In the second week of the session, legislators are working at a fast pace to take action on priority bills ahead of the first legislative deadline on March 21. The House passed a tax bill totaling $503 million for federal conformity and the repeal of business-to-business sales taxes. The Governor released his supplemental budget recommendations for the $1.2 billion state budget surplus and also suggested ideas for reform and simplification of state government in the "Unsession."
Governor Mark Dayton released his supplemental budget this week, setting forth his plans on how to utilize the $1.2 billion surplus in the state budget. The proposal aims to reduce taxes by $616 million, place $455 million into budget reserves and spend an additional $162 million on various state programs and operations.
The $616 million in tax cuts provides $301 million for federal tax conformity to change state law to match the updates in the federal tax code. Around $232 million would be used to repeal business-to-business sales taxes on warehousing, business equipment repair and telecommunications. About $15 million is allotted for the Angel Investor Tax Credit and additional business tax relief. The remaining proposals would be $25 million to reduce taxes for local governments and nonprofits and $43 million to simplify the estate tax and eliminate the gift tax.
On Thursday, the House passed HF1777, authored by Representative Ann Lenczewski (DFL-Bloomington), by a vote of 126-2. The bill includes $503 million in tax relief to conform the state's individual and corporate franchise tax code with recent changes in the federal tax code, retroactive to tax year 2013. The bill also repeals three business-to-business sales taxes that were enacted last session, including the repair and maintenance of business equipment, telecommunications, and storage and warehousing services.
The Senate Tax Committee is still working on a package of tax relief and has hearings scheduled next week to review tax bills. Governor Dayton has indicated he would like to sign legislation on tax conformity and the repeal of business-to-business sales taxes by March 14.
Unsession Plans Released
On Tuesday, Governor Dayton released ideas for reforming and simplifying state government. He started by issuing Executive Order 14-07 for the use of plain language on government websites, forms and documents. Recommendations were made to streamline permitting to ensure that 11,000 out of 15,000 annual permit requests are completed in 90 days or less and reform agency rulemaking by matching state rules to state and federal law to reduce processing time. He also plans to eliminate outdated laws that are too complex and hard to understand by removing more than 1,000 obsolete, incomprehensible or redundant statutes.
Legislation on pay equity compliance was passed out of the House Government Operations Committee this week. HF2373, authored by Representative Rena Moran (DFL-St. Paul), would require pay equity compliance certifications as a condition for some state contracts. The bill provides that a state agency may not accept a bid or proposal in excess of $500,000 from a business having more than 40 full-time employees in Minnesota unless the Commissioner of Human Rights has approved the business's plan and issued a compliance certificate to establish pay equity for its employees. The companion bill, SF1806, authored by Senator Sandra Pappas (DFL-St. Paul), has yet to receive a hearing in the Senate.
In the House Education Finance Committee, the focus was on free and reduced price lunches for low-income students. Representative Yvonne Selcer (DFL-Minnetonka) authored HF2480 and Representative Anna Wills (R-Rosemount) authored HF2630, which are identical bills seeking to increase the reimbursement rate for school lunches served to students who qualify for free or reduced price meals from 12.5 cents to 52.5 cents per lunch. This legislation also prevents school districts from charging an additional fee to students who qualify for free and reduced price lunch. If passed, this legislation would increase the 2015 state appropriation for school lunches by $3.35 million. In the Senate Education Policy Committee, Senator Katie Sieben (DFL-Hastings) presented SF2055, a bill to include a reporting date deadline for the early learning scholarships which were signed into law last session.
Jobs and Economic Development
The House Jobs and Economic Development Finance and Policy Committee heard Representative Will Morgan (DFL-Burnsville) and Representative Selcer (DFL-Minnetonka) present their bills to increase economic opportunities for women. Representative Morgan's bill, HF2291, seeks to increase the number of women in high wage, nontraditional occupations by establishing a grant program to be administered by the Minnesota Department of Employment and Economic Development (DEED). Representative Selcer's bill, HF2243, also seeks to create a grant program run through DEED focused on helping female entrepreneurs start or grow their business.