HF 1923

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to taxation; providing for a study of the effect of demographic change in
state tax revenues; appropriating money.

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

Section 1. new text begin STUDY; DEMOGRAPHIC CHANGE AND STATE TAX REVENUES.
new text end

new text begin (a) The commissioners of finance and revenue shall jointly prepare a study of the
effect of expected demographic changes over the next 25 years on the tax bases and
revenues of the individual income tax and general sales tax. In preparing this study, the
commissioners shall consult with and use the state demographer to estimate the changing
profile of the Minnesota population by age and other factors relevant to the tax bases and
revenues of the two taxes. The commissioners may contract with appropriate outside
experts to forecast or estimate the effects of these demographic changes on the amount
and type of economic activity in the state over the period that would affect the bases and
revenues of the two taxes.
new text end

new text begin (b) The study must include estimates for the years 2012, 2017, 2022, 2027, and
2032. The study must analyze the sensitivity of the results for changes in estimated
migration rates, labor force participation by older individuals, and the shares of capital
versus labor income. The principal purpose of the study is to help the legislature assess
the relationship between the current structure of the tax bases and projected demographic
changes and the effect on the revenue adequacy of the taxes. The commissioners may
make policy recommendations regarding changes in the structure of the taxes that would
preserve the current relationship between individual income and state tax revenues and
consumption and state tax revenues.
new text end

new text begin (c) The commissioners shall present preliminary results to the legislature on the
individual income tax by February 1, 2008, and a final written report on both taxes must
be provided to the legislature, in compliance with Minnesota Statutes, sections 3.195
and 3.197, by January 15, 2009.
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

Sec. 2. new text begin APPROPRIATION; TAX STUDY.
new text end

new text begin $....... for fiscal year 2008 and $....... for fiscal year 2009 are appropriated to the
commissioner of finance from the general fund for the purposes of the study required by
section 1. The commissioner of finance shall make available as much of the appropriation
as the commissioner determines appropriate to the commissioner of revenue to pay for the
Department of Revenue's costs of the study and to the commissioner of administration
to pay for the state demographer's costs.
new text end