HF 2360

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

A bill for an act
relating to state finance; establishing a tax volatility reduction account; directing
the commissioner of finance to adjust amounts in the account based on forecasts
of state revenue gains and losses due to changes in taxpayer behavior in
anticipation of changes of federal income tax rates on capital gains income;
amending Minnesota Statutes 2006, section 16A.152, by adding a subdivision.

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

Section 1.

Minnesota Statutes 2006, section 16A.152, is amended by adding a
subdivision to read:

new text begin Subd. 8. new text end

new text begin Tax volatility reduction account. new text end

new text begin (a) A tax volatility reduction account is
created in the general fund.
new text end

new text begin (b) Beginning with the November 2007 economic forecast and for each subsequent
economic forecast, the commissioner of finance, in consultation with the commissioner of
revenue, shall estimate the revenue gain or loss anticipated for the current biennium and
the next biennium, as a result of changes in taxpayer behavior in anticipation of (1) the
sunset of favorable federal income tax rates for capital gains income under Public Law
108-27; (2) the extension of the sunset referenced in (1); or (3) any other federal law that
changes federal income tax rates for capital gains income.
new text end

new text begin (c) If the commissioner estimates a revenue gain under paragraph (b) for the current
biennium, and if the amount of gain estimated for the current biennium is more than the
amount forecast to be in the tax volatility reduction account at the close of the current
biennium, then the difference is transferred to the tax volatility reduction account.
new text end

new text begin (d) If the commissioner estimates a revenue gain under paragraph (b) for the current
biennium, and if the amount of gain estimated for the current biennium is less than the
amount forecast to be in the tax volatility reduction account at the close of the current
biennium, then the difference is transferred from the tax volatility reduction account
to the general fund.
new text end

new text begin (e) If the commissioner estimates a revenue loss under paragraph (b) in the current
biennium, then the amount adequate to offset the loss, to the extent it is available, is
transferred from the tax volatility reduction account to the general fund.
new text end

new text begin (f) If the commissioner estimates a revenue gain for the next biennium under
paragraph (b), and if the amount of gain estimated for the next biennium is more than
the amount forecast to be in the tax volatility reduction account at the close of the next
biennium, then the difference is transferred to the tax volatility reduction account on
the first day of the next biennium.
new text end

new text begin (g) If the commissioner estimates a revenue gain for the next biennium under
paragraph (b), and if the amount of gain estimated for the next biennium is less than
the amount forecast to be in the tax volatility reduction account at the close of the next
biennium, then the difference is transferred from the tax volatility reduction account to the
general fund on the first day of the next biennium.
new text end

new text begin (h) If the commissioner estimates a revenue loss under paragraph (a) in the next
biennium, then the amount adequate to offset the loss, to the extent it is available, is
transferred from the tax volatility reduction account to the general fund on the first day of
the next biennium.
new text end

new text begin (i) For purposes of this subdivision "economic forecast" means the economic
forecast prepared according to section 16A.103.
new text end

new text begin (j) On July 1, 2007, the commissioner of finance must allocate the portion of fiscal
years 2010 and 2011 revenues anticipated to result from changes in taxpayer behavior in
anticipation of the sunset of favorable federal income tax rates for capital gains income
under Public Law 108-27, estimated at $327,000,000, to the tax volatility reduction
account for the fiscal year 2010-2011 biennium.
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