HF 3171

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/30/2023 12:01pm

A bill for an act
relating to taxation; modifying property taxes and individual income taxes;
modifying the first-tier valuation limit for agricultural homestead properties;
increasing tier limits for homestead resort properties; modifying the homestead
market value exclusion; reducing the state general levy; allowing an unlimited
Social Security subtraction; decreasing income tax rates; establishing a temporary
refundable child credit; providing a direct payment to individuals; appropriating
money; amending Minnesota Statutes 2022, sections 273.11, subdivision 23;
273.13, subdivisions 22, 35; 275.025, subdivision 1; 290.0132, subdivision 26;
290.06, subdivisions 2c, as amended, 2d.

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

Section 1.

Minnesota Statutes 2022, section 273.11, subdivision 23, is amended to read:

Subd. 23.

First tier valuation limit; agricultural homestead property.

(a) The
commissioner of revenue shall annually certify the first tier limit for agricultural homestead
property. For assessment year deleted text begin 2010 deleted text end new text begin 2024 new text end , the limit is deleted text begin $1,140,000 deleted text end new text begin $3,500,000 new text end . Beginning
with assessment year deleted text begin 2011 deleted text end new text begin 2025 new text end , the limit is the product of (i) the first tier limit for the
preceding assessment year, and (ii) the ratio of the statewide average taxable market value
of agricultural property per acre of deeded farm land in the preceding assessment year to
the statewide average taxable market value of agricultural property per acre of deeded farm
land for the second preceding assessment year. The limit shall be rounded to the nearest
$10,000.

(b) For the purposes of this subdivision, "agricultural property" means all class 2a
property under section 273.13, subdivision 23, except for property consisting of the house,
garage, and immediately surrounding one acre of land of an agricultural homestead.

(c) The commissioner shall certify the limit by January 2 of each assessment year.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 2.

Minnesota Statutes 2022, section 273.13, subdivision 22, is amended to read:

Subd. 22.

Class 1.

(a) Except as provided in subdivision 23 and in paragraphs (b) and
(c), real estate which is residential and used for homestead purposes is class 1a. In the case
of a duplex or triplex in which one of the units is used for homestead purposes, the entire
property is deemed to be used for homestead purposes. The market value of class 1a property
must be determined based upon the value of the house, garage, and land.

The first $500,000 of market value of class 1a property has a net classification rate of
one percent of its market value; and the market value of class 1a property that exceeds
$500,000 has a classification rate of 1.25 percent of its market value.

(b) Class 1b property includes homestead real estate or homestead manufactured homes
used for the purposes of a homestead by:

(1) any person who is blind as defined in section 256D.35, or the person who is blind
and the spouse of the person who is blind;

(2) any person who is permanently and totally disabled or by the person with a disability
and the spouse of the person with a disability; or

(3) the surviving spouse of a veteran who was permanently and totally disabled
homesteading a property classified under this paragraph for taxes payable in 2008.

Property is classified and assessed under clause (2) only if the government agency or
income-providing source certifies, upon the request of the homestead occupant, that the
homestead occupant satisfies the disability requirements of this paragraph, and that the
property is not eligible for the valuation exclusion under subdivision 34.

Property is classified and assessed under paragraph (b) only if the commissioner of
revenue or the county assessor certifies that the homestead occupant satisfies the requirements
of this paragraph.

Permanently and totally disabled for the purpose of this subdivision means a condition
which is permanent in nature and totally incapacitates the person from working at an
occupation which brings the person an income. The first $50,000 market value of class 1b
property has a net classification rate of .45 percent of its market value. The remaining market
value of class 1b property is classified as class 1a or class 2a property, whichever is
appropriate.

