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SF 3747

as introduced - 91st Legislature (2019 - 2020) Posted on 02/27/2020 03:59pm

KEY: stricken = removed, old language.
underscored = added, new language.

Current Version - as introduced

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A bill for an act
relating to taxation; individual income; modifying the K-12 education expense
credit; making conforming changes; amending Minnesota Statutes 2018, sections
124D.095, subdivision 4; 270C.445, subdivision 3; 289A.31, subdivision 8;
290.0132, subdivision 4; 290.0674, subdivisions 2, 4, by adding subdivisions;
290.0679, subdivisions 1, 2; Minnesota Statutes 2019 Supplement, sections 13.46,
subdivision 2; 290.0674, subdivision 1; repealing Minnesota Statutes 2018, section
290.0674, subdivision 2a.

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

Section 1.

Minnesota Statutes 2019 Supplement, section 13.46, subdivision 2, is amended
to read:


Subd. 2.

General.

(a) Data on individuals collected, maintained, used, or disseminated
by the welfare system are private data on individuals, and shall not be disclosed except:

(1) according to section 13.05;

(2) according to court order;

(3) according to a statute specifically authorizing access to the private data;

(4) to an agent of the welfare system and an investigator acting on behalf of a county,
the state, or the federal government, including a law enforcement person or attorney in the
investigation or prosecution of a criminal, civil, or administrative proceeding relating to the
administration of a program;

(5) to personnel of the welfare system who require the data to verify an individual's
identity; determine eligibility, amount of assistance, and the need to provide services to an
individual or family across programs; coordinate services for an individual or family;
evaluate the effectiveness of programs; assess parental contribution amounts; and investigate
suspected fraud;

(6) to administer federal funds or programs;

(7) between personnel of the welfare system working in the same program;

(8) to the Department of Revenue to assess parental contribution amounts for purposes
of section 252.27, subdivision 2a, administer and evaluate tax refund or tax credit programs
and to identify individuals who may benefit from these programs. The following information
may be disclosed under this paragraph: an individual's and their dependent's names, dates
of birth, Social Security numbers, income, addresses, and other data as required, upon
request by the Department of Revenue. Disclosures by the commissioner of revenue to the
commissioner of human services for the purposes described in this clause are governed by
section 270B.14, subdivision 1. Tax refund or tax credit programs include, but are not limited
to, the dependent care credit under section 290.067, the Minnesota working family credit
under section 290.0671, the property tax refund and rental credit under section 290A.04,
and the Minnesota education deleted text begincreditdeleted text endnew text begin refundnew text end under section 290.0674;

(9) between the Department of Human Services, the Department of Employment and
Economic Development, and when applicable, the Department of Education, for the following
purposes:

(i) to monitor the eligibility of the data subject for unemployment benefits, for any
employment or training program administered, supervised, or certified by that agency;

(ii) to administer any rehabilitation program or child care assistance program, whether
alone or in conjunction with the welfare system;

(iii) to monitor and evaluate the Minnesota family investment program or the child care
assistance program by exchanging data on recipients and former recipients of food support,
cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance under chapter
119B, medical programs under chapter 256B or 256L, or a medical program formerly
codified under chapter 256D; and

(iv) to analyze public assistance employment services and program utilization, cost,
effectiveness, and outcomes as implemented under the authority established in Title II,
Sections 201-204 of the Ticket to Work and Work Incentives Improvement Act of 1999.
Health records governed by sections 144.291 to 144.298 and "protected health information"
as defined in Code of Federal Regulations, title 45, section 160.103, and governed by Code
of Federal Regulations, title 45, parts 160-164, including health care claims utilization
information, must not be exchanged under this clause;

(10) to appropriate parties in connection with an emergency if knowledge of the
information is necessary to protect the health or safety of the individual or other individuals
or persons;

(11) data maintained by residential programs as defined in section 245A.02 may be
disclosed to the protection and advocacy system established in this state according to Part
C of Public Law 98-527 to protect the legal and human rights of persons with developmental
disabilities or other related conditions who live in residential facilities for these persons if
the protection and advocacy system receives a complaint by or on behalf of that person and
the person does not have a legal guardian or the state or a designee of the state is the legal
guardian of the person;

