HF 1510

as introduced - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; establishing a state tax reform
action commission; authorizing appointment to the
commission; directing preparation of a report to the
legislature; appropriating money.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1. new text begin FINDINGS.
new text end

new text begin The legislature finds that Minnesota's state and local tax
system is flawed and not well adapted to the changing nature of
the economy and the demographics of the state and must be
reformed so that it is:
new text end

new text begin (1) simple and transparent;
new text end

new text begin (2) fair and equitable to all Minnesotans; and
new text end

new text begin (3) neutral and efficient.
new text end

Sec. 2. new text begin TAX REFORM COMMISSION.
new text end

new text begin Subdivision 1. new text end

new text begin Commission established. new text end

new text begin A tax reform
action commission is established in the legislative branch to
study the Minnesota tax and revenue system and to make
recommendations to the legislature.
new text end

new text begin Subd. 2. new text end

new text begin Membership. new text end

new text begin (a) The commission consists of 15
members, appointed as follows:
new text end

new text begin (1) three members appointed by the governor, two from the
executive branch and one from private life;
new text end

new text begin (2) four members appointed by the majority leader of the
senate, two members of the senate and two from private life;
new text end

new text begin (3) two members appointed by the minority leader of the
senate, one member of the senate and one from private life;
new text end

new text begin (4) four members appointed by the speaker of the house of
representatives, two members of the house of representatives and
two from private life; and
new text end

new text begin (5) two members appointed by the minority leader of the
house of representatives, one member of the house of
representatives and one from private life.
new text end

new text begin (b) The appointing authority shall select members who are
of recognized standing and distinction and who possess
demonstrated capacity to discharge the duties of the
commission. In making appointments, the appointing authorities
shall attempt to appoint some individuals to the commission who
have special experience or knowledge in taxation, economics, and
accounting.
new text end

new text begin (c) The governor shall designate a member of the commission
as its chair who shall determine its duties and supervise its
staff.
new text end

new text begin (d) The appointing authorities shall appoint members of the
commission not more than 30 days after enactment of this
section. Members serve for the life of the commission. A
vacancy in the commission membership does not affect the power
of the remaining members to execute the duties of the
commission. A vacancy in commission membership is filled in the
same manner in which the original appointment was made.
new text end

new text begin Subd. 3. new text end

new text begin Duties; report. new text end

new text begin (a) The commission shall study
and evaluate the Minnesota state and local tax and revenue
system with a goal of making long-term improvements in the
system for the citizens of the state, given standard principles
of good tax policy and the background of expected demographic
and economic changes in the state, nation, and world. The
commission's recommendations must be done on a revenue neutral
basis. In particular, the commission shall examine:
new text end

new text begin (1) the mix of state revenues between tax revenues and fees
and charges for services used or benefits received;
new text end

new text begin (2) the implications of likely demographic and economic
changes, affecting both (i) the demands for state and local
government services and (ii) taxes and other revenues; and
new text end

new text begin (3) the extent to which the existing tax system and the
commission's proposal satisfy the following basic tax policy
principles:
new text end

new text begin (i) equity or fairness, including measures based on ability
to pay, equal treatment of equals, and payment for benefits
received;
new text end

new text begin (ii) neutrality or efficiency, the extent to which the
effects on private market decisions are minimized;
new text end

new text begin (iii) revenue adequacy, the extent to which the revenues
are stable and predictable and grow with increases in income or
economic activity;
new text end

new text begin (iv) competitiveness, the extent to which negative effects
on the state's attractiveness as a location for investment,
working, and living are minimized;
new text end

new text begin (v) simplicity, the extent to which it is easy to
understand;
new text end

new text begin (vi) ease of compliance and administration, the extent to
which taxpayers can easily comply and the government can easily
administer it;
new text end

new text begin (vii) visibility or accountability, the extent to which the
taxes or other charges are clear and apparent to their payers as
a cost of government and that the government officials imposing
the tax are accountable, through election or otherwise, to the
principal payers of the tax.
new text end

new text begin (b) The commission shall report to the legislature no later
than July 1, 2007. The report must include:
new text end

new text begin (1) the results of the commission's evaluation of the
present tax and revenue system and its research on alternatives;
new text end

new text begin (2) recommendations for reform and improvement of the
Minnesota state and local tax and revenue system, on a revenue
neutral basis, along with the rationale for the proposed
changes; and
new text end

new text begin (3) a draft bill implementing the commission's
recommendation for introduction in the 2008 legislative session.
new text end

new text begin Subd. 4. new text end

new text begin Per diem and expenses. new text end

new text begin Members of the
commission may be compensated and receive reimbursement for
expenses, as provided for members of advisory councils under
Minnesota Statutes, section 15.059, subdivision 3. This
subdivision does not apply to members of the legislature or
state employees.
new text end

new text begin Subd 5. new text end [STAFF.] new text begin The commission may employ staff as it
deems appropriate to carry out its duties or use existing
legislative and executive branch staff. All staff are in the
unclassified state service. Legislative staff and the
Department of Revenue staff must provide research, bill
drafting, and other services to the commission upon its
request. The commission may contract with consultants for
research and other services and enter other contracts, as it
deems necessary or appropriate to carry out its duties. These
contracts are not subject to the requirements of Minnesota
Statutes, chapter 16C.
new text end

new text begin Subd. 6. new text end

new text begin Appropriation. new text end

new text begin $....... is appropriated from
the general fund for fiscal years 2006 and 2007 to carry out the
provisions of this section.
new text end

new text begin Subd. 7. new text end

new text begin Expiration. new text end

new text begin The commission terminates 30 days
after transmitting its report to the legislature under
subdivision 3, paragraph (b).
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day
following final enactment.
new text end