CHAPTER 270A. REVENUE RECAPTURE ACT
Subdivision 1. Applicability.
For purposes of sections
, the terms
defined in this section have the meanings given them.
Subd. 2. Claimant agency.
"Claimant agency" means any state agency, as defined by section
14.02, subdivision 2
, the regents of the University of Minnesota, any district court of the state,
any county, any statutory or home rule charter city presenting a claim for a municipal hospital or a
public library or a municipal ambulance service, a hospital district, a private nonprofit hospital
that leases its building from the county in which it is located, any public agency responsible for
child support enforcement, any public agency responsible for the collection of court-ordered
restitution, and any public agency established by general or special law that is responsible for
the administration of a low-income housing program, and the Minnesota collection enterprise
as defined in section
16D.02, subdivision 8
, for the purpose of collecting the costs imposed
. A county may act as a claimant agency on behalf of an ambulance service
licensed under chapter 144E if the ambulance service's primary service area is located at least in
part within the county, but more than one county may not act as a claimant agency for a licensed
ambulance service with respect to the same debt.
Subd. 3. Commissioner.
"Commissioner" means the commissioner of revenue.
Subd. 4. Debtor.
"Debtor" means a natural person obligated on a debt to a claimant agency
or having a delinquent account with a public agency responsible for child support enforcement.
Subd. 5. Debt.
"Debt" means a legal obligation of a natural person to pay a fixed and certain
amount of money, which equals or exceeds $25 and which is due and payable to a claimant
agency. The term includes criminal fines imposed under section
, fines imposed
for petty misdemeanors as defined in section
609.02, subdivision 4a
, and restitution. The term
also includes the co-payment for the appointment of a district public defender imposed under
611.17, paragraph (c)
. A debt may arise under a contractual or statutory obligation, a court
order, or other legal obligation, but need not have been reduced to judgment.
A debt includes any legal obligation of a current recipient of assistance which is based
on overpayment of an assistance grant where that payment is based on a client waiver or an
administrative or judicial finding of an intentional program violation; or where the debt is owed
to a program wherein the debtor is not a client at the time notification is provided to initiate
recovery under this chapter and the debtor is not a current recipient of food support, transitional
child care, or transitional medical assistance.
A debt does not include any legal obligation to pay a claimant agency for medical care,
including hospitalization if the income of the debtor at the time when the medical care was
rendered does not exceed the following amount:
(1) for an unmarried debtor, an income of $8,800 or less;
(2) for a debtor with one dependent, an income of $11,270 or less;
(3) for a debtor with two dependents, an income of $13,330 or less;
(4) for a debtor with three dependents, an income of $15,120 or less;
(5) for a debtor with four dependents, an income of $15,950 or less; and
(6) for a debtor with five or more dependents, an income of $16,630 or less.
The income amounts in this subdivision shall be adjusted for inflation for debts incurred in
calendar years 2001 and thereafter. The dollar amount of each income level that applied to debts
incurred in the prior year shall be increased in the same manner as provided in section 1(f) of
the Internal Revenue Code of 1986, as amended through December 31, 2000, except that for the
purposes of this subdivision the percentage increase shall be determined from the year starting
September 1, 1999, and ending August 31, 2000, as the base year for adjusting for inflation
for debts incurred after December 31, 2000.
Debt also includes an agreement to pay a MinnesotaCare premium, regardless of the dollar
amount of the premium authorized under section
256L.15, subdivision 1a
Subd. 6. Department.
"Department" means the Department of Revenue.
Subd. 7. Refund.
"Refund" means an individual income tax refund or political contribution
refund, pursuant to chapter 290, or a property tax credit or refund, pursuant to chapter 290A, or a
sustainable forest tax payment to a claimant under chapter 290C.
For purposes of this chapter, lottery prizes, as set forth in section
349A.08, subdivision 8
amounts granted to persons by the legislature on the recommendation of the joint senate-house of
representatives Subcommittee on Claims shall be treated as refunds.