(12) to the county medical examiner or the county coroner for identifying or locating
relatives or friends of a deceased person;

(13) data on a child support obligor who makes payments to the public agency may be
disclosed to the Minnesota Office of Higher Education to the extent necessary to determine
eligibility under section 136A.121, subdivision 2, clause (5);

(14) participant Social Security numbers and names collected by the telephone assistance
program may be disclosed to the Department of Revenue to conduct an electronic data
match with the property tax refund database to determine eligibility under section 237.70,
subdivision 4a
;

(15) the current address of a Minnesota family investment program participant may be
disclosed to law enforcement officers who provide the name of the participant and notify
the agency that:

(i) the participant:

(A) is a fugitive felon fleeing to avoid prosecution, or custody or confinement after
conviction, for a crime or attempt to commit a crime that is a felony under the laws of the
jurisdiction from which the individual is fleeing; or

(B) is violating a condition of probation or parole imposed under state or federal law;

(ii) the location or apprehension of the felon is within the law enforcement officer's
official duties; and

(iii) the request is made in writing and in the proper exercise of those duties;

(16) the current address of a recipient of general assistance may be disclosed to probation
officers and corrections agents who are supervising the recipient and to law enforcement
officers who are investigating the recipient in connection with a felony level offense;

(17) information obtained from food support applicant or recipient households may be
disclosed to local, state, or federal law enforcement officials, upon their written request, for
the purpose of investigating an alleged violation of the Food Stamp Act, according to Code
of Federal Regulations, title 7, section 272.1(c);

(18) the address, Social Security number, and, if available, photograph of any member
of a household receiving food support shall be made available, on request, to a local, state,
or federal law enforcement officer if the officer furnishes the agency with the name of the
member and notifies the agency that:

(i) the member:

(A) is fleeing to avoid prosecution, or custody or confinement after conviction, for a
crime or attempt to commit a crime that is a felony in the jurisdiction the member is fleeing;

(B) is violating a condition of probation or parole imposed under state or federal law;
or

(C) has information that is necessary for the officer to conduct an official duty related
to conduct described in subitem (A) or (B);

(ii) locating or apprehending the member is within the officer's official duties; and

(iii) the request is made in writing and in the proper exercise of the officer's official duty;

(19) the current address of a recipient of Minnesota family investment program, general
assistance, or food support may be disclosed to law enforcement officers who, in writing,
provide the name of the recipient and notify the agency that the recipient is a person required
to register under section 243.166, but is not residing at the address at which the recipient is
registered under section 243.166;

(20) certain information regarding child support obligors who are in arrears may be
made public according to section 518A.74;

(21) data on child support payments made by a child support obligor and data on the
distribution of those payments excluding identifying information on obligees may be
disclosed to all obligees to whom the obligor owes support, and data on the enforcement
actions undertaken by the public authority, the status of those actions, and data on the income
of the obligor or obligee may be disclosed to the other party;

(22) data in the work reporting system may be disclosed under section 256.998,
subdivision 7
;

(23) to the Department of Education for the purpose of matching Department of Education
student data with public assistance data to determine students eligible for free and
reduced-price meals, meal supplements, and free milk according to United States Code,
title 42, sections 1758, 1761, 1766, 1766a, 1772, and 1773; to allocate federal and state
funds that are distributed based on income of the student's family; and to verify receipt of
energy assistance for the telephone assistance plan;

(24) the current address and telephone number of program recipients and emergency
contacts may be released to the commissioner of health or a community health board as
defined in section 145A.02, subdivision 5, when the commissioner or community health
board has reason to believe that a program recipient is a disease case, carrier, suspect case,
or at risk of illness, and the data are necessary to locate the person;

(25) to other state agencies, statewide systems, and political subdivisions of this state,
including the attorney general, and agencies of other states, interstate information networks,
federal agencies, and other entities as required by federal regulation or law for the
administration of the child support enforcement program;

