Session Weekly April 23, 2004, Volume 21, Number 12
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APRIL 23, 2004 VOLUME 21, NUMBER 12 In this issue: THE 2004 TAX BILL ADVANCES INVASIVE SPECIES, RENEWABLE ENERGY, AND MORE HF3180-HF3185 ESSION S Weekly Session Weekly is a nonpartisan publication of the Minnesota House of Representatives Public Information Services. During the 2003-2004 Legislative Session, each issue reports daily House ac- tion between Thursdays of each week, lists bill introductions and upcoming commit- tee meeting schedules, and provides other information. The publication is a service of the Minnesota House. No fee. CONTENTS To subscribe, contact: Minnesota House of Representatives IGHLIGHTS Public Information Services H 175 State Office Building Business • 5 Elections • 7 Insurance • 9 St. Paul, MN 55155-1298 Consumers • 5 Environment • 7 Local Government • 9 (651) 296-2146 or Crime • 5 Government • 8 Transportation • 9 1-800-657-3550 Development • 6 Health • 8 Veterans • 10 TTY (651) 296-9896 Education • 6 Director Barry LaGrave FEATURES Editor/Assistant Director AT ISSUE: AGRICULTURE — Money in the omnibus agriculture finance bill Michelle Kibiger would target invasive species such as gypsy moths and ash borers. • 11 Assistant Editor Mike Cook AT ISSUE: BONDING — The House bonding bill would provide more funding Art & Production Coordinator for higher education and transportation projects than Gov. Tim Pawlenty Paul Battaglia proposed. • 14 Writers AT ISSUE: ENERGY — University officials gave lawmakers a progress report on Miranda Bryant, Patty Janovec, Tom Lonergan, Mary Kay Watson, renewable energy initiatives. • 16 Nicole Wood AT ISSUE: SAFETY — A plan to combine the state’s gang and drug task forces Chief Photographer has mixed reviews with proponents saying the two activities are linked and Tom Olmscheid should be fought together. • 17 Photographers Andrew VonBank, Lisa Marie Sanders PEOPLE — After two terms in the Legislature, Rep. Eric Lipman (R-Lake Staff Assistants Elmo) is leaving the Legislature to spend more time with his growing family Christy Novak, Aaron Hoffman and professional pursuits. • 18 Session Weekly (ISSN 1049-8176) is published EOPLE weekly during the legislative session by the P — Rep. Steve Strachan (R-Farmington) is leaving the Legislature Minnesota House of Representatives Public after one term to take on a new position as the police chief in Lakeville. • 19 Information Services, 175 State Office Building, St. Paul, MN 55155-1298. Periodicals postage paid at St. Paul, MN, and at additional mailing offices. POSTMASTER: Send address changes to DEPARTMENTS/RESOURCES Session Weekly, Public Information Services, Minnesota House of Representatives, It’s A Fact: State schoolers • 4 Governor’s Desk (CH 134-CH159) • 22 175 State Office Building, St. Paul, Resources: 2004 House and Bill Introductions (HF3180 -HF3185) • 23 MN 55155-1298. Senate members • 20 Minnesota Index: Mining in Minnesota • 24 Printed on recycled paper which is 50% recycled, 30% post-consumer content. On the cover: An afternoon visitor looks up in awe at the Capitol dome, as seen from the catwalk high above the Rotunda floor. —Photo by Andrew VonBank 2 April 23, 2004 IRST READING F★ ★ ★ Revenue raiser To our readers: This issue of Session Weekly marks the final issue House tax bill adds $49.6 million in tax-related revenues, raises under the direction of our editor, Michelle Kibiger. Michelle, who also serves as assistant director for budget reserves, counts racino revenue worth $36.2 million House Public Information Services, is leaving the House after four-and-a-half years of dedicated work. BY MICHELLE KIBIGER Ron Abrams (R-Minnetonka), the bill spon- Michelle leaves behind a magazine that continues to he omnibus tax bill, approved by the sor, at the April 21 Ways and Means Commit- win recognition, including a recently announced House Taxes and Ways and Means tee. Economically, he said he is hopeful that National Association of Government Communicators Tcommittees, contains a number of pro- eventually the state will begin collecting more award for publications. Such an award is recognition posals intended to raise revenue, adjust alter- revenues than even forecasts expect, which for the hard work of all of our publications staff, native minimum tax income exemptions, would then allow more flexibility for provi- including Michelle. phase in a change to the way corporate fran- sions in the bill. We wish her the best in her future pursuits. chise taxes are calculated, and transfer budget Several members expressed concern regard- reserves in the event the state experiences ad- ing things not dealt with in the bill, including Barry LaGrave ditional budgetary problems before the fiscal local government aid and local sales taxes. biennium ends June 30, 2005. “I’m not concerned about what’s in the bill,” in the 1960s to target 155 taxpayers who made As approved by the committees, tax provi- said Rep. Paul