(c) Class 1c property is commercial use real and personal property that abuts public
water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by
the Department of Natural Resources, and is devoted to temporary and seasonal residential
occupancy for recreational purposes but not devoted to commercial purposes for more than
250 days in the year preceding the year of assessment, and that includes a portion used as
a homestead by the owner, which includes a dwelling occupied as a homestead by a
shareholder of a corporation that owns the resort, a partner in a partnership that owns the
resort, or a member of a limited liability company that owns the resort even if the title to
the homestead is held by the corporation, partnership, or limited liability company. For
purposes of this paragraph, property is devoted to a commercial purpose on a specific day
if any portion of the property, excluding the portion used exclusively as a homestead, is
used for residential occupancy and a fee is charged for residential occupancy. Class 1c
property must contain three or more rental units. A "rental unit" is defined as a cabin,
condominium, townhouse, sleeping room, or individual camping site equipped with water
and electrical hookups for recreational vehicles. Class 1c property must provide recreational
activities such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill
or cross-country ski equipment; provide marina services, launch services, or guide services;
or sell bait and fishing tackle. Any unit in which the right to use the property is transferred
to an individual or entity by deeded interest, or the sale of shares or stock, no longer qualifies
for class 1c even though it may remain available for rent. A camping pad offered for rent
by a property that otherwise qualifies for class 1c is also class 1c, regardless of the term of
the rental agreement, as long as the use of the camping pad does not exceed 250 days. If
the same owner owns two separate parcels that are located in the same township, and one
of those properties is classified as a class 1c property and the other would be eligible to be
classified as a class 1c property if it was used as the homestead of the owner, both properties
will be assessed as a single class 1c property; for purposes of this sentence, properties are
deemed to be owned by the same owner if each of them is owned by a limited liability
company, and both limited liability companies have the same membership. The portion of
the property used as a homestead is class 1a property under paragraph (a). The remainder
of the property is classified as follows: the first deleted text begin $600,000 deleted text end new text begin $850,000 new text end of market value is tier
I, the next deleted text begin $1,700,000 deleted text end new text begin $2,250,000 new text end of market value is tier II, and any remaining market value
is tier III. The classification rates for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent;
and tier III, 1.25 percent. Owners of real and personal property devoted to temporary and
seasonal residential occupancy for recreation purposes in which all or a portion of the
property was devoted to commercial purposes for not more than 250 days in the year
preceding the year of assessment desiring classification as class 1c, must submit a declaration
to the assessor designating the cabins or units occupied for 250 days or less in the year
preceding the year of assessment by January 15 of the assessment year. Those cabins or
units and a proportionate share of the land on which they are located must be designated as
class 1c as otherwise provided. The remainder of the cabins or units and a proportionate
share of the land on which they are located must be designated as class 3a commercial. The
owner of property desiring designation as class 1c property must provide guest registers or
other records demonstrating that the units for which class 1c designation is sought were not
occupied for more than 250 days in the year preceding the assessment if so requested. The
portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center
or meeting room, and (5) other nonresidential facility operated on a commercial basis not
directly related to temporary and seasonal residential occupancy for recreation purposes
does not qualify for class 1c.

(d) Class 1d property includes structures that meet all of the following criteria:

(1) the structure is located on property that is classified as agricultural property under
section 273.13, subdivision 23;

(2) the structure is occupied exclusively by seasonal farm workers during the time when
they work on that farm, and the occupants are not charged rent for the privilege of occupying
the property, provided that use of the structure for storage of farm equipment and produce
does not disqualify the property from classification under this paragraph;

(3) the structure meets all applicable health and safety requirements for the appropriate
season; and

(4) the structure is not salable as residential property because it does not comply with
local ordinances relating to location in relation to streets or roads.

The market value of class 1d property has the same classification rates as class 1a property
under paragraph (a).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective beginning with assessment year 2024.
new text end

Sec. 3.

Minnesota Statutes 2022, section 273.13, subdivision 35, is amended to read:

Subd. 35.

Homestead market value exclusion.

(a) Prior to determining a property's
net tax capacity under this section, property classified as class 1a or 1b under subdivision
22, and the portion of property classified as class 2a under subdivision 23 consisting of the
house, garage, and surrounding one acre of land, shall be eligible for a market value exclusion
as determined under paragraph (b).

(b) For a homestead valued at deleted text begin $76,000 deleted text end new text begin $95,000 new text end or less, the exclusion is 40 percent of
market value. For a homestead valued between deleted text begin $76,000 deleted text end new text begin $95,000 new text end and deleted text begin $413,800 deleted text end new text begin $517,200 new text end ,
the exclusion is deleted text begin $30,400 deleted text end new text begin $38,000 new text end minus nine percent of the valuation over deleted text begin $76,000 deleted text end new text begin $95,000 new text end .
For a homestead valued at deleted text begin $413,800 deleted text end new text begin $517,200 new text end or more, there is no valuation exclusion. The
valuation exclusion shall be rounded to the nearest whole dollar, and may not be less than
zero.