(26) to personnel of public assistance programs as defined in section 256.741, for access
to the child support system database for the purpose of administration, including monitoring
and evaluation of those public assistance programs;

(27) to monitor and evaluate the Minnesota family investment program by exchanging
data between the Departments of Human Services and Education, on recipients and former
recipients of food support, cash assistance under chapter 256, 256D, 256J, or 256K, child
care assistance under chapter 119B, medical programs under chapter 256B or 256L, or a
medical program formerly codified under chapter 256D;

(28) to evaluate child support program performance and to identify and prevent fraud
in the child support program by exchanging data between the Department of Human Services,
Department of Revenue under section 270B.14, subdivision 1, paragraphs (a) and (b),
without regard to the limitation of use in paragraph (c), Department of Health, Department
of Employment and Economic Development, and other state agencies as is reasonably
necessary to perform these functions;

(29) counties and the Department of Human Services operating child care assistance
programs under chapter 119B may disseminate data on program participants, applicants,
and providers to the commissioner of education;

(30) child support data on the child, the parents, and relatives of the child may be
disclosed to agencies administering programs under titles IV-B and IV-E of the Social
Security Act, as authorized by federal law;

(31) to a health care provider governed by sections 144.291 to 144.298, to the extent
necessary to coordinate services;

(32) to the chief administrative officer of a school to coordinate services for a student
and family; data that may be disclosed under this clause are limited to name, date of birth,
gender, and address;

(33) to county correctional agencies to the extent necessary to coordinate services and
diversion programs; data that may be disclosed under this clause are limited to name, client
demographics, program, case status, and county worker information; or

(34) between the Department of Human Services and the Metropolitan Council for the
following purposes:

(i) to coordinate special transportation service provided under section 473.386 with
services for people with disabilities and elderly individuals funded by or through the
Department of Human Services; and

(ii) to provide for reimbursement of special transportation service provided under section
473.386.

The data that may be shared under this clause are limited to the individual's first, last, and
middle names; date of birth; residential address; and program eligibility status with expiration
date for the purposes of informing the other party of program eligibility.

(b) Information on persons who have been treated for drug or alcohol abuse may only
be disclosed according to the requirements of Code of Federal Regulations, title 42, sections
2.1 to 2.67.

(c) Data provided to law enforcement agencies under paragraph (a), clause (15), (16),
(17), or (18), or paragraph (b), are investigative data and are confidential or protected
nonpublic while the investigation is active. The data are private after the investigation
becomes inactive under section 13.82, subdivision 5, paragraph (a) or (b).

(d) Mental health data shall be treated as provided in subdivisions 7, 8, and 9, but are
not subject to the access provisions of subdivision 10, paragraph (b).

For the purposes of this subdivision, a request will be deemed to be made in writing if
made through a computer interface system.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 2.

Minnesota Statutes 2018, section 124D.095, subdivision 4, is amended to read:


Subd. 4.

Online learning parameters.

(a) An online learning student must receive
academic credit for completing the requirements of an online learning course or program.
Secondary credits granted to an online learning student count toward the graduation and
credit requirements of the enrolling district. The enrolling district must apply the same
graduation requirements to all students, including online learning students, and must continue
to provide nonacademic services to online learning students. If a student completes an online
learning course or program that meets or exceeds a graduation standard or the grade
progression requirement at the enrolling district, that standard or requirement is met. The
enrolling district must use the same criteria for accepting online learning credits or courses
as it does for accepting credits or courses for transfer students under section 124D.03,
subdivision 9
. The enrolling district may reduce the course schedule of an online learning
student in proportion to the number of online learning courses the student takes from an
online learning provider that is not the enrolling district.

(b) An online learning student may:

(1) enroll in supplemental online learning courses equal to a maximum of 50 percent of
the student's full schedule of courses per term during a single school year and the student
may exceed the supplemental online learning registration limit if the enrolling district permits
supplemental online learning enrollment above the limit, or if the enrolling district and the
online learning provider agree to the instructional services;

(2) complete course work at a grade level that is different from the student's current
grade level; and

(3) enroll in additional courses with the online learning provider under a separate
agreement that includes terms for paying any tuition or course fees.

