HF 851

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

A bill for an act
relating to property taxation; requiring the
commissioner of revenue to conduct a study of the
metropolitan fiscal disparities program.

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

Section 1. new text begin STUDY REQUIRED.
new text end

new text begin By February 1, 2006, the commissioner of revenue shall
conduct a study of the metropolitan revenue distribution program
contained in Minnesota Statutes, chapter 473F, commonly known as
the fiscal disparities program, and shall make a report by March
1, 2006, to the chairs of the house and senate tax committees
consisting of the findings of the study and any recommendations
resulting from the study.
new text end

new text begin The study shall primarily address the question of whether
the program is achieving the purposes for which it was created.
Additionally, the study shall address the following questions:
new text end

new text begin (1) How has the program affected property tax disparities
across the Twin Cities metropolitan area?
new text end

new text begin (2) Is the formula for contributing tax base to the
areawide pool reasonable? Should certain commercial-industrial
tax base continue to be exempt from contribution to the areawide
pool, such as tax base in existence prior to 1979, tax base in
tax increment financing districts established before 1979, and
tax base located at the Minneapolis-St. Paul International
Airport? Should contribution amounts be adjusted for
differences in sales ratios between communities?
new text end

new text begin (3) Is the formula for distributing tax base from the
areawide pool reasonable? Should the formula reflect measures
of need in addition to population? Should the distribution
formula be based on tax capacity rather than market value?
new text end

new text begin (4) Does the program help promote orderly growth and
encourage environmentally sound land use?
new text end

new text begin (5) Does the program reduce competition for
commercial-industrial tax base between communities? Is reduced
competition for commercial-industrial tax base desirable?
new text end

new text begin (6) Do local governments derive sufficient tax revenues
from commercial-industrial property to cover the costs of
providing services to the property, considering the tax base
that must be contributed to the areawide pool?
new text end

new text begin (7) Could improvements be made in the administration of the
program?
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective July 1, 2005.
new text end