Legislature Reaches First Committee Deadline
Friday, March 20th, was the first committee
deadline and what a contrast between this year and last year. With the
change in power in the House, our agenda is almost entirely positive and there
have been few negative bills moving through the process as far as NFIB is concerned.
For the most part, legislators do honor the deadline and as of the 20th,
all bills either reached the floor or the finance or tax committee. That being
said, its important to note that nothing is dead for sure in Minnesota and
legislators can always bring up defeated bills on the floor in the form of
an amendment. Below is a brief update of the issues NFIB is involved in
in the 2015 session.
HOUSE MAJORITY PROPOSES HUGE TAX RELIEF!
The new House majority has set their budget targets for the
2016-2017 two-year budget and they just proposed $2 billion dollars total in
tax relief! This is incredibly encouraging news and it shows the new
House majority wants to return all of the recently projected $1.9 billion
dollar surplus to tax payers.
Hopefully this will be the year to finally conform
Minnesota’s general estate tax exemption to the federal. We are phasing
in to only a $2 million dollar per person general exemption starting in 2018
and the federal is currently at $5.43 million. Their tax bill will
hopefully include a small business income tax cut and a reduction or at least a
freeze in the growth of the statewide portion of the commercial property tax
and likely other positive provisions. Their proposal is quite a contrast
to Governor Dayton’s, who proposed spending virtually all of the large
projected budget surplus. The Senate has yet to propose their budget
targets.
MINIMUM WAGE/LOWER WAGE FOR SERVERS PASSES HOUSE!
HF 1027, Representative Pat Garofalo (Farmington) and SF
1941, Senator Gary Dahms (Redwood Falls)
A proposal to help restaurant owners deal with
the burden of the large minimum wage increase that passed last year was
approved by the House. The proposal would set a separate lower tiered
minimum wage for restaurant owners whose tipped employees earn at least $12.00
an hour on average for the year. The proposal freezes the minimum wage
for restaurant owners at the current $8.00 per hour, which is scheduled to rise
in increments to $9.50 on August 1, 2016
On behalf of our restaurant members, NFIB supported the
proposal and it was encouraging to see some bi-partisan support as the measure
passed 78 to 55. The bill’s authors feel the legislation is workable
since the average statewide per hour wage for servers is $18.00 and $22.00 in
the metro area. Minnesota is on another bad list when it comes to tipped
employees; we are one of only seven states that does not allow restaurant
owners to pay tipped employees a lower minimum wage, and unbelievably, New York
City, one of the most expensive places to live in our country, only requires
restaurant owners to pay between $4.90 and $5.65 per hour. Although that will
change to $7.50 per hour later this year.
Despite the encouraging vote prospects for this legislation,
the Senate appears to have no desire to help restaurant owners and Governor
Dayton remains opposed even though his two sons own a restaurant in Minneapolis
and have appealed to him about this issue.
MINIMUM WAGE/PREEMPTION OF LOCAL LAWS
HF 1241, REPRESENTATIVE Tony Albright (Prior Lake) and SF
565, Senator Lyle Koenen (Clara City)
NFIB is also strongly supporting legislation that would
preempt local units of government from enacting their own minimum wage and
benefit mandates on private sector employers. The proposal is a reaction
to the radical proposal in Minneapolis to enact a $15 per hour minimum wage for
all private employers in the city but also many legislators feel that issues
such as minimum wage and mandated benefits should be decided only by the state.
This would certainly make it easier for employers who have a statewide presence
to conduct business. The bill was heard in the House Jobs Committee and
was laid over for possible consideration in their omnibus jobs bill. NFIB
testified in support of the bill but it does not appear that the Senate bill
will be heard this year.
MINIMUM WAGE/ REPEAL OF ESCALATOR
HF 1419, Representative Garofalo (Farmington) and SF 830
Senator Vicki Jensen (Owatonna)
Legislation has been proposed in both the House and the
Senate to repeal the worst part of last year’s dramatic minimum wage increase,
the automatic escalator. To date there has been no action on this bill
but there is still the possibility the House could include this in one of their
budget bills and keep this important issue alive right up to the very
end.
UNEMPLOYMENT INSURANCE TAX CUT!
