1.1                          A bill for an act 
  1.2             relating to finance; providing for allocation of 
  1.3             certain revenues to the budget reserve account; 
  1.4             providing a refundable tax credit for the 1996 tax 
  1.5             year; amending Minnesota Statutes 1996, sections 
  1.6             16A.152, subdivision 2; 124.195, subdivisions 7 and 
  1.7             10; and 290.06, by adding a subdivision; repealing 
  1.8             Minnesota Statutes 1996, section 121.904, subdivision 
  1.9             4d. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  Minnesota Statutes 1996, section 16A.152, 
  1.12  subdivision 2, is amended to read: 
  1.13     Subd. 2.  [ADDITIONAL REVENUES; PRIORITY.] ~~If on the basis~~ 
  1.14  ~~of a forecast of general fund revenues and expenditures the~~ 
  1.15  ~~commissioner of finance determines that there will be a positive~~ 
  1.16  ~~unrestricted budgetary general fund balance at the close of the~~ 
  1.17  ~~biennium, the commissioner of finance must allocate money to the~~ 
  1.18  ~~budget reserve until the total amount in the account is~~ 
  1.19  ~~$270,000,000.  An amount equal to any additional biennial~~ 
  1.20  ~~unrestricted budgetary general fund balance made available as~~ 
  1.21  ~~the result of a forecast in an odd-numbered calendar year after~~ 
  1.22  ~~November 1 is appropriated in January of the following year to~~ 
  1.23  ~~reduce the property tax levy recognition percent under section~~ 
  1.24  ~~121.904, subdivision 4a, to zero before additional money beyond~~ 
  1.25  ~~$270,000,000 is allocated to the budget reserve account.  The~~ 
  1.26  ~~amount appropriated is the full amount forecast to be available~~ 
  1.27  ~~at the end of the biennium and is not limited to the amount~~ 
  2.1   ~~forecast to be available at the end of the current fiscal year.~~ 
  2.2   The budget reserve account shall be increased to $522,000,000 on 
  2.3   July 1, 1997.  If on the basis of a forecast of general fund 
  2.4   revenues and expenditures the commissioner of finance determines 
  2.5   that there will be a positive unrestricted budgetary general 
  2.6   fund balance at the close of the biennium, the commissioner of 
  2.7   finance shall allocate money to the budget reserve until the 
  2.8   total amount in the account equals five percent of projected 
  2.9   expenditures for the second year of the biennium. 
  2.10     The amounts necessary to meet the requirements of this 
  2.11  section are appropriated from the general fund. 
  2.12     Sec. 2.  Minnesota Statutes 1996, section 124.195, 
  2.13  subdivision 7, is amended to read: 
  2.14     Subd. 7.  [PAYMENTS TO SCHOOL NONOPERATING FUNDS.] Each 
  2.15  fiscal year state general fund payments for a district 
  2.16  nonoperating fund shall be made at 85 percent of the estimated 
  2.17  entitlement during the fiscal year of the entitlement~~, unless a~~ 
  2.18  ~~higher rate has been established according to section 121.904,~~ 
  2.19  ~~subdivision 4d~~.  This amount shall be paid in 12 equal monthly 
  2.20  installments.  The amount of the actual entitlement, after 
  2.21  adjustment for actual data, minus the payments made during the 
  2.22  fiscal year of the entitlement shall be paid prior to October 31 
  2.23  of the following school year.  The commissioner may make advance 
  2.24  payments of homestead and agricultural credit aid for a 
  2.25  district's debt service fund earlier than would occur under the 
  2.26  preceding schedule if the district submits evidence showing a 
  2.27  serious cash flow problem in the fund.  The commissioner may 
  2.28  make earlier payments during the year and, if necessary, 
  2.29  increase the percent of the entitlement paid to reduce the cash 
  2.30  flow problem. 
  2.31     Sec. 3.  Minnesota Statutes 1996, section 124.195, 
  2.32  subdivision 10, is amended to read: 
  2.33     Subd. 10.  [AID PAYMENT PERCENTAGE.] Except as provided in 
  2.34  subdivisions 8, 9, and 11, each fiscal year, all education aids 
  2.35  and credits in this chapter and chapters 121, 123, 124A, 124B, 
  2.36  125, 126, 134, and section 273.1392, shall be paid at 90 percent 
  3.1   for districts operating a program under section 121.585 for 
  3.2   grades 1 to 12 for all students in the district and 85 percent 
  3.3   for other districts of the estimated entitlement during the 
  3.4   fiscal year of the entitlement~~, unless a higher rate has been~~ 
  3.5   ~~established according to section 121.904, subdivision 4d~~.  
  3.6   Districts operating a program under section 121.585 for grades 1 
  3.7   to 12 for all students in the district shall receive 85 percent 
  3.8   of the estimated entitlement plus an additional amount of 
  3.9   general education aid equal to five percent of the estimated 
  3.10  entitlement.  For all districts, the final adjustment payment, 
  3.11  according to subdivision 6, shall be the amount of the actual 
  3.12  entitlement, after adjustment for actual data, minus the 
  3.13  payments made during the fiscal year of the entitlement. 
  3.14     Sec. 4.  Minnesota Statutes 1996, section 290.06, is 
  3.15  amended by adding a subdivision to read: 
  3.16     Subd. 25.  [1996 PERCENT OF TAX CREDIT.] (a) For the tax 
  3.17  year beginning in 1996, an individual is given a credit of $50 
  3.18  if the tax computed under subdivision 2c and sections 290.032 
  3.19  and 290.091, less the credits allowed under subdivision 22 and 
  3.20  section 290.091, subdivision 6, is between $1 and $227.  If the 
  3.21  tax computed above exceeds $227, the credit is 22 percent of the 
  3.22  tax computed, up to a maximum credit of $900 or $1,800 in the 
  3.23  case of married taxpayers filing a joint 1996 income tax return. 
  3.24     (b) If the amount of the credit which a taxpayer is 
  3.25  eligible to receive exceeds the taxpayer's tax liability under 
  3.26  chapter 290, the excess amount shall be refunded to the taxpayer 
  3.27  by the commissioner of revenue.  
  3.28     (c) Notwithstanding any law to the contrary, the amount 
  3.29  refunded to the taxpayer because of this credit bears interest 
  3.30  from the later of 90 days from the date the taxpayer files the 
  3.31  taxpayer's 1996 Minnesota individual income tax return or 
  3.32  November 15, 1997.  
  3.33     Sec. 5.  [REPEALER.] 
  3.34     Minnesota Statutes 1996, section 121.904, subdivision 4d, 
  3.35  is repealed. 
  3.36     Sec. 6.  [EFFECTIVE DATE.] 
  4.1      Sections 1 to 3 and 5 are effective July 1, 1997.  
  4.2      Section 4 is effective for the tax year beginning in 1996.