HF 1838

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act
  1.2             relating to taxation; income; adopting federal 
  1.3             adjusted gross income as the tax base; providing for 
  1.4             personal exemptions and dependent credits; 
  1.5             appropriating money; amending Minnesota Statutes 1994, 
  1.6             sections 290.01, subdivisions 19, 19a, and 19b; and 
  1.7             290.06, subdivisions 2c and 2d; proposing coding for 
  1.8             new law in Minnesota Statutes, chapter 290; repealing 
  1.9             Minnesota Statutes 1994, sections 290.067; 290.0671; 
  1.10            and 290.091. 
  1.11  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.12     Section 1.  Minnesota Statutes 1994, section 290.01, 
  1.13  subdivision 19, is amended to read: 
  1.14     Subd. 19.  [NET INCOME.] For individuals, estates, and 
  1.15  trusts, the term "net income" means the federal adjusted gross 
  1.16  income, as defined in section 62 of the Internal Revenue Code of 
  1.17  1986, as amended through the date named in this subdivision, 
  1.18  incorporating any elections made by the taxpayer in accordance 
  1.19  with the Internal Revenue Code in determining federal adjusted 
  1.20  gross income for federal income tax purposes, and with the 
  1.21  modifications provided in subdivisions 19a, 19b, and 19f.  For 
  1.22  corporations, the term "net income" means the federal taxable 
  1.23  income, as defined in section 63 of the Internal Revenue Code of 
  1.24  1986, as amended through the date named in this subdivision, 
  1.25  incorporating any elections made by the taxpayer in accordance 
  1.26  with the Internal Revenue Code in determining federal taxable 
  1.27  income for federal income tax purposes, and with the 
  1.28  modifications provided in subdivisions 19a 19c to 19f. 
  2.1      In the case of a regulated investment company or a fund 
  2.2   thereof, as defined in section 851(a) or 851(h) of the Internal 
  2.3   Revenue Code, federal taxable income means investment company 
  2.4   taxable income as defined in section 852(b)(2) of the Internal 
  2.5   Revenue Code, except that:  
  2.6      (1) the exclusion of net capital gain provided in section 
  2.7   852(b)(2)(A) of the Internal Revenue Code does not apply; and 
  2.8      (2) the deduction for dividends paid under section 
  2.9   852(b)(2)(D) of the Internal Revenue Code must be applied by 
  2.10  allowing a deduction for capital gain dividends and 
  2.11  exempt-interest dividends as defined in sections 852(b)(3)(C) 
  2.12  and 852(b)(5) of the Internal Revenue Code.  
  2.13     The net income of a real estate investment trust as defined 
  2.14  and limited by section 856(a), (b), and (c) of the Internal 
  2.15  Revenue Code means the real estate investment trust taxable 
  2.16  income as defined in section 857(b)(2) of the Internal Revenue 
  2.17  Code.  
  2.18     The net income of a designated settlement fund as defined 
  2.19  in section 468B(d) of the Internal Revenue Code means the gross 
  2.20  income as defined in section 468B(b) of the Internal Revenue 
  2.21  Code. 
  2.22     The Internal Revenue Code of 1986, as amended through 
  2.23  December 31, 1986, shall be in effect for taxable years 
  2.24  beginning after December 31, 1986.  The provisions of sections 
  2.25  10104, 10202, 10203, 10204, 10206, 10212, 10221, 10222, 10223, 
  2.26  10226, 10227, 10228, 10611, 10631, 10632, and 10711 of the 
  2.27  Omnibus Budget Reconciliation Act of 1987, Public Law Number 
  2.28  100-203, the provisions of sections 1001, 1002, 1003, 1004, 
  2.29  1005, 1006, 1008, 1009, 1010, 1011, 1011A, 1011B, 1012, 1013, 
  2.30  1014, 1015, 1018, 2004, 3041, 4009, 6007, 6026, 6032, 6137, 
  2.31  6277, and 6282 of the Technical and Miscellaneous Revenue Act of 
  2.32  1988, Public Law Number 100-647, and the provisions of sections 
  2.33  7811, 7816, and 7831 of the Omnibus Budget Reconciliation Act of 
  2.34  1989, Public Law Number 101-239, shall be effective at the time 
  2.35  they become effective for federal income tax purposes.  
