Yes I have gotten interest on my refund checks. By law, they owe you interest starting 45 days after your filing. Exempt is a smart way to go, because otherwise you are floating them an interest free loan for several months to a year.

Every state that has income tax that I know of begins with the federal adjusted gross income as a starting point. If that number is zero because of LMR, then you should be entitled to a refund of state income tax as well.