SF 2213

as introduced - 89th Legislature (2015 - 2016) Posted on 05/17/2015 02:52pm

A bill for an act
relating to taxes; creating a Tax Expenditure Advisory Commission; providing
for review and sunset of tax expenditures; proposing coding for new law as
Minnesota Statutes, chapter 290D.

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

Section 1.

new text begin [290D.02] DEFINITIONS.
new text end

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
the meanings given in this section unless the context clearly indicates a different meaning.
new text end

new text begin Subd. 2. new text end

new text begin Commission. new text end

new text begin "Commission" means the Tax Expenditure Advisory
Commission.
new text end

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
person to whom the commissioner has delegated functions.
new text end

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
270C.11, subdivision 6.
new text end

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

Sec. 2.

new text begin [290D.03] TAX EXPENDITURE ADVISORY COMMISSION.
new text end

new text begin Subdivision 1. new text end

new text begin Membership. new text end

new text begin The Tax Expenditure Advisory Commission consists
of 14 members, as follows:
new text end

new text begin (1) four senators, including the chair of the committee with jurisdiction over taxes,
one senator appointed by the senate Subcommittee on Committees of the Committee on
Rules and Administration, and two senators appointed by the senate minority leader;
new text end

new text begin (2) four members of the house of representatives, including the chair of the
committee with jurisdiction over taxes, one representative appointed by the speaker of the
house of representatives, and two representatives appointed by the house minority leader;
new text end

new text begin (3) six public members appointed by the governor, including at least one who is a
taxpayer eligible for the Minnesota working family tax credit, one who is an owner of a
small business as defined in section 645.445, one who is an officer or board member of a
Fortune 500 company, one who is an officer or board member of a nonprofit organization,
one who is a person with experience in economic or business development, and the
remainder shall be individuals who have a basic understanding of state tax policy,
government operations, and public services.
new text end

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
each odd-numbered year. Public members serve two-year terms expiring September 1 of
each odd-numbered year.
new text end

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
committee with jurisdiction over taxes are subject to the following restrictions:
new text end

new text begin (1) after an individual serves four years on the commission, the individual is not
eligible for appointment to another term or part of a term;
new text end

new text begin (2) a legislative member who serves a full term may not be appointed to an
immediately succeeding term; and
new text end

new text begin (3) a public member may not serve consecutive terms, and, for purposes of this
prohibition, a member is considered to have served a term only if the member has served
more than one-half of the term.
new text end

new text begin Subd. 4. new text end

new text begin Appointments. new text end

new text begin The appointing authorities shall make appointments before
September 1 of each odd-numbered year.
new text end

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
of the legislative body from which the member was appointed, the member vacates
membership on the commission. If a legislative member who is a chair of a house of
representatives or senate committee with jurisdiction over taxes ceases to be a chair of that
committee, the member vacates membership on the commission.
new text end

new text begin Subd. 6. new text end

new text begin Vacancies. new text end

new text begin If a vacancy occurs, the authority who appointed the vacating
member shall appoint a person to serve for the remainder of the unexpired term in the
same manner as the original appointment.
new text end

new text begin Subd. 7. new text end

new text begin Officers. new text end

new text begin The commission shall elect a chair and vice-chair as presiding
officers from its membership. The chair and vice-chair must alternate every two years
between the two membership groups: legislators and public members. The chair and
vice-chair may not be from the same membership group.
new text end

new text begin Subd. 8. new text end

new text begin Quorum; voting. new text end

new text begin Eight members of the commission constitute a quorum.
A final action or recommendation may not be made unless approved by a recorded vote
of at least eight members. All other actions by the commission shall be decided by a
majority of the members present and voting.
new text end

new text begin Subd. 9. new text end

new text begin Compensation. new text end

new text begin Public members shall be compensated as provided
in section 15.059, subdivision 3.
new text end

new text begin Subd. 10. new text end

new text begin Acting chair and first meeting. new text end

new text begin The chair of the senate committee with
jurisdiction over taxes shall convene the first meeting of the commission by December
31, 2015. At the first meeting, the commission shall elect a chair and vice chair from
its membership.
new text end

Sec. 3.

new text begin [290D.04] STAFF.
new text end

new text begin The Legislative Coordinating Commission shall provide staff and administrative
services for the commission.
new text end

Sec. 4.

