Purpose of the Bill

The purpose of this Minnesota legislative bill is to modify the existing provisions governing contingent reductions in provider taxes within the state. This is intended to adjust tax rates based on the financial status and balance of the health care access fund.

Main Provisions

• The bill amends Minnesota Statutes 2024, section 295.52, subdivision 8, which relates specifically to the method and circumstances under which provider tax rates may be adjusted contingent upon the financial position of the health care access fund.
• The commissioner of management and budget is required to conduct an assessment by December 1 each year to determine the projected balance in the health care access fund for the upcoming biennium.
• If the health care access fund's balance projection shows that revenues exceed expenditures and transfers by more than 125% and the actual cash balance is deemed adequate, tax rates may be reduced. This decision is made in consultation with the commissioner of revenue.
• The rate adjustment aims to ensure that the projected revenues do not surpass 125% of the projected expenditures and transfers.
• These adjusted tax rates are to be rounded to the nearest one-tenth of one percent, and the updated rates will only apply for the subsequent calendar year. Each year, the tax reduction is re-evaluated and subject to change based on the latest projections.

Significant Changes

• The bill clarifies the conditions under which provider tax rates can be reduced, cementing the requirement that a 125% revenue-to-expenditure ratio (or more) in the health care access fund triggers a tax reduction.
• It updates the roles of both the commissioner of management and budget and the commissioner of revenue in determining these tax rates for effective governance and fund sustainability.

Relevant Terms

• Contingent reduction
• Provider taxes
• Health care access fund
• Revenue-to-expenditure ratio
• Commissioner of Management and Budget
• Commissioner of Revenue