HF 778

as introduced - 93rd Legislature (2023 - 2024) Posted on 01/30/2023 08:36pm

A bill for an act
relating to retirement; public employees police and fire retirement plan; State Patrol
retirement plan; increasing the postretirement adjustment (COLA) to three percent
for members receiving a disability benefit; establishing an individual income tax
subtraction for certain duty disability benefits; amending Minnesota Statutes 2022,
sections 290.0132, by adding a subdivision; 290.091, subdivision 2; 353.6511,
subdivision 7; 353.6512, subdivision 7; 356.415, subdivisions 1c, 1e.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2022, section 290.0132, is amended by adding a subdivision
to read:

new text begin Subd. 31. new text end

new text begin Duty disability benefits. new text end

new text begin The amount of duty disability benefits received
under sections 352B.10, subdivision 1, and 353.656, subdivisions 1 and 1a, and retirement
annuities received under sections 352B.105, subdivisions 2 and 3, and 353.656, subdivision
5a, is a subtraction.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 2.

Minnesota Statutes 2022, section 290.091, subdivision 2, is amended to read:

Subd. 2.

Definitions.

For purposes of the tax imposed by this section, the following
terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable
year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section
55(b)(2) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum
taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a person with a disability;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue
Code, with respect to each property (as defined in section 614 of the Internal Revenue Code),
to the extent not included in federal alternative minimum taxable income, the excess of the
deduction for depletion allowable under section 611 of the Internal Revenue Code for the
taxable year over the adjusted basis of the property at the end of the taxable year (determined
without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount
of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue
Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount
of interest income as provided by section 290.0131, subdivision 2;

(6) the amount of addition required by section 290.0131, subdivisions 9, 10, and 16;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent
not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount
of foreign-derived intangible income deducted under section 250 of the Internal Revenue
Code;

less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision
3, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on
indebtedness to the extent that the amount does not exceed net investment income, as defined
in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted
in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by
section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, deleted text begin and deleted text end 26 to 29 new text begin , and 31 new text end ;

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11,
paragraph (c); and

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122,
subdivision 7.

In the case of an estate or trust, alternative minimum taxable income must be computed
as provided in section 59(c) of the Internal Revenue Code, except alternative minimum
taxable income must be increased by the addition in section 290.0131, subdivision 16.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of
the Internal Revenue Code.

(c) "Net minimum tax" means the minimum tax imposed by this section.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard
to this section and section 290.032), reduced by the sum of the nonrefundable credits allowed
under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income
after subtracting the exemption amount determined under subdivision 3.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2022.
new text end

Sec. 3.

Minnesota Statutes 2022, section 353.6511, subdivision 7, is amended to read:

Subd. 7.

Postretirement adjustments.

Effective January 1, 2012, service pensions and
survivor benefits in force are entitled to be recomputed with the number of units specified
in subdivision 2, subdivision 4, and subdivision 6. Optional annuities under Minnesota
Statutes 2010, section 423C.05, subdivision 8, also are entitled to be recomputed as the
actuarial equivalent of the service pensions and survivor benefits with the number of units
specified in subdivision 2, subdivision 4, and subdivision 6. Retirement annuities, service
pensions, disability benefits, and survivor benefits after December 31, 2015, are eligible
for postretirement adjustments under section 356.415, subdivision 1c. The unit value for
the calculation of a retirement annuity first payable after December 31, 2015, is the calendar
year 2015 unit value, plus any annual postretirement adjustment percentage amount payable
after December 31, 2015, under section 356.415, subdivision 1c, paragraph (a), clause (1) new text begin ,
or paragraph (b), clause (1), as applicable new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 4.

Minnesota Statutes 2022, section 353.6512, subdivision 7, is amended to read:

Subd. 7.

Postretirement adjustments.

Retirement annuities, service pensions, disability
benefits, and survivor benefits after December 31, 2015, are eligible for postretirement
adjustments under section 356.415, subdivision 1c. The unit value for the calculation of a
retirement annuity first payable after December 31, 2015, is the calendar year 2015 unit
value, plus any annual postretirement adjustment percentage amount payable after December
31, 2015, under section 356.415, subdivision 1c, paragraph (a), clause (1) new text begin , or paragraph (b),
clause (1), as applicable new text end .

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 5.

Minnesota Statutes 2022, section 356.415, subdivision 1c, is amended to read:

Subd. 1c.

