1.1.................... moves to amend H.F. No. 1261 as follows:
1.2Delete everything after the enacting clause and insert:

1.3    "Section 1. [270C.991] PROPERTY TAX SYSTEM BENCHMARKS AND
1.4CRITICAL INDICATORS.
1.5    Subdivision 1. Purpose. State policy makers should be provided with the tools to
1.6create a more accountable and efficient property tax system. This section provides the
1.7principles and available tools necessary to work toward achieving that goal.
1.8    Subd. 2. Property tax principles. To better evaluate the various property tax
1.9proposals that come before the legislature, the following basic property tax principles
1.10should be taken into consideration:
1.11(1) transparent and understandable;
1.12(2) simple and efficient;
1.13(3) equitable;
1.14(4) stable and predictable;
1.15(5) compliance and accountability;
1.16(6) competitive, both nationally and globally; and
1.17(7) responsive to economic conditions.
1.18    Subd. 3. Major indicators. There are many different types of indicators available to
1.19legislators to evaluate tax legislation. Indicators are useful to have available as benchmarks
1.20when legislators are contemplating changes. Each tool has its own limitation, and no one
1.21tool is perfect or should be used independently. Some of the tools measure the global
1.22characteristics of the entire tax system, while others are only a measure of the property tax
1.23impacts and its administration. The following is a list of the available major indicators:
1.24(1) property tax principles scale, the components of which are listed in subdivision
1.252, relate to the various features of the property tax system;
1.26(2) price of government report, as required under section 16A.102;
2.1(3) tax incidence report, as required under section 270C.13;
2.2(4) tax expenditure budget and report, as required under section 270C.11;
2.3(5) state tax rankings;
2.4(6) property tax levy plus aid data, and market value and net tax capacity data, by
2.5taxing district for current and past years;
2.6(7) effective tax rate (tax as a percent of market value) and the equalized effective
2.7tax rate (effective tax rate adjusted for assessment differences);
2.8(8) assessment sales ratio study, as required under section 127A.48;
2.9(9) "Voss" database, which matches homeowner property taxes and household
2.10income;
2.11(10) revenue estimates under section 270C.11, subdivision 5, and state fiscal notes
2.12under section 477A.03, subdivision 2b; and
2.13(11) local impact notes, with improved local analysis as described in subdivision 7.
2.14    Subd. 4. Property tax working group. (a) A property tax working group is
2.15established as provided in this subdivision. The goals of the working group are:
2.16(1) to investigate ways to simplify the property tax system and make advisory
2.17recommendations on ways to make the system more understandable;
2.18(2) to reexamine the property tax calendar to determine what changes could be made
2.19to shorten the two-year cycle from assessment through property tax collection; and
2.20(3) to determine the cost versus the benefits of the various property tax components,
2.21including property classifications, credits, aids, exclusions, exemptions, and abatements,
2.22and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
2.23(b) The 12-member working group shall consist of the following members:
2.24(1) two state representatives, both appointed by the chair of the house tax committee,
2.25one from the majority party and one from the minority party;
2.26(2) two senators, both appointed by the chair of the senate tax committee, one from
2.27the majority party and one from the minority party;
2.28(3) the commissioner of revenue, or designee;
2.29(4) one person, appointed by the Association of Minnesota Counties;
2.30(5) one person, appointed by the League of Minnesota Cities;
2.31(6) one person, appointed by the Minnesota Association of Townships;
2.32(7) one person, appointed by the Minnesota Chamber of Commerce;
2.33(8) one person, appointed by the Minnesota Association of Assessing Officers; and
2.34(9) two homeowners, one who is under 65 years of age, and one who is 65 years of
2.35age or older, both appointed by the commissioner of revenue.
3.1The commissioner of revenue shall chair the initial meeting, and the working
3.2group shall elect a chair at that initial meeting. The working group will meet at the call
3.3of the chair. Members of the working group shall serve without compensation. The
3.4commissioner of revenue must provide administrative support to the working group.
3.5Minnesota Statutes, chapter 13D, does not apply to meetings of the working group.
3.6Meetings of the working group must be open to the public and the working group must
3.7provide notice of a meeting to potentially interested persons at least seven days before the
3.8meeting. A "meeting" of the council occurs when a quorum is present.
3.9(c) The working group shall make its advisory recommendations to the chairs of
3.10the house of representatives and senate tax committees on or before February 1, 2011, at
3.11which time the working group shall be finished and this subdivision expires. The advisory
3.12recommendations should be reviewed by the tax committee under subdivision 5.