  2.36     The Internal Revenue Code of 1986, as amended through 
  3.1   December 31, 1987, shall be in effect for taxable years 
  3.2   beginning after December 31, 1987.  The provisions of sections 
  3.3   4001, 4002, 4011, 5021, 5041, 5053, 5075, 6003, 6008, 6011, 
  3.4   6030, 6031, 6033, 6057, 6064, 6066, 6079, 6130, 6176, 6180, 
  3.5   6182, 6280, and 6281 of the Technical and Miscellaneous Revenue 
  3.6   Act of 1988, Public Law Number 100-647, the provisions of 
  3.7   sections 7815 and 7821 of the Omnibus Budget Reconciliation Act 
  3.8   of 1989, Public Law Number 101-239, and the provisions of 
  3.9   section 11702 of the Revenue Reconciliation Act of 1990, Public 
  3.10  Law Number 101-508, shall become effective at the time they 
  3.11  become effective for federal tax purposes.  
  3.12     The Internal Revenue Code of 1986, as amended through 
  3.13  December 31, 1988, shall be in effect for taxable years 
  3.14  beginning after December 31, 1988.  The provisions of sections 
  3.15  7101, 7102, 7104, 7105, 7201, 7202, 7203, 7204, 7205, 7206, 
  3.16  7207, 7210, 7211, 7301, 7302, 7303, 7304, 7601, 7621, 7622, 
  3.17  7641, 7642, 7645, 7647, 7651, and 7652 of the Omnibus Budget 
  3.18  Reconciliation Act of 1989, Public Law Number 101-239, the 
  3.19  provision of section 1401 of the Financial Institutions Reform, 
  3.20  Recovery, and Enforcement Act of 1989, Public Law Number 101-73, 
  3.21  and the provisions of sections 11701 and 11703 of the Revenue 
  3.22  Reconciliation Act of 1990, Public Law Number 101-508, shall 
  3.23  become effective at the time they become effective for federal 
  3.24  tax purposes.  
  3.25     The Internal Revenue Code of 1986, as amended through 
  3.26  December 31, 1989, shall be in effect for taxable years 
  3.27  beginning after December 31, 1989.  The provisions of sections 
  3.28  11321, 11322, 11324, 11325, 11403, 11404, 11410, and 11521 of 
  3.29  the Revenue Reconciliation Act of 1990, Public Law Number 
  3.30  101-508, and the provisions of sections 13224 and 13261 of the 
  3.31  Omnibus Budget Reconciliation Act of 1993, Public Law Number 
  3.32  103-66, shall become effective at the time they become effective 
  3.33  for federal purposes.  
  3.34     The Internal Revenue Code of 1986, as amended through 
  3.35  December 31, 1990, shall be in effect for taxable years 
  3.36  beginning after December 31, 1990. 
  4.1      The provisions of section 13431 of the Omnibus Budget 
  4.2   Reconciliation Act of 1993, Public Law Number 103-66, shall 
  4.3   become effective at the time they became effective for federal 
  4.4   purposes.  
  4.5      The Internal Revenue Code of 1986, as amended through 
  4.6   December 31, 1991, shall be in effect for taxable years 
  4.7   beginning after December 31, 1991.  
  4.8      The provisions of sections 1936 and 1937 of the 
  4.9   Comprehensive National Energy Policy Act of 1992, Public Law 
  4.10  Number 102-486, and the provisions of sections 13101, 13114, 
  4.11  13122, 13141, 13150, 13151, 13174, 13239, 13301, and 13442 of 
  4.12  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
  4.13  103-66, shall become effective at the time they become effective 
  4.14  for federal purposes.  
  4.15     The Internal Revenue Code of 1986, as amended through 
  4.16  December 31, 1992, shall be in effect for taxable years 
  4.17  beginning after December 31, 1992.  
  4.18     The provisions of sections 13116, 13121, 13206, 13210, 
  4.19  13222, 13223, 13231, 13232, 13233, 13239, 13262, and 13321 of 
  4.20  the Omnibus Budget Reconciliation Act of 1993, Public Law Number 
  4.21  103-66, shall become effective at the time they become effective 
  4.22  for federal purposes. 
  4.23     The Internal Revenue Code of 1986, as amended through 
  4.24  December 31, 1993, shall be in effect for taxable years 
  4.25  beginning after December 31, 1993. 
  4.26     Except as otherwise provided, references to the Internal 
  4.27  Revenue Code in subdivisions 19a to 19g mean the code in effect 
  4.28  for purposes of determining net income for the applicable year. 
