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Session Weekly April 14, 2006, Volume 23, Number 7

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Session Weekly April 14, 2006, Volume 23, Number 7 A NONPARTISAN PUBLICATION ★ ★ ★ ESSION S Weekly MINNESOTA HOUSE OF REPRESENTATIVES • PUBLIC INFORMATION SERVICES VOLUME 23, NUMBER 7 • APRIL 14, 2006 INSIDE: TAXES, MINNESOTA MOVIES, GLOBAL POSITIONING AND MORE This Week’s Bill Introductions HF4116-HF4148 ESSION S Weekly Session Weekly is a nonpartisan publication of the Minnesota House of Representatives Public Information Services office. During the 2005-2006 Legis- lative Session, each issue reports daily House action between Thursdays of each week, lists bill introductions, and provides other information. No fee. ONTENT To subscribe, contact: C S Minnesota House of Representatives Public Information Services 175 State Office Building HIGHLIGHTS 100 Rev. Dr. Martin Luther King Jr. Blvd. St. Paul, MN 55155-1298 Agriculture • 5 Government • 6 Retirement • 9 (651) 296-2146 or Bonding • 5 Higher Education • 7 Safety • 10 1-800-657-3550 Business • 5 Housing • 7 Taxes • 10 TTY (651) 296-9896 http://www.house.mn/hinfo/subscribesw.asp Employment • 5 Human Services • 8 Transportation • 11 Environment • 6 Insurance • 8 Veterans • 11 Director Barry LaGrave Editor/Assistant Director BILL INTRODUCTIONS (HF4116-HF4148) • 23 Lee Ann Schutz Assistant Editor Mike Cook Art & Production Coordinator FEATURES Paul Battaglia Writers FIRST READING: Taxes — making it a local option • 3 Nick Busse, Patty Janovec, AT ISSUE: Getting tough on hate crimes • 12 Bao Ong, Irene Voth AT ISSUE: Education bill long on policy, short on funding • 13 Chief Photographer Tom Olmscheid AT ISSUE: Transportation bill covers big projects • 14-15 Photographers AT ISSUE: Future of environmental funding plan is anyone’s guess • 16 Andrew VonBank, Sarah Stacke Staff Assistants AT ISSUE: Positioning the state as a biotech leader • 17 Christy Novak, Rebekah Raymond AT ISSUE: Avian flu — how well are we prepared? • 18 FEATURE: Turning a good idea into good legislation • 19 Session Weekly (ISSN 1049-8176) is pub- lished weekly during the legislative session by FEATURE: Bringing filmmakers back to Minnesota • 20 Minnesota House of Representatives Public Information Services office, 175 State Office RESOURCES: Come to the Capitol • 21 Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155-1298. Periodicals postage MINNESOTA INDEX: Taxes • 24 paid at Minneapolis, Minn. POSTMASTER: Send address changes to Session Weekly, Public Information Services office, Minnesota House of Representatives, 175 State Office Building, 100 Rev. Dr. Martin Luther King Jr. Blvd., St. Paul, MN 55155-1298. Printed on recycled paper which is 50% recycled, 30% post-consumer content. On the cover: Donna Peterson, University of Minnesota associate vice president of government relations, waits for a colleague on the front steps of the Capitol April 10. The temperature exceeded 70 degrees that day for the first time this spring. —Photo by: Tom Olmscheid 2 April 14, 2006 IRST READING F★ ★ ★ Local sales taxes currently in place Taxes — a local option City/County Rate Stadium talk brings forward the use of local option sales tax Albert Lea (beginning 4/1/06) 0.50% Bemidji 0.50% Cook County 1.00% BY BRENDA VAN DYCK a 3 percent tax on lodging, and Bloomington Duluth 1.00% ne way local governments can fund imposed the tax on admissions to spectator Hermantown 0.50% special projects is through a local sales events; Rochester imposed a 3 percent tax Mankato 0.50% Otax. on transient lodging. In 1987, the Legislature Currently, 17 cities and one county have enacted a bill allowing cities to adopt a lodging Minneapolis 0.50% sales and use taxes that have been used to tax of up to 3 percent if the proceeds are used New Ulm 0.50% fund everything from civic and convention to promote tourism. Proctor 0.50% centers to wastewater treatments to park improvements. Most recently, Hennepin A taxing history Rochester 0.50% County has proposed a local sales tax to help According to a 2004 Department of Revenue St. Cloud Area (St. Cloud, Sauk Rapids, fund a new Twins stadium in Minneapolis, report, the 1971 prohibition reflected the St. Augusta, St. Joseph and Waite Park) 0.50% and Anoka County is hoping to use this as a Legislature’s desire to reduce local property St. Paul 0.50% funding mechanism to help construct a new taxes with state aid, rather than with revenues Two Harbors 0.50% Vikings stadium in Blaine. from new local option sales taxes. Local governments need legislative approval When the Legislature prohibited local sales Willmar 0.50% to implement local sales taxes because the taxes, a statewide sales tax had only been Legislature prohibited local sales taxes in implemented four years earlier. Minnesota implementing sales taxes in the 1930s when 1971. Before that time local governments was one of the last states to implement a sales they had difficulty financing the basic could impose local sales taxes, and five cities tax