3.13    Subd. 5. Tax committee review and resolution. On or before March 1, 2011, and
3.14every two years thereafter, the house and senate tax committees must review the major
3.15indicators as contained in subdivision 3, and ascertain the accountability and efficiency of
3.16the property tax system. The house and senate tax committees shall prepare a resolution
3.17on targets and benchmarks for use during the current biennium.
3.18    Subd. 6. Department of Revenue; revenue estimates. As provided under
3.19section 270C.11, subdivision 5, the Department of Revenue is required to prepare an
3.20estimate of the effect on the state's tax revenues which result from the passage of a
3.21legislative bill establishing, extending, or restricting a tax expenditure. Beginning with
3.22the 2010 legislative session, those revenue estimates must also identify how the property
3.23tax principles, contained in subdivision 2, apply to the proposed tax changes. The
3.24commissioner of revenue shall develop a scale for measuring the appropriate principles
3.25for each proposed change. The department shall quantify the effects, if possible, or at a
3.26minimum, shall identify the relevant factors so that legislators are aware of possible
3.27outcomes, including administrative difficulties and cost. The interaction of property tax
3.28shifting should be identified and quantified to the degree possible.
3.29    Subd. 7. Local impact notes. Local impact notes are statements that provide
3.30information about changes in local government responsibility, administration, and cost due
3.31to changes in state law. The local impact note process seeks the participation of political
3.32subdivisions to gather information as needed by the legislature. The local impact network
3.33of political subdivisions shall consist of representation from associations from Minnesota
3.34counties, cities, towns, and school districts, and other members as needed. They shall,
3.35among other things, work with the legislature and the commissioner of finance to analyze:
3.36(1) changes in tax revenues for local governments;
4.1(2) changes in expenditures for local governments, including program and
4.2administration costs; and
4.3(3) incidences of tax shifting, including identifying the target audience (taxpayers
4.4who will benefit from the tax shift) and the impact audience (taxpayers who will bear the
4.5burden of the tax shift).
4.6For tax bills the local impact network of political subdivisions shall rate the impact
4.7on Minnesota's tax system using the tax principles contained in subdivision 2.
4.8Some of the cost for preparing this information shall be distributed to the local
4.9impact network as provided under section 477A.03, subdivision 2b, paragraph (b).
4.10EFFECTIVE DATE.This section is effective the day following final enactment.

4.11    Sec. 2. Minnesota Statutes 2008, section 477A.03, subdivision 2b, is amended to read:
4.12    Subd. 2b. Counties. (a) For aids payable in 2009 and thereafter, the total aid
4.13payable under section 477A.0124, subdivision 3, is $111,500,000 minus one-half of the
4.14total aid amount determined under section 477A.0124, subdivision 5, paragraph (b),
4.15subject to adjustment in subdivision 5. Each calendar year, $500,000 shall be retained
4.16by the commissioner of revenue to make reimbursements to the commissioner of finance
4.17for payments made under section 611.27. For calendar year 2004, the amount shall
4.18be in addition to the payments authorized under section 477A.0124, subdivision 1.
4.19For calendar year 2005 and subsequent years, the amount shall be deducted from the
4.20appropriation under this paragraph. The reimbursements shall be to defray the additional
4.21costs associated with court-ordered counsel under section 611.27. Any retained amounts
4.22not used for reimbursement in a year shall be included in the next distribution of county
4.23need aid that is certified to the county auditors for the purpose of property tax reduction
4.24for the next taxes payable year.
4.25    (b) For aids payable in 2009 and thereafter, the total aid under section 477A.0124,
4.26subdivision 4 , is $116,132,923 minus one-half of the total aid amount determined under
4.27section 477A.0124, subdivision 5, paragraph (b), subject to adjustment in subdivision
4.285. The commissioner of finance shall bill the commissioner of revenue for the cost of
4.29preparation of local impact notes as required by section 3.987, not to exceed $207,000 in
4.30fiscal year 2004 and thereafter. The commissioner of education shall bill the commissioner
4.31of revenue for the cost of preparation of local impact notes for school districts as
4.32required by section 3.987, not to exceed $7,000 in fiscal year 2004 and thereafter. The
4.33commissioner of revenue shall deduct the amounts billed under this paragraph from
4.34the appropriation under this paragraph. The amounts deducted are appropriated to the
4.35commissioner of finance and the commissioner of education for the preparation of local
5.1impact notes. The commissioner of finance shall annually use at least $150,000 of the
5.2$207,000 appropriation to contract with the representative associations for counties, cities,
5.3towns, and school districts to establish a local impact network of political subdivisions
5.4for preparing local impact notes that provide information to the legislature as provided in
5.5section 270C.991, subdivision 7.
5.6EFFECTIVE DATE.This section is effective for fiscal year 2010 and thereafter."