At the Capitol - Week of April 30, 2018

At the Capitol - Week of April 30, 2018

April 30, 2018

LEGISLATIVE FOCUS TURNS TO FLOOR ACTION, CONFERENCE COMMITTEES

House Republicans rolled out their omnibus tax bill last week – HF 4385, Rep. Greg Davids, R-Preston. A floor vote is scheduled today. Here are links to the House omnibus tax bill's language, 2nd Engrossment PDF and House Research Summary. We support the proposal as it enacts pro-growth tax reforms of reducing both the corporate and individual income tax rates; full conformity to Section 179 for immediate expensing of equipment; and repeal of the corporate alternative minimum tax. These reforms will help mitigate, but will not completely offset, the tax increases for businesses that will occur from adoption of new federal tax definitions. The bill has a net tax decrease of $107 million in FY 2018/19 and $34 million in FY2020/21.

Senate Republicans are expected to release their omnibus tax bill Tuesday with a possible floor vote as early as Thursday.

The House and Senate have both completed committee work on their supplemental budgets, and now the focus shifts to floor action to get the bills to conference committees. The Senate rolled its supplemental budgets into one bill – SF 3656, Sen. Julie Rosen-R, Vernon Center – and passed the bill April 26. The House has separate budget bills and is expected to pass all of them off the floor this week. The House and Senate will then begin conference committees and negotiations with Governor Dayton in order to complete work by the constitutional deadline of May 21.

  • The Governor would allocate $223 million for new spending and leave $126 million on the bottom line. He raises taxes by $12 million in FY 2018/19, ballooning to a $409 million tax increase in FY 2020/21, mainly through tax increases on businesses – C corporations as well as pass-through entities.
  • The House would allocate $222 million for new spending and $107 million for tax relief. Approximately one-third of the surplus, or $101 million, is allocated to transportation, including a one-time investment of $76 million to the Highway User Tax Distribution Fund which would be divided among state, county and municipal roads.
  • The Senate has proposed new spending of $108 million. The Senate has not released its tax bill target.

We continue to encourage the Governor and Legislature to use the federal tax reform as an opportunity – and need – to rightsize Minnesota's tax system for the benefit of employers and employees.

In the news: Editorial: Minn. Chamber takes a wise approach with the governor and legislature (Crookston Times)

LABOR-MANAGEMENT
Standard to bring harassment claim (HF 4459, Peppin, R-Rogers/SF 4031, Housley, R- St. Marys Point): WE OPPOSE

Under existing law, individuals must prove that conduct is either "severe or pervasive" to create the legal grounds for a hostile work environment claim. This standard is intended to allow valid claims to proceed without flooding the courts with lawsuits. The proposed legislation, summarized here, would eliminate that standard, enabling employees to bring claims for conduct that was neither severe nor pervasive. In addition, the bill would undermine the entire body of case law that courts have developed under the "severe or pervasive" standard, such as requirements that a reasonable person find the conduct inappropriate and that the judge consider the totality of the circumstances. We are committed to protecting employees from sexual harassment, and in light of recent events employers are emphasizing training, compliance and culture more than ever. No matter how well intentioned, though, this bill would open the floodgates to frivolous litigation and detract from the claims of actual harassment victims in need of support. Please contact your legislators today and underscore that this legislation would make Minnesota an outlier in employment law.

TRANSPORTATION
Constitutional amendment (SF 3837, Newman, R-Hutchinson): WE SUPPORT

The Minnesota Chamber is working with a broad group of stakeholders that supports dedicating 100% of auto parts sales taxes to transportation through a constitutional amendment. The Senate bill has been passed by the Transportation Committee and is awaiting action by the Taxes Committee. In the House, the bill has been heard by the Transportation Committee and is awaiting action by the Taxes Committee.

Become engaged in the Vote Yes 4 Roads campaign. Encourage your legislators to give Minnesotans the opportunity to fix our crumbling roads and deficient bridges to make our transportation system safer and less congested.

HEALTH CARE
Independent Health Policy Commission (HF 3823, Schomacker, R-Luverne/SF 3417. Benson, R-Ham Lake): WE SUPPORT

This bill appropriates money for grants to increase the supply of child care in communities with a documented shortage of providers, with a 50-percent match requirement. The Senate version was not included in an omnibus bill. The House bill with a $750,000 appropriation is included in an omnibus spending bill – HF 4099, Rep. Jim Knoblach, R-St. Cloud – which is awaiting a floor vote.

EDUCATION/WORKFORCE DEVELOPMENT
Child-care provider grants (HF 3605, Baker, R-Willmar/SF 3316, Utke, R-Park Rapids): WE SUPPORT

This bill appropriates money for grants to increase the supply of child care in communities with a documented shortage of providers, with a 50-percent match requirement. The Senate version was not included in an omnibus bill. The House bill with a $750,000 appropriation is included in an omnibus spending bill – HF 4099, Rep. Jim Knoblach, R-St. Cloud – which is awaiting a floor vote.

ENVIRONMENT
Environmental permitting (HF 3120, Fabian, R-Roseau/SF 2705, Ingebrigtsen, R-Alexandria): WE SUPPORT

This bill contains several provisions supported by the Minnesota Chamber to further streamline environmental review and permitting at state agencies. It makes changes to the wetland mitigation law, establishes a peer review for new water quality standards, requires legislative approval for water quality fee increases and creates a 16-year permit for wastewater treatment plants. The House bill was included in the omnibus jobs, environment, state government and agriculture bill. The companion bill was included in the Senate omnibus supplemental budget bill.

Eliminate wild rice/sulfate standard (HF 3280, Lueck, R-Aitkin/SF 2983, Eichorn, R-Grand Rapids): WE SUPPORT
Reviewing and updating pollution laws to protect wild rice is back in the hands of the Legislature. The Minnesota Pollution Control Agency announced that it reached an impasse among stakeholders to protect wild rice from sulfate discharged by wastewater treatment plants. The MPCA withdrew its proposed wild rice regulation from the rule-making process and will turn to the Legislature for guidance on how to proceed. A bill has been progressing through the Legislature that eliminates the standard altogether. The House has passed the bill; the Senate bill is on the floor today. The Minnesota Chamber looks forward to working with the agency and other stakeholders to find a compromise that protects the natural resource without hindering economic development.

READ PREVIOUS WEEKS 'AT THE CAPITOL' REPORTS
April 23 | April 16 | April 9