(c) Any valuation exclusions or adjustments under section 273.11 shall be applied prior
to determining the amount of the valuation exclusion under this subdivision.

(d) In the case of a property that is classified as part homestead and part nonhomestead,
(i) the exclusion shall apply only to the homestead portion of the property, but (ii) if a portion
of a property is classified as nonhomestead solely because not all the owners occupy the
property, not all the owners have qualifying relatives occupying the property, or solely
because not all the spouses of owners occupy the property, the exclusion amount shall be
initially computed as if that nonhomestead portion were also in the homestead class and
then prorated to the owner-occupant's percentage of ownership. For the purpose of this
section, when an owner-occupant's spouse does not occupy the property, the percentage of
ownership for the owner-occupant spouse is one-half of the couple's ownership percentage.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for assessment year 2024 and thereafter.
new text end

Sec. 4.

Minnesota Statutes 2022, section 275.025, subdivision 1, is amended to read:

Subdivision 1.

Levy amount.

The state general levy is levied against
commercial-industrial property and seasonal residential recreational property, as defined
in this section. The state general levy for commercial-industrial property is $716,990,000
for taxes payable in 2023 new text begin . The state general levy for commercial-industrial property is
$683,913,000 for taxes payable in 2024 new text end and thereafter. The state general levy for
seasonal-recreational property is $41,690,000 for taxes payable in deleted text begin 2020 deleted text end new text begin 2023. The state
general levy for seasonal-recreational property is $39,767,000 for taxes payable in 2024 new text end
and thereafter. The tax under this section is not treated as a local tax rate under section
469.177 and is not the levy of a governmental unit under chapters 276A and 473F.

The commissioner shall increase or decrease the preliminary or final rate for a year as
necessary to account for errors and tax base changes that affected a preliminary or final rate
for either of the two preceding years. Adjustments are allowed to the extent that the necessary
information is available to the commissioner at the time the rates for a year must be certified,
and for the following reasons:

(1) an erroneous report of taxable value by a local official;

(2) an erroneous calculation by the commissioner; and

(3) an increase or decrease in taxable value for commercial-industrial or seasonal
residential recreational property reported to the commissioner under section 270C.85,
subdivision 2, clause (4), for the same year.

The commissioner may, but need not, make adjustments if the total difference in the tax
levied for the year would be less than $100,000.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxes payable in 2024 and thereafter.
new text end

Sec. 5.

Minnesota Statutes 2022, section 290.0132, subdivision 26, is amended to read:

Subd. 26.

Social Security benefits.

(a) deleted text begin A portion deleted text end new text begin The amount new text end of deleted text begin taxable deleted text end Social Security
benefits new text begin received by a taxpayer in the taxable year new text end is allowed as a subtraction. deleted text begin The subtraction
equals the lesser of taxable Social Security benefits or a maximum subtraction subject to
the limits under paragraphs (b), (c), and (d).
deleted text end

deleted text begin (b) For married taxpayers filing a joint return and surviving spouses, the maximum
subtraction equals $5,150. The maximum subtraction is reduced by 20 percent of provisional
income over $78,180. In no case is the subtraction less than zero.
deleted text end

deleted text begin (c) For single or head-of-household taxpayers, the maximum subtraction equals $4,020.
The maximum subtraction is reduced by 20 percent of provisional income over $61,080.
In no case is the subtraction less than zero.
deleted text end

deleted text begin (d) For married taxpayers filing separate returns, the maximum subtraction equals
one-half the maximum subtraction for joint returns under paragraph (b). The maximum
subtraction is reduced by 20 percent of provisional income over one-half the threshold
amount specified in paragraph (b). In no case is the subtraction less than zero.
deleted text end

deleted text begin (e) deleted text end new text begin (b) new text end For purposes of this subdivision, deleted text begin "provisional income" means modified adjusted
gross income as defined in section 86(b)(2) of the Internal Revenue Code, plus one-half of
the taxable Social Security benefits received during the taxable year, and deleted text end "Social Security
benefits" has the meaning given in section 86(d)(1) of the Internal Revenue Code.

deleted text begin (f) The commissioner shall adjust the maximum subtraction and threshold amounts in
paragraphs (b) to (d) as provided in section 270C.22. The statutory year is taxable year
2019. The maximum subtraction and threshold amounts as adjusted must be rounded to the
nearest $10 amount. If the amount ends in $5, the amount is rounded up to the nearest $10
amount.
deleted 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. 6.

