Minnesota Legislature
HF 3515
1st Committee Engrossment - 86th Legislature (2009 - 2010) Posted on 03/19/2013 07:29pm
KEY: stricken = removed, old language.
underscored = added, new language.
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. APPROPRIATION; DEPARTMENT OF REVENUE.
1.8 Subdivision 1. Tax system management. (a) $2,428,500 is appropriated to the
1.9commissioner of revenue for additional activities to identify and collect tax liabilities from
1.10individuals and businesses that currently do not pay all taxes owed. This initiative is
1.11expected to result in new general fund revenues of $6,532,500 for fiscal year 2011. This
1.12initiative is in addition to any other initiative enacted in the 2010 legislative session.
1.13(b) The department must report to the chairs of the house of representative Ways
1.14and Means and senate Finance Committees by March 15, 2011, and January 15, 2012,
1.15on the following performance indicators:
1.16(1) the number of corporations noncompliant with the corporate tax system each
1.17year and the percentage and dollar amounts of valid tax liabilities collected;
1.18(2) the number of businesses noncompliant with the sales and use tax system and the
1.19percentage and dollar amount of the valid tax liabilities collected; and
1.20(3) the number of individual noncompliant cases resolved and the percentage and
1.21dollar amount of valid tax liabilities collected.
1.22(c) The reports must also identify base-level expenditures and staff positions related
1.23to compliance and audit activities, including baseline information as of January 1, 2009.
1.24The information must be provided at the budget activity level.
2.1 Subd. 2. Debt collection management. $935,000 is for additional activities to
2.2identify and collect tax liabilities from individuals and businesses that currently do not
2.3pay all taxes owed. This initiative is expected to result in new general fund revenues of
2.4$6,900,000 for fiscal year 2011. This initiative is in addition to any other initiative enacted
2.5in the 2010 legislative session.
2.6 Subd. 3. Telecommuting. To the extent possible, staff hired for the compliance
2.7initiative under this section must telecommute.
2.8 Sec. 2. REQUEST FOR PROPOSALS.
2.9(a) The commissioner of revenue shall issue a request for proposals for a contract to
2.10implement a system of tax analytics and business intelligence tools to enhance the state's
2.11tax collection process and revenues by improving the means of identifying candidates
2.12for audit and collection activities and prioritizing those activities to provide the highest
2.13returns on auditors' and collection agents' time. The request for proposals must require
2.14that the system recommended and implemented by the contractor:
2.15(1) leverage the Department of Revenue's existing data and other available data
2.16sources to build models that more effectively and efficiently identify accounts for audit
2.17review and collections;
2.18(2) leverage advanced analytical techniques and technology such as pattern
2.19detection, predictive modeling, clustering, outlier detection, and link analysis to identify
2.20suspect accounts for audit review and collections;
2.21(3) leverage a variety of approaches and analytical techniques to rank accounts and
2.22improve the success rate and the return on investment of department employees engaged
2.23in audit activities;
2.24(4) leverage technology to make the audit process more sustainable and stable, even
2.25with turnover of department auditing staff;
2.26(5) provide optimization capabilities to more effectively prioritize collections and
2.27increase the efficiency of employees engaged in collections activities; and
2.28(6) incorporate mechanisms to decrease wrongful auditing and reduce interference
2.29with Minnesota taxpayers who are fully complying with the laws.
2.30(b) Based on acceptable responses to the request for proposals, the commissioner
2.31shall enter into a contract for the services specified in paragraph (a) by July 1, 2012. The
2.32contract must incorporate a performance-based vendor financing option whereby the
2.33vendor shares in the risk of the project's success.
2.34EFFECTIVE DATE.This section is effective July 1, 2011.
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. APPROPRIATION; DEPARTMENT OF REVENUE.
1.8 Subdivision 1. Tax system management. (a) $2,428,500 is appropriated to the
1.9commissioner of revenue for additional activities to identify and collect tax liabilities from
1.10individuals and businesses that currently do not pay all taxes owed. This initiative is
1.11expected to result in new general fund revenues of $6,532,500 for fiscal year 2011. This
1.12initiative is in addition to any other initiative enacted in the 2010 legislative session.
1.13(b) The department must report to the chairs of the house of representative Ways
1.14and Means and senate Finance Committees by March 15, 2011, and January 15, 2012,
1.15on the following performance indicators:
1.16(1) the number of corporations noncompliant with the corporate tax system each
1.17year and the percentage and dollar amounts of valid tax liabilities collected;
1.18(2) the number of businesses noncompliant with the sales and use tax system and the
1.19percentage and dollar amount of the valid tax liabilities collected; and
1.20(3) the number of individual noncompliant cases resolved and the percentage and
1.21dollar amount of valid tax liabilities collected.
1.22(c) The reports must also identify base-level expenditures and staff positions related
1.23to compliance and audit activities, including baseline information as of January 1, 2009.
1.24The information must be provided at the budget activity level.
2.1 Subd. 2. Debt collection management. $935,000 is for additional activities to
2.2identify and collect tax liabilities from individuals and businesses that currently do not
2.3pay all taxes owed. This initiative is expected to result in new general fund revenues of
2.4$6,900,000 for fiscal year 2011. This initiative is in addition to any other initiative enacted
2.5in the 2010 legislative session.
2.6 Subd. 3. Telecommuting. To the extent possible, staff hired for the compliance
2.7initiative under this section must telecommute.
2.8 Sec. 2. REQUEST FOR PROPOSALS.
2.9(a) The commissioner of revenue shall issue a request for proposals for a contract to
2.10implement a system of tax analytics and business intelligence tools to enhance the state's
2.11tax collection process and revenues by improving the means of identifying candidates
2.12for audit and collection activities and prioritizing those activities to provide the highest
2.13returns on auditors' and collection agents' time. The request for proposals must require
2.14that the system recommended and implemented by the contractor:
2.15(1) leverage the Department of Revenue's existing data and other available data
2.16sources to build models that more effectively and efficiently identify accounts for audit
2.17review and collections;
2.18(2) leverage advanced analytical techniques and technology such as pattern
2.19detection, predictive modeling, clustering, outlier detection, and link analysis to identify
2.20suspect accounts for audit review and collections;
2.21(3) leverage a variety of approaches and analytical techniques to rank accounts and
2.22improve the success rate and the return on investment of department employees engaged
2.23in audit activities;
2.24(4) leverage technology to make the audit process more sustainable and stable, even
2.25with turnover of department auditing staff;
2.26(5) provide optimization capabilities to more effectively prioritize collections and
2.27increase the efficiency of employees engaged in collections activities; and
2.28(6) incorporate mechanisms to decrease wrongful auditing and reduce interference
2.29with Minnesota taxpayers who are fully complying with the laws.
2.30(b) Based on acceptable responses to the request for proposals, the commissioner
2.31shall enter into a contract for the services specified in paragraph (a) by July 1, 2012. The
2.32contract must incorporate a performance-based vendor financing option whereby the
2.33vendor shares in the risk of the project's success.
2.34EFFECTIVE DATE.This section is effective July 1, 2011.