1.1 	A bill for an act
1.2 	relating to taxation; individual income; providing an
1.3 	income tax checkoff to fund grants to members of the
1.4 	National Guard and reserves who have incurred
1.5 	financial need as the result of being ordered to
1.6 	federal active service since 9/11; authorizing
1.7 	administration by the adjutant general; appropriating
1.8 	money; amending Minnesota Statutes 2004, section
1.9 	190.09, subdivision 2; proposing coding for new law in
1.10 	Minnesota Statutes, chapter 290.
1.11 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.12 	Section 1. Minnesota Statutes 2004, section 190.09,
1.13 	subdivision 2, is amended to read:
1.14 		Subd. 2.Mission; efficiency.  It is part of the
1.15 	department's mission that within the department's resources the
1.16 	adjutant general shall endeavor to:
1.17 	(1) prevent the waste or unnecessary spending of public
1.18 	money;
1.19 	(2) use innovative fiscal and human resource practices to
1.20 	manage the state's resources and operate the department as
1.21 	efficiently as possible;
1.22 	(3) coordinate the department's activities wherever
1.23 	appropriate with the activities of other governmental agencies;
1.24 	(4) use technology where appropriate to increase agency
1.25 	productivity, improve customer service, increase public access
1.26 	to information about government, and increase public
1.27 	participation in the business of government;
1.28 	(5) utilize constructive and cooperative labor-management
2.1 	practices to the extent otherwise required by chapters 43A and
2.2 	179A;
2.3 	(6) report to the legislature on the performance of agency
2.4 	operations and the accomplishment of agency goals in the
2.5 	agency's biennial budget according to section 16A.10,
2.6 	subdivision 1; ~~and~~ 
2.7 	(7) recommend to the legislature appropriate changes in law
2.8 	necessary to carry out the mission and improve the performance
2.9 	of the department; and 
2.10 	(8) administer checkoff funds as provided in section
2.11 	290.433.
2.12 	
EFFECTIVE DATE. This section is effective for taxable
2.13 	years beginning after December 31, 2004.

2.14 	Sec. 2. [290.433] NATIONAL GUARD AND RESERVES CHECKOFF.
2.15 		Subdivision 1.Checkoff established. Every individual
2.16 	who files an income tax return may designate on their original
2.17 	return that $1 or more shall be added to the tax or deducted
2.18 	from the refund that would otherwise be payable by or to that
2.19 	individual and paid into a Minnesota military families relief
2.20 	account established in the special revenue fund.  The
2.21 	commissioner of revenue shall, on the income tax return, notify
2.22 	filers of their right to designate that a portion of their tax
2.23 	or refund shall be paid into the Minnesota military families
2.24 	relief account.  Amounts so designated to be paid shall be
2.25 	credited to the account as returns are processed, in as timely a
2.26 	manner as practical.  All interest earned on money accrued,
2.27 	gifts to the program, contributions to the program, and
2.28 	reimbursements of expenditures shall be credited to the
2.29 	account.  All money in the account is appropriated to the
2.30 	adjutant general of the Department of Military Affairs for the
2.31 	purpose of making grants as specified in subdivision 2.
2.32 		Subd. 2.Grants. (a) The adjutant general is authorized
2.33 	to expend any money appropriated from the Minnesota military
2.34 	families relief account in the special revenue fund for the
2.35 	purpose of making grants:
2.36 	(1) directly to eligible individuals; or 
3.1 	(2) to one or more eligible foundations for the purpose of
3.2 	making grants to eligible individuals, as provided in this
3.3 	section.
3.4 	(b) The term, "eligible individual" includes any Minnesota
3.5 	resident who is:
3.6 	(1) a member of the Minnesota National Guard or other
3.7 	United States armed forces reserves who has been ordered to
3.8 	federal active service since September 11, 2001, and has a
3.9 	financial need as a result of that service;
3.10 	(2) the spouse or dependent child of a person described in
3.11 	clause (1); or 
3.12 	(3) the surviving spouse or surviving dependent child of a
3.13 	person described in clause (1).
3.14 	(c) The term "eligible foundation" includes any
3.15 	organization that:
3.16 	(1) is a tax-exempt organization under section 501(c)(3) of
3.17 	the Internal Revenue Code;
3.18 	(2) has articles of incorporation under chapter 317A
3.19 	specifying the purpose of the organization as including the
3.20 	provision of financial assistance to members of the Minnesota
3.21 	National Guard and other United States armed forces reserves and
3.22 	their families and survivors; and 
3.23 	(3) agrees in writing to distribute any grant money
3.24 	received from the adjutant general under this section to
3.25 	eligible individuals as defined in this section and in
3.26 	accordance with any written policies and rules the adjutant
3.27 	general may impose as conditions of the grant to the foundation.
3.28 	(d) The maximum grant awarded to an eligible individual in
3.29 	a calendar year with funds from the Minnesota military families
3.30 	relief account, either through an eligible institution or
3.31 	directly from the adjutant general, may not exceed $2,000.
3.32 	(e) The state pledges and agrees with all contributors to
3.33 	the account to use the contributed funds solely for the purpose
3.34 	of providing assistance to eligible individuals.
3.35 	(f) The state further agrees that it will not impose
3.36 	additional conditions or restrictions that will limit or
4.1 	otherwise restrict the ability of the adjutant general to award
4.2 	grants under this section.
4.3 	(g) For purposes of this section, the term "federal active
4.4 	service" has the meaning given in section 190.05, subdivision
4.5 	5c, but excludes service performed exclusively for purposes of:
4.6 	(1) basic combat training, advanced individual training,
4.7 	annual training, and periodic inactive duty training;
4.8 	(2) special training periodically made available to reserve
4.9 	members; and 
4.10 	(3) service performed in accordance with section 190.08,
4.11 	subdivision 3.
4.12 		Subd. 3.Annual report. The adjutant general must report
4.13 	by February 1, 2007, and each year thereafter, to the chairs and
4.14 	ranking minority members of the legislative committees and
4.15 	divisions with jurisdiction over military and veterans' affairs
4.16 	on the number, amounts, and use of grants issued from the
4.17 	Minnesota military families relief account in the previous year.
4.18 		Subd. 4.Exception from rulemaking. Actions of the
4.19 	adjutant general under this section are not rules under the
4.20 	Administrative Procedure Act.
4.21 	
EFFECTIVE DATE. This section is effective for income tax
4.22 	returns for taxable years beginning after December 31, 2004.

4.23 	Sec. 3. INCOME TAX FORM.
 4.24 	In revising the individual income tax form M-1 to include
4.25 	the checkoff in section 2, the commissioner must transfer the
4.26 	least used additions and subtractions from form M-1 to form M-1M
4.27 	as necessary so that form M-1 does not exceed two pages in
4.28 	length.

4.29 	EFFECTIVE DATE. This section is effective for taxable
4.30 	years beginning after December 31, 2004.