Minnesota Statutes 2022, section 290.06, subdivision 2c, as amended by Laws
2023, chapter 1, section 15, is amended to read:

Subd. 2c.

Schedules of rates for individuals, estates, and trusts.

(a) The income taxes
imposed by this chapter upon married individuals filing joint returns and surviving spouses
as defined in section 2(a) of the Internal Revenue Code must be computed by applying to
their taxable net income the following schedule of rates:

(1) On the first deleted text begin $38,770 deleted text end new text begin $43,950 new text end , deleted text begin 5.35 deleted text end new text begin 4.35 new text end percent;

(2) On all over deleted text begin $38,770 deleted text end new text begin $43,950 new text end , but not over deleted text begin $154,020 deleted text end new text begin $174,610 new text end , deleted text begin 6.8 deleted text end new text begin 5.8 new text end percent;

(3) On all over deleted text begin $154,020 deleted text end new text begin $174,610 new text end , but not over deleted text begin $269,010 deleted text end new text begin $304,970 new text end , 7.85 percent;

(4) On all over deleted text begin $269,010 deleted text end new text begin $304,970 new text end , 9.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their income
tax by applying the above rates to their taxable income, except that the income brackets
will be one-half of the above amounts after the adjustment required in subdivision 2d.

(b) The income taxes imposed by this chapter upon unmarried individuals must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin $26,520 deleted text end new text begin $30,070 new text end , deleted text begin 5.35 deleted text end new text begin 4.35 new text end percent;

(2) On all over deleted text begin $26,520 deleted text end new text begin $30,070 new text end , but not over deleted text begin $87,110 deleted text end new text begin $98,760 new text end , deleted text begin 6.8 deleted text end new text begin 5.8 new text end percent;

(3) On all over deleted text begin $87,110 deleted text end new text begin $98,760 new text end , but not over deleted text begin $161,720 deleted text end new text begin $183,340 new text end , 7.85 percent;

(4) On all over deleted text begin $161,720 deleted text end new text begin $183,340 new text end , 9.85 percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as
a head of household as defined in section 2(b) of the Internal Revenue Code must be
computed by applying to taxable net income the following schedule of rates:

(1) On the first deleted text begin $32,650 deleted text end new text begin $37,010 new text end , deleted text begin 5.35 deleted text end new text begin 4.35 new text end percent;

(2) On all over deleted text begin $32,650 deleted text end new text begin $37,010 new text end , but not over deleted text begin $131,190 deleted text end new text begin $148,730 new text end , deleted text begin 6.8 deleted text end new text begin 5.8 new text end percent;

(3) On all over deleted text begin $131,190 deleted text end new text begin $148,730 new text end , but not over deleted text begin $214,980 deleted text end new text begin $243,720 new text end , 7.85 percent;

(4) On all over deleted text begin $214,980 deleted text end new text begin $243,720 new text end , 9.85 percent.

(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax
of any individual taxpayer whose taxable net income for the taxable year is less than an
amount determined by the commissioner must be computed in accordance with tables
prepared and issued by the commissioner of revenue based on income brackets of not more
than $100. The amount of tax for each bracket shall be computed at the rates set forth in
this subdivision, provided that the commissioner may disregard a fractional part of a dollar
unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute the
individual's Minnesota income tax as provided in this subdivision. After the application of
the nonrefundable credits provided in this chapter, the tax liability must then be multiplied
by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income as
defined in section 62 of the Internal Revenue Code and increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
17, and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government
interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132,
subdivisions 9, 10, 14, 15, 17, 18, 27, and 31, and 290.0137, paragraph (c), after applying
the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in section
62 of the Internal Revenue Code, increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, and
17, and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 10, 14, 15, 17, 18, 27,
and 31, and 290.0137, paragraph (c).