(c) An online learning student has the same access to the computer hardware and
education software available in a school as all other students in the enrolling district. An
online learning provider must assist an online learning student whose family qualifies for
the education tax deleted text begincreditdeleted text endnew text begin refundnew text end under section 290.0674 to acquire computer hardware and
educational software for online learning purposes.

(d) An enrolling district may offer digital learning to its enrolled students. Such digital
learning does not generate online learning funds under this section. An enrolling district
that offers digital learning only to its enrolled students is not subject to the reporting
requirements or review criteria under subdivision 7, unless the enrolling district is a full-time
online learning provider. A teacher with a Minnesota license must assemble and deliver
instruction to enrolled students receiving online learning from an enrolling district. The
delivery of instruction occurs when the student interacts with the computer or the teacher
and receives ongoing assistance and assessment of learning. The instruction may include
curriculum developed by persons other than a teacher holding a Minnesota license.

(e) Both full-time and supplemental online learning providers are subject to the reporting
requirements and review criteria under subdivision 7. A teacher holding a Minnesota license
must assemble and deliver instruction to online learning students. The delivery of instruction
occurs when the student interacts with the computer or the teacher and receives ongoing
assistance and assessment of learning. The instruction may include curriculum developed
by persons other than a teacher holding a Minnesota license. Unless the commissioner grants
a waiver, a teacher providing online learning instruction must not instruct more than 40
students in any one online learning course or program.

(f) To enroll in more than 50 percent of the student's full schedule of courses per term
in online learning, the student must qualify to exceed the supplemental online learning
registration limit under paragraph (b) or apply to enroll in an approved full-time online
learning program, consistent with subdivision 3, paragraph (a). Full-time online learning
students may enroll in classes at a local school under a contract for instructional services
between the online learning provider and the school district.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 3.

Minnesota Statutes 2018, section 270C.445, subdivision 3, is amended to read:


Subd. 3.

Standards of conduct.

No tax preparer shall:

(1) without good cause fail to promptly, diligently, and without unreasonable delay
complete a client's return;

(2) obtain the signature of a client to a return or authorizing document that contains
blank spaces to be filled in after it has been signed;

(3) fail to sign a client's return when compensation for services rendered has been made;

(4) fail to provide on a client's return the preparer tax identification number when required
under section 6109(a)(4) of the Internal Revenue Code or section 289A.60, subdivision 28;

(5) fail or refuse to give a client a copy of any document requiring the client's signature
within a reasonable time after the client signs the document;

(6) fail to retain for at least four years a copy of a client's returns;

(7) fail to maintain a confidential relationship with clients or former clients;

(8) fail to take commercially reasonable measures to safeguard a client's nonpublic
personal information;

(9) make, authorize, publish, disseminate, circulate, or cause to make, either directly or
indirectly, any false, deceptive, or misleading statement or representation relating to or in
connection with the offering or provision of tax preparation services;

(10) require a client to enter into a loan arrangement in order to complete a client's return;

(11) claim credits or deductions on a client's return for which the tax preparer knows or
reasonably should know the client does not qualify;

(12) report a household income on a client's claim filed under chapter 290A that the tax
preparer knows or reasonably should know is not accurate;

(13) engage in any conduct that is subject to a penalty under section 289A.60, subdivision
13, 20, 20a, 26, or 28;

(14) whether or not acting as a taxpayer representative, fail to conform to the standards
of conduct required by Minnesota Rules, part 8052.0300, subpart 4;

(15) whether or not acting as a taxpayer representative, engage in any conduct that is
incompetent conduct under Minnesota Rules, part 8052.0300, subpart 5;

(16) whether or not acting as a taxpayer representative, engage in any conduct that is
disreputable conduct under Minnesota Rules, part 8052.0300, subpart 6;

(17) charge, offer to accept, or accept a fee based upon a percentage of an anticipated
refund for tax preparation services;