Annual postretirement adjustments; PERA-police and fire.

(a) Retirement
annuity, disability benefit, or survivor benefit recipients of the public employees police and
fire retirement plan new text begin , except for recipients of a duty disability paid under section 353.656,
subdivision 1 or 1a, new text end are entitled to an annual postretirement adjustment, effective as of each
January 1, as follows:

(1) for each annuitant or benefit recipient who will have been receiving an annuity or
benefit for at least 36 full months as of the immediate preceding June 30, a postretirement
increase of one percent must be applied each year to the amount of the monthly annuity or
benefit of the annuitant or benefit recipient; or

(2) for each annuitant or benefit recipient who has been receiving the annuity or benefit
for at least 25 full months, but less than 36 months as of the immediate preceding June 30,
a postretirement increase of 1/12 of one percent for each full month that the person has been
receiving an annuity or benefit during the fiscal year in which the annuity or benefit was
effective must be applied each year to the amount of the monthly annuity or benefit of the
annuitant or benefit recipient.

new text begin (b) Recipients of a duty disability benefit paid under section 353.656, subdivision 1 or
1a, are entitled to an annual postretirement adjustment, effective as of each January 1, as
follows:
new text end

new text begin (1) for each benefit recipient who has been receiving a benefit for at least 36 full months
as of the immediately preceding June 30, a postretirement increase of three percent must
be applied each year to the amount of the monthly benefit of the benefit recipient; or
new text end

new text begin (2) for each benefit recipient who has been receiving a benefit for at least 25 full months,
but less than 36 months as of the immediately preceding June 30, a postretirement increase
of 1/12 of three percent for each full month that the person has been receiving a benefit
during the fiscal year in which the benefit was effective must be applied each year to the
amount of the monthly benefit of the benefit recipient.
new text end

new text begin (c) Recipients of a retirement annuity paid under section 353.656, subdivision 5a, are
entitled to a postretirement adjustment under paragraph (a).
new text end

deleted text begin (b) deleted text end new text begin (d) new text end An increase in annuity or benefit payments under this section must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the Public Employees Retirement Association requesting that the
increase not be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 6.

Minnesota Statutes 2022, section 356.415, subdivision 1e, is amended to read:

Subd. 1e.

Annual postretirement adjustments; State Patrol retirement plan.

(a)
Retirement annuity, disability benefit, or survivor benefit recipients of the State Patrol
retirement plan new text begin , except for recipients of a duty disability benefit paid under section 352B.10,
subdivision 1, new text end are entitled to an annual postretirement adjustment, effective as of each
January 1, as follows:

(1) a postretirement increase of one percent must be applied each year to the monthly
annuity or benefit of each annuitant or benefit recipient who has been receiving an annuity
or a benefit for at least 12 full months as of the June 30 of the calendar year immediately
before the adjustment; and

(2) for each annuitant or benefit recipient who has been receiving an annuity or a benefit
for at least one full month, but less than 12 full months as of the June 30 of the calendar
year immediately before the adjustment, an annual postretirement increase of 1/12 of one
percent for each month that the person has been receiving an annuity or benefit must be
applied to the amount of the monthly annuity or benefit of each annuitant or benefit recipient.

new text begin (b) Recipients of a duty disability benefit paid under section 352B.10, subdivision 1,
are entitled to an annual postretirement adjustment, effective as of each January 1, as follows:
new text end

new text begin (1) a postretirement increase of three percent must be applied each year to the monthly
benefit of each benefit recipient who has been receiving a benefit for at least 12 full months
as of June 30 of the calendar year immediately before the adjustment; and
new text end

new text begin (2) for each benefit recipient who has been receiving a benefit for at least one full month,
but less than 12 full months as of June 30 of the calendar year immediately before the
adjustment, an annual postretirement increase of 1/12 of three percent for each month that
the person has been receiving a benefit must be applied to the amount of the benefit of each
benefit recipient.
new text end

new text begin (c) Recipients of a retirement annuity paid under section 352B.105, subdivision 2 or 3,
are entitled to a postretirement adjustment under paragraph (a).
new text end

deleted text begin (b) deleted text end new text begin (d) new text end An increase in annuity or benefit payments under this subdivision must be made
automatically unless written notice is filed by the annuitant or benefit recipient with the
executive director of the applicable covered retirement plan requesting that the increase not
be made.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end