  4.29     Sec. 2.  Minnesota Statutes 1994, section 290.01, 
  4.30  subdivision 19a, is amended to read: 
  4.31     Subd. 19a.  [ADDITIONS TO FEDERAL TAXABLE INCOME.] For 
  4.32  individuals, estates, and trusts, there shall be added to 
  4.33  federal taxable adjusted gross income: 
  4.34     (1)(i) interest income on obligations of any state other 
  4.35  than Minnesota or a political or governmental subdivision, 
  4.36  municipality, or governmental agency or instrumentality of any 
  5.1   state other than Minnesota exempt from federal income taxes 
  5.2   under the Internal Revenue Code or any other federal statute, 
  5.3   and 
  5.4      (ii) exempt-interest dividends as defined in section 
  5.5   852(b)(5) of the Internal Revenue Code, except the portion of 
  5.6   the exempt-interest dividends derived from interest income on 
  5.7   obligations of the state of Minnesota or its political or 
  5.8   governmental subdivisions, municipalities, governmental agencies 
  5.9   or instrumentalities, but only if the portion of the 
  5.10  exempt-interest dividends from such Minnesota sources paid to 
  5.11  all shareholders represents 95 percent or more of the 
  5.12  exempt-interest dividends that are paid by the regulated 
  5.13  investment company as defined in section 851(a) of the Internal 
  5.14  Revenue Code, or the fund of the regulated investment company as 
  5.15  defined in section 851(h) of the Internal Revenue Code, making 
  5.16  the payment; and 
  5.17     (iii) for the purposes of items (i) and (ii), interest on 
  5.18  obligations of an Indian tribal government described in section 
  5.19  7871(c) of the Internal Revenue Code shall be treated as 
  5.20  interest income on obligations of the state in which the tribe 
  5.21  is located; 
  5.22     (2) the amount of income taxes paid or accrued within the 
  5.23  taxable year under this chapter and income taxes paid to any 
  5.24  other state or to any province or territory of Canada, to the 
  5.25  extent allowed as a deduction under section 63(d) of the 
  5.26  Internal Revenue Code, but the addition may not be more than the 
  5.27  amount by which the itemized deductions as allowed under section 
  5.28  63(d) of the Internal Revenue Code exceeds the amount of the 
  5.29  standard deduction as defined in section 63(c) of the Internal 
  5.30  Revenue Code.  For the purpose of this paragraph, the 
  5.31  disallowance of itemized deductions under section 68 of the 
  5.32  Internal Revenue Code of 1986, income tax is the last itemized 
  5.33  deduction disallowed; 
  5.34     (3) (2) the capital gain amount of a lump sum distribution 
  5.35  to which the special tax under section 1122(h)(3)(B)(ii) of the 
  5.36  Tax Reform Act of 1986, Public Law Number 99-514, applies; and 
  6.1      (4) (3) the amount of income taxes paid or accrued within 
  6.2   the taxable year under this chapter and income taxes paid to any 
  6.3   other state or any province or territory of Canada, to the 
  6.4   extent allowed as a deduction in determining federal adjusted 
  6.5   gross income.  For the purpose of this paragraph, income taxes 
  6.6   do not include the taxes imposed by sections 290.0922, 
  6.7   subdivision 1, paragraph (b), 290.9727, 290.9728, and 290.9729. 
  6.8      Sec. 3.  Minnesota Statutes 1994, section 290.01, 
  6.9   subdivision 19b, is amended to read: 
  6.10     Subd. 19b.  [SUBTRACTIONS FROM FEDERAL TAXABLE ADJUSTED 
  6.11  GROSS INCOME.] For individuals, estates, and trusts, there shall 
  6.12  be subtracted from federal taxable adjusted gross income: 
  6.13     (1) interest income on obligations of any authority, 
  6.14  commission, or instrumentality of the United States to the 
  6.15  extent includable in taxable income for federal income tax 
  6.16  purposes but exempt from state income tax under the laws of the 
  6.17  United States; 
  6.18     (2) if included in federal taxable income, the amount of 
  6.19  any overpayment of income tax to Minnesota or to any other 
  6.20  state, for any previous taxable year, whether the amount is 
  6.21  received as a refund or as a credit to another taxable year's 
  6.22  income tax liability; 
  6.23     (3) the amount paid to others not to exceed $650 for each 
  6.24  dependent in grades kindergarten to 6 and $1,000 for each 
  6.25  dependent in grades 7 to 12, for tuition, textbooks, and 
  6.26  transportation of each dependent in attending an elementary or 
  6.27  secondary school situated in Minnesota, North Dakota, South 
  6.28  Dakota, Iowa, or Wisconsin, wherein a resident of this state may 
  6.29  legally fulfill the state's compulsory attendance laws, which is 
  6.30  not operated for profit, and which adheres to the provisions of 
  6.31  the Civil Rights Act of 1964 and chapter 363.  As used in this 
  6.32  clause, "textbooks" includes books and other instructional 
  6.33  materials and equipment used in elementary and secondary schools 
  6.34  in teaching only those subjects legally and commonly taught in 
  6.35  public elementary and secondary schools in this state.  