(18) under any circumstances, withhold or fail to return to a client a document provided
by the client for use in preparing the client's return;

(19) establish an account in the preparer's name to receive a client's refund through a
direct deposit or any other instrument unless the client's name is also on the account, except
that a taxpayer may assign the portion of a refund representing the Minnesota education
deleted text begin creditdeleted text endnew text begin refundnew text end available under section 290.0674 to a bank account without the client's name,
as provided under section 290.0679;

(20) fail to act in the best interests of the client;

(21) fail to safeguard and account for any money handled for the client;

(22) fail to disclose all material facts of which the preparer has knowledge which might
reasonably affect the client's rights and interests;

(23) violate any provision of section 332.37;

(24) include any of the following in any document provided or signed in connection
with the provision of tax preparation services:

(i) a hold harmless clause;

(ii) a confession of judgment or a power of attorney to confess judgment against the
client or appear as the client in any judicial proceeding;

(iii) a waiver of the right to a jury trial, if applicable, in any action brought by or against
a debtor;

(iv) an assignment of or an order for payment of wages or other compensation for
services;

(v) a provision in which the client agrees not to assert any claim or defense otherwise
available;

(vi) a waiver of any provision of this section or a release of any obligation required to
be performed on the part of the tax preparer; or

(vii) a waiver of the right to injunctive, declaratory, or other equitable relief or relief on
a class basis; or

(25) if making, providing, or facilitating a refund anticipation loan, fail to provide all
disclosures required by the federal Truth in Lending Act, United States Code, title 15, in a
form that may be retained by the client.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 4.

Minnesota Statutes 2018, section 289A.31, subdivision 8, is amended to read:


Subd. 8.

Liability of vendor for repayment of refund.

If deleted text beginan individual income taxdeleted text endnew text begin a
Minnesota education
new text end refund deleted text beginresulting from claiming an education creditdeleted text endnew text begin claimednew text end under
section 290.0674 is paid by means of directly depositing the proceeds of the refund into a
bank account controlled by the vendor of the product or service upon which the education
deleted text begin creditdeleted text endnew text begin refundnew text end is based, and the commissioner subsequently disallows the deleted text begincreditdeleted text endnew text begin refundnew text end, the
commissioner may seek repayment of the refund from the vendor. The amount of the
repayment must be assessed and collected in the same time and manner as an erroneous
refund under section 289A.37, subdivision 2.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 5.

Minnesota Statutes 2018, section 290.0132, subdivision 4, is amended to read:


Subd. 4.

Education expenses.

(a) Subject to the limits in paragraph (b), the following
amounts paid to others for each qualifying child are a subtraction:

(1) education-related expenses; plus

(2) tuition and fees paid to attend a school described in section 290.0674, subdivision
1
, clause (4), that are not included in education-related expenses; less

(3) any amount used to claim the deleted text begincreditdeleted text endnew text begin refundnew text end under section 290.0674.

(b) The maximum subtraction allowed under this subdivision is:

(1) $1,625 for each qualifying child in kindergarten through grade 6; and

(2) $2,500 for each qualifying child in grades 7 through 12.

(c) The definitions in section 290.0674, subdivision 1, apply to this subdivision.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 6.

Minnesota Statutes 2019 Supplement, section 290.0674, subdivision 1, is amended
to read:


Subdivision 1.

deleted text beginCreditdeleted text endnew text begin Refundnew text end allowed; definitions.

new text begin(a) new text endAn individual deleted text beginis alloweddeleted text endnew text begin may
claim
new text end a deleted text begincredit against the tax imposed by this chapterdeleted text endnew text begin refundnew text end in an amount equal to 75 percent
of the amount paid for education-related expenses for a qualifying child in kindergarten
through grade 12new text begin in an eligible yearnew text end. For purposes of this section, "education-related
expenses" means:

