1.1                          A bill for an act 
  1.2             relating to taxation; providing for use of tax refunds 
  1.3             to pay debts for child support before tax offsets; 
  1.4             amending Minnesota Statutes 2000, sections 270.07, 
  1.5             subdivision 5; 270A.10; and 290A.15. 
  1.6   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.7      Section 1.  Minnesota Statutes 2000, section 270.07, 
  1.8   subdivision 5, is amended to read: 
  1.9      Subd. 5.  [CREDIT OF OVERPAYMENT TO DELINQUENT TAX 
  1.10  LIABILITIES.] Notwithstanding any other provision of law to the 
  1.11  contrary, in the case of an overpayment of any tax collected by 
  1.12  the commissioner of revenue, the commissioner must apply the 
  1.13  amount of the overpayment first to debts for child support as 
  1.14  provided in section 270A.10 and then may credit the amount of 
  1.15  such any remaining overpayment against any uncontested 
  1.16  delinquent tax liability on the part of the taxpayer who made 
  1.17  the overpayment.  An overpayment may be credited against a tax 
  1.18  liability under this subdivision only if the uncontested 
  1.19  delinquent liability has been assessed within ten years of the 
  1.20  date on which the overpayment is credited.  However, this 
  1.21  limitation shall not be applicable if the delinquent liability 
  1.22  has been entered into judgment or if legal action is pending for 
  1.23  collection of the liability or for renewal of the judgment.  An 
  1.24  amount paid as tax shall constitute an overpayment even if in 
  1.25  fact there was no tax liability with respect to which such 
  2.1   amount was paid. 
  2.2      <b>[EFFECTIVE DATE.]</b> This section is effective for claims 
  2.3   submitted after June 30, 2002. 
  2.4      Sec. 2.  Minnesota Statutes 2000, section 270A.10, is 
  2.5   amended to read: 
  2.6      270A.10 [PRIORITY OF CLAIMS.] 
  2.7      If two or more debts, in a total amount exceeding the 
  2.8   debtor's refund, are submitted for setoff, the priority of 
  2.9   payment shall be as follows:  First, any delinquent tax 
  2.10  obligations of the debtor which are owed to the department shall 
  2.11  be satisfied.  Secondly, the refund shall be applied to debts 
  2.12  for child support based on the order in time in which the 
  2.13  commissioner received the debts.  Thirdly the refund must be 
  2.14  applied to debts for child support based on the order in time in 
  2.15  which the commissioner received the debts.  Second, any 
  2.16  delinquent tax obligations of the debtor that are owed to the 
  2.17  department must be satisfied.  Third, the refund shall be 
  2.18  applied to payment of restitution obligations.  Fourthly, the 
  2.19  refund shall be applied to the remaining debts based on the 
  2.20  order in time in which the commissioner received the debts. 
  2.21     <b>[EFFECTIVE DATE.]</b> This section is effective for claims 
  2.22  submitted after June 30, 2002. 
  2.23     Sec. 3.  Minnesota Statutes 2000, section 290A.15, is 
  2.24  amended to read: 
  2.25     290A.15 [CLAIM APPLIED AGAINST OUTSTANDING LIABILITY.] 
  2.26     The amount of any claim otherwise payable under this 
  2.27  chapter must be applied by the commissioner first to debts for 
  2.28  child support as provided in section 270A.10 and then may be 
  2.29  applied by the commissioner against any delinquent tax liability 
  2.30  of the claimant or spouse of the claimant payable to the 
  2.31  department of revenue. 
  2.32     <b>[EFFECTIVE DATE.]</b> This section is effective for claims 
  2.33  submitted after June 30, 2002.