Biofuels, tax policy headline 2020 legislative priorities

MN Capitol

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

Today the second session of the 91st Minnesota Legislature convened. In the second year of a biennium, the legislative session usually has a focus on capital investment or public works projects and policy initiatives.

Last year, the Legislature adopted a two-year budget for the state but after the February forecast, Governor Walz and Lieutenant Governor Flanagan are expected to submit a supplemental budget request. The November 2019 forecast projected a $1.3 billion surplus, but the February forecast will be used by legislators to determine spending decisions, including potential tax relief or funds to add to the budget reserve. Embedded in all of the policy and budget decisions this session is a fall election where all 201 legislative seats – 134 in the House and 67 in the Senate – will be on the ballot across Minnesota.

Although the session will be short – adjournment date is May 18 – it will be filled with plenty of opportunities and challenges, and the Minnesota Corn Growers Association (MCGA) will be there to help navigate the dynamics and advocate for Minnesota’s corn farmers.

MCGA looks forward to working with the legislature and members of the administration to advance policy priorities that are important to corn farmers and rural communities. Here is a look at the top priorities that MCGA will be advocating for this session.

Better Fuel Initiative
Announced at MN Ag Expo, the Better Fuel Initiative aims to further increase awareness, understanding and usage of biofuels in Minnesota. Also part of the initiative is the promotion of state policies. During the legislative session, MCGA supports an increase in Minnesota’s biofuel standard from 10 to 15 percent.  

Recognizing the environmental, health and economic benefits of biofuels, Minnesota became the first state in the nation to require ethanol-blended fuels in 1997. Last year (2019), the federal government issued a federal waiver authorizing a higher blend of biofuel to be sold year-round in vehicles manufactured in 2001 and newer. This is an important opportunity for Minnesota to further advance our biofuel leadership by conforming our biofuel standard to the new federal waiver (from 10 to 15 percent). Minnesota would be the first state in the nation to set a higher biofuel standard.

Buffer Property Tax Relief
MCGA will be back at it again this session to continue advocating for buffer property tax relief. With the passage of the buffer law in 2015, Minnesota corn farmers have invested considerable time and money to bring their farms into compliance. According to government agencies, almost all Minnesota farmers are in compliance with the buffer law.

There is, however, a significant issue that was left unresolved in the buffer statute – the need to eliminate the financial penalty of continuing to impose property taxes at the highest rates on farm land that is removed from income-producing crop production when converted to conservation buffers. MCGA supports enactment of a buffer property tax exemption.

Full Conformity to Section 179
The 2019 Minnesota tax bill enacted retroactive state income tax increases on many farmers and businesses by conforming to the tax increases from the Federal Tax Cuts and Jobs Action, but did so without adoption of most of the federal offsets. Minnesota fully conformed to 1031 like-kind exchange rules which results in an increase in tax liability for trade-in of certain equipment, but Minnesota did not conform to the tax offset of Section 179 immediate expensing.

As a result, many farmers are getting hit with unexpected tax bills due to the now taxable income gain from the trade-in on equipment but without the ability to expense the purchase to the lack of Section 179 conformity. MCGA supports full conformity with Section 179 business expensing.

Water Quality and Environmental Concerns
MCGA has made a commitment to sustainability by adopting a vision of becoming the most sustainable and environmentally corn farmers in the United States. MCGA has implemented sustainability initiatives, research investments and farmer-led innovation grants to demonstrate our sustainability commitment in action. MCGA supports directing state resources towards incentives and programs to on-the-ground implementation to protect water quality.

Health care choice and affordability
Despite past reforms and premium price supports for the individual market, many farmers face high costs for health insurance. Additionally, many farmers lack options to healthcare providers in many parts of rural Minnesota. MCGA supports solutions to address high health insurance premiums and lack of availability to individual health insurance options.

Capital Investment/Bonding
Farmers depend on well-maintained road and bridge infrastructure to move their product to market. Aging and crumbling infrastructure adds additional wear and tear on farm vehicles and machinery. MCGA supports significant capital investment in rural road and bridge infrastructure.

MCGA also supports additional general obligation-user financed bonds for the Rural Finance Authority at the Minnesota Department of Agriculture.

Be sure to follow the MCGA blog and its social channels (FacebookTwitter) throughout session for updates from the Capitol. You can also follow me on Twitter (@AjBilek).

Did you like this article?

Share this post with your friends!