MN HF174

Commissioner of Revenue shall issue a request for proposals for a tax analytics and business intelligence system to improve tax collection by identifying audit candidates and prioritizing collection activities.

The system must use advanced analytical techniques including pattern detection, predictive modeling, clustering, and outlier detection to identify suspect accounts and rank them by return on investment.

System must include safeguards to decrease wrongful audits and reduce interference with compliant taxpayers, and may use vendor financing but cannot compensate vendors based on percentage of taxes collected.

$11,504,000 appropriated for fiscal year ending June 30, 2012, and $23,269,000 for fiscal year ending June 30, 2013, with expectation of generating $133,000,000 in new general fund revenues for the biennium.

Commissioner must report to legislative committees by March 1, 2012, and January 15, 2013, on revenue collection; if revenues fall short of $133,000,000, the Commissioner of Management and Budget must reduce other agency appropriations by the shortfall amount.