(1) fees or tuition for instruction by an instructor under section 120A.22, subdivision
10
, clause (1), (2), (3), (4), or (5), or a member of the Minnesota Music Teachers Association,
and who is not a lineal ancestor or sibling of the dependent for instruction outside the regular
school day or school year, including tutoring, driver's education offered as part of school
curriculum, regardless of whether it is taken from a public or private entity or summer
camps, in grade or age appropriate curricula that supplement curricula and instruction
available during the regular school year, that assists a dependent to improve knowledge of
core curriculum areas or to expand knowledge and skills under the required academic
standards under section 120B.021, subdivision 1, and the world languages standards under
section 120B.022, subdivision 1, and that do not include the teaching of religious tenets,
doctrines, or worship, the purpose of which is to instill such tenets, doctrines, or worship;

(2) expenses for textbooks, including books and other instructional materials and
equipment purchased or leased for use in elementary and secondary schools in teaching
only those subjects legally and commonly taught in public elementary and secondary schools
in this state. "Textbooks" does not include instructional books and materials used in the
teaching of religious tenets, doctrines, or worship, the purpose of which is to instill such
tenets, doctrines, or worship, nor does it include books or materials for extracurricular
activities including sporting events, musical or dramatic events, speech activities, driver's
education, or similar programs;

(3) a maximum expense of $200 per family for personal computer hardware, excluding
single purpose processors, and educational software that assists a dependent to improve
knowledge of core curriculum areas or to expand knowledge and skills under the required
academic standards under section 120B.021, subdivision 1, and the elective standard under
section 120B.022, subdivision 1, clause (2), purchased for use in the taxpayer's home and
not used in a trade or business regardless of whether the computer is required by the
dependent's school; and

(4) the amount paid to others for transportation of a qualifying child attending an
elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa,
or Wisconsin, wherein a resident of this state may legally fulfill the state's compulsory
attendance laws, which is not operated for profit, and which adheres to the provisions of
the Civil Rights Act of 1964 and chapter 363A. Amounts under this clause exclude any
expense the taxpayer incurred in using the taxpayer's or the qualifying child's vehicle.

new text begin (b) new text endFor purposes of this sectiondeleted text begin,deleted text endnew text begin:
new text end

new text begin (1)new text end "qualifying child" has the meaning given in section 32(c)(3) of the Internal Revenue
Codedeleted text begin.deleted text endnew text begin;
new text end

new text begin (2) "eligible year" means the calendar year in which education-related expenses are
incurred; and
new text end

new text begin (3) "household" has the meaning given in section 290A.03, subdivision 4.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31,2019.
new text end

Sec. 7.

Minnesota Statutes 2018, section 290.0674, subdivision 2, is amended to read:


Subd. 2.

Limitations.

(a) For claimants with new text beginadjusted gross new text endincome not greater than
$33,500new text begin in the taxable year immediately preceding an eligible yearnew text end, the maximum deleted text begincreditdeleted text endnew text begin
refund
new text end allowed for a family is $1,000 multiplied by the number of qualifying children in
kindergarten through grade 12 in the family. The maximum deleted text begincreditdeleted text endnew text begin refundnew text end for families with
one qualifying child in kindergarten through grade 12 is reduced by $1 for each $4 of
deleted text begin householddeleted text endnew text begin adjusted grossnew text end income over $33,500, and the maximum deleted text begincreditdeleted text endnew text begin refundnew text end for families
with two or more qualifying children in kindergarten through grade 12 is reduced by $2 for
each $4 of deleted text beginhouseholddeleted text end new text beginadjusted gross new text endincome over $33,500deleted text begin, but in no case is the credit less
than zero
deleted text end.

deleted text begin (b) In the case of a married claimant, a credit is not allowed unless a joint income tax
return is filed.
deleted text end

deleted text begin (c)deleted text endnew text begin (b)new text end For a nonresident or part-year resident, the deleted text begincreditdeleted text endnew text begin refundnew text end determined under
subdivision 1 and the maximum deleted text begincreditdeleted text endnew text begin refundnew text end amount in paragraph (a) must be allocated
using the percentage calculated in section 290.06, subdivision 2c, paragraph (e).

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 8.

