SF 1984

as introduced - 85th Legislature (2007 - 2008) 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;
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new text begin (2) fair and equitable to all Minnesotans; and
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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;
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new text begin (2) four members appointed by the majority leader of the senate, two members of the
senate and two from private life;
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new text begin (3) two members appointed by the minority leader of the senate, one member of the
senate and one from private life;
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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
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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;
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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:
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new text begin (i) equity or fairness, including measures based on ability to pay, equal treatment of
equals, and payment for benefits received;
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new text begin (ii) neutrality or efficiency, the extent to which the effects on private market
decisions are minimized;
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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;
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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;
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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;
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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, 2009. The
report must include:
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new text begin (1) the results of the commission's evaluation of the present tax and revenue system
and its research on alternatives;
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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
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new text begin (3) a draft bill implementing the commission's recommendation for introduction
in the 2010 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

new text begin Staff. new text end

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 2008 and 2009 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).
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new text begin EFFECTIVE DATE. new text end

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