Legislative Update: Section 179, Buffer Tax Credit and more hit home stretch

By Amanda Bilek, Minnesota Corn Growers Association senior public policy director

It sounds like planters are finally starting to roll in most areas of Minnesota. While you are busy in the field, lawmakers are busy in St. Paul trying to finalize a long to-do list during the last two weeks of session.

Taxes

Last week the Senate worked on their tax bill by giving an overview in the taxes committee, taking public testimony and considering amendments to the bill. The full Senate passed the bill on a straight party line vote of 34-32.

Since the House passed their tax bill on April 30 and the Senate passed their bill last week, a conference committee has been appointed to reconcile the differences the between and the House and Senate versions, as well as negotiate with Governor Dayton to determine if all three sides can agree to a final bill that will be enacted this year.

The importance of federal tax conformity has been acknowledged and stressed by all three parties, but certain tax reform proposals put on the table by all three sides will be a stumbling block in the final negotiations.

The good news for agriculture is that all three tax bills include full federal conformity on Section 179 for equipment expensing and bonus depreciation. If enacted, federal conformity on Section 179 would increase the deduction amount from $25,000 to $1 million. This is a top tax policy priority for several agriculture and business groups. We are hopeful that final negotiations on the tax bill will be successful and important federal conformity and tax reform provisions can be signed into law.

Buffer Property Tax Credit

Last week the House Property Tax and Local Government Finance Division considered HF 4395, a bill brought forward by Rep. Paul Anderson (R-Starbuck) with bipartisan support. The bill was also heard in the House Taxes committee and referred to the House Legacy Committee. A hearing with the Senate has not yet been scheduled. Securing the buffer tax credit is a top legislative priority for the Minnesota Corn Growers Association (MCGA).

My update last week gave a brief overview of the bill. Although there is bipartisan support for the policy, the proposed source to fund the property tax credit–Clean Water Funds–has raised concerns from Gov. Mark Dayton’s administration about the constitutionality and stability of Clean Water Funds. MCGA policy supports annual compensation utilizing state legacy funds to property owners affected by the 2015 buffer law.

MCGA will continue to advocate for our position to the legislature and the Governor. We think it only makes sense to use dedicated funding that aims to “protect, restore and enhance water quality” to help ease the financial burden of landowners working to comply with the buffer law, which was first proposed and enacted to address water quality concerns.

Supplemental Budget   

Following the Senate, the House completed work last week on supplemental budget spending bills. A conference committee has been appointed and will start to reconcile the differences. Yesterday Gov. Dayton sent a letter to legislative leadership outlining significant differences among the House, Senate and the administration on the supplemental budget bill and other policy bills. It remains a little unclear if the House, Senate and Gov. Dayton can come to agreement in the next two weeks, but here is a quick look at some of the provisions included in the House supplemental budget bill that impact agriculture.

  • $250,000 for farmer mental health services
  • $35 million in bond financing for Rural Finance Authority
  • Extend the Agricultural Fertilizer Research and Education Council and the fertilizer surcharge and account to June 2030
  • Modify the Bioincentive Program to lower minimum production eligibility for Advanced Biofuel Incentive and Renewable Chemical Incentive
  • Prohibit the Minnesota Department of Agriculture from implementing the Groundwater Protection Rule, unless specifically approved by law
  • Prohibit the Minnesota Pollution Control Agency from increasing water permit fees until approved by the Legislature
  • Exempt temporary grain storage facilities from certain air permitting requirements
  • Provide additional guidance for external peer review of water quality standards

The two weeks ahead at the Legislature will be filled with floor debates, conference committee meetings and closely watched negotiations among legislative leaders and Gov. Dayton. Even though there is a lot left to do, things have a way of coming together in St. Paul as the session winds down. We will continue to advocate for tax, policy and spending proposals that will have a positive impact for Minnesota’s corn growers.

If you have a question about any of the above or any policy-related issued, please contact Amanda Bilek at abilek@mncorn.org.

 

 

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