2001 Minnesota Statutes

     270.66 Right of setoff. 

    Subdivision 1.    Certification by commissioner.  Upon 
 certification by the commissioner of revenue to the commissioner 
 of finance, or to any state agency described in subdivision 3 
 which disburses its own funds, within ten years after the date 
 of assessment of the tax, that a taxpayer has an uncontested 
 delinquent tax liability owed to the commissioner of revenue, 
 the commissioner of finance or the state agency shall apply to 
 such delinquent tax liability funds sufficient to satisfy such 
 unpaid tax liability from funds appropriated for payment of an 
 obligation of the state or any of its agencies that are due and 
 owing the taxpayer, provided however, that such credit shall not 
 be made against any funds exempt under section 550.37 or those 
 funds owed an individual taxpayer who receives assistance under 
 the provisions of chapter 256. 

    Subd. 2.    Setoff satisfies state obligation.  All 
 funds, whether general or dedicated, shall be subject to setoff 
 in the manner herein provided.  Transfer of funds as herein 
 provided is payment of the obligation of the state or any of its 
 agencies to such taxpayer and any actions for said funds, if 
 any, shall be had against the department of revenue on the issue 
 of such tax liability.  Nothing in this section shall be 
 construed to limit the previously existing right of the state or 
 any of its agencies to setoff. 

    Subd. 3.    Agencies shall maintain records.  
 Notwithstanding any provision to the contrary, every person, 
 organization, or corporation doing business (hereafter called 
 vendor) with the state of Minnesota or any of its departments, 
 agencies, or educational institutions including the University 
 of Minnesota (all hereafter called agency) shall provide that 
 agency with either their social security number, federal 
 taxpayer identification number, or Minnesota tax identification 
 number.  The commissioner may verify to the agency the 
 identifying information provided by a vendor.  The agency shall 
 maintain records of this information, and shall make these 
 records available, on request, to the commissioner for the sole 
 purpose of identifying people who have not filed state tax 
 returns or who have not paid uncontested state tax liabilities 
 (hereafter called delinquent taxpayer).  When an agency is 
 notified by the commissioner that a vendor is a delinquent 
 taxpayer, payments shall not be made by the agency to the vendor 
 until the commissioner notifies the agency that the vendor no 
 longer is a delinquent taxpayer.  Furthermore, if the vendor has 
 an uncontested delinquent tax liability, the setoff provided in 
 subdivision 1 may be implemented.  The commissioner shall 
 determine that a vendor no longer is a delinquent taxpayer when 
 the vendor has filed all delinquent state tax returns, paid all 
 uncontested state tax liabilities or entered into an agreement 
 with the commissioner which provides for the payment of these 
 liabilities.  

    Subd. 4.    Political subdivision debts.  (a) As used in 
 this subdivision, "political subdivision" means counties and 
 home rule charter or statutory cities, and "debts" means a legal 
 obligation to pay a fixed amount of money, which equals or 
 exceeds $100 and which is due and payable to the claimant 
 political subdivision. 

    (b) If one political subdivision owes a debt to another 
 political subdivision, and the debt has not been paid within six 
 months of the date when payment was due, the creditor political 
 subdivision may notify the commissioner of revenue of the debt, 
 and shall provide the commissioner with information sufficient 
 to verify the claim.  If the commissioner has reason to believe 
 that the claim is valid, and the debt has not been paid, the 
 commissioner shall initiate setoff procedures under this 
 subdivision. 

    (c) Within ten days of receipt of the notification from the 
 creditor political subdivision, the commissioner shall send a 
 written notice to the debtor political subdivision, advising it 
 of the nature and amount of the claim.  This written notice 
 shall advise the debtor of the creditor political subdivision's 
 intention to request setoff of the refund against the debt. 

    The notice will also advise the debtor that the debt can be 
 setoff against a state aid payment, and will advise the debtor 
 of the right to contest the validity of the claim at a hearing.  
 The debtor must assert this right by written request to the 
 commissioner of revenue, which request the commissioner must 
 receive within 45 days of the mailing date of the notice. 

    (d) If the commissioner receives written notice of a debtor 
 political subdivision's intention to contest at hearing the 
 claim upon which the intended setoff is based, the commissioner 
 shall initiate a hearing according to contested case procedures 
 established in the state Administrative Procedure Act not later 
 than 30 days after receipt of the debtor's request for a 
 hearing.  The costs of the hearing shall be paid equally by the 
 political subdivisions that are parties to the hearing.  The 
 office of administrative hearings shall separately bill each 
 political subdivision for one-half of the costs. 

    (e) If the debtor political subdivision does not object to 
 the claim, or does not prevail in an objection to the claim or 
 at a hearing on the claim, the commissioner of revenue shall 
 deduct the amount of the debt from the next payment scheduled to 
 be made to the debtor under section 273.1398 or chapter 477A.  
 The commissioner shall remit the amount deducted to the claimant 
 political subdivision. 

    HIST: 1975 c 377 s 5; 1981 c 356 s 337; 1982 c 523 art 2 s 5; 
 1985 c 101 s 3; 1986 c 444; 1989 c 184 art 2 s 13; 1991 c 291 
 art 16 s 2; 1993 c 375 art 17 s 7; 1Sp1997 c 3 s 29