  6.36  "Textbooks" does not include instructional books and materials 
  7.1   used in the teaching of religious tenets, doctrines, or worship, 
  7.2   the purpose of which is to instill such tenets, doctrines, or 
  7.3   worship, nor does it include books or materials for, or 
  7.4   transportation to, extracurricular activities including sporting 
  7.5   events, musical or dramatic events, speech activities, driver's 
  7.6   education, or similar programs.  In order to qualify for the 
  7.7   subtraction under this clause the taxpayer must elect to itemize 
  7.8   deductions under section 63(e) of the Internal Revenue Code; 
  7.9      (4) (3) to the extent included in federal taxable adjusted 
  7.10  gross income, distributions from a qualified governmental 
  7.11  pension plan, an individual retirement account, simplified 
  7.12  employee pension, or qualified plan covering a self-employed 
  7.13  person that represent a return of contributions that were 
  7.14  included in Minnesota gross income in the taxable year for which 
  7.15  the contributions were made but were deducted or were not 
  7.16  included in the computation of federal adjusted gross income.  
  7.17  The distribution shall be allocated first to return of 
  7.18  contributions until the contributions included in Minnesota 
  7.19  gross income have been exhausted.  This subtraction applies only 
  7.20  to contributions made in a taxable year prior to 1985; 
  7.21     (5) (4) income as provided under section 290.0802; 
  7.22     (6) (5) the amount of unrecovered accelerated cost recovery 
  7.23  system deductions allowed under subdivision 19g; 
  7.24     (7) (6) to the extent included in federal adjusted gross 
  7.25  income, income realized on disposition of property exempt from 
  7.26  tax under section 290.491; and 
  7.27     (8) (7) to the extent not deducted in determining federal 
  7.28  taxable adjusted gross income, the amount paid for health 
  7.29  insurance of self-employed individuals as determined under 
  7.30  section 162(l) of the Internal Revenue Code, except that the 25 
  7.31  percent limit does not apply.  If the taxpayer deducted 
  7.32  insurance payments under section 213 of the Internal Revenue 
  7.33  Code of 1986, the subtraction under this clause must be reduced 
  7.34  by the lesser of: 
  7.35     (i) the total itemized deductions allowed under section 
  7.36  63(d) of the Internal Revenue Code, less state, local, and 
  8.1   foreign income taxes deductible under section 164 of the 
  8.2   Internal Revenue Code and the standard deduction under section 
  8.3   63(c) of the Internal Revenue Code; or 
  8.4      (ii) the lesser of (A) the amount of insurance qualifying 
  8.5   as "medical care" under section 213(d) of the Internal Revenue 
  8.6   Code to the extent not deducted under section 162(1) of the 
  8.7   Internal Revenue Code or excluded from income or (B) the total 
  8.8   amount deductible for medical care under section 213(a).; and 
  8.9      (8) an exemption amount equal to the sum of a taxpayer 
  8.10  exemption and an additional exemption for senior or disabled 
  8.11  taxpayers.  The taxpayer exemption is equal to $15,000 for 
  8.12  married individuals filing joint returns and surviving spouses; 
  8.13  $11,000 for unmarried individuals qualifying as heads of 
  8.14  household as defined in section 2(b) of the Internal Revenue 
  8.15  Code; and $7,500 for unmarried individuals and married 
  8.16  individuals filing separate returns.  The additional exemption 
  8.17  amount is equal to $750 for each individual who has attained the 
  8.18  age of 65 before the end of the tax year, and $750 for each 
  8.19  disabled individual.  The exemption amount is reduced by one 
  8.20  percent for each $1,000 of adjusted gross income or part thereof 
  8.21  above a threshold.  The threshold is $100,000 for married 
  8.22  individuals filing joint returns and surviving spouses; $75,000 
  8.23  for unmarried individuals; and $50,000 for married individuals 
  8.24  filing separate returns.  In no case is the exemption amount 
  8.25  less than zero. 