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying
owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision
7a, paragraph (b), the individual must compute the individual's Minnesota income tax as
provided in paragraph (e), and also must include, to the extent attributed to the electing
qualifying entity:

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the
addition under section 290.0131, subdivision 5; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the
subtraction under section 290.0132, 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. 7.

Minnesota Statutes 2022, section 290.06, subdivision 2d, is amended to read:

Subd. 2d.

Inflation adjustment of brackets.

The commissioner shall annually adjust
the minimum and maximum dollar amounts for each rate bracket for which a tax is imposed
in subdivision 2c as provided in section 270C.22. The statutory year is taxable year deleted text begin 2019 deleted text end new text begin
2023 new text end . The rate applicable to any rate bracket must not be changed. The dollar amounts
setting forth the tax shall be adjusted to reflect the changes in the rate brackets. The rate
brackets as adjusted must be rounded to the nearest $10 amount. If the rate bracket ends in
$5, it must be rounded up to the nearest $10 amount. The commissioner shall determine the
rate bracket for married filing separate returns after this adjustment is done. The rate bracket
for married filing separate must be one-half of the rate bracket for married filing joint.

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. 8. new text begin MINNESOTA CHILD CREDIT.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For the purposes of this section:
new text end

new text begin (1) "qualifying child" has the meaning given in section 152(c) of the Internal Revenue
Code, except that section 152(c)(3)(A)(ii) and section 152(c)(3)(B) do apply, and
new text end

new text begin (2) the definitions in Minnesota Statutes, chapter 290, apply.
new text end

new text begin Subd. 2. new text end

new text begin Credit allowed. new text end

new text begin (a) An individual income taxpayer is allowed a credit against
the tax imposed under Minnesota Statutes, chapter 290, equal to $1,800 for each qualifying
child of the taxpayer.
new text end

new text begin (b) The credit is reduced by ten percent of adjusted gross income in excess of:
new text end

new text begin (1) $150,000 for a married taxpayer filing a joint return; and
new text end

new text begin (2) $75,000 for all other taxpayers.
new text end

new text begin Subd. 3. new text end

new text begin Credit refundable; appropriation. new text end

new text begin (a) If the amount of credit which a claimant
is eligible to receive under this section exceeds the claimant's tax liability under this chapter,
the commissioner shall refund the excess to the claimant.
new text end

new text begin (b) An amount sufficient to pay the refunds required by this section is appropriated to
the commissioner from the general fund.
new text end

new text begin Subd. 4. new text end

new text begin Advance payment of tax credits. new text end

new text begin (a) The commissioner of revenue must allow
taxpayers to elect to receive six periodic advance payments of the credit under this section.
The aggregate amount of advance payments made to a taxpayer during must equal the
amount of the credit for which taxpayer was eligible. The commissioner must not distribute
advance payments to a taxpayer who does not elect to receive advance payments. The
process for applying for and distributing payments must include:
new text end

new text begin (1) a process for a taxpayer to elect to receive and cease receiving advance payments;
new text end

new text begin (2) a process for distributing advance payments to taxpayers through direct deposit,
United States mail, or any other method deemed appropriate by the commissioner; and
new text end

new text begin (3) a process for informing taxpayers of the amount of advance payments received in
the calendar year.
new text end

new text begin (b) The amount of a taxpayer's credit under this section for the taxable year is reduced
by the amount of advance payments under this section.
new text end

new text begin (c) If a taxpayer's advance payments exceeded the credit the taxpayer was eligible to
receive for the taxable year, the taxpayer's liability for tax is increased by the difference
between the amount of advance payments received and the credit amount.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective retroactively for taxable years beginning
after December 31, 2022, and before January 1, 2025.
new text end

