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Finally, the legislature must not increase <br />reporting burdens for local units of <br />government. Any new reporting <br />requirement should have a clearly defined <br />statement of purpose and public need not <br />currently met with existing reports, a <br />sunset date to facilitate a future <br />discussion of the usefulness of the <br />requirement as well as full state funding <br />for the costs associated with a new <br />reporting mandate. <br />FF -7. Direct Property Tax Relief <br />Programs <br />Issue: In 2013, the legislature expanded the <br />homeowner property tax refund (PTR) <br />program and renamed it the Homestead <br />Credit Refund program. As a direct taxpayer <br />relief program, the Homestead Credit <br />Refund avoids the problems with the former <br />Market Value Homestead Credit system <br />where the state provided a credit on the <br />homeowner's property tax statement but did <br />not always reimburse cities and counties for <br />the amount of the credit. <br />Response: The League of Minnesota <br />Cities supports providing additional <br />property tax relief directly to <br />homeowners through an expansion of the <br />Homestead Credit Refund program, the <br />targeting program or other programs <br />that provide property tax relief directly <br />from the state to taxpayers. In addition, <br />the League supports the 2013 legislation <br />that requires the Department of Revenue <br />to notify potentially eligible homeowners <br />of the program and would also support <br />legislative modifications to these <br />programs to eliminate the taxpayer filing <br />requirement thereby making the tax relief <br />payments automatic. <br />The League opposes property tax credit <br />programs that reimburse local units of <br />government for reduced tax burden such <br />as the former market value homestead <br />credit system due to the fact that the <br />reimbursements to local units of <br />government can be cut while the credit to <br />the taxpayer remains on the property tax <br />statement. In addition, the League <br />opposes reinstituting Limited Market <br />Value, a program that reduces the taxable <br />value of individual properties based on <br />assessor's valuation increase. Limited <br />Market Value creates inequities between <br />similar properties based solely on the <br />valuation increase determined by the <br />assessor. <br />FF -8. Sales Tax on Local <br />Government Purchases <br />Issue: The local government sales tax <br />exemption enacted in 2013 and expanded in <br />2014 does not apply to all city purchases. <br />During the 2015 first special session, the <br />legislature delayed until January 1, 2017 the <br />exemption for purchases by joint powers <br />entities, economic development authorities, <br />housing and redevelopment authorities, port <br />authorities and other special districts. Some <br />purchases for municipal enterprise <br />operations, such as liquor stores and golf <br />courses are excluded from the exemption. In <br />addition, in order to receive the sales tax <br />exemption on construction materials under <br />current law, cities must bid labor and <br />materials separately and also designate a <br />contractor to be a purchasing agent on <br />behalf of the city. The existing Department <br />of Revenue rules (MN Rules 8130.1200, <br />Subp. 3) are complex and the <br />implementation can be so complicated that it <br />can cost cities more money to implement <br />than they will save on the tax exemption. <br />Finally, although cities currently do not pay <br />the motor vehicle sales tax on marked police <br />vehicles or firefighting vehicles, other city <br />vehicles are not exempt from the motor <br />vehicle sales tax. <br />League of Minnesota Cities <br />2016 City Policies Page 98 <br />