In the case of a joint property tax refund payable to spouses under chapter 290A, the refund
shall be considered as belonging to each spouse in the proportion of the total refund that equals
each spouse's proportion of the total income determined under section
290A.03, subdivision 3
In the case of a joint income tax refund under chapter 289A, the refund shall be considered as
belonging to each spouse in the proportion of the total refund that equals each spouse's proportion
of the total taxable income determined under section
290.01, subdivision 29
. The commissioner
shall remit the entire refund to the claimant agency, which shall, upon the request of the spouse
who does not owe the debt, determine the amount of the refund belonging to that spouse
and refund the amount to that spouse. For court fines, fees, and surcharges and court-ordered
restitution under section
611A.04, subdivision 2
, the notice provided by the commissioner of
revenue under section
270A.07, subdivision 2
, paragraph (b), serves as the appropriate legal
notice to the spouse who does not owe the debt.
Subd. 8. Restitution.
"Restitution" means money due to the victim of a crime or a juvenile
offense under an order of restitution issued by a court under section
of a sentence or as a condition of probation, or under an order entered by a court under section
260B.198, subdivision 1
, paragraph (e), following a finding of delinquency.
History: 1980 c 607 art 12 s 3; 1Sp1981 c 2 s 20,21; 1982 c 424 s 130; 1984 c 502 art 14 s
3; 1985 c 235 s 2; 1Sp1986 c 1 art 8 s 7; 1987 c 261 s 1-3; 1988 c 638 s 1,2; 1988 c 668 s 5; 1990
c 480 art 10 s 2-4; 1991 c 291 art 6 s 6; 1992 c 571 art 17 s 1; 1993 c 375 art 17 s 8; 1994 c 614 s
2; 1995 c 264 art 4 s 1; 1996 c 471 art 3 s 52; art 13 s 10,11; 1997 c 17 s 4; 1997 c 85 art 5 s 24;
1997 c 231 art 2 s 70; 1998 c 407 art 5 s 41; 1999 c 139 art 4 s 2; 1999 c 243 art 16 s 8; 2000 c
490 art 13 s 7,8; 1Sp2001 c 5 art 7 s 8; art 8 s 4; 2003 c 127 art 8 s 6; 1Sp2003 c 2 art 3 s 1;
1Sp2003 c 14 art 1 s 106; 1Sp2003 c 21 art 11 s 7; 2005 c 151 art 9 s 14
270A.04 AGENCY PARTICIPATION.
Subdivision 1. Collection remedy.
The collection remedy under this section is in addition to
and not in substitution for any other remedy available by law.
Subd. 2. Requirements for submission.
Any debt owed to a claimant agency must not be
submitted by the agency for collection under the procedure established by sections
if (a) there is a written payment agreement between the debtor and the claimant agency
in which revenue recapture is prohibited and the debtor is complying with the agreement, (b) the
collection attempt would result in a loss of federal funds, or (c) the agency is unable to supply
the department with the necessary identifying information required by subdivision 3 or rules
promulgated by the commissioner, or (d) the debt is barred by section
Subd. 3. Information required.
For each debt submitted, the claimant agency shall provide
the commissioner with the name and Social Security number of the debtor and any other
identifying information required by rules promulgated by the commissioner.
Subd. 4. Information obtained.
Whenever possible, a claimant agency shall obtain the
identifying information required by subdivision 3 from any individual for whom the agency
provides any service or transacts any business and who the claimant agency can foresee may
become a debtor of the claimant agency.
History: 1980 c 607 art 12 s 4; 1984 c 502 art 14 s 4; 1990 c 480 art 10 s 5; 1991 c 292 art
5 s 71; 1992 c 511 art 7 s 3
270A.06 COLLECTION OF DEBTS THROUGH SETOFF.
Subject to the limitations of sections
, the department shall, upon request
by a claimant agency, render assistance in the collection of any debt owing to the agency. This
assistance shall be provided by use of a procedure in which the sum of the refund due the debtor is
applied to the amount due and owing from the debtor to the claimant agency.
History: 1980 c 607 art 12 s 6
270A.07 PROCEDURE FOR SETOFF COLLECTION.
Subdivision 1. Notification requirement.
(a) Any claimant agency, seeking collection of a
debt through setoff against a refund due, shall submit to the commissioner information indicating
the amount of each debt and information identifying the debtor, as required by section
(b) For each setoff of a debt against a refund due, the commissioner shall charge a fee of
$15. The proceeds of fees shall be allocated by depositing $4 of each $15 fee collected into a
Department of Revenue recapture revolving fund and depositing the remaining balance into the
general fund. The sums deposited into the revolving fund are appropriated to the commissioner
for the purpose of administering the Revenue Recapture Act.
(c) For each debt for which a county acts as claimant agency on behalf of a licensed
ambulance service, the county may charge the ambulance service a fee not to exceed the cost
of administering the claim.
