SF 3413

Introduction - 86th Legislature (2009 - 2010)

Posted on 05/08/2010 12:46 p.m.

1.1A bill for an act 1.2relating to taxes; creating a Tax Expenditure Advisory Commission; providing 1.3for review and sunset of tax expenditures;proposing coding for new law as 1.4Minnesota Statutes, chapter 290D. 1.5BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.6    Section 1. new text begin [290D.01] TITLE AND PURPOSE. new text end 1.7     new text begin Subdivision 1. new text end new text begin Citation. new text end new text begin This chapter shall be known and cited as the Tax new text end 1.8 new text begin Expenditure Review Act. new text end 1.9     new text begin Subd. 2. new text end new text begin Purpose. new text end new text begin State governmental policy objectives may be achieved both new text end 1.10 new text begin by direct expenditure of governmental funds and by granting special and selective tax new text end 1.11 new text begin preferences or tax expenditures. Both direct expenditures of governmental funds and tax new text end 1.12 new text begin expenditures have an effect on the ability of state and local governments to reduce general new text end 1.13 new text begin tax rates or to increase expenditures; therefore, tax expenditures should be subject to new text end 1.14 new text begin regular review and reauthorization in a manner similar to direct expenditures. new text end 1.15    Sec. 2. new text begin [290D.02] DEFINITIONS. new text end 1.16     new text begin Subdivision 1. new text end new text begin Applicability. new text end new text begin For purposes of this chapter, the following terms have new text end 1.17 new text begin the meanings given in this section unless the context clearly indicates a different meaning. new text end 1.18     new text begin Subd. 2. new text end new text begin Commission. new text end new text begin "Commission" means the Tax Expenditure Advisory new text end 1.19 new text begin Commission. new text end 1.20     new text begin Subd. 3. new text end new text begin Commissioner. new text end new text begin "Commissioner" means the commissioner of revenue or a new text end 1.21 new text begin person to whom the commissioner has delegated functions. new text end 1.22     new text begin Subd. 4. new text end new text begin Tax expenditure. new text end new text begin "Tax expenditure" has the meaning given in section new text end 1.23 new text begin 270C.11, subdivision 6. new text end 2.1     new text begin Subd. 5. new text end new text begin Tax. new text end new text begin "Tax" has the meaning given in section 270C.11, subdivision 6. new text end 2.2    Sec. 3. new text begin [290D.03] TAX EXPENDITURE ADVISORY COMMISSION. new text end 2.3     new text begin Subdivision 1. new text end new text begin Membership. new text end new text begin The Tax Expenditure Advisory Commission consists new text end 2.4 new text begin of 12 members appointed by the governor, as follows: new text end 2.5 new text begin (1) three senators and three members of the house of representatives, including the new text end 2.6 new text begin chairs of the house of representatives and senate committees with jurisdiction over taxes, new text end 2.7 new text begin with no more than three of the six legislators being from the same political party; and new text end 2.8 new text begin (2) six public members, including at least one who must be a citizen representing new text end 2.9 new text begin working families, one must be a representative of a nonprofit organization, one must be a new text end 2.10 new text begin person with experience in economic or business development, and the remainder shall be new text end 2.11 new text begin individuals who have a basic understanding of state tax policy, government operations, new text end 2.12 new text begin and public services. new text end 2.13     new text begin Subd. 2. new text end new text begin Terms. new text end new text begin Legislative members serve two-year terms expiring September 1 of new text end 2.14 new text begin each odd-numbered year. Public members serve two-year terms expiring September 1 of new text end 2.15 new text begin each odd-numbered year. new text end 2.16     new text begin Subd. 3. new text end new text begin Limits. new text end new text begin Members who are not chairs of a house of representatives or senate new text end 2.17 new text begin committee with jurisdiction over taxes are subject to the following restrictions: new text end 2.18 new text begin (1) after an individual serves four years on the commission, the individual is not new text end 2.19 new text begin eligible for appointment to another term or part of a term; new text end 2.20 new text begin (2) a legislative member who serves a full term may not be appointed to an new text end 2.21 new text begin immediately succeeding term; and new text end 2.22 new text begin (3) a public member may not serve consecutive terms, and, for purposes of this new text end 2.23 new text begin prohibition, a member is considered to have served a term only if the member has served new text end 2.24 new text begin more than one-half of the term. new text end 2.25     new text begin Subd. 4. new text end new text begin Appointments. new text end new text begin The governor shall make appointments before September new text end 2.26 new text begin 1 of each odd-numbered year. new text end 2.27     new text begin Subd. 5. new text end new text begin Legislative members. new