  8.26     The dollar amounts of the exemption and income thresholds 
  8.27  must be adjusted for inflation.  The commission shall adjust the 
  8.28  exemption and threshold amounts by the percentage determined 
  8.29  under section 290.06, subdivision 2d, for the taxable year. 
  8.30     Sec. 4.  Minnesota Statutes 1994, section 290.06, 
  8.31  subdivision 2c, is amended to read: 
  8.32     Subd. 2c.  [SCHEDULES OF RATES FOR INDIVIDUALS, ESTATES, 
  8.33  AND TRUSTS.] (a) The income taxes imposed by this chapter upon 
  8.34  married individuals filing joint returns and surviving spouses 
  8.35  as defined in section 2(a) of the Internal Revenue Code must be 
  8.36  computed by applying to their taxable net income the following 
  9.1   schedule of rates: 
  9.2      (1) On the first $19,910 $20,000, 6 percent; 
  9.3      (2) On all over $19,910 $20,000, but not 
  9.4   over $79,120 $40,000, 8 percent; 
  9.5      (3) On all over $79,120 $40,000, 8.5 percent. 
  9.6      Married individuals filing separate returns, estates, and 
  9.7   trusts must compute their income tax by applying the above rates 
  9.8   to their taxable income, except that the income brackets will be 
  9.9   one-half of the above amounts.  
  9.10     (b) The income taxes imposed by this chapter upon unmarried 
  9.11  individuals must be computed by applying to taxable net income 
  9.12  the following schedule of rates: 
  9.13     (1) On the first $13,620 $13,680, 6 percent; 
  9.14     (2) On all over $13,620 $13,680, but not 
  9.15  over $44,750 $27,370, 8 percent; 
  9.16     (3) On all over $44,750 $27,370, 8.5 percent. 
  9.17     (c) The income taxes imposed by this chapter upon unmarried 
  9.18  individuals qualifying as a head of household as defined in 
  9.19  section 2(b) of the Internal Revenue Code must be computed by 
  9.20  applying to taxable net income the following schedule of rates: 
  9.21     (1) On the first $16,770 $16,840, 6 percent; 
  9.22     (2) On all over $16,770 $16,840, but not 
  9.23  over $67,390 $33,680, 8 percent; 
  9.24     (3) On all over $67,390 $33,680, 8.5 percent. 
  9.25     (d) In lieu of a tax computed according to the rates set 
  9.26  forth in this subdivision, the tax of any individual taxpayer 
  9.27  whose taxable net income for the taxable year is less than an 
  9.28  amount determined by the commissioner must be computed in 
  9.29  accordance with tables prepared and issued by the commissioner 
  9.30  of revenue based on income brackets of not more than $100.  The 
  9.31  amount of tax for each bracket shall be computed at the rates 
  9.32  set forth in this subdivision, provided that the commissioner 
  9.33  may disregard a fractional part of a dollar unless it amounts to 
  9.34  50 cents or more, in which case it may be increased to $1. 
  9.35     (e) An individual who is not a Minnesota resident for the 
  9.36  entire year must compute the individual's Minnesota income tax 
 10.1   as provided in this subdivision.  After the application of the 
 10.2   nonrefundable credits provided in this chapter, the tax 
 10.3   liability must then be multiplied by a fraction in which:  
 10.4      (1) The numerator is the individual's Minnesota source 
 10.5   federal adjusted gross income as defined in section 62 of the 
 10.6   Internal Revenue Code after applying the allocation and 
 10.7   assignability provisions of section 290.081, clause (a), or 
 10.8   290.17; and 
 10.9      (2) the denominator is the individual's federal adjusted 
 10.10  gross income as defined in section 62 of the Internal Revenue 
 10.11  Code of 1986, as amended through December 31, 1993, increased by 
 10.12  the addition required for interest income from non-Minnesota 
 10.13  state and municipal bonds under section 290.01, subdivision 19a, 
 10.14  clause (1). 
