Legislative Update: mid-session review

Upon their arrival, House and Senate members were faced with important unresolved issues from prior sessions such as taxes, transportation and bonding. Another top priority entering the session was the soaring costs of health care insurance premiums. With Republican majorities for the first time in 40 years in both the House and Senate, and a DFL governor in Mark Dayton, Minnesotans have been looking for lawmakers to get through the gridlock that hampered previous sessions and resolve these significant issues. 

The first year of a biennium is traditionally focused on setting the state’s two-year budget that begins July 1. In addition to establishing the fiscal budget, this is a time for legislators to tackle those unresolved priorities from the previous session.

While the governor, legislative leaders, and legislators are forwarding their own agendas, the Minnesota Soybean Growers have been actively engaged on a number of different fronts.  The following is only a partial list of these initiatives:

Taxes

Coming into the 2017 session, everyone was prepared for a big debate over tax cuts. First, the 2016 session ended with a tax bill that was ultimately vetoed. That meant there was already a push to address some of those failed tax cuts from last year. Then the state’s budget surplus grew to $1.65 billion, leaving even more room for the newly-installed Republican legislative majorities to propose cuts. House Republicans have come in with the biggest cut, proposing about $1.35 billion in “tax relief” over the next two years. Senate Republicans come in lower than the House at $900 million. Gov. Mark Dayton’s tax-reduction package totals about $280 million, about $1 billion less than the House and Senate’s. Included in all the tax packages is a property tax credit on all property classified as agricultural. In the House, it is equal to 50 percent of the tax on the property attributable to school district bonded debt levies and 40 percent in the Senate and Governors bills. MSGA support’s legislative initiatives that would give agriculture land owners a property tax relief on bonded indebtedness for school construction projects.

Health Care

Earlier in the session, Gov. Dayton signed into law a legislative package intended to provide relief for Minnesotans with rising insurance premiums. The law, effective Jan. 27, 2017, has a premium subsidy that provides  a 25 percent reduction in the premium paid by an eligible person to a health carrier. Additionally, a bill currently in conference committee would establish a $300 million per-year program to subsidize insurance companies carrying high-cost customers. The reinsurance legislation attempts to address the estimated 2.2 percent of customers in Minnesota’s individual insurance marketplace that make up 40 percent of its medical bills. Also being debated is a Gov. Dayton’s proposed “MinnesotaCare Buy-In” program. Individuals who opt for this insurance would pay their own way – meaning the cost of the premiums would pay for their coverage, without any additional ongoing costs to Minnesota tax payers. Under the proposal, those who choose this option, individuals would get quality health care coverage for about $469 per-person, per-month on average.  That is 12 percent less than the average statewide premium of $538 for commercial health plans in 2017.  MSGA supported legislative efforts that provides premium relief for Minnesotans who buy health insurance on the individual market. We continue to engage the legislative efforts that supports proposals to provide long-term health insurance reform that provides affordable quality health care.

Transportation

A transportation funding solution and agreement continues to seemingly evade Gov. Dayton and legislative leaders. Dayton has proposed raising $600 million by increasing the gas tax by 15 cents, about $400 million for transit and other projects by raising the sales tax a half cent in the metro area, and another $125 million from higher vehicle registration fees. House and Senate Republicans rolled out transportation plans that that don’t raise the gas tax but do increase transportation revenue by moving some state revenue streams. House Republicans want to specifically dedicate about $300 million of that funding to roads and bridges. Senate Republicans’ budget targets keep the general fund expenditure for transportation steady, but they call for an additional $570 million in new permanent transportation funding.

Buffers

Under current law, buffers or alternative water-quality practices must be in place by Nov. 1, 2017, for public waters, and 12 months later for public drainage systems. In the House a provision would delay buffer requirements for 1 year and the Senate 2 years. Also included in the buffer initiative is language that seeks to modify buffer laws in several ways including a change that 50-foot buffers would be needed on public waters classified as “shoreland,” while public waters without that classification would only need a 16.5-foot buffer, and moving the date when buffers must be in place along public waters and public ditches to November 2018. And the legislation prohibits enforcement of buffer requirements unless federal or state assistance is available to the landowner paying 100 percent of the cost to establish the buffers. MSGA is strongly supporting legislative initiatives that seeks to delay and clarify the 2015 buffer law. 

Biodiesel

Interests within the petroleum oil industry introduced a bill (HF 2217) that would do a number of things to move the state backward on its use of biodiesel. Provisions in HF 2217 include delaying the move to B20 to 2019, removing April from the list of months that require higher biodiesel blends, and delaying the use of B20 until the federal tax credit is reinstated. This bill has not yet been heard, but there has been talks about a hearing later in the legislative session. MSGA is strongly opposed to this bill.

Ditch Mowing

The commissioner of transportation would be prohibited from requiring or issuing permits to mow or bale hay in ditches within MnDOT right-of-way under legislation passed on the House and Senate Floors. This legislation comes in response to a surprise policy shift from MnDOT, altering requirements for the mowing and baling of state highway right-of-way, and prompting significant criticism from rural Minnesotans. The agency’s policy requires, among other restrictions, landowners to apply for permits to mow state highway rights-of-way.  The legislation would place a moratorium on MnDOT from enacting any new permitting process on ditch mowing, common in rural areas of the state, until March 30, 2018. The bill would also require MnDOT to report back to the Legislature no later than March 1, 2018, with a plan to establish a permitting process. It would not change current state rules governing the mowing of ditches, including a prohibition on doing so before Aug. 1, 2017.  MSGA supports legislation that seeks to delay and clarify MnDOT’s ditch mowing permitting requirements.

The constitutional deadline for adjournment of the 2017 Legislative Session is May 22, 2017.