<a id="pl.1.3"></a><var>1.3</var>revenue for additional activities to identify and collect tax liabilities; directing <br/>
<a id="pl.1.4"></a><var>1.4</var>the commissioner to issue a request for proposals for a contract to implement a <br/>
<a id="pl.1.5"></a><var>1.5</var>related system of tax analytics and business intelligence tools.<br/>
<a id="pl.1.6"></a><var>1.6</var>BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:<br/>
<br/>
<a id="bill.0.1.0"></a><a id="pl.1.7"></a><var>1.7</var>    Section 1. <b>APPROPRIATION; DEPARTMENT OF REVENUE.</b><br/>
<a id="pl.1.8"></a><var>1.8</var>    Subdivision 1. <b>Tax system management.</b> (a) $2,428,500 is appropriated to the <br/>
<a id="pl.1.9"></a><var>1.9</var>commissioner of revenue for additional activities to identify and collect tax liabilities from <br/>
<a id="pl.1.10"></a><var>1.10</var>individuals and businesses that currently do not pay all taxes owed. This initiative is <br/>
<a id="pl.1.11"></a><var>1.11</var>expected to result in new general fund revenues of $6,532,500 for fiscal year 2011. This <br/>
<a id="pl.1.12"></a><var>1.12</var>initiative is in addition to any other initiative enacted in the 2010 legislative session.<br/>
<a id="pl.1.13"></a><var>1.13</var>(b) The department must report to the chairs of the house of representative Ways <br/>
<a id="pl.1.14"></a><var>1.14</var>and Means and senate Finance Committees by March 15, 2011, and January 15, 2012, <br/>
<a id="pl.1.15"></a><var>1.15</var>on the following performance indicators:<br/>
<a id="pl.1.16"></a><var>1.16</var>(1) the number of corporations noncompliant with the corporate tax system each <br/>
<a id="pl.1.17"></a><var>1.17</var>year and the percentage and dollar amounts of valid tax liabilities collected;<br/>
<a id="pl.1.18"></a><var>1.18</var>(2) the number of businesses noncompliant with the sales and use tax system and the <br/>
<a id="pl.1.19"></a><var>1.19</var>percentage and dollar amount of the valid tax liabilities collected; and<br/>
<a id="pl.1.20"></a><var>1.20</var>(3) the number of individual noncompliant cases resolved and the percentage and <br/>
<a id="pl.1.21"></a><var>1.21</var>dollar amount of valid tax liabilities collected.<br/>
<a id="pl.1.22"></a><var>1.22</var>(c) The reports must also identify base-level expenditures and staff positions related <br/>
<a id="pl.1.23"></a><var>1.23</var>to compliance and audit activities, including baseline information as of January 1, 2009. <br/>
<a id="pl.1.24"></a><var>1.24</var>The information must be provided at the budget activity level.<br/>
<a id="pl.2.1"></a><var>2.1</var>    Subd. 2. <b>Debt collection management.</b> $935,000 is for additional activities to <br/>
<a id="pl.2.2"></a><var>2.2</var>identify and collect tax liabilities from individuals and businesses that currently do not <br/>
<a id="pl.2.3"></a><var>2.3</var>pay all taxes owed. This initiative is expected to result in new general fund revenues of <br/>
<a id="pl.2.4"></a><var>2.4</var>$6,900,000 for fiscal year 2011. This initiative is in addition to any other initiative enacted <br/>
<a id="pl.2.5"></a><var>2.5</var>in the 2010 legislative session.<br/>
<a id="pl.2.6"></a><var>2.6</var>    Subd. 3. <b>Telecommuting.</b> To the extent possible, staff hired for the compliance <br/>
<a id="pl.2.7"></a><var>2.7</var>initiative under this section must telecommute.<br/>
<br/>
<a id="bill.0.2.0"></a><a id="pl.2.8"></a><var>2.8</var>    Sec. 2. <b>REQUEST FOR PROPOSALS.</b><br/>
<a id="pl.2.9"></a><var>2.9</var>(a) The commissioner of revenue shall issue a request for proposals for a contract to <br/>
<a id="pl.2.10"></a><var>2.10</var>implement a system of tax analytics and business intelligence tools to enhance the state's <br/>
<a id="pl.2.11"></a><var>2.11</var>tax collection process and revenues by improving the means of identifying candidates <br/>
<a id="pl.2.12"></a><var>2.12</var>for audit and collection activities and prioritizing those activities to provide the highest <br/>
<a id="pl.2.13"></a><var>2.13</var>returns on auditors' and collection agents' time. The request for proposals must require <br/>
<a id="pl.2.14"></a><var>2.14</var>that the system recommended and implemented by the contractor:<br/>
<a id="pl.2.15"></a><var>2.15</var>(1) leverage the Department of Revenue's existing data and other available data <br/>
<a id="pl.2.16"></a><var>2.16</var>sources to build models that  more effectively and efficiently identify accounts for audit <br/>
<a id="pl.2.17"></a><var>2.17</var>review and collections;<br/>
<a id="pl.2.18"></a><var>2.18</var>(2) leverage advanced analytical techniques and technology such as pattern <br/>
<a id="pl.2.19"></a><var>2.19</var>detection, predictive modeling, clustering, outlier detection, and link analysis to identify <br/>
<a id="pl.2.20"></a><var>2.20</var>suspect accounts for audit review and collections;<br/>
<a id="pl.2.21"></a><var>2.21</var>(3) leverage a variety of approaches and analytical techniques to rank accounts and <br/>
<a id="pl.2.22"></a><var>2.22</var>improve the success rate and the return on investment of department employees engaged <br/>
<a id="pl.2.23"></a><var>2.23</var>in audit activities;<br/>
<a id="pl.2.24"></a><var>2.24</var>(4) leverage technology to make the audit process more sustainable and stable, even <br/>
<a id="pl.2.25"></a><var>2.25</var>with turnover of department auditing staff;<br/>
<a id="pl.2.26"></a><var>2.26</var>(5) provide optimization capabilities to more effectively prioritize collections and <br/>
<a id="pl.2.27"></a><var>2.27</var>increase the efficiency of employees engaged in collections activities; and<br/>
<a id="pl.2.28"></a><var>2.28</var>(6) incorporate mechanisms to decrease wrongful auditing and reduce interference <br/>
<a id="pl.2.29"></a><var>2.29</var>with Minnesota taxpayers who are fully complying with the laws.<br/>
<a id="pl.2.30"></a><var>2.30</var>(b) Based on acceptable responses to the request for proposals, the commissioner <br/>
<a id="pl.2.31"></a><var>2.31</var>shall enter into a contract for the services specified in paragraph (a) by July 1, 2012. The <br/>
<a id="pl.2.32"></a><var>2.32</var>contract must incorporate a performance-based vendor financing option whereby the <br/>
<a id="pl.2.33"></a><var>2.33</var>vendor shares in the risk of the project's success.<br/>
<a id="pl.2.34"></a><var>2.34</var><b>EFFECTIVE DATE.</b>This section is effective July 1, 2011.<br/>