new text begin [290D.06] REPORT TO COMMISSION.
new text end

new text begin Subdivision 1. new text end

new text begin State tax provisions. new text end

new text begin In addition to the information provided in each
even-numbered year under section 270C.11, before September 1 of each year prior to the
first year of a regular legislative session, the commissioner shall provide a report with
the following information, where applicable, for each tax expenditure subject to review
during the following biennium:
new text end

new text begin (1) the positive and negative impacts of the expenditure on the taxpayer or taxpayers
before or after the tax expenditure;
new text end

new text begin (2) the impact of the tax expenditure on the tax incidence in the state;
new text end

new text begin (3) the economic development impacts of the preference, including the impact on
jobs, wages, and benefits;
new text end

new text begin (4) the cumulative fiscal impacts of other state and federal taxes providing benefits
to taxpayers for similar activities;
new text end

new text begin (5) the measurable impacts of the tax expenditure in meeting the goal of the
expenditure;
new text end

new text begin (6) a comparison of the tax expenditure with tax treatment of taxpayers engaged
in similar activities in neighboring states;
new text end

new text begin (7) consideration of the probable impact on overall uniformity and fairness of the
tax code; and
new text end

new text begin (8) the number of taxpayers impacted by the tax expenditure and the nature of
the impact.
new text end

new text begin Subd. 2. new text end

new text begin Federal conformity. new text end

new text begin The commission must also report on outstanding
federal conformity provisions considering the factors listed in subdivision 1.
new text end

Sec. 5.

new text begin [290D.07] COMMISSION DUTIES.
new text end

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
regularly scheduled legislative session, the commission shall (1) review information from
the most recent tax expenditure budget report under section 270C.11 and the additional
report under section 290D.06; (2) take public testimony; and (3) vote on recommendations
for continuation or repeal of each tax expenditure subject to review in that legislative
session.
new text end

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
in a commission report, the commission shall conduct public hearings concerning the
impact of the tax expenditure on (1) the beneficiaries; (2) the state economy; (3) its
performance in meeting its purpose; (4) its impact on the tax incidence in the state; and (5)
any other information that the commission deems relevant.
new text end

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
every regular legislative session, the commission shall present to the chairs of the senate
and house of representatives committees with jurisdiction over taxes and over finance, the
majority and minority leaders of the house of representatives and senate, the commissioner
of revenue, the commissioner of management and budget, and the governor, a report on the
tax expenditures reviewed. In the report the commission shall report its recommendations
for each tax expenditure, its findings on the demonstrated ability of each tax expenditure to
meet its stated goal, the impact on the general fund budget of retaining or abolishing the tax
expenditure, draft legislation to implement its recommendations, and any other information
that the commission deems relevant to explain its recommendation for each expenditure.
new text end

Sec. 6.

new text begin [290D.08] REQUIREMENT FOR REVIEW AND PERIODIC
REENACTMENT OF ALL EXISTING AND NEW TAX EXPENDITURES.
new text end

new text begin Subdivision 1. new text end

new text begin Review of existing tax expenditures. new text end

new text begin The tax expenditures in statute
as of July 1, 2015, are subject to sunset review on the following schedule:
new text end

new text begin (1) all tax expenditures in chapters 168, 297A, and 297B, on December 31, 2017,
and every tenth year thereafter;
new text end

new text begin (2) all tax expenditures in chapters 295, 296A, 297D, 297E, 297F, 297G, 297H, and
297I, on December 31, 2019, and every tenth year thereafter;
new text end

new text begin (3) all tax expenditures in chapter 290, on December 31, 2021, and every tenth
year thereafter;
new text end

new text begin (4) all tax expenditures in chapters 287, 290A, 290B, 291, and 298, on December
31, 2023, and every tenth year thereafter; and
new text end

new text begin (5) all tax expenditures in chapters 88, 270, 272, 273, 290C, 469, and 473H, on
December 31, 2025, and every tenth year thereafter.
new text end

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,
or continues a tax expenditure must include the following provisions:
new text end

new text begin (1) an intent statement that clearly provides the purposes for the tax expenditure and
a standard or goal against which its effectiveness can be measured; and
new text end

new text begin (2) an expiration date for the tax expenditure that may not exceed 12 years from
the day the provision takes effect and must correspond to the expiration date or review
schedule for other tax expenditures in the same tax area, as listed in subdivision 1.
new text end

Sec. 7.

new text begin [290D.09] MONITORING OF RECOMMENDATIONS.
new text end

new text begin During each legislative session, the staff of the commission shall monitor legislation
affecting tax expenditures that have undergone sunset review and shall periodically
report to the members of the commission on proposed changes which would modify
prior recommendations of the commission.
new text end

Sec. 8.

new text begin [290D.10] CONTINUATION BY LAW.
new text end

new text begin During the regular session in which the commission's report is received, the
legislature may enact legislation to continue a tax expenditure contained in the report
for a period not to exceed ten years. This chapter does not prohibit the legislature from
eliminating a tax expenditure on a date earlier than that provided in this chapter.
new text end