Happenings at the Capitol
With passage of the third committee deadline at midnight on Friday, March 31, the legislature is coming to the final stretch of session, where most action will take place on the House and Senate floors, with little work taking place in the committee rooms. Last week saw both chambers meeting on the floor every day of the week to pass major finance and appropriation (omnibus) bills. Finance committees in both the House and the Senate have been in a flurry of activity, holding meetings all day to hear testimony on hundreds of proposals included in the bills. The passing of committee deadlines means that committees will likely not take formal action on any bills for the remainder of the session (excluding the Senate Finance committee, the House Ways and Means committee, The House and Senate Capital Investment committees and House and Senate Taxes committees which operate with no committee deadlines).
House Hears Multitude of NMMA Transportation Projects
Last week the House Transportation Finance Committee heard 58 bills proposing hundreds of millions of dollars in bonding for transportation-related projects. Several NMMA supported projects were included on the agenda and NMMA member cities provided important testimony. The bills have been submitted to the House Capital Investment Committee for possible inclusion in a potential bonding bill included:
- HF1543 (Smith) Trunk Highway 610 interchange project modification funding.
- HF1286 (Whelan) Anoka, Coon Rapids, and Ramsey; U.S. Highway 10 and frontage road funding provided.
- HF207 (Uglem)/HF304 (Hortman) Coon Rapids; Hanson Boulevard high-rail grade crossing separation funding provided.
- HF206 (Uglem) Brooklyn Park; Trunk Highway 169 and 101st Avenue interchange project funding provided, bonds issued, and money appropriated
- HF187 (West) Blaine; 105th avenue reconstruction funding provided.
- HF1044 (Whelan) Anoka; high-rail grade separation project funding provided.
- HF1435 (Whelan) Ramsey; County State-Aid Highway 56 highway-rail grade separation project funding provided.
- HF1286 (Whelan) Anoka, Coon Rapids, and Ramsey; U.S. Highway 10 and frontage road funding provided, bonds issued, and money appropriated.
- HF1506 (Koegel) Coon Rapids; Foley Boulevard Northwest rail grade separation.
Other bills heard that are not included in NMMA’s Legislative Action Plan but affect NMMA member cities included:
- HF462 (Dettmer) Anoka County; interchange improvement and road realignment funding provided for I-35W and TH97.
- HF590 (Koegel) Anoka County; Foley Boulevard Northstar commuter rail station funding provided.
House Minority Leader Melissa Hortman, Coon Rapids Mayor Jerry Koch, Rep. Mark Uglem and Coon Rapids Fire Chief John Piper testify in support of funding for rail grade seperation at Hanson Blvd in Coon Rapids.
House Omnibus Transportation Bill
- $6 billion in additional investments into transportation over the next 10 years by dedicating the revenue generated from the current sales tax on rental cars, leased vehicles and auto parts to transportation funding.
- Redirects the $10 motor vehicle registration and title fee from the Environmental Fund to roads and bridges.
- Authorizes $1.3 billion in trunk highway bonding for the Corridors of Commerce Program ($300 million annually) and state road and construction ($250 million annually) for the next four years.
- Authorizes the use of federal FAST Act funds.
- Uses MnDOT’s unreserved fund balances for state roads.
- Requires MnDOT to achieve 15% efficiencies for Fiscal Years 2018 and 2019.
- $2 billion in General Obligation bonds over the next 10 years for local roads and bridges as well as rail grade crossing improvements.
- No gas tax increase.
- Reduces transit funding to the Metropolitan Council.
- Requires CTIB to 100% fund operating costs for LRT.
- Prevents the Metropolitan Council or local unit of government from planning on a state share for capital costs for a light rail project.
- Prohibits local units of government from using their own funds to study or construct an LRT project without the approval of the legislature.
Senate Omnibus Transportation Bill
- $3.6 billion in additional transportation investments over the next 10 years by dedicating the revenue generated from the current sales tax on rental cars and leased vehicles.
- Dedicate 70% of the revenue from auto-parts sales tax revenue to transportation.
- Redirect state turn back funds to state roads and bridges.
- Authorize $325 million in trunk highway bonds allocating $200 million for the Corridors of Commerce Program while earmarking funds for US 12 (Hennepin), Highway 212 (Carver) and Highway 14 (between Owatonna and Dodge Center).
- Authorizes the use of federal FAST Act funds.
- No gas tax increase.
- Does not provide funding to the Metropolitan Council metro area bus service shortfall.
- Provides state’s 50% share of operating costs for any new LRT lines only if the state provides funding to help build the line.
House Omnibus Tax Bill
On Thursday, the House passed its Tax omnibus bill, HF4, off the floor. Chief authored by Rep. Greg Davids (R-Preston), the bill contains numerous items that were included in the tax bill vetoed in 2016 by Gov. Mark Dayton due to a drafting error. The bill is well over 400 pages long; it also includes tax provisions linked to funding roads and bridges contained in the House Transportation omnibus bill — including $450 million in reprioritized General Fund vehicle-related fees and taxes.
