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Legislative wrap up

Thu, May 29th, 2014
Posted in All Commentary

By Jeremy Miller

Senator serving Fillmore, Houston and Winona Counties

The 2014 legislative session wrapped up with the legislature adjourning Sine Die on Friday, May 16. While this session was hectic and demanding, it was also very productive. We passed significant tax relief, much needed COLA increases for those who provide support and services to our most vulnerable Minnesotans, income tax reciprocity and strengthened synthetic drug laws in our state.

Before getting into session highlights, I would like to take this time to thank all of my constituents for their ideas, concerns, feedback and passion throughout this legislative session. It is an honor to serve as your State Senator.

Included in this update are some of the key bills and achievements of this session. As always, if you ever have any questions, concerns or comments, or if I can ever be helpful on issues facing the state, please do not hesitate to contact me at or at 651-296-5649.

Tax Relief

In February, The Office of Minnesota Management and Budget released an economic forecast projecting a $1.2 billion General Fund surplus for the state of Minnesota. As a result of this surplus, the legislature passed two Omnibus Tax Bills this session which provided tax relief for Minnesotans.

The first bill used $578 million of the $1.2 billion surplus, $426 of which was in net tax reductions and another $150 million was added to the budget reserve.

Additionally this tax bill contained major provisions to conform state law to the federal tax code which totaled $200 million in tax reductions. These included deductions for mortgage insurance premiums, educator expenses as well as excluding employer provided education assistance. This allowed students to deduct their student loan interest, qualified tuition and other related expenses. The bill also included relief from the marriage penalty.

Notably, this tax bill provided $232 million in tax reductions by repealing all three business-to-business sales taxes passed in 2013. These included the repeal of the tax on labor service charges for repair and maintenance of business equipment and machines, repeal of the tax on telecommunications equipment and repeal of the tax on storage and warehousing services of business related goods.

Furthermore, there was a retroactive repeal of the gift tax imposed last session for gifts made after June 30, 2013 and an increased exemption of $2 million for the estate tax.

The second tax bill provided an additional $90.7 million in tax reductions and another $10.2 million in tax aids and credits. Important provisions included an expansion of current sales tax exemptions for purchases made by local governments, federal income tax conformity for mortgage short-sales and increases to current law for past military and combat zone credits. It also made permanent the $10 million per year spending increase for County Program Aid to combat aquatic invasive species.

Income Tax Reciprocity

An important provision included in the Omnibus Tax Bill #2 provides funding and orders the Revenue Commissioner to enter into negotiations with the State of Wisconsin on income tax reciprocity.

Tax reciprocity continues to be a significant issue for southeastern Minnesota and other border communities that are impacted by the lack of a reciprocity agreement. While it is unfortunate that an agreement was not reached before the 2014 tax season, this provision and the funding included is a huge step in the right direction.

Specifically, the provision requires that the state with a net revenue loss must receive the amount of that loss by the other state. If an agreement is reached before October 1, 2014, then the amount received must be at least the net revenue loss minus $1 million. The $1 million amount must not be subtracted from the payment if an agreement is reached after September 30, 2014. The Omnibus Tax Bill #2 included $1 million in funding for this provision.

Synthetic Drug Legislation

Throughout my time in the legislature, a priority of mine has been to strengthen the definitions of synthetic drugs in Minnesota. In 2011, I authored legislation which added very dangerous synthetic drugs known as “plant food” and “bath salts” to the list of schedule I drugs in Minnesota statute. As a Schedule I controlled substance, penalties for sale or possession now fall into line with other schedule I offenses. This could include felonies, depending on the particular case.

To expand on that effort, this session I worked with Senator Roger Reinert (DFL –Duluth) to pass legislation that will further regulate synthetic drugs in Minnesota.

This legislation further broadens the definition of “drug” in the chapter of law addressing pharmacy matters. “Drug” would include any compound, substance, or derivative which is not approved for human consumption by the U.S. Federal Drug Administration or specifically permitted by Minnesota law, and when introduced into the body, induces an effect substantially similar to that of a Schedule I or II controlled substance. This broader definition will give the Board of Pharmacy more power to regulate synthetic drugs.

This bill also empowers the Board of Pharmacy to issue cease and desist orders to businesses who are selling synthetic drugs. The language in this bill clarifies that pharmacists and retailers may not sell synthetic drugs and are subject to the authority of the Board of Pharmacy if they do, as well as expressly prohibits the sale of synthetic drugs that induce the same or substantially similar effect as scheduled controlled substances.

Lastly, this legislation appropriates funds to the Department of Human Services for educating and increasing public awareness of the dangers of synthetic drugs.

The passage of this legislation was a step forward for Minnesota. It is important that we use this two step approach to the problem of synthetic drug use by strengthening the definitions of synthetic drugs to allow law enforcement to do their job properly, but also by focusing on educating Minnesotans, especially our youth, about the dangers of drug abuse.

5 Percent Campaign

We are very fortunate in our state to have top rate facilities and organizations with trained and dedicated staff providing high quality care for Minnesota’s elderly and disabled. In the last few years, however, these organizations and their employees have suffered severe funding cuts, pay freezes and economic stagnation which have raised significant challenges such as high turnover rates of their workers and support professionals.

This session I was proud to successfully co-author legislation that provided a 5 percent wage increase to community-based services. This legislation was critical to move Minnesota back on track by valuing direct support and caregivers’ work, strengthening the economy and state budget and ensuring the future of quality services.

This legislation ensures that life in the community is the first and best option for people living with disabilities, the elderly and their families. With the help of so many wonderful advocates and organizations from across the state, who worked all session to see the 5 percent Campaign pass, we ensured that there is a safety net for our most vulnerable Minnesotans as well as adequate funding for those who care for this population.

Natural Disaster Debt

Service Equalization

Included in the Omnibus Supplemental Appropriations bill this session was important legislation to assist school districts affected by natural disasters by providing special debt service aid. This will help many districts in the future and will provide current relief and assistance to the Moose Lake and Rushford-Peterson School Districts which were hit with extreme flooding within the last several years.

In order to be eligible for debt service aid, a district must have been impacted by a natural disaster event occurring January 1, 2005 or later, the President of the United States must have declared a state of emergency and Federal Emergency Management Payments made available, the natural disaster must have caused more than $500,000 in damages to the district’s school buildings and the repair and replacement costs must not be covered by insurance.

As we have seen in past years, severe storms, high winds and flooding can occur across the state. For areas where homeowners, individuals and businesses are trying to rebuild their own lives, communities are unable to help their schools. This is an important step in ensuring our children and school’s are safe and provide a healthy environment following natural disasters.

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