2016 Minnesota Session Begins

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Acrimony and Lengthy Debate

The 2016 Minnesota Legislative Session convened at noon on Tuesday, March 8. With a condensed ten week calendar, it will be a race against the clock to complete business. The House spent the bulk of their opening session arguing about space issues at the Capitol. Democrats expressed dismay over allocating just 18 seats in our House Chambers for members of the public, and 15 seats for reporters.

The opening Senate session was not a kumbaya moment either. Republicans were not pleased with a recent DFL decision to break into two, the Environment, Economic Development and Agriculture Budget Division. Sen. John Marty (DFL-Roseville) will chair the Environment and Energy Budget Division and Sen. David Tomassoni (DFL-Chisolm) will chair what remains of his committee, now called the Natural Resources, Economic Development, and Agriculture Budget Division. Tomassoni, an Iron Range lawmaker, was criticized last year over a number of provisions in environment legislation that were viewed as favorable to business interests at the expense of environmental concerns. Republicans noted that the newly formed committee will only have representation from one Iron Range member and will be chaired by a Twin Cities environmentalist (Marty). They demanded to know who made the decision. Bakk said he was meeting with Minority Leader David Hann (R-Eden Prairie) later in the day and would provide him with that information, but would not give names while on the floor of the Senate.

Out of the Gate

There are a few areas of agreement heading into the 2016 session. Both parties support a 26 week extension of unemployment benefits for laid-off Iron Range mine workers. On Thursday, following heated debate, the Senate took up and passed the package. Republicans offered an amendment to extend a one-time, $270 million unemployment tax credit to business and a provision to automatically reduce employer rates if the unemployment trust fund grows beyond federal solvency guidelines. The amendment was not adopted, but is likely to be offered and adopted in the House, sending the bill to conference committee.

In addition, House and Senate leaders are also ready to pass a measure to move the State toward compliance with the federal driver’s license and identification card requirements (Real ID).

On Thursday, March 10, the Senate Transportation Committee amended a bill in committee with a delete-all, which allows Real ID planning. This is the first bill in a two part series. This bill will allow the Department of Public Safety (DPS) to plan for implementation of the Real ID; however, it requires additional approval before DPS can fully implement Real ID.

The amended language requires a report to the Legislature from DPS by March 31, 2016 that will include planning for implementation, itemizing costs, and implementing a two-tier license program among other items.

Sen. Scott Dibble (DFL-Minneapolis) assured the committee he will have the second bill before the committee as soon as DPS can provide the needed information. He intends to pass the Real ID measure this session.

The bill will next be heard in Senate Judiciary on Friday, March 11, 2016. It will be on the Senate floor next week, and then sent to the House.

Transportation

DFL Governor Mark Dayton recently said he was pessimistic about getting a meaningful transportation funding bill this year, even though it’s one of his top priorities. Dayton prefers a dedicated gas tax increase for road and bridge projects. He opposes a House Republican plan to use existing sales tax revenue from the General Fund.

Republican House Speaker Kurt Daudt (R-Crown) says he’s optimistic about getting a transportation deal, if all sides can focus on the areas where they agree. Daudt made it clear that a gas tax increase is not one of those areas.

Taxes

House Republicans are also still pushing for the $2 billion in tax cuts that they passed last session. Their plan includes a phase out of the tax on Social Security income.

Democrats say the cost of those tax cuts is too high. The latest State economic forecast showed even less money than expected sitting around. The revised budget surplus for the current biennium of $900 million was $300 million lower than the estimate from early December. Bakk said the shrinking surplus makes spending decisions harder this session.

However, House Taxes Chair Greg Davids (R-Preston) said that chances of a new tax bill this year are slim. Last year’s omnibus tax bill is stalled in conference committee. Davids is not keen on having a second tax bill to contend with this year. He did say that if they can get agreement on a few items, like the federal conformity measure, it could happen. The committee did hear two bills this week: one allowing for a historic rehabilitation tax credit, and another allowing a sales tax exemption for different types of equipment used by internet service providers.

Bonding

The second year of a biennium is often considered a capital bonding year to fund a wide array of projects through proceeds from the sales of bonds. House Capital Investment Committee members heard many requests on Thursday, including $35 million for the State’s Rural Finance Authority; $14.5 million for construction of a new seal and sea lion habitat at St. Paul’s Como Zoo; $10 million for Metropolitan Regional Parks from the Met Council; and $8.2 million for asset preservation and facility upgrades at the Minnesota State Academies.

Dayton has proposed $1.4 billion in borrowing for public construction projects throughout the State. House Republicans say they want to keep the bonding bill at about $800 million.

Paid Family Leave

On Monday, Sen. Katie Sieben (D-Cottage Grove) along with the Minnesota Coalition for Paid Family Leave held a press conference unveiling a proposal for 12 weeks of paid family and medical leave. It includes a new insurance model (affordable payroll insurance pool) to help provide paid leave for all Minnesota workers.

The bill was described as providing partial wage replacement for a major life event. The payout would be calculated based on a maximum average weekly wage or $1,000 per week. Bill sponsor Sieben said that Minnesota has one of the highest female work participation rates, and that paid family leave is the most basic family value.

The program would be funded with a 50% employer and 50% employee contribution and would include State workers. The program would be phased in over time and would have a startup cost for the State, but would eventually be self-funded. The payout would be progressive so that those earning the lowest wages would get the biggest payout. If an employer currently provides paid leave with the same or better benefits then they would be granted an exemption.

In February, Gov. Dayton proposed paid parental leave for the State’s 35,000 public employees. His plan would provide six weeks of paid leave to new parents. Dayton plans to include his proposal in a supplemental budget this year.

Mining

Gov. Mark Dayton said Monday that he will not grant access to State land for the development of a copper-nickel mine near the Boundary Waters Canoe Area (BWCA).

In a letter to a top executive of Twin Metals Minnesota, Dayton said he has an obligation to protect an extraordinary natural legacy. Monday’s letter was the first time Dayton definitively and publicly stated opposition to mining in the Boundary Waters wilderness. It followed last week’s approval by the Department of Natural Resources of a 10-year environmental review for another mining project, proposed by PolyMet Mining Corp.

PolyMet’s project lies in a watershed that drains southeast towards Lake Superior, while the Twin Metals watershed drains north toward the BWCA.

Dayton’s statement delighted environmental groups, but outraged Iron Range legislators who have been pushing him to allow copper-nickel mining projects to move forward.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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