April 24 is the final day for Finance bills to clear committees. One of those is the Omnibus Ag Finance bill in the House. The bill was unveiled on this Friday, April 10, and passed out of the House Ag Finance committee on Tuesday, April 14.
An Ag Finance target with only a $7.5 million increase over the previous biennium was determined by House leadership March 24. Given last fall’s election and the emphasis on rural Minnesota most were surprised and disappointed by the minimal target, but House Republicans are centering their efforts on tax reductions instead. It had been hoped by many that given the $2 billion dollar surplus, that both tax reductions and some new spending on agriculture could be accomplished.
Conversely, Senate targets for the bill that contains Agriculture Finance, increase by $57 million. The Senates bill will be unveiled today (April 16).
Low targets developed by House leadership led to a disappointing roll out of the Ag Finance bill for many. The low targets resulted in a limited $7.2 million allocation for the Ag Research portion of the bill. That amount compares to the $39 million request by the Ag Coalition.
AURI funding was reduced $2 million from the previous biennium. Additionally, a large portion of new spending, including the research dollars, was accomplished by a redirection of the current Agri-Fund dollar base. Those Agri-Fund dollars had already been allocated in the previous biennium to crop research. That fact puts the new spending at odds with the Governor’s budget and could draw line item vetoes if it were to remain the same after conference committee. The bill was intended to have further hearings this week in the Ways and Means committee but seems to have been pulled from the schedule. There is an assumption by many, at this point, that some retooling is going on behind the scenes. The Senate companion bill has yet to develop.
There is little solid policy in the bill that is of high value to production agriculture. The bill does however have some framework that could develop positive results if additional funds are produced by the Ways and Means committee or the conference committee. That is the hope of the author, Representative Rod Hamilton. The following is an itemization of bill highlights as enumerated by the House Weekly:
What would HF1437 do?
The bill includes measures that would:
- establish a new grant program to provide financial and technical assistance to eligible cities around the state that create urban agriculture development zones;
- create three production-based bioenergy grant programs, to be administered by the Department of Agriculture, to encourage advanced biofuel, renewable chemical and biomass thermal production;
- form an Agriculture, Research, Education, Extension, and Technology Transfer Board to award grants to projects that help Minnesota achieve long-term agricultural productivity;
- triple the annual income limit for home cooks and gardeners who sell their products to the public and require sellers to attend a safe food handling course every three years;
- fund a farm-to-foodshelf program that compensates agriculture producers for the costs of harvesting and distributing surplus vegetables and produce to charitable organizations;
- fund grants to Second Harvest Heartland for the purchase and distribution of fresh milk to charitable organizations;
- commission a livestock industry study to identify causes of growth or decline of poultry and livestock production in the Upper Midwest over the last 10 years;
- commission a feasibility study of importing baitfish into the state for resale; and
- establish a pilot program to train inmates at the Northeast Regional Corrections Center for careers as butchers upon their release.
Good News from House Tax committee
MSGA and the Farm Bureau have jointly worked to develop and pass a bill giving tax relief to farmers who are burdened by school bond debt. Lobbyists from the two organizations drafted the legislation, which would relieve 50 percent of the net tax capacity relative to school bond indebtedness. The bill has been authored by Representative Steve Drazkowski in the House and Senator Lyle Koenen in the Senate. Representative Drazkowski is the Chair of the House Property Tax Division. Senator Koenen serves on the Senate Tax committee.
MSGA and Farm Bureau lobbyists testified before both the House and Senate tax committees. No other organizations spoke before the committee, however, the Minnesota Farmers Union asked to have their support for the bill be acknowledged. It was.
During the testimony it was stated that the bill had several advantages including simplicity, it has no shifts to other property classifications, the fact that it would be applied to both new and old school bond debt, and that it would not negatively impact the passage of a school bond referendum. The bill would relieve $50 million each year of farm tax burden and would apply to all classes of farm property, except to the house, garage, and one acre.
No opposition arose in the House and the measure has been included in the House property tax division report and is expected to survive the process in the House.
There was some opposition expressed in the Senate by one Republican and two DFL Senators who represent suburban and metropolitan districts. It generally received bipartisan support, however and was laid over for possible inclusion in the omnibus tax bill.
Governor Gives State of State, Mentions Buffers as Continued Priority
Last Thursday evening Governor Dayton offered a review of those items which he felt were great positives that have been accomplished during his Governorship. He credited low unemployment, high standings in state by state comparisons, and all day kindergarten as accomplishments of his administration. He thanked the farmers, businesses, and workers of the state for helping to increase the state’s coffers and indicated that the estimated $2 billion surplus had nothing to do with the approximate $2 billion tax increase passed earlier under his administration. He chastised those that argue taxes are too high and urged the legislature not to reduce investments in the state’s future. He pushed for a bonding bill along with higher spending in education. However, none of his investments included increased funding in agricultural spending at any level. Under his proposals, agricultural research spending remains frozen at the same level as the past four years. The only increases in Department of Agriculture spending are based on increased regulatory action funded by fee increases.
One other point of note during the speech was a renewed push for buffers. The speech was met, like most State of State speeches, with a partisan view by those legislators attending.