(d) The claimant agency shall notify the commissioner when a debt has been satisfied or
reduced by at least $200 within 30 days after satisfaction or reduction.
Subd. 2. Setoff procedures.
(a) The commissioner, upon receipt of notification, shall initiate
procedures to detect any refunds otherwise payable to the debtor. When the commissioner
determines that a refund is due to a debtor whose debt was submitted by a claimant agency, the
commissioner shall first deduct the fee in subdivision 1, paragraph (b), and then remit the refund
or the amount claimed, whichever is less, to the agency. In transferring or remitting moneys to
the claimant agency, the commissioner shall provide information indicating the amount applied
against each debtor's obligation and the debtor's address listed on the tax return.
(b) The commissioner shall remit to the debtor the amount of any refund due in excess of
the debt submitted for setoff by the claimant agency. Notice of the amount setoff and address of
the claimant agency shall accompany any disbursement to the debtor of the balance of a refund,
or shall be sent to the debtor at the time of setoff if the entire refund is set off. The notice shall
also advise the debtor of the right to contest the validity of the claim, other than a claim based
upon child support under chapter 518A or 518C at a hearing, subject to the restrictions in this
paragraph. The debtor must assert this right by written request to the claimant agency, which
request the claimant agency must receive within 45 days of the date of the notice. This right does
not apply to (1) issues relating to the validity of the claim that have been previously raised at a
hearing under this section or section
; (2) issues relating to the validity of the claim that
were not timely raised by the debtor under section
270A.08, subdivision 2
; (3) issues relating
to the validity of the claim that have been previously raised at a hearing conducted under rules
promulgated by the United States Department of Housing and Urban Development or any public
agency that is responsible for the administration of a low-income housing program, or that were
not timely raised by the debtor under those rules; or (4) issues relating to the validity of the
claim for which a hearing is discretionary under section
. The notice shall include an
explanation of the right of the spouse who does not owe the debt to request the claimant agency to
repay the spouse's portion of a joint refund.
Subd. 3. Deposit of funds.
Any amounts remitted or transferred to state agencies shall
be deposited as provided in section
Subd. 4. Effect of transfer or payment.
Transfer or remittance of funds to a claimant
agency pursuant to this section constitutes payment of the department's obligation to refund the
sums as overpayments of taxes or property tax credits or refunds. Any action for the setoff funds
shall be made against the claimant agency pursuant to section
Subd. 5. Refunds wrongly applied.
Any refund wrongfully or incorrectly applied to a debt
and transferred to a claimant agency shall be paid by the agency to the debtor. The sum wrongfully
or incorrectly withheld shall bear interest at the rate specified in section
from the date when the refund would begin to bear interest under section
289A.56, subdivision 2
regardless of whether the refund is payable under chapter 290 or 290A. If the claimant agency is a
state agency, the payment shall be made out of the agency's appropriation.
History: 1980 c 607 art 12 s 7; 1Sp1985 c 13 s 308; 1Sp1985 c 14 art 15 s 4; 1987 c 268 art
17 s 9; 1990 c 480 art 1 s 46; 1992 c 511 art 7 s 5,6; 1995 c 264 art 9 s 6; 1999 c 243 art 16 s 9;
2000 c 490 art 13 s 9,10; 1Sp2001 c 10 art 2 s 72; 1Sp2003 c 1 art 2 s 80; 1Sp2003 c 21 art 11 s
8,9; 2005 c 151 art 2 s 17; 2005 c 164 s 29; 1Sp2005 c 7 s 28; 2006 c 280 s 46
270A.08 NOTICE AND HEARING REQUIRED.
Subdivision 1. Notice to debtor.
Not later than five days after the claimant agency has sent
notification to the department pursuant to section
270A.07, subdivision 1
, the claimant agency
shall send a written notification to the debtor asserting the right of the claimant agency to the
refund or any part thereof. If the notice is returned to the claimant agency as undeliverable, or
the claimant agency has reason to believe the debtor did not receive the notice, the claimant
agency shall obtain the current address of the debtor from the commissioner and resend the
Subd. 2. Requirements of notice.
(a) This written notice shall clearly and with specificity
set forth the basis for the claim to the refund including the name of the benefit program involved
if the debt arises from a public assistance grant and the dates on which the debt was incurred and,
further, shall advise the debtor of the claimant agency's intention to request setoff of the refund
against the debt.
