The Capitol Letter

Vol. 14, No. 3,  Feb. 19, 2015

House Committee Debates Coal Power Import Lawsuit

On Monday, the House Job Growth and Energy Affordability Committee discussed HF 639, a bill that would repeal a provision of the 2007 Next Generation Energy Act that banned the importation of power from non-exempted out-of-state coal-fired electric generating units.   The State of North Dakota, along with other parties, challenged this law in Federal District Court.  The judge ruled in favor of North Dakota, citing violation the commerce clause of the U.S. Constitution.  In his budget recommendations, Governor Dayton asked for a $1 million appropriation to fund an appeal of this decision.

The bill author (Rep. Jim Newberger, R-Becker) and proponents including the MN Chamber of Commerce correctly stated that repealing this statute provision, as the bill would do, would prevent the state from spending additional state dollars to appeal the judge’s correct decision.  Opponents, including the Division of Energy Resources and the Sierra Club, suggested that the bill would end a state’s rights debate and ensure that Minnesota would be liable for North Dakota’s attorney fees.  Both sides agreed that the bill would have minimal effect on Minnesota emissions or energy portfolio, in light of the EPA’s pending Clean Power Plan.

After partisan and contentious debate, the bill was passed to the House floor.

House Tax Committee Hears Refundable Sales Tax Bill

On Tuesday, the House Tax Committee heard HF 531, a bill that would make the local government sales tax for construction materials refundable.  Providing supportive testimony were City of Marshall Public Works Director Glenn Olson and MMU Director Brad Roos, who both highlighted past and future construction projects where a refundable sales tax would provide significant cost savings.

The bill was laid over for possible inclusion in an omnibus tax bill.  It is customary practice to assemble numerous tax provisions into a larger package.  MMUA Government Relations staff will continue to monitor the Tax Committee proceedings and encourage the inclusion of the refundable sales tax provision in the omnibus bill.

On a related note, the Tax Committee also considered HF 874, which would provide an exemption for construction materials for wastewater treatment facility upgrades in Mora.  City Administrator Joel Dhien explained the significant savings the exemption would provide to the 1,200 customers of the Mora Municipal Utilities.  This bill was also laid over for possible inclusion in the omnibus tax bill.

MPCA Fees Restructuring Discussed in House Environment Committee

On Tuesday, the House Environment Committee was briefed on the Governor’s proposed budget for the Minnesota Pollution Control Agency.  His recommendations would allow the MPCA to begin a rulemaking process for restructuring its Land and Water Program fees.  The MPCA testified that, currently, revenue collected through Land and Water fees only fund 7% and 19% (respectively) of the work being done in the programs.  The agency recommends allowing these programs to be structured like the Air Program, under which the Legislature authorizes the level of fees that may be collected each year and the fees are distributed to permittees through a formula.

Under the budget proposal, MPCA would like to begin working with stakeholders and permittees on developing new ways for the Land and Water program fees to be collected.  Rulemaking would then be used to develop the formula by which the fees would be collected.

MMUA Government Relations staff will continue to monitor these discussions, seek member feedback, and collaborate with other stakeholders regarding this proposal.

Broadband Funding Bill has First Hearing in House

On Thursday, the Greater Minnesota Economic and Workforce Development Policy Committee heard HF 593, which provides $50 million for the Border to Border Broadband Program.  Bill author Rep. Ron Kresha (R-Little Falls) offered an amendment, which was adopted by the committee, that removes the existing requirement that sixty percent of the program funds must be reserved for “unserved” communities.  This has the effect of allowing projects in both underserved and unserved areas equal access to grant dollars.

An amendment to provide an additional $50 million for the fund in FY 2017 was offered and withdrawn due to lack of support.  An amendment to change the definition of unserved areas was voted down by the committee, due to concerns of the implications such a change would have on past grant awardees.

The bill was re-referred as amended to the Job Growth and Energy Affordability Committee.  MMUA Government Relations staff will continue to monitor and support its progress.

Pounding the Pavement for MMUA’s Priorities

Bill and Amanda continue to meet with legislators regarding MMUA’s positions and concerns with the assessments and fees being proposed in the Governor’s budget.  They also met with representatives from the League of Minnesota and Cities Coalition of Greater Minnesota Cities to discuss water-related legislation and having a coordinated response to the Governor’s proposed assessments and fee restructuring.