Deadline brings action on flurry of bills

Marriage, minimum wage, Mayo subsidy bills move

As the first committee deadlines of 2013 loom, Minnesota legislators have spent the week holding hearings on high-profile legislation ranging from the legalization of same-sex marriage to state funding for a Mayo Clinic-driven “destination medical center” development push in Rochester.

This Friday marks the first of a series of committee deadlines that bills must theoretically meet in order to be considered viable this year. The March 15 deadline requires that any policy proposal must clear all relevant committees in one chamber. But with the 2013 session nearing its halfway point, pure policy bills were not the only pieces of legislation on the move.

The onslaught will only intensify in the coming weeks as lawmakers begin working in earnest to patch a $627 million budget deficit. Here’s a status update on several key proposals moving through committee:

Gay marriage: The gay marriage debate went fairly smoothly at the Capitol on Tuesday, with bills to legalize same-sex marriage easily passing through House and Senate committees on party-line votes. The bills are now queued up for votes on both floors. Proponents of gay marriage say they’ll wait to take that vote until after work on the state budget is complete, but those statements didn’t shield them from accusations of “overreach” by opponents of the bill this week.

Rev. Gus Booth of Warroad Community Church hit that theme as the first testifier of the day in the House Civil Law Committee. He said the failure last fall of a Republican constitutional amendment to ban gay marriage was not a mandate to legalize gay marriage in the state. Booth accused Democrats of overreach and of making the people of Minnesota “collateral damage” in their decisions.

“It is not the will of the people,” Booth said. “Before the election, we were told we could vote against the marriage amendment and nothing would change. We were told that if the amendment was defeated, our marriage laws wouldn’t change and same-sex marriage would remain illegal. We now know that we were sold a false bill of goods.”

Testimony was emotional from both sides, with many gay couples pleading with lawmakers to allow them to be legally married in the state. In the House committee, 11-year-old Grace Evans testified in opposition to gay marriage, saying children should have both a mother and a father. “Which parent do I not need, my mom or my dad?” she asked the committee.

A surprisingly emotional argument in favor of the bill came from former Plymouth Republican Rep. Lynne Osterman, who voted in favor of strengthening the state’s Defense of Marriage Act nearly a decade ago. Osterman said she took a “politically expedient” vote then and has regretted it ever since. “Voting no today, this session, might seem politically expedient, but I’m telling you today that you will have to live knowing that a no vote is not fair,” she told House committee members. “I’m imploring you, please get this right.”

Only one Democratic lawmaker, Sen. Barb Goodwin, expressed hesitation about the timing of the vote ahead of the committee hearing. But when it came time to vote on Tuesday, Goodwin said she is fully behind the effort to legalize gay marriage in Minnesota. “My concern is that we need to make sure that, when this goes on the floor, we have enough votes to pass it,” Goodwin said. “I don’t want to see it fail.”

That seems to be the growing sentiment among Democrats who are expecting to vote on the issue later in the session, regardless of the political risks. DFL Rep. Melissa Hortman, a co-sponsor of the proposal, addressed that in her testimony, saying Democrats are voting on this bill “at our peril.”

Health care insurance exchange: The 10-member conference committee on legislation establishing a health-insurance exchange is working feverishly to reconcile the House and Senate bills.

Conferees were named Monday afternoon, and the panel held its first meeting that evening. The hope was to wrap up the process by midnight Wednesday. That would allow the House to take up the bill on Thursday and the Senate on Monday.

Time is tight, because the state faces a federal deadline of March 31 to enact exchange legislation or face the prospect of having one imposed by the federal government. With the Easter/Passover break looming, that likely means that the bill needs to be off to the governor’s desk by March 21. Legislative leaders want to leave some buffer time in case of protracted partisan wrangling on the House or Senate floor.

There are a couple of substantive differences between the two bills. The Senate version grants the seven-member board that will oversee the exchange the authority to determine which insurance products can be offered for sale. By contrast, the House bill allows all insurance firms that meet certain threshold requirements permission to offer plans through the marketplace. The Minnesota Chamber of Commerce and the Minnesota Council of Health Plans have been strongly opposed to the Senate language, arguing that it grants extraordinary power to the exchange board to pick winners and losers.

In addition, the two bills differ on how to pay for the exchange, which is expected to cost roughly $60 million per year to operate. The House relies on a tax of up to 3.5 percent on premiums purchased through the marketplace, while the Senate uses tobacco taxes, which are part of the general fund. Minnesota Management and Budget Commissioner Jim Schowalter has raised concerns about utilizing general fund dollars to pay for the exchange.

Nearly 1.3 million individuals are expected to purchase coverage through the state-run marketplace once it’s in place, including 300,000 individuals who currently lack insurance. Roughly 700,000 of the individuals expected to use the exchange are already covered by Medicaid.

The conference committee is being led by Sen. Tony Lourey, DFL-Kerrick, and Rep. Joe Atkins, DFL-Inver Grove Heights, the chief authors of the two versions. Most of the conferees were predictable based on expertise in health care and commerce issues. One surprise in the House: Freshman Rep. Dan Schoen of St. Paul Park was named to the panel.

Just one Republican, Rep. Jim Abeler of Anoka, was named to the conference committee. He was also the sole GOP vote in favor of the legislation.

Rochester/Mayo expansion: Advocates of a $6 billion plan to build a destination medical center around the Mayo clinic in Rochester were asked by the House Taxes Committee to take a moment of pause.