text end new text begin If a legislative member ceases to be a member new text end 2.28 new text begin of the legislative body from which the member was appointed, the member vacates new text end 2.29 new text begin membership on the commission. If a legislative member who is a chair of a house of new text end 2.30 new text begin representatives or senate committee with jurisdiction over taxes ceases to be a chair of that new text end 2.31 new text begin committee, the member vacates membership on the commission. new text end 2.32     new text begin Subd. 6. new text end new text begin Vacancies. new text end new text begin If a vacancy occurs, the governor shall appoint a person to serve new text end 2.33 new text begin for the remainder of the unexpired term in the same manner as the original appointment. new text end 2.34     new text begin Subd. 7. new text end new text begin Officers. new text end new text begin The commission shall have a chair and vice-chair as presiding new text end 2.35 new text begin officers. The chair and vice-chair must alternate every two years between the two new text end 3.1 new text begin membership groups: legislators and public members. The chair and vice-chair may not be new text end 3.2 new text begin from the same membership group. new text end 3.3     new text begin Subd. 8. new text end new text begin Quorum; voting. new text end new text begin Seven members of the commission constitute a quorum. new text end 3.4 new text begin A final action or recommendation may not be made unless approved by a recorded vote new text end 3.5 new text begin of at least seven members. All other actions by the commission shall be decided by a new text end 3.6 new text begin majority of the members present and voting. new text end 3.7     new text begin Subd. 9. new text end new text begin Compensation. new text end new text begin Each member of the commission is entitled to new text end 3.8 new text begin reimbursement for actual and necessary expenses incurred in performing commission new text end 3.9 new text begin duties. Each legislative member is entitled to reimbursement from the appropriate new text end 3.10 new text begin fund of the member's respective legislative body. Each public member is entitled to new text end 3.11 new text begin reimbursement from funds appropriated to the commission. new text end 3.12    Sec. 4. new text begin [290D.04] STAFF. new text end 3.13 new text begin The commission shall employ an executive director to act as the executive head of new text end 3.14 new text begin the commission. The executive director shall employ persons necessary to carry out new text end 3.15 new text begin this chapter. new text end 3.16    Sec. 5. new text begin [290D.05] RULES. new text end 3.17 new text begin The commission shall adopt rules necessary to carry out this chapter. new text end 3.18    Sec. 6. new text begin [290D.06] REPORT TO COMMISSION. new text end 3.19 new text begin In addition to the information provided in each even-numbered year under section new text end 3.20 new text begin 270C.11, before September 1 of each year prior to the first year of a regular legislative new text end 3.21 new text begin session, the commissioner shall provide a report with the following information for each new text end 3.22 new text begin tax expenditure scheduled to expire during the following biennium: new text end 3.23 new text begin (1) the positive and negative impacts of the expenditure on the taxpayer or taxpayers new text end 3.24 new text begin before or after the tax expenditure; new text end 3.25 new text begin (2) the impact of the tax expenditure on the tax incidence in the state; new text end 3.26 new text begin (3) the economic development impacts of the preference, including the impact on new text end 3.27 new text begin jobs, wages, and benefits; new text end 3.28 new text begin (4) the cumulative fiscal impacts of other state and federal taxes providing benefits new text end 3.29 new text begin to taxpayers for similar activities; new text end 3.30 new text begin (5) the measurable impacts of the tax expenditure in meeting the goal of the new text end 3.31 new text begin expenditure; new text end 3.32 new text begin (6) a comparison of the tax expenditure with tax treatment of taxpayers engaged in new text end 3.33 new text begin similar activities in neighboring states; and new text end 4.1 new text begin (7) consideration of the probable impact on overall uniformity and fairness of the new text end 4.2 new text begin tax code. new text end 4.3    Sec. 7. new text begin [290D.07] COMMISSION DUTIES. new text end 4.4     new text begin Subdivision 1. new text end new text begin Review of tax expenditures. new text end new text begin Before February 1 of the first year of a new text end 4.5 new text begin regularly scheduled legislative session, the commission shall (1) review information from new text end 4.6 new text begin the most recent tax expenditure report under section 270C.11 and the additional report new text end 4.7 new text begin under section 290D.06; (2) take public testimony; and (3) vote on recommendations for new text end 4.8 new text begin continuation or repeal of each tax expenditure subject to expire in that legislative session. new text end 4.9     new text begin Subd. 2. new text end new text begin Public hearings. new text end new text begin Before January 1 of the year a tax expenditure is included new text end 4.10 new text begin in a commission