MN HF3885

Any bill creating, renewing, or continuing a tax expenditure must include a statement of purpose and effectiveness standards, with an expiration date no more than eight years from enactment, effective for the 2021 legislative session.

Establishes a Tax Expenditure Review Commission with eight legislators (two from each party in each chamber) plus ex officio members from the Department of Revenue and relevant committee chairs to review Minnesota's tax expenditures on a rotating basis with each tax reviewed at least once every eight years.

The commission must evaluate tax expenditures on annual revenue lost, purpose, measurable impacts, efficiency compared to direct expenditures, potential modifications, and effects on the state's tax system incidence; commission must submit written reports by December 15 each year with public hearings held before December 1.

The governor's budget must include equivalent performance data on tax expenditures as required for programs, with recommendations on whether each tax expenditure should be continued or discontinued including fiscal and policy effects.

Department of Revenue must submit its tax expenditure budget report by November 1 (changed from February 1) of even-numbered years beginning in 2022, detailing revenue forgone, statutory authority, purpose, incidence for significant expenditures, and potential tax rate reductions.