Minnesota Session Laws - 1988, Regular Session

  

                         Laws of Minnesota 1988 

                        CHAPTER 672-S.F.No. 2255 
           An act relating to agriculture; extending certain 
          benefits under the family farm security act; amending 
          Minnesota Statutes 1986, section 41.57, subdivision 4; 
          proposing coding for new law in Minnesota Statutes, 
          chapter 41. 
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
    Section 1.  Minnesota Statutes 1986, section 41.57, 
subdivision 4, is amended to read:  
    Subd. 4.  [ADDITIONAL PAYMENT; PRINCIPAL REDUCTION.] (a) 
The commissioner must annually pay to qualified sellers of 
property, financed by a family farm security loan, an amount 
approximately equal to the additional state income tax paid as a 
result of the inclusion in gross income of the interest and 
payment adjustment earned on a seller sponsored family farm 
security loan.  No payment may be made under this subdivision to 
a qualified seller, unless the seller agrees to reduce the 
outstanding principal amount of the loan by three percent 
effective prior to or beginning for the year in which 
application is made. 
    (b) The payment amount must be determined as follows: 
    (1) In order to qualify for a payment, the seller must 
apply to the commissioner by October 1, 1986 following the 
previous tax year.  The application must include a copy of the 
seller's 1985 previous tax year state income tax return.  The 
commissioner must recompute the seller's total state income tax 
liability that would be due if the interest and payment 
adjustment amounts were not includable in gross income for state 
income tax purposes.  The commissioner may require the seller to 
compute these amounts as part of the application.  For any 
calendar year 1986 the amount of the payment equals the 
reduction in state income tax liability that would occur if the 
interest and payment adjustment were not included in gross 
income for state tax purposes. 
    (2) For calendar years beginning with 1987, the additional 
payment amount must be determined as follows:  (A) The calendar 
year 1986 payment must be divided by the amount of interest and 
payment adjustment received during calendar year 1986.  (B) The 
resulting quotient must be multiplied by the interest and 
payment adjustment received for the calendar year.  (C) The 
product determined under clause (B) is the payment for the 
calendar year. 
    (c) If for a tax year after 1986 the qualified seller's 
taxable income has changed substantially, the commissioner may 
provide by rule that upon reapplication a later tax year will be 
used to compute the quotient under clause (b)(2)(A). 
    (d)(1) (c) If the seller elects to receive payments under 
this subdivision, the buyer's payments of principal and interest 
under the loan must be recalculated.  The revised payment 
schedule must reflect the three percent reduction in the 
outstanding principal required by paragraph (a) and must provide 
for equal payments over the remaining term of the loan.  The 
interest rate on the loan may not be increased. 
    (2) The state's payment adjustment under subdivision 2 and 
the amount of the payment under paragraph (b) must be calculated 
on the basis of the outstanding principal amount of the loan 
before the reduction required by paragraph (a). 
    (e) (d) The commissioner may make the payments under this 
subdivision in the same manner provided for the payment 
adjustment under subdivision 2. 
    (f) (e) For purposes of this subdivision, the following 
terms have the meanings given: 
    (1) "Gross income" means gross income as defined for 
purposes of chapter 290. 
    (2) "Qualified seller" means an individual who sold farm 
land under a seller sponsored loan after April 1, 1978 and 
before June 28 December 31, 1985, and who is a resident of 
Minnesota during the calendar year and is subject to the payment 
of Minnesota income taxes. 
    Sec. 2.  [41.63] [DATA PRIVACY.] 
    Personal financial information, credit reports, financial 
statements, tax refund calculations, and net worth statements, 
received or prepared by the commissioner regarding any family 
farm security loans, are private data on individuals under 
chapter 13. 
    Sec.  3.  [EFFECTIVE DATE.] 
    This act is effective the day following final enactment. 
    Approved April 26, 1988