HF 3515

1st Committee Engrossment - 86th Legislature (2009 - 2010)

Posted on 03/19/2013 07:29 p.m.

1.1A bill for an act 1.2relating to state government; appropriating money to the commissioner of 1.3revenue for additional activities to identify and collect tax liabilities; directing 1.4the commissioner to issue a request for proposals for a contract to implement a 1.5related system of tax analytics and business intelligence tools. 1.6BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.7    Section 1. new text begin APPROPRIATION; DEPARTMENT OF REVENUE. new text end 1.8     new text begin Subdivision 1. new text end new text begin Tax system management. new text end new text begin (a) $2,428,500 is appropriated to the new text end 1.9 new text begin commissioner of revenue for additional activities to identify and collect tax liabilities from new text end 1.10 new text begin individuals and businesses that currently do not pay all taxes owed. This initiative is new text end 1.11 new text begin expected to result in new general fund revenues of $6,532,500 for fiscal year 2011. This new text end 1.12 new text begin initiative is in addition to any other initiative enacted in the 2010 legislative session. new text end 1.13 new text begin (b) The department must report to the chairs of the house of representative Ways new text end 1.14 new text begin and Means and senate Finance Committees by March 15, 2011, and January 15, 2012, new text end 1.15 new text begin on the following performance indicators: new text end 1.16 new text begin (1) the number of corporations noncompliant with the corporate tax system each new text end 1.17 new text begin year and the percentage and dollar amounts of valid tax liabilities collected; new text end 1.18 new text begin (2) the number of businesses noncompliant with the sales and use tax system and the new text end 1.19 new text begin percentage and dollar amount of the valid tax liabilities collected; and new text end 1.20 new text begin (3) the number of individual noncompliant cases resolved and the percentage and new text end 1.21 new text begin dollar amount of valid tax liabilities collected. new text end 1.22 new text begin (c) The reports must also identify base-level expenditures and staff positions related new text end 1.23 new text begin to compliance and audit activities, including baseline information as of January 1, 2009. new text end 1.24 new text begin The information must be provided at the budget activity level. new text end 2.1     new text begin Subd. 2. new text end new text begin Debt collection management. new text end new text begin $935,000 is for additional activities to new text end 2.2 new text begin identify and collect tax liabilities from individuals and businesses that currently do not new text end 2.3 new text begin pay all taxes owed. This initiative is expected to result in new general fund revenues of new text end 2.4 new text begin $6,900,000 for fiscal year 2011. This initiative is in addition to any other initiative enacted new text end 2.5 new text begin in the 2010 legislative session. new text end 2.6     new text begin Subd. 3. new text end new text begin Telecommuting. new text end new text begin To the extent possible, staff hired for the compliance new text end 2.7 new text begin initiative under this section must telecommute. new text end 2.8    Sec. 2. new text begin REQUEST FOR PROPOSALS. new text end 2.9 new text begin (a) The commissioner of revenue shall issue a request for proposals for a contract to new text end 2.10 new text begin implement a system of tax analytics and business intelligence tools to enhance the state's new text end 2.11 new text begin tax collection process and revenues by improving the means of identifying candidates new text end 2.12 new text begin for audit and collection activities and prioritizing those activities to provide the highest new text end 2.13 new text begin returns on auditors' and collection agents' time. The request for proposals must require new text end 2.14 new text begin that the system recommended and implemented by the contractor: new text end 2.15 new text begin (1) leverage the Department of Revenue's existing data and other available data new text end 2.16 new text begin sources to build models that more effectively and efficiently identify accounts for audit new text end 2.17 new text begin review and collections; new text end 2.18 new text begin (2) leverage advanced analytical techniques and technology such as pattern new text end 2.19 new text begin detection, predictive modeling, clustering, outlier detection, and link analysis to identify new text end 2.20 new text begin suspect accounts for audit review and collections; new text end 2.21 new text begin (3) leverage a variety of approaches and analytical techniques to rank accounts and new text end 2.22 new text begin improve the success rate and the return on investment of department employees engaged new text end 2.23 new text begin in audit activities; new text end 2.24 new text begin (4) leverage technology to make the audit process more sustainable and stable, even new text end 2.25 new text begin with turnover of department auditing staff; new text end 2.26 new text begin (5) provide optimization capabilities to more effectively prioritize collections and new text end 2.27 new text begin increase the efficiency of employees engaged in collections activities; and new text end 2.28 new text begin (6) incorporate mechanisms to decrease wrongful auditing and reduce interference new text end 2.29 new text begin with Minnesota taxpayers who are fully complying with the laws. new text end 2.30 new text begin (b) Based on acceptable responses to the request for proposals, the commissioner new text end 2.31 new text begin shall enter into a contract for the services specified in paragraph (a) by July 1, 2012. The new text end 2.32 new text begin contract must incorporate a performance-based vendor financing option whereby the new text end 2.33 new text begin vendor shares in the risk of the project's success. new text end 2.34 new text begin EFFECTIVE DATE. new text end new text begin This section is effective July 1, 2011. new text end