Marquart (DFL-Dilworth) be- more than $200,000 in income but paid no taxes. sions in the bill would result in $49.6 million fore the House Taxes Committee April 20. “I’m The tax operates parallel to the regular income in additional revenues for 2004-05. It includes concerned, members, by what is not in the bill.” tax system. It allows for fewer deductions, ex- a $3.8 million appropriation for increased He said not addressing some of the local gov- emptions, and credits than regular income tax. compliance measures and for specific studies. ernment aid cuts from 2003 created “extreme The move will cost the state $2.2 million in The bill also accounts for the financial pro- unfairness” to rural Minnesota. revenue for 2005 and is projected to cost visions of the proposed casino at Canterbury “This bill doesn’t correct any of those $13.9 million in the 2006-07 biennium. Park, part of another bill (HF646) passed by things,” he said. The bill would also phase out the charitable con- the House during 2003. The tax bill accounts The bill would increase the exemption al- tribution limit for alternative minimum taxpayers. for $39.7 million in additional revenue as a lowed for the alternative minimum tax The bill would also phase in a new structure result of the casino and establishes a stable tax through 2006. By then, the exemption for a for calculating corporate franchise taxes. Under rate for the plan so it provides married couple, filing a joint return would current law, Minnesota taxes are calculated by a 40 percent of revenues to the general fund. grow to $44,000 from the current level of formula that weighs sales in the state at 75 per- However, another provision would provide $40,000, which according to nonpartisan fis- cent, and both property and payroll at 12.5 per- a 5 percent franchise fee on card club revenue cal and research staff, would reduce the num- cent. Under the bill, sales would bear the full 100 at the racetrack. ber of total filers under the alternative percent by 2012, which proponents say increases In addition, the bill would bring the budget minimum tax by 39 percent. In addition, all the incentive for businesses to physically locate reserve to $290 million and move $350 million tax filers with federal adjusted gross incomes in the state and pay employees good salaries. to the cash flow account. It would also add new less than $100,000 subject to the alternative A few tobacco-related provisions are also spending priorities if the state has another bud- tax would be reduced by 56 percent. included in the bill. Sales taxes on cigarettes get surplus before a rebate may be considered: Congress created the alternative minimum tax would be collected at the wholesale level, based • add to cash flow account until it on the gross invoice price of dis- reaches $350 million, tributors. The provision is an at- • increase the budget reserve tempt by the Revenue account until it reaches Department to increase compliance $635 million, in payment of the tax. • restore any property tax revenue In addition, delivery sales of to- shifts for K-12 education, and bacco products, typically from the • move holdback payments for K- Internet, would be regulated under 12 state aid up to 90 percent. the bill, including requirements that There would also be a number of sellers verify the identity of the pur- additional restrictions on Internet chaser upon delivery and that shipped cigarette sales, as well as reductions on packages only be delivered to adults, certain special tax rates. as verified by a signature. PHOTO BY TOM OLMSCHEID The bill meets its target and keeps Members of the House Taxes Committee debate the omnibus tax bill that, The bill would also create an in- effects to the state budget in future in part, would result in $49.6 million in additional revenues for 2004-05, ternational economic development biennia at a minimum, said Rep. before approving the measure April 20. zone within 60 miles of the Session Weekly 3 Minneapolis-St. Paul International Airport to serve as a regional distribution center that would increase capacity and handle air freight. The zone would be eligible for certain tax exemptions for up to eight years, including state and local sales tax on purchases used by businesses in the zone, State schoolers property taxes on improvements within the zone, Minnesota state orphanage in Owatonna operated for 60 years and a jobs credit for higher paying jobs. In 1885 the Minnesota Legislature estab- school, with children arriving and leaving, The bill also includes a number of provi- lished the state’s only publicly funded or- made the task a challenge for teachers. sions heard during the 2004 legislative session. phanage. Located in Owatonna, the State Recreation was considered an important • Income tax payers may subtract up to $10,000 Public School for Dependent and Neglected part of education. Tumbling was popular, for travel and lodging expenses and lost Children opened its doors the next year.