Legislative Update: Tax bills take center stage
By Amanda Bilek, Minnesota Corn Growers Association senior public policy director
Three weeks remain in the 2018 Minnesota legislative session and there is still a lot of work to do before lawmakers adjourn. Taxes and supplemental finance bills were the focus in St. Paul last week and will be again this week.
Taxes
The House tax bill, HF 4385, was heard in committee and considered by the full House of Representatives on April 30. The bill passed 90-38. The tax bill makes several changes to state tax code to conform to federal tax changes and also makes changes to individual, corporate and estate tax provisions. A top priority for several agriculture and business groups, including the Minnesota Corn Growers Association (MCGA), is full federal conformity on Section 179 for capital equipment expensing, exchange on equipment and bonus depreciation. The bill would also prohibit local municipalities from taxing specific foods and food containers. This provisions is also supported by MCGA.
The Senate is expected to unveil their tax bill today and will be heard in committee and considered by the full Senate. There will likely be some differences between the House and Senate tax bills, which will need to be resolved in a conference committee. The Dayton administration will also negotiate with the House and Senate to (hopefully) agree to a tax package that can be signed into law.
Buffer Property Tax Credit
On Wednesday, the House Property Tax and Local Government Finance Division will consider HF 4395, a bill brought forward by Rep. Paul Anderson (R-Starbuck) with bipartisan support and a top legislative priority for MCGA. The bill would establish an annual $50 per acre tax credit for ag land that is no longer in production and is in compliance with the Minnesota Buffer Law. The Clean Water Fund is the proposed funding source to provide tax credits to farmers.
The Buffer legislation, passed in 2015, not only failed to provide any compensation to farmers for the costs of creating buffers, but farmers continue to be taxed each year on buffer acres at valuations that assume those acres are still producing crops and revenue. HF 4395 at least helps reduce the tax burden on acres that are no longer generating any income.
With only three weeks remaining, it is crunch time to get the Buffer Property Tax Credit moved through the process and to the Governor’s desk. We still have a lot of work do in these closing weeks of the legislative session to ultimately secure passage, but your message of addressing property tax relief for ag land converted to buffers is getting heard!
Supplemental Budget
Last week the Senate folded all the supplemental budget bills from various committees into one large supplemental budget bill. After a 12-hour floor debate on the 600+ page bill, it was passed 34-31. A few provisions specific to agriculture include:
- Extend public water buffer waivers from July 1, 2018, to July 1, 2019, as well as enable a public ditch authorized agent who has filed a compliance plan with the Soil and Water Conservation District by Nov. 1, 2018, to be granted a conditional compliance waiver until July 1, 2019
- Enable drainage authorities and other local units of government to apply for the Minnesota Department of Agriculture (MDA) AgBMP low-interest loan program to assist with buffer strip establishment on public ditches
- Exempt temporary grain storage facilities from certain air permitting requirements
- Prohibit the Minnesota Pollution Control Agency from increasing water permit fees until approved by the Legislature
- Reinstate soil loss requirements as only applicable when approved by county or local government unit
- Fund rural mental health services with $200,000 in additional funding
- Prohibit MDA from implementing the Groundwater Protection Rule, unless specifically approved by law
- 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
This week the House of Representatives will be taking up supplemental spending bills, which will be folded together into one large supplemental budget bill to match up with the approach in the Senate. A conference committee will be appointed to work out the differences between the House and Senate bills and negotiate with the administration.
There is no doubt that the last three weeks of session will be very busy as the major pieces of legislation have come together. It will be up to House and Senate Leadership and the Governor to chart a path to the successful end of session. We will be sure to keep you updated as the weather has finally started to improve and you are able to get out in the field for spring planting.
If you have a question about any of the above or any policy-related issued, please contact Amanda Bilek at abilek@mncorn.org.
