At the Capitol - Week of May 7, 2018

At the Capitol - Week of May 7, 2018

May 7, 2018

LEGISLATURE ADJOURNS IN TWO WEEKS

It's crunch time. The Legislature faces a constitutional adjournment of May 21, and considerable work remains. The House and Senate have passed all their spending and tax bills, and conference committees will begin meeting this week in conjunction with negotiations between Governor Dayton and legislative leaders. Now is a critical time to connect with your legislators and underscore the priorities of the statewide business community. Please watch your emails for legislative alerts. Legislators are more inclined to vote favorably on our issues when they hear from their constituents and employers that operate businesses in their districts

TAXES
The Senate Republicans released and passed their tax bill last week. We now have the tax proposals from Governor Dayton plus House and Senate leadership. The House passed its tax bill a strong bipartisan vote, 90-38. The Senate passed its bill on a party-line vote, 34-32.

Our goal this session was to enact pro-growth tax reforms and mitigate the state tax increases from federal conformity. On a positive note, the bills include some good reforms and tax relief measures as well as progress on some tax rates. Following are highlights of the three proposals:

On a negative note, none of the three proposals completely mitigate the tax increases on business taxpayers from conforming to federal tax definitions. The House proposal offsets more of the tax change by reducing rates on both C corporations and individuals. The Governor has the largest tax increase on businesses with no rate offsets.

Impacts will vary depending on how the specific federal tax conformity changes affect each specific business taxpayer. For example, some businesses may see a state tax decrease due to full conformity to Section 179 for immediate expensing of equipment purchases. Other taxpayers may see a state tax increase due to conformity with the limitation on net interest expensing. For more specifics on the tax proposals, contact Beth Kadoun, our vice president of tax and fiscal policy.

Click here for a report from Beth Kadoun, our vice president of tax and fiscal policy.

HEALTH CARE
Strengthening medical price transparency law (HF 3893, Anderson, R-Plymouth/SF 3480, Draheim, R-Madison Lake): WE SUPPORT

Health care costs are raising out-of-pocket costs for health insurance policyholders, forcing them to be better consumers of health care but often with incomplete information about cost. This bill would strengthen existing law, requiring providers and insurers to disclose the cost of medical procedures upon request and within 10 days. It also requires a posting of the costs for basic procedures and the disclosure of any facility fees or other charges to be paid by patients. The bill passed the Senate last week on a 65-2 vote. We hope to see it on the House floor this week.

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 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. It also 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 continue working with partners in the business community to express our concerns. The Senate has indicated it may wait until next year to consider changes to the law, while the House continues to advance the bill. Other groups, including local governments and the education community, also are weighing in with concerns. We will keep you apprised of negotiations on this complex and sensitive issue and on the legal implications of eliminating a well-established standard. Please contact your legislators today and underscore that this legislation would make Minnesota an outlier in employment law.

Workers' compensation costs
We have good news to report on efforts to reduce employers' workers' compensation costs. The Minnesota Chamber, through our participation on the Workers' Compensation Advisory Council, has been working for some time to put outpatient and ambulatory surgical centers on a fee schedule for treatment of injuries incurred on the job, while also removing administrative friction from the work comp system that slows payment and hinders accuracy. The council last week approved a global deal among hospitals, insurance carriers, employers and labor for a fee schedule and appropriate benefit increase. This change will bring efficiencies to the work comp system and over time put the system on a path for significant savings. We thank our partners from the insurance industry, and our members from the hospital/ambulatory surgical centers community, for their ability to help us craft this compromise. The deal is being sent to the Legislature for its prompt consideration in the final days of the session.

EDUCATION/WORKFORCE DEVELOPMENT
Child-care regulations (HF 3403, Peterson, R-Lakeville/SF 3310, Weber): WE SUPPORT

The number of licensed in-home family child-care providers has decreased by almost 30% across the state, according to the Minnesota Department of Employment and Economic Development and the Center for Rural Policy and Development. This bill would reduce redundant insurance paperwork and bring transparency to state regulations. Both the House and Senate bills are scheduled to be heard on the floor today.

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. Communities must provide a 50-percent match. At least 60 percent of the grant funds must go to communities located outside of the seven-county metropolitan area. This bill was included in omnibus bill SF3656, which passed the House. It now goes to conference committee.

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 industrial wastewater treatment plants. Our measures were included in the respective House and Senate omnibus bills, which passed both bodies and are headed to conference committee.

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 that eliminates the standard altogether has passed conference committee and is scheduled for floor votes today in both the House and Senate. We look 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
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