when it imposed a 3 percent sales tax in functions of government. Before that time, had local taxes for specific items. Minneapolis 1967. The Legislature increased the sales tax to states relied primarily on property, excise, had a 3 percent tax on admissions, transient 4 percent in 1971, 5 percent in 1981, 6 percent business and some income taxes. Minnesota’s lodging (i.e., lodging less than 30 days), in 1983 and 6.5 percent in 1991. sales tax was designed to provide additional and amusements with live entertainment; There are only five states that don’t have Bloomington, Duluth and St. Paul imposed a statewide sales tax. States first started First Reading continued on page 4 Photo courtesy of the Minnesota Twins Hennepin County would like to raise its sales tax by 0.15 percent, without voter approval, to help fund a new ballpark for the Minnesota Twins. April 14, 2006 Session Weekly 3 Photo courtesy of the Minnesota Vikings - © Crawford Architects 2005 To help finance a Minnesota Vikings stadium development plan, Anoka county would like to raise its sales tax by 0.75 percent without voter approval. First Reading continued from page 3 advisory council, the 1997 Legislature adopted model legislation for authorizing and imposing Local sales tax bills sources of revenue that would replace local sales taxes. The law was intended to The Property and Local Tax Division of the increasing, and increasingly unpopular, local create a consistent system for applying new House Taxes Committee is considering 14 local property taxes. and existing local sales taxes that would ease option sales tax bills this session. Since 1971, the Legislature has authorized compliance costs, and help the Department HF2757-Cloquet HF3311-Pequot Lakes many local sales taxes that are in addition to of Revenue administer the taxes. The law HF2845-Owatonna HF3814-Medford the percent statewide sales tax. Of the existing codified what was then common practice for HF3184-Winona HF3965-Ely local sales taxes, most of the tax rates are how local governments and the Legislature HF3333-Duluth HF3994-Fergus Falls 0.5 percent; Cook HF3122-North HF2652-Luverne were proposing and Mankato HF3410-Austin County and Duluth Hennepin and Anoka counties are each approving local sales HF3324-Baxter, HF3749-Breezy Point have a 1 percent tax. proposing a local sales tax increase to help taxes. Brainerd, Nisswa Local sales and use The 1997 law also A request from Hennepin County to help taxes apply to the same fund stadiums for the Minnesota Twins requires the local fund a new Twins stadium is scheduled to be things the statewide and Vikings. But the Legislature must de- unit of government heard April 19. A request from Anoka County to tax does, which are cide whether to allow the tax, and if it can to adopt a resolution help fund a new Vikings stadium will also get a generally tangible stating its intentions hearing yet this session, according to Rep. Phil goods purchased at be implemented without voter approval. Krinkie (R-Lino Lakes), chair of the House Taxes to impose a local Committee. retail. Some items are tax prior to seeking (I. Voth) exempt, like food for home consumption and legislative approval. clothing. In 1999, the Legislature began requiring Revenues from local sales and use taxes are local governments to hold a referendum in And there’s the use tax used to fund specific capital improvements. For which voters affected by the tax could vote on The 1997 law also required local governments example, revenue from Bemidji’s 0.5 percent tax it. This also codified what was already general to impose a complementary use tax with the goes to fund park and trail improvements. practice. sales tax. Generally, the local sales tax is only in effect Local governments can get exemptions Use tax applies when someone buys a for the amount of time it takes to raise the from any of the requirements in the law. taxable item or service in an area that has a revenue for the specified project. For instance, they can seek to eliminate a sales tax, but doesn’t pay the sales tax because referendum. Duluth, Minneapolis and St. that person does not live in the jurisdiction. Ask the voters Paul implemented their local taxes without The use tax is the same rate as the sales tax. During the 1990s, the number of requests voter approval; Mankato’s tax was subject Under state law, when a person buys more by local governments to authorize local sales to a reverse referendum, which means voters than $770 worth of merchandise or services taxes increased. As a result, local sales taxes could vote to stop the imposition of the tax. subject to the sales tax, that person must pay varied widely. To deal with this issue, the The legislation for the proposed 0.15 percent the use tax. 1995 Legislature created an advisory council Hennepin County tax increase to help fund to study the sales tax and recommend ways to a Minnesota Twins ballpark exempts it from — Brenda van Dyck is the editor/publications manager change the system.
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