Sec. 9. new text begin DIRECT PAYMENT; APPROPRIATION.
new text end

new text begin (a) The following individuals are eligible for a direct payment:
new text end

new text begin (1) an individual who was a resident of Minnesota, as defined in Minnesota Statutes,
section 290.01, subdivision 7, for any part of 2021, and filed a 2021 Minnesota individual
income tax return by October 15, 2022; and
new text end

new text begin (2) an individual who was eligible for and who filed a claim for refund by December
31, 2022, under Minnesota Statutes, chapter 290A.04, subdivision 2, for property taxes
payable in 2022 or subdivision 3, for rent constituting property taxes paid in 2021.
new text end

new text begin (b) The direct payment is equal to:
new text end

new text begin (1) $2,500 for a married couple who filed a joint return; and
new text end

new text begin (2) $1,250 for all other filers.
new text end

new text begin (c) For an individual who was a resident of Minnesota for less than the entire year, the
direct payment equals the direct payment under paragraph (b) for the individual's filing
status multiplied by the percentage determined pursuant to Minnesota Statutes, section
290.06, subdivision 2c, paragraph (e), as calculated on the individual's original 2021
individual income tax return.
new text end

new text begin (d) A direct payment under this section shall be paid by the commissioner of revenue
based on information available in the commissioner's records. A person eligible for a direct
payment does not have to file a claim to receive the payment.
new text end

new text begin (e) The commissioner of revenue shall pay individuals who filed a joint income tax
return or joint property tax refund return for 2021 a joint direct payment.
new text end

new text begin (f) The direct payment is a "Minnesota tax law" for purpose of Minnesota Statutes,
section 270B.01, subdivision 8.
new text end

new text begin (g) The commissioner of revenue must not apply, and must not certify to another agency
to apply, a payment under this section to any unpaid tax or nontax debt owed by an individual
who is paid a direct payment.
new text end

new text begin (h) A payment under this section is not considered income of a recipient in determining
the recipient's Minnesota individual income tax, any Minnesota individual income tax
credits, the Minnesota property tax refund, or the Minnesota senior citizen property tax
deferral. A direct payment must not be counted as income or as an asset, personal property,
or resource when determining eligibility for any program administered by the Department
of Human Services. A direct payment is not assistance based on need for purposes of
Minnesota Statutes, section 550.37, subdivision 14.
new text end

new text begin (i) If an individual eligible to receive a direct payment dies prior to the issuance of the
direct payment the right to the payment lapses.
new text end

new text begin (j) If the commissioner of revenue cannot locate an individual entitled to a direct payment
within two years of the date that the original check or warrant was issued, or if an individual
to whom a direct payment was made has not cashed the check or warrant within two years
of the date that the original check or warrant was issued, the right to the payment lapses. If
an individual to whom a direct payment was made by debit card has not withdrawn from
the card the total amount of the direct payment within two years of the date of issuance of
the original debit card, the right to any remaining balance lapses to the state general fund.
new text end

new text begin (k) If a direct payment check or warrant is cashed by someone other than the payee or
payees of the check or warrant, and the commissioner of revenue determines that the check
has been forged or improperly endorsed, the commissioner may recover the amount of the
check or warrant from the endorsee or forger. The recovery may be made using the same
procedures used in assessing additional tax under Minnesota Statutes, section 270C.33. The
assessment must be made within two years after the check or warrant is cashed. If a direct
payment was made through a debit card and the commissioner determines that the card was
activated and accessed by an unauthorized person, the commissioner may recover from the
unauthorized person the amount of any unauthorized withdrawals. The recovery may be
made using the same procedures used in assessing additional tax under Minnesota Statutes,
section 270C.33. The assessment must be made within two years after the last unauthorized
withdrawal.
new text end

new text begin (l) Notwithstanding Minnesota Statutes, sections 9.031 and 16B.49, chapter 16C, and
any other law to the contrary, the commissioner of revenue may take whatever actions the
commissioner deems necessary to pay the direct payment required by this section. The
commissioner may, in consultation with the commissioner of management and budget,
contract with a private vendor or vendors to process, print, mail, or deliver the checks,
warrants, or debit cards required under this section and receive and disburse state funds to
make the direct payments by check, warrant, electronic funds transfer, or debit card.
new text end

new text begin (m) The amount necessary to make the direct payments provided in this section is
appropriated from the general fund to the commissioner of revenue in fiscal year 2023 and
is available until June 30, 2024.
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