HF 1416 Representative Dennis Smith (Maple Grove) and SF
1320 Senator Dan Sparks (Austin)
With a large surplus in the unemployment insurance trust
fund that is expected to swell to $1.6 billion by January 1, 2016, another
unemployment insurance tax cut bill has been proposed. The bill would
reduce both the minimum tax and the taxable wage base. It would reduce
taxes employers pay by about $30-$100 per worker. Those with higher taxable
wage bases (the current maximum is $30,000) will receive larger reductions.
NFIB strongly supports this legislation and is concerned
about the trust fund balance becoming too large. The tax cuts would be
rescinded if the balance in the fund drops below approximately $1 billion.
The bill did not get a hearing in the Senate and the Department of Employment
and Economic Development, which administers the unemployment program, has voiced
concerns about the bill. Stay tuned.
FIGHTING LAWSUIT ABUSE/TORT REFORM
Restrictions on Trespasser Lawsuits,
HF 799 Representative Dan Fabian (Roseau) and SF 395, Senator
Sparks
Legislation has been introduced that passed committee in the
House to protect land owners from most lawsuits that a trespasser may attempt
to file if they were injured during the act of trespassing on private
property. Our tort reform coalition of which NFIB is a co- leader,
Minnesotans for Lawsuit Reform, is concerned about new types of baseless claims
that may be filed by trespassers against landowners. Currently in
Minnesota, such claims are difficult to file and this bill codifies past rulings
and would shield a property owner in most cases unless they acted willfully
caused an injury of a trespasser. This bill has not been heard yet in the
Senate Judiciary committee.
Reduction in Prejudgment Interest from 10% to 4%
HF 1524 Representative Nick Zerwas (Elk River) and SF
1512, Senator John Hoffman (Champlin)
A second important lawsuit related bill also passed out of
committee in the House. The legislation would reduce prejudgment interest
that defendants have to pay from the current unrealistically high 10% to
4%. Back in 2009, the plaintiff lawyers convinced the legislature to
raise prejudgment interest to the unreasonable level of 10% which is completely
out of sync with any interest rates in current financial markets.
Unfortunately in 2010, local governments and the state became exempted, leaving
only private parties to pay this unrealistic amount. Also disturbing on
this issue is the fact that the time period for which a losing defendant owes
starts when they receive a letter informing them that they have been sued which
sometimes occurs well head of the lawsuit actually being filed. All
totaled, some losing defendants end up paying three to four years of
prejudgment interest and frequently it is demanded in settlement offers.
Prospects for this bill are uphill in the Senate but
hopefully the House leadership will include it in the omnibus judiciary finance
bill and keep this important issue alive until the very end of session.
Exempting Small Business from New Familial Status
Discrimination Lawsuits Stalls
HF 1128, Representative Peggy Scott (Andover) and SF
1266, Senator Jensen
Unfortunately, legislation to exempt small business and any
small organization from these new discrimination lawsuits stalled. The
House leadership declined to hear the bill when the Senate Judiciary Chair,
Senator Ron Latz (St Louis Park), refused to hear the bill. The new law
authorizing these new types of lawsuits against employers just took effect and
we have yet to find a case that has been filed. NFIB will continue to
closely monitor this new law.
HEALTH INSURANCE LEGISLATION
Significant Restrictions on MNsure Program
HF 5, Representative Tara Mack (Apple Valley)
The House is advancing two bills to address one of the
nation’s worst health insurance exchanges, MNsure. The House bill
authored by Representative Tara Mack places several restrictions on MNsure and
hopefully will bring about significant improvement. Among the changes
would be to remove their ability to arbitrarily exclude otherwise qualified
insurers from participating in the health insurance exchange. This is
known as the Active Purchaser Provision that never should’ve been enacted in
the first place. The legislation also allows an insurance agent to be
appointed to the board and subjects all MNsure employees to the state salary
schedules to keep salaries in check and makes many other changes.
Finally, the legislation directs the Commissioner of Commerce
to seek a federal waiver to allow individuals and small businesses to purchase
subsidized health insurance plans outside of the insurance exchange.
