Purpose of the Bill

This bill aims to modify the provisions related to taxing health care providers, with a focus on contingent reductions of tax rates based on the financial status of the health care access fund in Minnesota.

Main Provisions

• Annual Review: Every year by December 1st, the commissioner of management and budget is required to assess the projected financial balance of the state's health care access fund for the upcoming biennium (a two-year fiscal period).
• Tax Rate Reduction: If the health care access fund's projected balance indicates that revenues exceed expenditures by more than 125%, and if the actual cash balance is adequate, the tax rates for providers will be reduced. This decision is made in consultation with the commissioner of revenue.
• Rate Calculation: The new tax rates will be adjusted so that the projected revenues do not surpass 125% of expenditures and will be rounded to one-tenth of one percent.
• Temporary Effect: Any reduction in tax rates applies only until the end of the calendar year and must be re-evaluated annually.

Significant Changes

• The amendment ensures that the process of reducing tax rates is specifically tied to the financial health of the health care access fund, maintaining fiscal responsibility and possibly reducing the tax burden on health care providers if the fund is performing well.

Relevant Terms

contingent reduction, provider taxes, health care access fund, tax rate reduction, projected balance, biennium, revenues to expenditures ratio, commissioner of management and budget, structural balance.