HF 174

3rd Engrossment - 87th Legislature (2011 - 2012) Posted on 05/10/2011 02:07pm

A bill for an act
relating to state government; requiring the Department of Revenue to issue a
request for proposals for a tax analytics and business intelligence contract;
appropriating money.

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

Section 1. new text begin DEPARTMENT OF REVENUE; REQUEST FOR PROPOSALS.
new text end

new text begin (a) The commissioner of revenue shall issue a request for proposals for a contract to
implement a system of tax analytics and business intelligence tools to enhance the state's
tax collection process and revenues by improving the means of identifying candidates
for audit and collection activities and prioritizing those activities to provide the highest
returns on auditors' and collection agents' time. The request for proposals must require
that the system recommended and implemented by the contractor:
new text end

new text begin (1) leverage the Department of Revenue's existing data and other available data
sources to build models that more effectively and efficiently identify accounts for audit
review and collections;
new text end

new text begin (2) leverage advanced analytical techniques and technology such as pattern
detection, predictive modeling, clustering, outlier detection and link analysis to identify
suspect accounts for audit review and collections;
new text end

new text begin (3) leverage a variety of approaches and analytical techniques to rank accounts and
improve the success rate and the return on investment of department employees engaged
in audit activities;
new text end

new text begin (4) leverage technology to make the audit process more sustainable and stable, even
with turnover of department auditing staff;
new text end

new text begin (5) provide optimization capabilities to more effectively prioritize collections and
increase the efficiency of employees engaged in collections activities; and
new text end

new text begin (6) incorporate mechanisms to decrease wrongful auditing and reduce interference
with Minnesota taxpayers who are fully complying with the laws.
new text end

new text begin (b) Based on reasonable responses to the request for proposals, the commissioner
shall enter into a contract for the services specified in paragraph (a) by October 1, 2011.
new text end

new text begin (c) Incorporating the system of tax analytics and business intelligence tools under
the contract in this section, the commissioner of revenue shall identify and collect tax
liabilities from individuals and businesses that currently do not pay all taxes owed.
The commissioner may enter into additional contracts and retain up to five percent
administrative costs as necessary to implement this section. A contract may incorporate
a vendor financing option. A contract shall not compensate the vendor based on a
percentage of taxes assessed or collected.
new text end

new text begin (d) $11,504,000 for the fiscal year ending June 30, 2012, and $23,269,000 for
the fiscal year ending June 30, 2013, are appropriated from the general fund to the
commissioner of revenue for purposes of this section. This initiative is expected to result
in new general fund revenues of $133,000,000 for the biennium ending June 30, 2013.
new text end

new text begin (e) The commissioner of revenue must report to the chairs of the house of
representatives Ways and Means and senate Finance Committees by March 1, 2012, and
January 15, 2013, on collection of additional revenue under this section.
new text end

new text begin (f)(1) If the commissioner of revenue determines that the initiative under this section
will result in new general fund revenues of less than $133,000,000 for the biennium
ending June 30, 2013, the commissioner must notify the commissioner of management
and budget of the amount of new general fund revenues anticipated under this section.
new text end

new text begin (2) Upon receiving a notice from the commissioner of revenue under clause (1), the
commissioner of management and budget must reduce general fund appropriations to
executive agencies for agency operations for the biennium ending June 30, 2013, by an
amount equal to the difference between $133,000,000 and the amount of new general fund
revenues anticipated by the commissioner of revenue under the notice in clause (1).
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. 2. new text begin APPROPRIATIONS MADE ONLY ONCE.
new text end

new text begin If the appropriations made in this bill are enacted more than once in the 2011 regular
session, these appropriations must be given effect only once.
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