 10.15     Sec. 5.  Minnesota Statutes 1994, section 290.06, 
 10.16  subdivision 2d, is amended to read: 
 10.17     Subd. 2d.  [INFLATION ADJUSTMENT OF BRACKETS.] (a) For 
 10.18  taxable years beginning after December 31, 1991 1995, the 
 10.19  minimum and maximum dollar amounts for each rate bracket for 
 10.20  which a tax is imposed in subdivision 2c shall be adjusted for 
 10.21  inflation by the percentage determined under paragraph (b).  For 
 10.22  the purpose of making the adjustment as provided in this 
 10.23  subdivision all of the rate brackets provided in subdivision 2c 
 10.24  shall be the rate brackets as they existed for taxable years 
 10.25  beginning after December 31, 1990 1994, and before January 
 10.26  1, 1992 1996.  The rate applicable to any rate bracket must not 
 10.27  be changed.  The dollar amounts setting forth the tax shall be 
 10.28  adjusted to reflect the changes in the rate brackets.  The rate 
 10.29  brackets as adjusted must be rounded to the nearest $10 amount.  
 10.30  If the rate bracket ends in $5, it must be rounded up to the 
 10.31  nearest $10 amount.  
 10.32     (b) The commissioner shall adjust the rate brackets and by 
 10.33  the percentage determined pursuant to the provisions of section 
 10.34  1(f) of the Internal Revenue Code, except that in section 
 10.35  1(f)(3)(B) the word "1990" shall be substituted for the word 
 10.36  "1987."  For 1991 1996, the commissioner shall then determine 
 11.1   the percent change from the 12 months ending on August 31, 1990 
 11.2   1995, to the 12 months ending on August 31, 1991 1996, and in 
 11.3   each subsequent year, from the 12 months ending on August 31, 
 11.4   1990 1995, to the 12 months ending on August 31 of the year 
 11.5   preceding the taxable year.  The determination of the 
 11.6   commissioner pursuant to this subdivision shall not be 
 11.7   considered a "rule" and shall not be subject to the 
 11.8   administrative procedure act contained in chapter 14.  
 11.9      No later than December 15 of each year, the commissioner 
 11.10  shall announce the specific percentage that will be used to 
 11.11  adjust the tax rate brackets. 
 11.12     Sec. 6.  [290.0672] [DEPENDENT CREDIT.] 
 11.13     Subdivision 1.  [CREDIT ALLOWED.] An individual is allowed 
 11.14  a credit against the tax imposed by this chapter equal to $650 
 11.15  for each dependent exemption claimed under section 151(c) of the 
 11.16  Internal Revenue Code.  The total credit allowed for any 
 11.17  individual may not exceed $2,000.  The credit amount is reduced 
 11.18  by two percent for each $500 of adjusted gross income or portion 
 11.19  thereof above a threshold.  For married individuals filing joint 
 11.20  returns, the threshold is $24,000.  For unmarried individuals 
 11.21  the threshold is $18,000.  For married individuals filing 
 11.22  separate returns the threshold is $12,000.  In no case is the 
 11.23  credit amount less than zero. 
 11.24     For a nonresident or part-year resident, the credit 
 11.25  determined under section 32 of the Internal Revenue Code must be 
 11.26  allocated based on the percentage calculated under section 
 11.27  290.06, subdivision 2c, paragraph (e). 
 11.28     For a person who was a resident for the entire tax year and 
 11.29  has earned income not subject to tax under this chapter, the 
 11.30  credit must be allocated based on the ratio of federal adjusted 
 11.31  gross income reduced by the earned income not subject to tax 
 11.32  under this chapter over federal adjusted gross income. 
 11.33     Subd. 2.  [CREDIT REFUNDABLE.] If the amount of credit 
 11.34  which the claimant is eligible to receive under this section 
 11.35  exceeds the claimant's tax liability under this chapter, the 
 11.36  commissioner shall refund the excess to the claimant. 
 12.1      Subd. 3.  [INFLATION ADJUSTMENT.] The dollar amount of the 
 12.2   credit and income thresholds in subdivision 1 must be adjusted 
 12.3   for inflation.  The commissioner shall adjust the credit and 
 12.4   threshold amounts by the percentage determined under section 
 12.5   290.06, subdivision 2d, for the taxable year. 
 12.6      Subd. 4.  [APPROPRIATION.] An amount sufficient to pay the 
 12.7   refunds required by this section is appropriated to the 
 12.8   commissioner from the general fund. 
 12.9      Sec. 7.  [REPEALER.] 
 12.10     Minnesota Statutes 1994, sections 290.067; 290.0671; and 
 12.11  290.091, are repealed. 
 12.12     Sec. 8.  [EFFECTIVE DATE.] 
 12.13     Sections 1 to 7 are effective for taxable years beginning 
 12.14  after December 31, 1994.