Legislative Update

capitolpic2.gifAlmost all of the committees have finished up their work in the house and we will begin hearing omnibus bills on the floor this week.  I am told we will be on the floor everyday this week including Saturday.




The Omnibus Agriculture, Rural Economies, Veterans and Military Affairs Finance Bill passed through the committees on Finance and Taxes this week.  In Finance, there was no opposition to the bill. In Taxes, the FarmZ provisions were removed from the bill, for later consideration in the Tax bill. Ways and Means is considering the bill Friday morning.

(Similar to JobZ, FarmZ tax incentives include exemptions from the individual income tax, corporate franchise tax, state and local general sales tax, motor vehicle sales tax, and state and local property tax, and a jobs credit. The tax incentives are limited to the portion of the farm that consists of the agricultural processing facility and do not apply to the rest of the farm.)


The Omnibus Early Childhood Bill (HF 6) was split into two parts, so as to align with the Senate bills.  (This is the bill now includes my HF5 Bill.) Half of the bill relating to early childhood provisions applies to the Department of Education so it was added to the Omnibus K-12 Finance Bill (HF 6).  The other half of the bill, relating to early childhood under the jurisdiction of the Department of Human Services, was added to the Omnibus Health & Human Services Budget Bill (HF 297).   The Omnibus K-12 Finance Bill (HF 6) continues to wind through the committee approval process.  On Wednesday, the Finance Committee voted 32-2, with 1 abstention, to pass the bill.  The Tax Committee passed the bill on a voice vote, with no audible dissent.  On Monday, Ways & Means is scheduled to hear the bill.   


The omnibus bill (HF  1651) was heard in the Finance, Tax, and Ways and Means Committees.  At its first stop in Finance, it was combined with the Energy Bill (HF 1392).  Following a Delete All amendment, both bills were inserted into SF 2096, the Senate's Energy And Environment Omnibus Bill. 

The Finance Committee spent several hours on the energy and the environment and natural resources bills.  One successful amendment deleted a provision that prohibited DNR from renewing or issuing licenses to aquaculture that would raise minnows in public waters that have US Fish and Wildlife Conservation easements attached to them. These easements are purchased with the proceeds from the sale of migratory waterfowl stamps and are designed to protect duck habitat.

The Tax Committee spent four hours discussing most of the provisions of the bill.  Three successful amendments remove an increase in the ATV share of gas tax revenues so that it can be included in the tax bill, address a local situation, and incorporate some portions of HF 299 to provide relief to timber sale permit holders in the face of falling timber prices.

The Omnibus bill passed Ways & Means Friday morning.  On a roll call vote, the Republican proposal to delete the "let's go fishing" provision – a program to help seniors enjoy fishing on Minnesota's lakes, was defeated.


The Higher Education and Workforce Finance Bill was heard, amended and passed by the Finance Committee.   The bill was amended into two bills that align with the Senate, creating SF 2089 (Tomassoni) Economic Development Finance and SF 1989 (Pappas) Higher Education Finance, which were passed to Taxes.


On Thursday, the full Finance Committee held a hearing on the Health and Human Services Omnibus Finance Bill (HF297-Huntley).  The Committee adopted an author's amendment to make technical changes to certain aspects of the bill, most notably to reallocate mental health funding towards providing improved mental health coverage for the state's health care programs. The biggest change from the previous version was an author's amendment to begin rebasing of nursing facilities' operating rates in 2010 at a cost of $18M ('10/11) and a larger cost in future years. This is important for nursing facilities located in rural areas currently experiencing severe financial hardship.


The Finance Committee passed the Omnibus Housing and Public Health Finance Bill this week.  The bill appropriates $426 million for programs operated by the Minnesota Housing Finance Agency, the Department of Human Services, the Department of Health and twenty health-related boards.  This amount is $17.5 million more than the Governor's recommended spending for these areas, mostly in human services. Of the $426 million authorized in the bill, over half goes to public health programs, nearly one-third goes to housing, and approximately one-tenth goes to human services.

In public health, community and family health promotion programs were the top priorities, with a recommended spending increase of $42.9 million over current levels. Most of this increase is in health support activities for low-income individuals and families. The bill also includes health-monitoring initiatives designed to help discern the impact of chemicals and environmental toxins on human health.  A provision requiring a state standard of three parts per billion for atrazine in drinking water was taken out of the bill during Finance Committee debate.  

In housing, the bill increases funding for homeownership programs by $41.6 million — $8 million more than the Governor proposed.  The bill also funds a University of Minnesota project to develop a predictive model for identifying properties at risk for foreclosure.


The Public Safety Omnibus Bill was heard in both the Finance Committee and the Tax Committee.  Only minor amendments were made to the bill, including author's amendments. 

The Finance Committee adopted an author's amendment that established a working group to study the appropriateness of additional regional forensic crime laboratories and regional crime strike task forces; appropriated money for background check training for mentor programs; permitted any political subdivision to apply for funds to establish a safe cab program under the Crime Victim Fund; and added several mental health screening provisions. 

The Tax Committee passed an amendment (adopting Senate language) making it a misdemeanor for a scrap metal dealer or agent, employee or representative to intentionally violate any of the scrap metal dealer provisions in the bill.  The author of the original House bill supported this amendment. 


The Omnibus State Government Finance Bill (HF 953/SF 1997) passed out of the Finance and Tax Committees this week. 


This week, the Tax Committee heard several bills related to corporate taxes and subsidies, eight Omnibus Bills, and several other miscellaneous tax bills. 

The committee spent four hours on Tuesday hearing testimony and debate on several bills that would close Foreign Operating Corporation (FOC) loopholes.  The former Commissioner of Revenue under Rudy Perpich testified that when the FOC provision was enacted in the 1980's, the crafters of the legislation never intended for it to be used as a mechanism for shielding income from taxation in foreign corporations, as some companies have done under the current law.  Supporters of closing FOC loopholes argued that current law rewards aggressive accounting tactics and hurts businesses that don't engage in them. 

The committee also heard four hours of testimony on bills that would provide subsidies to Thomson West (HF 1138 and HF 2129) and the Mall of America (HF 2237).  Supporters of the Thomson West proposal argued that the proposed expansion would create 2,000 jobs with an average pay of $70,000 a year.  The St. Paul Building and Construction Trade Council testified in support of the bill, stating that the project would create 350,000 work hours for construction workers. 

Construction trade groups also expressed support for the Mall of America (MOA) proposal.  MOA proponents argued that the mall brings tourists from around the country and world who spend money in Minnesota.

Some members expressed concerns about the Thomson West and MOA bills.  Members questioned whether it was appropriate for the state to provide subsidies to corporations.  Art Rolnick, Director of Research at the Federal Reserve Bank of Minnesota, argued against providing public subsidies to private companies.  Mr. Rolnick argued that investing in the labor force, through increased investments in education, provided a much higher return for the state.


Ways & Means sent the Environment and Energy Finance, Ag and Vets Finance and Public Safety Finance bills to the General Register on Friday. 

53a.jpgIf you are interested in what some other blogging legislators are saying about17b.jpg the session you might check out

Rep. Paul Gardner and Rep. Jeremy Kalin

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