Providing $1.3 billion in tax relief, the bill also contains:
- $585 million in reduced individual income taxes
- $205.3 million in changes to the state general levy
- $161.7 million in changes to the estate tax
- $97.1 million in reduced corporate franchise taxes
- $92.9 million in sales and use tax reductions
- $269 million for a Social Security benefits subtraction
- Student Loan tax relief
- Relief for first time home-buyers
- Refundable tax credits for foundations that provide scholarships for non-public schools
- Sales tax exemptions on building materials for local governments and non-profits
- Agriculture property tax credit equal to 50% of the school bond levy
The House Omnibus Tax Bill includes over $300 million in recommendations from the House Property Tax and Local Government Finance Division that includes reverse referendum, reduces LGA to cities who contribute to a World’s Fair, enact certain ordinances and utilize lobbying services but does not include increases to Local Government Aid or County Program Aid. Provisions of interest in the Property Tax Articles of HF4 include:
The House Omnibus Tax Bill includes over $300 million in recommendations from the House Property Tax and Local Government Finance Division which can be found in Articles 2-3 of HF4, beginning on page 59.4 of the THIRD engrossment. Some of the notable provisions include:
- Exempting the first $200,000 of commercial-industrial property from the state general tax
- Freezing the state general tax at the 2017 level
- Exempting a Major League Soccer stadium to be constructed in St. Paul from state and local property taxes
- Providing a reduced class rate for congressionally-chartered veterans’ services organizations
- Establishing a Legislative Working Group to develop proposals for simplifying the property tax system
- Providing for more efficient management and disposal of tax forfeited property
Senate Omnibus Tax Bill
Similarly, the Senate passed their Omnibus Tax Bill last week. SF2255, chief authored by Sen. Roger Chamberlain (R-Lino Lakes), proposes $900 million in tax relief focused mainly on individual taxes, rural Minnesota and business owners.
Highlights of the bill include:
- $393 million for permanent reduction to the lowest bracket
- $64 million federal conformity for Section 179 expensing
- $75 million for Social Security income subtraction
- Tax credit for student loans
- $85 million for exemption from the statewide business property tax for first $100,000 of market value
- Phase out statewide business property tax automatic inflator
- $14 million to modify school debt service equalization aid
- Ag property tax credit equal to 40% of the school bond levy
- Move toward federal conformity for estate tax
- Tax incentives for new small businesses to purchase equipment
- Increases Local Government Aid to cities by $12 million for 2018
- Increases County Program Aid by $6 million for 2018
- Workforce housing credit for 2018
- Simplify research and development credit
- First-time home buyer program
- Student Loan Credit up to $700 for 2018 only
At just over 300 pages long, the bill also increases the working family credit, encourages online filing and conforms with the federal government level of estate tax. The bill does not contain the extensive property tax articles contained in the House Omnibus Tax Bill.
WDE Landfill Hazardous Waste Pit
Andover City Administrator Jim Dickinson participated in a lengthy House Capital Investment Committee hearing last week which discussed legislation proposing to appropriate $11.35 million in bond proceeds to remove the hazardous waste and contaminated soil from a pit in Andover. Between November 1972 and January 1974, approximately 6,600 barrels of hazardous waste were dumped in landfill. Since 1995, $13.7 million has been spent on systems to reduce health and environmental risks associated with the site. Operation and maintenance costs exceeded $500,000 last year.
In 2016 the legislature provided $650,000 for preparation work that is now underway. A design is expected to be ready by June.
The committee did not take official action on HF269 (Scott) but pledged to consider the bill for possible inclusion in a possible future bonding bill.
Andover City Administrator Jim Dickinson testifies before the House Capital Investment Committee March 29 in support of a bill sponsored by Rep. Peggy Scott, right, that would provide closed landfill cleanup funding. Photo by Andrew VonBank.
After being defeated in the Senate earlier this session, on Thursday last week, the Senate passed legislation establishing a Real ID for Minnesota. With only a one vote majority in the Senate and with five Republican Senators opposing Real ID, the Senate version that earned passage has removed language denying driver licenses to undocumented immigrants. The move gained support for the bill from DFL Senators which passed the Senate 60-7. A House/Senate conference committee will be appointed to reconcile differences between the House and Senate versions. For more information, read this Pioneer Press article.
With most House and Senate committees having completed their work, both the House and the Senate will now spend more time on the House floor as they debate and pass their budget bills. Be aware that House and Senate committee schedules are subject to change and additions with short notice. Here are some of the many meetings taking place that may be of interest. To view the complete legislative schedule, click here.
9:30 Senate Meets in Session (Watch Live)
The Senate is expected to debate and vote on their Omnibus Tax Bill sometime on Monday
10:00 House Meets in Session (Watch Live)
10:15 House Ways and Means Committee (Watch Live)
SF1937 – (Garofalo): Omnibus job growth and energy affordability policy and finance bill
SF605 – (Anderson): Omnibus state government finance bill
Tuesday – TBA
Wednesday – TBA
Thursday – TBA
Friday – TBA
Where to Find Legislative Information
Both the House and Senate websites contain useful information to help track legislation and stay in touch with your legislators. NMMA encourages its members to visit the House and Senate websites and sign up for legislative updates from your legislators.