Minnesota Statutes 2018, section 290.0674, subdivision 4, is amended to read:


Subd. 4.

deleted text beginCredit to be refundabledeleted text endnew text begin Method of claiming refundnew text end.

deleted text begin If the amount of credit
that the claimant is eligible to receive under this section exceeds the claimant's tax liability
under this chapter, the commissioner shall refund the excess to the claimant.
deleted text end new text begin A claim for
refund must be filed on a form prescribed by the commissioner no earlier than January 1 of
the eligible year and no later than April 15 of the calendar year following the eligible year.
A taxpayer may file only one claim per eligible year. Amounts paid by the commissioner
after June 15 of the calendar year in which the refund is claimed must include interest at
the rate specified in section 270C.405.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 9.

Minnesota Statutes 2018, section 290.0674, is amended by adding a subdivision
to read:


new text begin Subd. 4a. new text end

new text begin One claimant per household. new text end

new text begin A claim for a refund of education-related
expenses must be made by only one claimant per household. Payment of the refund may
be made payable to the spouses as one claimant. The commissioner, upon written request,
may issue separate checks to the spouses for one-half of the relief, provided the original
check has not been issued or has been returned. Individuals related as spouses who were
married during the year may elect to file a joint claim which shall include each spouse's
adjusted gross income. Spouses who were married for the entire year and were domiciled
in the same household for the entire year must file a joint claim. The maximum dollar amount
allowable for a joint claim shall not exceed the amount that one individual could receive.
For purposes of this section, "claimant" means a person, other than a dependent as defined
under sections 151 and 152 of the Internal Revenue Code, disregarding section 152(b)(3),
who filed a claim authorized by this section.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 10.

Minnesota Statutes 2018, section 290.0674, is amended by adding a subdivision
to read:


new text begin Subd. 4b. new text end

new text begin Claim applied against outstanding liability. new text end

new text begin The amount of any claim
otherwise payable under this section may be applied by the commissioner against any
delinquent tax liability of any member of the household. If there are two members of the
household, the commissioner may apply only one-half of a refund to the separate liability
of the household.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 11.

Minnesota Statutes 2018, section 290.0679, subdivision 1, is amended to read:


Subdivision 1.

Definitions.

(a) "Qualifying taxpayer" means a resident who has a child
in kindergarten through grade 12 in the deleted text begincurrent taxdeleted text endnew text begin eligible year and the taxable year
immediately preceding the eligible
new text end year and who met the income requirements under section
290.0674, subdivision 2, for receiving the education deleted text begincreditdeleted text endnew text begin refundnew text end in the deleted text begintaxdeleted text endnew text begin taxablenew text end year
new text begin immediately new text endpreceding the deleted text beginassignment of the taxpayer's refunddeleted text endnew text begin eligible yearnew text end.

(b) "Education deleted text begincreditdeleted text endnew text begin refundnew text end" means the deleted text begincreditdeleted text endnew text begin refundnew text end allowed under section 290.0674.

deleted text begin (c) "Refund" means an individual income tax refund.
deleted text end

deleted text begin (d)deleted text endnew text begin(c) new text end "Financial institution" means a state or federally chartered bank, savings bank,
savings association, or credit union.

deleted text begin (e)deleted text endnew text begin (d)new text end "Qualifying organization" means a tax-exempt organization under section 501(c)(3)
of the Internal Revenue Code.

deleted text begin (f)deleted text endnew text begin (e)new text end "Assignee" means a financial institution or qualifying organization that is entitled
to receive payment of a refund assigned under this section.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 12.

Minnesota Statutes 2018, section 290.0679, subdivision 2, is amended to read:


Subd. 2.

Conditions for assignment.

