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Legislative Update: April 4, 2017

Posted By Administration, Tuesday, April 4, 2017

Omnibus Bills Dominate the Week

With the passage of the third committee deadline at midnight of 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. This past week saw both chambers meeting on the floor every day of the week passing 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 the hundreds of proposals included in the bills. The passing of committee deadlines means that committees will not take formal action on any bills for the remainder of the session (excluding the Senate Finance Committee and the House Ways and Means Committee).

Every finance committee compiles an omnibus bill. What follows is a detailed description of the House and Senate jobs, taxes and transportation omnibus bills.

Job Growth

As noted last week, the House and Senate Jobs Committees have been constructing their omnibus bills over the last few weeks. SF 1937, chief authored by Sen. Jeremy Miller (R-Winona), was introduced two weeks ago and was passed off the Senate floor last week Wednesday. The bill passed with bipartisan support on a 58-9 vote. Provisions in the Senate bill include: the Minnesota Investment Fund (MIF) receiving $12.5 million in both FY 2018 and FY 2019 and the Job Creation Fund (JCF) receiving $8 million per year. Also included in the bill is an appropriation of $1.5 million to the Redevelopment Grant Program.

The Senate proposal also has provisions allowing for flexibility between the programs. Sen. Miller’s bill allows for $2 million that could be moved between MIF and JCF accounts by the Department of Employment & Economic Development to meet business demand. The language adjusts the qualifying thresholds to be an eligible JCF business. They are lowered for projects in greater Minnesota or for businesses with majority ownership by women, veterans, minorities or persons with a disability.

In the House, HF 2209 received two hearings last week with one hearing for public testimony and the other for members to amend the bill.   The House Jobs Committee passed the bill of committee on a party line vote and sent the bill to the Ways and Means Committee. On Monday night the bill was sent to the House floor and will most likely get heard on Thursday, April 6.

Under Rep. Pat Garofalo’s (R-Farmington) bill, MIF would receive $12 million in FY 2018 and $11 million in FY 2019. The JCF would receive $5 million in each year. No funding for the Redevelopment Grant Program was included in the bill. Like the Senate bill, there was some policy language that was included. JCF policy changes outlined in the bill would put restrictions on the JCF by limiting awards to counties where the average unemployment rate for the prior 12 months is equal to or greater than the state average unemployment rate for the same 12 months. This would eliminate communities from 31 Minnesota counties from accessing JCF funds.

Both bills include funding for the Border-to-Border Broadband Grant program. Under the Senate bill, the program is funded at $10.25 million for both FY 2018 and FY 2019. The House proposal funds the program for FY 2018 $7 million.

In the House, we are expecting to see a number of amendments offered that look to increase funding to MIF, JCF, RDG and Broadband. There will also most likely be an amendment that would remove the language that would not allow 31 counties to access JCF Funds.

Once the House acts on the bill, EDAM will be sending out an update to members asking them to contact legislators in regards to the two bills as they will be going to conference committee. We will need everyone’s help in the last six weeks of session.


On Thursday of last week, the House passed their Tax omnibus bill, HF 4, 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. With the bill being 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 but does not include increases to Local Government Aid, County Program Aid or working family tax credit.

Similarly, the Senate Taxes committee announced last week that their Omnibus Tax bill, SF 2255, 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
  • Reciprocity authority
  • Estate Tax subtraction federal conformity
  • First-time home buyer program
  • Student Loan Credit up to $700 for 2018 only

At 296 pages long, the bill also increases the working family credit, encourages online filing and conforms with the federal government level of estate tax.


The House Transportation Finance Committee last week approved its omnibus bill. HF 861, chief authored by Rep. Paul Torkelson (R-Hanska). The House passed the bill on Friday off the House floor with a 76-54 vote.

Highlights of the bill include:

  • $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 the Minnesota Department of Transportation’s (MnDOT) 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 light rail transit.
  • 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 a light rail project without the approval of the legislature.

View the complete appropriation spreadsheet for the House transportation omnibus bill.

The Senate Transportation omnibus bill has been approved by the Senate. SF1060, chief authored by Sen. Scott Newman (R-Hutchinson) was passed off the Senate floor on Thursday, March 30.

Highlights of the bill include:

  • $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 turnback 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 Fixing America’s Surface Transportation 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 light rail transit lines only if the state provides funding to help build the line.

View the complete appropriation spreadsheet for the Senate transportation omnibus bill.

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