report, the commission shall conduct public hearings concerning the new text end 4.11 new text begin impact of the tax expenditure on (1) the beneficiaries; (2) the state economy; (3) its new text end 4.12 new text begin performance in meeting its purpose; (4) its impact on the tax incidence in the state; and (5) new text end 4.13 new text begin any other information that the commission deems relevant. new text end 4.14     new text begin Subd. 3. new text end new text begin Commission report; recommendations. new text end new text begin By February 1 of the first year of new text end 4.15 new text begin every regular legislative session, the commission shall present to the chairs of the senate new text end 4.16 new text begin and house of representatives committees with jurisdiction over taxes, a report on the tax new text end 4.17 new text begin expenditures reviewed. In the report the commission shall report its recommendations for new text end 4.18 new text begin each tax expenditure, its findings on the demonstrated ability of each tax expenditure to new text end 4.19 new text begin meet its stated goal, the impact on the general fund budget of retaining or abolishing the new text end 4.20 new text begin tax expenditure, and any other information that the commission deems relevant to explain new text end 4.21 new text begin its recommendation for each expenditure. new text end 4.22    Sec. 8. new text begin [290D.08] REQUIREMENT FOR REVIEW AND PERIODIC new text end 4.23 new text begin REENACTMENT OF ALL EXISTING AND NEW TAX EXPENDITURES. new text end 4.24     new text begin Subdivision 1. new text end new text begin Expiration of existing tax expenditures. new text end new text begin The tax expenditures in new text end 4.25 new text begin statute as of July 1, 2010, are subject to sunset review and expiration on the following new text end 4.26 new text begin schedule: new text end 4.27 new text begin (1) all tax expenditures in chapters 168, 297A, and 297B, on December 31, 2012, new text end 4.28 new text begin and every tenth year thereafter; new text end 4.29 new text begin (2) all tax expenditures in chapters 295, 296A, 297D, 297E, 297F, 297G, 297H, and new text end 4.30 new text begin 297I, on December 31, 2014, and every tenth year thereafter; new text end 4.31 new text begin (3) all tax expenditures in chapters 290 and 298, on December 31, 2016, and every new text end 4.32 new text begin tenth year thereafter; new text end 4.33 new text begin (4) all tax expenditures in chapters 287, 290A, 290B, 291, and 298, on December new text end 4.34 new text begin 31, 2018, and every tenth year thereafter; and new text end 5.1 new text begin (5) all tax expenditures in chapters 88, 270, 272, 273, 290C, 469, and 473H, on new text end 5.2 new text begin December 31, 2020, and every tenth year thereafter. new text end 5.3     new text begin Subd. 2. new text end new text begin New and renewed tax expenditures. new text end new text begin Any legislation that creates, renews, new text end 5.4 new text begin or continues a tax expenditure must include the following provisions: new text end 5.5 new text begin (1) an intent statement that clearly provides the purposes for the tax expenditure and new text end 5.6 new text begin a standard or goal against which its effectiveness can be measured; and new text end 5.7 new text begin (2) an expiration date for the tax expenditure that may not exceed 12 years from new text end 5.8 new text begin the day the provision takes effect and must correspond to the expiration date for other tax new text end 5.9 new text begin expenditures in the same tax area, as listed in subdivision 1. new text end 5.10    Sec. 9. new text begin [290D.09] MONITORING OF RECOMMENDATIONS. new text end 5.11 new text begin During each legislative session, the staff of the commission shall monitor legislation new text end 5.12 new text begin affecting tax expenditures that have undergone sunset review and shall periodically new text end 5.13 new text begin report to the members of the commission on proposed changes which would modify new text end 5.14 new text begin prior recommendations of the commission. new text end 5.15    Sec. 10. new text begin [290D.10] CONTINUATION BY LAW. new text end 5.16 new text begin During the regular session in which the commission's report is received, the new text end 5.17 new text begin legislature may enact legislation to continue a tax expenditure contained in the report new text end 5.18 new text begin for a period not to exceed ten years. This chapter does not prohibit the legislature from new text end 5.19 new text begin eliminating a tax expenditure on a date earlier than that provided in this chapter. new text end 5.20    Sec. 11. new text begin [290D.11] GIFTS AND GRANTS. new text end 5.21 new text begin The commission may accept gifts, grants, and donations from any organization new text end 5.22 new text begin described in section 501(c)(3) of the Internal Revenue Code for the purpose of funding new text end 5.23 new text begin any activity under this chapter. All gifts, grants, and donations must be accepted in an new text end 5.24 new text begin open meeting by a majority of the voting members of the commission and reported in the new text end 5.25 new text begin public record of the commission with the name of the donor and purpose of the gift, grant, new text end 5.26 new text begin or donation. Money received under this section is appropriated to the commission. new text end