HF2466

Purpose of the Bill

The bill aims to modify existing tax provisions related to health care provider taxes. Its purpose is to ensure that tax rates are adjusted based on the financial health of the health care access fund in Minnesota.

Main Provisions

• Projected Financial Review: By December 1 of each year, the commissioner of management and budget must assess the projected balance of the health care access fund for the next biennium (a two-year budgetary period).
• Tax Rate Reduction: If the fund's projected balance shows that revenues exceed expenditures by more than 125%, the commissioner, in consultation with the commissioner of revenue, is mandated to reduce the health care provider tax rates. This reduction aims to bring the fund's balance closer to equilibrium.
• Calculation Specifics: The reduction will be determined such that revenue aligns with not more than 125% of expenditures. The adjusted rate will be rounded to the nearest tenth of a percent.
• Annual Assessment: The tax rate reduction is temporary, expiring at the end of each calendar year and must be reviewed annually to decide if further adjustments are necessary.

Significant Changes to Existing Law

• The bill amends the process and criteria by which provider tax reductions are calculated, making it mandatory for the commissioners to act if certain financial thresholds are met.
• Requires inclusion of projected revenues in financial assessments for more informed tax rate decisions.

Relevant Terms

health care access fund, provider tax, tax rate reduction, structural balance, biennium, revenue to expenditure ratio, fiscal policy