Before its hearing this week, the expansion plan was moving through the Legislature with unprecedented speed for one of the largest public subsidies proposals in the state’s history. As originally proposed, the bill would put state and local governments on the hook for about $585 million in funding to help pay for infrastructure and bridges as part of the expansion. Mayo would start kicking in its $3.5 billion contribution to the project first, which would generate extra sales and business property taxes they’d like to see captured by the state in a special tax increment financing district. Lawmakers in jobs and labor committees heaped praise on the bill for its creative funding scheme and the potential to create tens of thousands of permanent jobs in the area.

But legislators got a bit of sticker shock last week when a new fiscal note on the bill bumped the state’s price tag up to well over $1 billion over 30 years. In House Taxes, Chairwoman Ann Lenczewski called the bill a “massive” public subsidy that’s being couched as involving no cost to the state. “Is this a public subsidy that’s worth it for taxpayers and all of Minnesota?” she asked.

Lenczewski, who is known for her aversion to carving out special tax districts, also questioned the notion that Mayo’s private investment would create such a big economic boost. Project supporters have touted up to 32,200 new jobs and growth that would allow the state to capture more than $8 billion in tax revenue over 30-plus years. Lenczewski asked House staff to research that claim, specifically what would have happened if the fund had been created between 1987 and 1991. The research found that a fund started in any given year in that time period would have captured about $1 billion in additional state tax revenue over 20 years, but less than $40 million of that amount would have come from additional tax revenue that went above and beyond growth rates across the state.

“There’s no exceptional growth, there is no excess revenue here,” she said. “It is a public subsidy from Minnesota, from the very first dollar.”

After the committee, Lenczewski said the bill would need major changes if it’s to pass this session. House Taxes will likely take the bill up again next week. The Senate Judiciary Committee last week agreed to pass the bill without recommendation, a fairly rare move that is typically reserved for bills without much support. Its next stop is the Senate State and Local Government Committee.

Minimum wage: A bill to dramatically increase the state’s minimum wage has quickly pushed its way through House committees.

In a packed hearing of the House Commerce and Consumer Protection Committee on Tuesday, DFL Rep. Ryan Winkler presented his bill to increase minimum wage to $10.55 for the final time before it heads to the floor. The proposal was quickly and successfully amended by freshman DFL Rep. Laurie Halverson, who proposed to lower the increase to $9.95 an hour. That would be more in line with inflation adjustments over the years, she said.
“I think 450,000 Minnesotans are getting closer to a pay increase,” Winkler said after the bill passed in Commerce. It is now headed to the full House floor for a vote.

Under his bill, the increase would kick in by mid-August and be adjusted for inflation in the following years. The minimum wage in Minnesota is $6.15 an hour for large employers and $5.25 for small firms, although most workers in the state are paid the federal minimum wage of $7.25 per hour.

The bill is moving more slowly in the state Senate. DFL Sen. Chris Eaton’s bill to raise the state minimum wage to $7.50 an hour has yet to pass through its first committee, despite Senate Democrats labeling the bill as a priority at the start of session. Gov. Mark Dayton has said he supports an increase to $9 or $9.50 an hour.

Energy policy: The House Energy Policy Committee on Tuesday rolled out its omnibus energy policy bill. The bill includes amended versions of the major renewable energy proposals that have emerged this session.

One item on environmentalists’ wish list is increasing the 2007 Renewable Energy Standard (RES) so that Minnesota utilities are required to produce 40 percent of their power from renewable sources by 2030. The original RES called for 25 percent by 2025. The 40 percent standard is in the House bill, sponsored by Energy Policy Chair Melissa Hortman, DFL-Brooklyn Park, but municipal and rural electrical cooperative utilities are exempt. Both utility groups have contended that they can’t achieve the standards as easily as larger, investor-owned utilities.

The bill also includes a solar energy standard. But the goal is for 4 percent of the power generated from Minnesota utilities to be generated from solar by 2025, a substantial reduction from the 10 percent goal that had been initially proposed.

Agriculture policy: A bill that makes changes to the state’s so-called “Buy the Farm” law advanced this week in House and Senate energy committees after receiving amendments. The Buy the Farm law, which was enacted in the 1970s and is unique to Minnesota, allows landowners to demand that utilities buy their land when it builds a high-voltage transmission line over their property. News reports this year have unearthed complaints from landowners that utilities building the CapX2020 high-voltage power line between Monticello and Fargo, N.D., have dragged out the process for determining if they would buy affected parcels of land.

Proposals from Rep. David Bly, DFL-Northfield, and Sen. Kevin Dahle, DFL-Northfield, have attracted a bipartisan list of co-authors. The House bill still has to pass the Government Operations Committee. It will also need to be heard in the Civil Law Committee, because it deals with eminent domain law.

Utilities are largely exempt from the eminent domain law that state lawmakers passed in 2006. The bill would apply more strictures to utilities, such as requiring they give a written offer to buy the land within 90 days. Lawmakers are also weighing whether to require the payment of relocation costs for landowners.

Margaret Munson of St. Paul told the House Energy Committee that small organic farms lose their certification when they have to move, and incur significant costs in re-establishing their operation. “If they are forced to move because they can no longer run their dairy in conditions favorable to the health of their animals, they should at the very least receive full financial reparations for all of the relocation costs,” Munson said.