCELLANEOUS 
 43.21     Section 1.  Minnesota Statutes 2000, section 144.3831, 
 43.22  subdivision 2, is amended to read: 
 43.23     Subd. 2.  [COLLECTION AND PAYMENT OF FEE.] The public water 
 43.24  supply described in subdivision 1 shall: 
 43.25     (1) collect the fees assessed on its service connections; 
 43.26     (2) pay the department of ~~revenue~~ health an amount 
 43.27  equivalent to the fees based on the total number of service 
 43.28  connections.  The service connections for each public water 
 43.29  supply described in subdivision 1 shall be verified every four 
 43.30  years by the department of health; and 
 43.31     (3) pay one-fourth of the total yearly fee to the 
 43.32  department of ~~revenue~~ health each calendar quarter.  The first 
 43.33  quarterly payment is due on or before September 30, 1992.  In 
 43.34  lieu of quarterly payments, a public water supply described in 
 43.35  subdivision 1 with fewer than 50 service connections may make a 
 43.36  single annual payment by June 30 each year, starting in 1993.  
 44.1   The fees payable to the department of ~~revenue~~ health shall be 
 44.2   deposited in the state treasury as nondedicated state government 
 44.3   special revenue fund revenues. 
 44.4      <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 44.5   following final enactment. 
 44.6      Sec. 2.  Minnesota Statutes 2000, section 270.06, is 
 44.7   amended to read: 
 44.8      270.06 [POWERS AND DUTIES.] 
 44.9      The commissioner of revenue shall: 
 44.10     (1) have and exercise general supervision over the 
 44.11  administration of the assessment and taxation laws of the state, 
 44.12  over assessors, town, county, and city boards of review and 
 44.13  equalization, and all other assessing officers in the 
 44.14  performance of their duties, to the end that all assessments of 
 44.15  property be made relatively just and equal in compliance with 
 44.16  the laws of the state; 
 44.17     (2) confer with, advise, and give the necessary 
 44.18  instructions and directions to local assessors and local boards 
 44.19  of review throughout the state as to their duties under the laws 
 44.20  of the state; 
 44.21     (3) direct proceedings, actions, and prosecutions to be 
 44.22  instituted to enforce the laws relating to the liability and 
 44.23  punishment of public officers and officers and agents of 
 44.24  corporations for failure or negligence to comply with the 
 44.25  provisions of the laws of this state governing returns of 
 44.26  assessment and taxation of property, and cause complaints to be 
 44.27  made against local assessors, members of boards of equalization, 
 44.28  members of boards of review, or any other assessing or taxing 
 44.29  officer, to the proper authority, for their removal from office 
 44.30  for misconduct or negligence of duty; 
 44.31     (4) require county attorneys to assist in the commencement 
 44.32  of prosecutions in actions or proceedings for removal, 
 44.33  forfeiture and punishment for violation of the laws of this 
 44.34  state in respect to the assessment and taxation of property in 
 44.35  their respective districts or counties; 
 44.36     (5) require town, city, county, and other public officers 
 45.1   to report information as to the assessment of property, 
 45.2   collection of taxes received from licenses and other sources, 
 45.3   and such other information as may be needful in the work of the 
 45.4   department of revenue, in such form and upon such blanks as the 
 45.5   commissioner may prescribe; 
 45.6      (6) require individuals, copartnerships, companies, 
 45.7   associations, and corporations to furnish information concerning 
 45.8   their capital, funded or other debt, current assets and 
 45.9   liabilities, earnings, operating expenses, taxes, as well as all 
 45.10  other statements now required by law for taxation purposes; 
 45.11     (7) subpoena witnesses, at a time and place reasonable 
 45.12  under the circumstances, to appear and give testimony, and to 
 45.13  produce books, records, papers and documents for inspection and 
 45.14  copying relating to any matter which the commissioner may have 
 45.15  authority to investigate or determine; 
 45.16     (8) issue a subpoena which does not identify the person or 
 45.17  persons with respect to whose liability the subpoena is issued, 
 45.18  but only if (a) the subpoena relates to the investigation of a 
 45.19  particular person or ascertainable group or class of persons, 
 45.20  (b) there is a reasonable basis for believing that such person 
 45.21  or group or class of persons may fail or may have failed to 
 45.22  comply with any law administered by the commissioner, (c) the 
 45.23  information sought to be obtained from the examination of the 
 45.24  records (and the identity of the person or persons with respect 
 45.25  to whose liability the subpoena is issued) is not readily 
 45.26  available from other sources, (d) the subpoena is clear and 
 45.27  specific as to the information sought to be obtained, and (e) 
 45.28  the information sought to be obtained is limited solely to the 
 45.29  scope of the investigation.  Provided further that the party 
 45.30  served with a subpoena which does not identify the person or 
 45.31  persons with respect to whose tax liability the subpoena is 
 45.32  issued shall have the right, within 20 days after service of the 
 45.33  subpoena, to petition the district court for the judicial 
 45.34  district in which lies the county in which that party is located 
 45.35  for a determination as to whether the commissioner of revenue 
 45.36  has complied with all the requirements in (a) to (e), and thus, 
 46.1   whether the subpoena is enforceable.  If no such petition is 
 46.2   made by the party served within the time prescribed, the 
 46.3   subpoena shall have the force and effect of a court order; 
 46.4      (9) cause the deposition of witnesses residing within or 
