HF5005

Purpose

• The bill would adopt and codify the Interstate Fiscal Sovereignty Compact and create a framework for federal taxes to be held in a state-based escrow system. It aims to establish new authority, reporting requirements, and funding mechanisms related to the compact, including creating a new Minnesota statute chapter (289B) to govern these provisions.

Main Provisions

• Adoption and codification
  • Establishes Minnesota statutes chapter 289B to implement the Interstate Fiscal Sovereignty Compact.
  • Requires reports and appropriation of money as part of implementing the compact.
• Key definitions and terms
  • Activation order: an order from the Compact Commission directing all member states to begin escrow operations on a specific date.
  • Commissioner: refers to Minnesota’s commissioner of revenue.
  • Compact: the Interstate Fiscal Sovereignty Compact itself.
  • Compact Commission: the governing body of the Compact.
  • Escrow fund: the fund established under the Compact.
  • Lawfully certified: pertains to presidential elector certification that remains valid under state law and not overturned by a final court order.
  • Member state: any state that has enacted substantially similar legislation and filed membership notice with the Compact Commission.
  • Triggering event: an event described in the Compact’s Article VIII that starts certain escrow actions.
• Federal Tax Escrow Fund
  • Creates the Federal Tax Escrow Fund in the state treasury.
  • Money in the fund must be kept in trust, not commingled with other state funds, and not used for any other state purpose.
  • The Commissioner of Management and Budget must deposit interest and earnings from the fund into the escrow fund.
  • The Commissioner of Management and Budget must maintain records of all deposits and disbursements from the fund.

Significant Changes to Existing Law

• Adds a new framework (Minnesota Statutes chapter 289B) to govern the Interstate Fiscal Sovereignty Compact and the associated escrow arrangements for federal taxes.
• Establishes a new state treasury fund (the Federal Tax Escrow Fund) with explicit trust protections, reporting duties, and revenue-tracking requirements.
• Introduces new defined terms (activation order, triggering event, compact commission, etc.) to standardize how the compact operates within Minnesota law.
• Creates potential intergovernmental obligations and reporting/appropriation requirements tied to participation in the compact and its escrow operations.

Relevant terms - Interstate Fiscal Sovereignty Compact - Federal Tax Escrow Fund - Activation order - Compact Commission - Member state - Triggering event - Lawfully certified - Commissioner of Revenue - Commissioner of Management and Budget - Escrow fund - Minnesota Statutes chapter 289B - Trust funds - Not commingled - Interest and earnings - Records of deposits and disbursements

Relevant Terms (plain list of keywords) Interstate Fiscal Sovereignty Compact; Federal Tax Escrow Fund; activation order; triggering event; compact commission; member state; lawfully certified; commissioner of revenue; commissioner of management and budget; escrow fund; Minnesota Statutes chapter 289B; trust; not commingled; records; deposits; disbursements; reports; appropriations.