A qualifying taxpayer may assign all or part of
an anticipated refund for the current and future taxable years to a financial institution or a
qualifying organization. A financial institution or qualifying organization accepting
assignment must pay the amount secured by the assignment to a third-party vendor. The
commissioner of education shall, upon request from a third-party vendor, certify that the
vendor's products and services qualify for the education deleted text begincreditdeleted text endnew text begin refundnew text end. A denial of a
certification is subject to the contested case procedure under chapter 14. A financial institution
or qualifying organization that accepts assignments under this section must verify as part
of the assignment documentation that the product or service to be provided by the third-party
vendor has been certified by the commissioner of education as qualifying for the education
deleted text begin creditdeleted text endnew text begin refundnew text end. The amount assigned for the current and future taxable years may not exceed
the maximum allowable education deleted text begincreditdeleted text endnew text begin refundnew text end for the current taxable year. Both the
taxpayer and spouse must consent to the assignment of a refund from a joint return.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for claims made for education-related
expenses made in taxable years beginning after December 31, 2019.
new text end

Sec. 13. new text beginREPEALER.
new text end

new text begin Minnesota Statutes 2018, section 290.0674, subdivision 2a, new text end new text begin is repealed.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective for taxable years beginning after December
31, 2019.
new text end

APPENDIX

Repealed Minnesota Statutes: 20-6750

290.0674 MINNESOTA EDUCATION CREDIT.

Subd. 2a.

Income.

(a) For purposes of this section, "income" means the sum of the following:

(1) federal adjusted gross income as defined in section 62 of the Internal Revenue Code; and

(2) the sum of the following amounts to the extent not included in clause (1):

(i) all nontaxable income;

(ii) the amount of a passive activity loss that is not disallowed as a result of section 469, paragraph (i) or (m) of the Internal Revenue Code and the amount of passive activity loss carryover allowed under section 469(b) of the Internal Revenue Code;

(iii) an amount equal to the total of any discharge of qualified farm indebtedness of a solvent individual excluded from gross income under section 108(g) of the Internal Revenue Code;

(iv) cash public assistance and relief;

(v) any pension or annuity (including railroad retirement benefits, all payments received under the federal Social Security Act, Supplemental Security Income, and veterans benefits), which was not exclusively funded by the claimant or spouse, or which was funded exclusively by the claimant or spouse and which funding payments were excluded from federal adjusted gross income in the years when the payments were made;

(vi) interest received from the federal or a state government or any instrumentality or political subdivision thereof;

(vii) workers' compensation;

(viii) nontaxable strike benefits;

(ix) the gross amounts of payments received in the nature of disability income or sick pay as a result of accident, sickness, or other disability, whether funded through insurance or otherwise;

(x) a lump-sum distribution under section 402(e)(3) of the Internal Revenue Code of 1986, as amended through December 31, 1995;

(xi) contributions made by the claimant to an individual retirement account, including a qualified voluntary employee contribution; simplified employee pension plan; self-employed retirement plan; cash or deferred arrangement plan under section 401(k) of the Internal Revenue Code; or deferred compensation plan under section 457 of the Internal Revenue Code;

(xii) nontaxable scholarship or fellowship grants;

(xiii) the amount of deduction allowed under section 199 of the Internal Revenue Code;

(xiv) the amount of deduction allowed under section 220 or 223 of the Internal Revenue Code;

(xv) the amount deducted for tuition expenses under section 222 of the Internal Revenue Code; and

(xvi) the amount deducted for certain expenses of elementary and secondary school teachers under section 62(a)(2)(D) of the Internal Revenue Code.

In the case of an individual who files an income tax return on a fiscal year basis, the term "federal adjusted gross income" means federal adjusted gross income reflected in the fiscal year ending in the next calendar year. Federal adjusted gross income may not be reduced by the amount of a net operating loss carryback or carryforward or a capital loss carryback or carryforward allowed for the year.

(b) "Income" does not include:

(1) amounts excluded pursuant to the Internal Revenue Code, sections 101(a) and 102;

(2) amounts of any pension or annuity that were exclusively funded by the claimant or spouse if the funding payments were not excluded from federal adjusted gross income in the years when the payments were made;

(3) surplus food or other relief in kind supplied by a governmental agency;

(4) relief granted under chapter 290A;

(5) child support payments received under a temporary or final decree of dissolution or legal separation; and

(6) restitution payments received by eligible individuals and excludable interest as defined in section 803 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16.