1.1                          A bill for an act
  1.2             relating to taxation; sales and use; establishing a 
  1.3             sales and use tax advisory council. 
  1.4   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.5      Section 1.  [ADVISORY COUNCIL; SALES TAX.] 
  1.6      Subdivision 1.  [CREATION; MEMBERSHIP.] (a) A state 
  1.7   advisory council is established to study the general and motor 
  1.8   vehicle sales and use taxes under Minnesota Statutes 1994, 
  1.9   chapters 297A and 297B, and to make recommendations to the 1996 
  1.10  legislature.  The study shall be completed and findings reported 
  1.11  to the legislature by February 1, 1996. 
  1.12     (b) The advisory council consists of 15 members who serve 
  1.13  at the pleasure of the appointing authority as follows: 
  1.14     (1) six legislators; three members of the senate, including 
  1.15  one member of the minority party, appointed by the subcommittee 
  1.16  on committees of the committee on rules and administration and 
  1.17  three members of the house of representatives, including one 
  1.18  member of the minority party, appointed by the speaker; 
  1.19     (2) the commissioner of revenue or the commissioner's 
  1.20  designee; and 
  1.21     (3) eight members of the public; two appointed by the 
  1.22  subcommittee on committees of the committee on rules and 
  1.23  administration of the senate, two appointed by the speaker of 
  1.24  the house, and four appointed by the governor. 
  2.1      Subd. 2.  [SCOPE OF STUDY.] (a) The purpose of the advisory 
  2.2   council is to: 
  2.3      (1) develop a framework of appropriate tax policy goals to 
  2.4   be used in evaluating the overall sales tax system; 
  2.5      (2) evaluate the current sales and use tax system as it 
  2.6   relates to these policy goals, including identification of 
  2.7   current inconsistencies in treatment of various industries, 
  2.8   problems with compliance and administration, and the economic 
  2.9   impact of the system; 
  2.10     (3) analyze changes in the global and regional economy and 
  2.11  the potential problems that might arise in sales tax collection 
  2.12  and administration due to these changes, including but not 
  2.13  limited to impacts of international trade agreements (GATT and 
  2.14  NAFTA), and changes in technology and telecommunications; 
  2.15     (4) suggest options for changing the sales tax system, 
  2.16  including eliminating or changing exemptions, broadening the tax 
  2.17  base, or replacing it with an alternative tax system such as 
  2.18  value added tax or another form of consumption tax.  The options 
  2.19  should be evaluated in terms of advancing the policy goals 
  2.20  established under clause (1). 
  2.21     (b) The advisory council's report to the legislature must 
  2.22  include recommendations for modifying the sales and use tax 
  2.23  system in light of the tax policy goals established by the 
  2.24  council.  The report must also establish a tax policy framework 
  2.25  for evaluating other proposed changes in the sales tax. 
  2.26     Subd. 3.  [STAFF.] The department of revenue and 
  2.27  legislative staff shall provide administrative and staff 
  2.28  assistance when requested by the advisory council. 
  2.29     Subd. 4.  [COOPERATION BY OTHER AGENCIES.] The 
  2.30  commissioners of the department of trade and economic 
  2.31  development, the department of finance, and any other state 
  2.32  department or agency shall, upon request by the advisory 
  2.33  council, provide data or other information that is collected or 
  2.34  possessed by their agencies and that is necessary or useful in 
  2.35  conducting the study and preparing the report required by this 
  2.36  section. 
  3.1      Sec. 2.  [EFFECTIVE DATE.] 
  3.2      Section 1 is effective the day following final enactment.