 46.5   without the state, or absent therefrom, to be taken, upon notice 
 46.6   to the interested party, if any, in like manner that depositions 
 46.7   of witnesses are taken in civil actions in the district court, 
 46.8   in any matter which the commissioner may have authority to 
 46.9   investigate or determine; 
 46.10     (10) investigate the tax laws of other states and countries 
 46.11  and to formulate and submit to the legislature such legislation 
 46.12  as the commissioner may deem expedient to prevent evasions of 
 46.13  assessment and taxing laws, and secure just and equal taxation 
 46.14  and improvement in the system of assessment and taxation in this 
 46.15  state; 
 46.16     (11) consult and confer with the governor upon the subject 
 46.17  of taxation, the administration of the laws in regard thereto, 
 46.18  and the progress of the work of the department of revenue, and 
 46.19  furnish the governor, from time to time, such assistance and 
 46.20  information as the governor may require relating to tax matters; 
 46.21     (12) transmit to the governor, on or before the third 
 46.22  Monday in December of each even-numbered year, and to each 
 46.23  member of the legislature, on or before November 15 of each 
 46.24  even-numbered year, the report of the department of revenue for 
 46.25  the preceding years, showing all the taxable property in the 
 46.26  state and the value of the same, in tabulated form; 
 46.27     (13) inquire into the methods of assessment and taxation 
 46.28  and ascertain whether the assessors faithfully discharge their 
 46.29  duties, particularly as to their compliance with the laws 
 46.30  requiring the assessment of all property not exempt from 
 46.31  taxation; 
 46.32     (14) administer and enforce the assessment and collection 
 46.33  of state taxes and fees, including the use of any remedy 
 46.34  available to nongovernmental creditors, and, from time to time, 
 46.35  make, publish, and distribute rules for the administration and 
 46.36  enforcement of assessments and fees administered by the 
 47.1   commissioner and state tax laws.  The rules have the force of 
 47.2   law; 
 47.3      (15) prepare blank forms for the returns required by state 
 47.4   tax law and distribute them throughout the state, furnishing 
 47.5   them subject to charge on application; 
 47.6      (16) prescribe rules governing the qualification and 
 47.7   practice of agents, attorneys, or other persons representing 
 47.8   taxpayers before the commissioner.  The rules may require that 
 47.9   those persons, agents, and attorneys show that they are of good 
 47.10  character and in good repute, have the necessary qualifications 
 47.11  to give taxpayers valuable services, and are otherwise competent 
 47.12  to advise and assist taxpayers in the presentation of their case 
 47.13  before being recognized as representatives of taxpayers.  After 
 47.14  due notice and opportunity for hearing, the commissioner may 
 47.15  suspend and ~~disbar~~ bar from further practice before the 
 47.16  commissioner any person, agent, or attorney who is shown to be 
 47.17  incompetent or disreputable, who refuses to comply with the 
 47.18  rules, or who with intent to defraud, willfully or knowingly 
 47.19  deceives, misleads, or threatens a taxpayer or prospective 
 47.20  taxpayer, by words, circular, letter, or by advertisement.  This 
 47.21  clause does not curtail the rights of individuals to appear in 
 47.22  their own behalf or partners or corporations' officers to appear 
 47.23  in behalf of their respective partnerships or corporations; 
 47.24     (17) appoint agents as the commissioner considers necessary 
 47.25  to make examinations and determinations.  The agents have the 
 47.26  rights and powers conferred on the commissioner to subpoena, 
 47.27  examine, and copy books, records, papers, or memoranda, subpoena 
 47.28  witnesses, administer oaths and affirmations, and take 
 47.29  testimony.  In addition to administrative subpoenas of the 
 47.30  commissioner and the agents, upon demand of the commissioner or 
 47.31  an agent, the court administrator of any district court shall 
 47.32  issue a subpoena for the attendance of a witness or the 
 47.33  production of books, papers, records, or memoranda before the 
 47.34  agent for inspection and copying.  Disobedience of a court 
 47.35  administrator's subpoena shall be punished by the district court 
 47.36  of the district in which the subpoena is issued, or in the case 
 48.1   of a subpoena issued by the commissioner or an agent, by the 
 48.2   district court of the district in which the party served with 
 48.3   the subpoena is located, in the same manner as contempt of the 
 48.4   district court; 
 48.5      (18) appoint and employ additional help, purchase supplies 
 48.6   or materials, or incur other expenditures in the enforcement of 
 48.7   state tax laws as considered necessary.  The salaries of all 
 48.8   agents and employees provided for in this chapter shall be fixed 
 48.9   by the appointing authority, subject to the approval of the 
 48.10  commissioner of administration; 
 48.11     (19) execute and administer any agreement with the 
 48.12  secretary of the treasury of the United States or a 
 48.13  representative of another state regarding the exchange of 
 48.14  information and administration of the tax laws; 
 48.15     (20) administer and enforce the provisions of sections 
 48.16  325D.30 to 325D.42, the Minnesota Unfair Cigarette Sales Act; 
 48.17     (21) authorize the use of unmarked motor vehicles to 
 48.18  conduct seizures or criminal investigations pursuant to the 
 48.19  commissioner's authority; and 
 48.20     (22) exercise other powers and perform other duties 
 48.21  required of or imposed upon the commissioner of revenue by law.  
 48.22     <b>[EFFECTIVE DATE.]</b> This section is effective the day 
 48.23  following final enactment.