The Senate has a totally different approach. They are
trying to make MNsure a state agency but between the two bills hopefully the
power of this failed exchange will be significantly regulated one way or
another and its performance will improve. NFIB did testify in support of
several of the reforms contained in the House bill.
Legislation to Abolish MNsure
HF 1664 Representative Matt Dean (Dellwood)
Representative Matt Dean has a different approach. He
wants to abolish MNsure and Minnesota would become one of the many states that
utilizes the federal exchange. You can make a pretty strong argument for
this when you consider the terrible launch and first year experience the health
insurance exchange had, and even Governor Dayton has said he’s open to possibly
doing this. At some point the federal grants will be cut off to Minnesota
and if the exchange is operating in a deficit, Minnesota tax payers will have
to back it versus federal tax payers and that could be a key factor in the
future of this troubled health insurance exchange.
Loosening Restrictions on Self-Insurance for Small
Business
HF 294, Representative Bob Loonan (Shakopee) and SF 300,
Senator Jensen
Legislation to loosen restrictions on self-insurance for
small business and make it easier for small employers to self-insure (purchase
stop-loss coverage), has advanced in both the House and the Senate.
Currently, Minnesota makes this more expensive and difficult to do than other
states and the legislation puts us in line with what many other states
require. If enacted, small employers who are able to take advantage of
this law could save 10-40% of premiums when compared to federally regulated
Obamacare plans. NFIB supports the legislation and we testified in
support of it.
RULE-MAKING REFORM/ LEGISLATIVE APPROVAL OF SOME NEW
RULES
HF 1261, Representative Ron Kresha (Little Falls) and SF
1329, Senator Kent Eken (Twin Valley)
Legislation that makes a significant reform to the current
administrative rule-making process has advanced in the House. The bill
establishes four criteria for when a rule would cause a substantial economic
impact, and if the agency proposing the rule or the administrative law judge
feel that criteria is met, the Legislative Auditor is directed to convene a
five-person peer review advisory panel to conduct an economic impact analysis
of the proposed rule. Once the analysis is completed the proposed rule would be
have to be reviewed and approved by the legislature.
This bill makes a positive change to the rulemaking process
but was not heard in the Senate and is receiving resistance from state
agencies. Stay tuned.
TRANSPORTATION SHOWDOWN!
The latest turn in the transportation showdown occurred last
Monday when the House majority proposed a sweeping $7 billion, 10 year
transportation funding package that will not include new and wasteful light
rail spending. Earlier in the session, Governor Dayton proposed a
completely unrealistic $11 billion increase in gas taxes and sales taxes to
fund his plan which sets the stage for a showdown that could include a special
session. It remains to be seen if the majority caucus in the Senate,
which is up for election in 2016, will actually support a dramatic increase in
gas taxes and sales taxes.
The Governor and the House majority caucus are at least
getting closer together on a total number but their approach is dramatically
different. The governor’s proposal is virtually all funded with increased
gas tax and sales taxes including an unpredictable proposal to sales tax,
gasoline at the whole sale level, which could make the amount of tax fluctuate
significantly for consumers.
Some of the highlights of the House plan which does not
raise any new gas or sales taxes is to bond for $2 billion, something Minnesota
has never done and likely should, dedicate all sales tax revenue from all auto
part sales which would raise $2.5 billion over ten years, raise $1.2 billion by
realigning MNDOT’s (Minnesota Department of Transportation) resources and use
$228 million from the current budget surplus. Stay tuned, this has a long
way to go.
SEVERAL BAD BILLS STALLED, SO FAR
Several bad bills micromanaging your business in about every
way conceivably possible have stalled so far in the Senate thanks to the chair
of the Senate Jobs Committee, Dan Sparks (Austin). The bills range from a
dramatic new paid family leave benefit that imposes a new tax on every employee
and employer in the state to a new wage theft protection measure that has new
penalties for employers to a fair scheduling bill that will have the government
assisting you in setting employee schedules and the perennial mandatory paid
sick leave bill that can’t even pass when the liberals have total
control. NFIB gives a big kudos to Senator Sparks for holding the line on
these negative bills that stand little chance in the new House of Representatives
but as mentioned earlier, everything is alive in Minnesota until they adjourn.