(b) Except as provided in paragraph (c), the notice will also advise the debtor that the debt
can be setoff against a refund unless the time period allowed by law for collecting the debt has
expired, and will advise the debtor of the right to contest the validity of the claim at a hearing.
The debtor must assert this right by written request to the claimant agency, which request the
agency must receive within 45 days of the mailing date of the original notice or of the corrected
notice, as required by subdivision 1. If the debtor has not received the notice, the 45 days shall
not commence until the debtor has received actual notice. The debtor shall have the burden of
showing no notice and shall be entitled to a hearing on the issue of notice as well as on the merits.
(c) If the claimant agency is a public agency that is responsible for the administration of a
low-income housing program, the notice will also advise the debtor that the debt can be set off
against a refund unless the time period allowed by law for collecting the debt has expired. If the
public agency has provided the debtor with the opportunity to contest the issues relating to the
validity of the claim at a hearing under rules promulgated by the United States Department of
Housing and Urban Development or the public agency, the notice will advise the debtor of that
fact and advise the debtor that no further hearing may be requested by the debtor to contest the
validity of the claim.
History: 1980 c 607 art 12 s 8; 1984 c 502 art 14 s 5,6; 1986 c 444; 1990 c 480 art 10 s 6;
1991 c 292 art 5 s 72; 1992 c 511 art 7 s 7; 1999 c 243 art 16 s 10
270A.09 CONTESTED CLAIMS PROCEDURE.
Subdivision 1. Hearing.
If a claimant agency receives written notice of a debtor's intention
to contest at hearing the claim upon which the intended setoff is based, it shall initiate a hearing
according to contested case procedures established in the state Administrative Procedure Act not
later than 30 days after receipt of the debtor's request for a hearing.
Subd. 1a. Employment and economic development claims.
1, any debtor contesting a setoff claim by the Department of Employment and Economic
Development shall have a hearing conducted in the same manner as an appeal under section
Subd. 2. Issues raised.
No issue may be raised at the hearing which has been previously
litigated. If a debt is based on a court judgment or court order, the hearing required by subdivision
1 need not, but may be granted at the sole discretion of the commissioner of the claimant agency.
Subd. 3. Contested case; final decision.
The report of the administrative law judge shall
contain a decision and order, which constitute the final decision in the contested case. A copy of
the decision and order shall be served by first class mail upon each party, the commissioner of
revenue, and the attorney general. Fees and expenses may be awarded as provided in sections
. The provisions for judicial review under sections
decisions of the administrative law judge under this subdivision.
History: 1980 c 607 art 12 s 9; 1980 c 615 s 64; 1987 c 385 s 48; 1994 c 483 s 1; 1995 c 54
s 25; 1995 c 264 art 9 s 7; 1997 c 7 art 2 s 70; 2004 c 206 s 52
270A.10 PRIORITY OF CLAIMS.
If two or more debts, in a total amount exceeding the debtor's refund, are submitted for
setoff, the priority of payment shall be as follows: First, any delinquent tax obligations of the
debtor which are owed to the department shall be satisfied. Secondly, the refund shall be applied
to debts for child support based on the order in time in which the commissioner received the debts.
Thirdly, the refund shall be applied to payment of restitution obligations. Fourthly, the refund
shall be applied to the remaining debts based on the order in time in which the commissioner
received the debts.
History: 1980 c 607 art 12 s 10; 1987 c 261 s 4; 1993 c 375 art 17 s 9
270A.11 DATA PRIVACY.
Private and confidential data on individuals may be exchanged among the department, the
taxpayer's rights advocate, the attorney general, the claimant agency, and the debtor as necessary
to accomplish and effectuate the intent of sections
, as provided by section
13.05, subdivision 4
, clause (b). The department may disclose to the claimant agency only the
debtor's name, address, Social Security number and the amount of the refund, and in the case of a
joint return, the name of the debtor's spouse. Any person employed by, or formerly employed by, a
claimant agency who discloses any such information for any other purpose, shall be subject to the
civil and criminal penalties of section
. Data collected by the department from claimant
agencies relating to claims filed under this chapter are private data on individuals.
History: 1980 c 607 art 12 s 11; 1981 c 311 s 39; 1982 c 545 s 24; 1989 c 184 art 2 s 16;
1992 c 511 art 7 s 8; 1995 c 264 art 9 s 8; 1Sp2001 c 5 art 7 s 9