Sen. LeRoy Stumpf (DFL-Thief River Falls) explained the education funding provisions. "When we began in January we realized there is a significant deficit we must satisfy, but when we saw the governor's proposal we saw there were huge cuts to many programs. We can be proud that we maintained funding at current levels in this proposal," Stumpf said. He said one of the most significant cuts in the governor's proposal was in the area of special education, but the committee felt it would be better to keep funding stable. We are living up to our commitment to fund education that we made two years ago he said. "There are no frills, no extras and no inflation adjustments in the bill," Stumpf said. "We tried to stay as close to current law as we could. That is the heart of this bill," he added.

Stumpf said that there were portions of the governor's proposal included in the spending provisions. The bill began with a moratorium on charter schools, but that was changed to reductions in the lease aid, Stumpf said, which is similar to the governor's proposal. There are reforms in the measure, one of which is to create a statewide library board, he said. Sen. Steve Kelley (DFL-Hopkins) explained two additional reform provisions. One of the reforms is the implementation of incentives for performance pay if districts and bargaining units agree on a valid measure for performance pay, Kelley said. Districts and teachers need more flexibility in compensation in order to retain the best teachers, Kelley said. The other reform is designed to move Minnesota forward with on-line learning, Kelley said.

Pogemiller said the rest of the bill pays for the education funding provisions. Pogemiller outlined the provisions in the revenue portions of the bill. The measure creates a new tax bracket for taxpayers earning more that $135,000 for single taxpayers and $250,000 for married taxpayers. The measure also contains two corporate tax provisions. In addition, the measure includes a $1 per pack hike in the cigarette tax and increases the tax on tobacco products. Pogemiller said the increases in tobacco taxes are earmarked for health care costs and for the statewide tobacco prevention program. The bill also targets development incentives to regional centers throughout the state and provides for a biotechnology development zone, Pogemiller said.

Pogemiller offered the governor's proposal as an amendment to the bill. Sen. William Belanger (R-Bloomington) gave a brief summary of the governor's bill. The bill reduces local government aid payments and adopts levy limits, Belanger said. The bill also modifies the local government aid formula and generates funds through accelerated payments and alters the disposition of a variety of taxes, he said. The bill also transfers tobacco endowments to the general fund. "The governor took a reasonable approach to solve the greatest shortfall in history without raising taxes," Belanger said.

Sen. Dave Kleis (R-St. Cloud) said, "The underlying bill is a huge tax increase. It is a huge tax increase on businesses and entrepreneurs and will drive businesses out of the state." Sen. Geoff Michel (R-Edina) said the governor has been very clear; he is not going to raise taxes. "We need to be competitive with other states and other governors are not raising taxes. Other governors are taking the same tack as Gov. Pawlenty because they have realized we can't pile on by increasing taxes," Michel said.

Sen. Julianne Ortman (R-Chanhassen) said it is pure rhetoric to say the revenue increases are dedicated for specific purposes such as health care and higher education in the bill. Pogemiller responded that it is understood that the revenue is needed to make whole the budgets in the health and human services areas. "This is a DFL spending and tax increase bill, but I am concerned about our long-term economic recovery," Ortman said. Ortman said there is a price to pay in new jobs, less investment and less economic growth with a tax increase. "We need long-term economic recovery and this is not the answer," Ortman said. Stumpf responded that the governor's bill translates into a property tax increase, but the Senate plan raises general taxes that are fairer.

Belanger said the amendment protects those who have lost their jobs, are under salary freezes and protects job providers. Pogemiller urged a no vote and said the cuts on local government aids are too severe.

Kleis offered an amendment to the amendment altering the local government aid formula. "I strongly support the fact the amendment does not include tax increases, but I am concerned about the cuts to local government aids," Kleis said. Kleis said the amendment does not have such severe cuts for cities under 5,000 in population and lessens cuts for other cities in Greater Minnesota. Pogemiller opposed the amendment and said the original bill provides a better balance. Sen. Betsy Wergin (R-Princeton), Sen. David Senjem (R-Rochester) and Sen. Cal Larson (R-Fergus Falls) all spoke in support and said the amendment to the amendment protects small communities in Greater Minnesota. Sen. John Hottinger (DFL-St. Peter), though, spoke against the amendment and said it attempts to make a bad amendment better. He urged members to support the underlying bill and reject both the amendment to the amendment and the amendment containing the governor's proposal. The amendment to the amendment failed on a 16-48 vote.

Ortman said, "We are back to the option of supporting the governor's proposal or the DFL proposal. The governor's proposal is a better option because he has asked local governments not to raise property taxes and his bill provides for a reverse referendum. The Senate DFL proposal has a draconian property tax freeze." However, the amendment containing the governor's budget proposal failed on a 19-46 roll call vote.

Sen. Dallas Sams (DFL-Staples) offered an amendment providing for revenue recapture by ambulance services. The amendment was adopted. Sen. David Knutson (R-Burnsville) offered an amendment to reinstate the school academic and financial performance evaluation project. Knutson said, "We are going to spend over $12 billion on education funding, but we have no idea of the correlation of performance and funding." However, Kelley and Stumpf argued against the amendment and said the provision does not accurately measure education success. The amendment failed on a 29-36 roll call vote.

Sen. Michele Bachmann (R-Stillwater) offered an amendment providing for a constitutional amendment to limit increases in government spending and taxes unless approved by the voters. The amendment was ruled out of order under the Senate Rules. Bachmann moved to suspend the rules in order to have debate on the proposal. "We need to have a debate about a philosophical change," Bachmann said. The motion to suspend the rules failed on a 30-32 roll call vote.

Senjem offered an amendment allowing counties to adjust services if funding is reduced or terminated for a state mandated program. Pogemiller said the only reason the amendment is needed is if the services are not funded, but under the bill services will be funded. The amendment failed on a 33-33 tie vote. Sen. Mady Reiter (R-Shoreview) offered an amendment deleting a provision providing for county housing redevelopment authorities in Hennepin, Ramsey, Anoka and Washington County. Sen. Michael Jungbauer (R-East Bethel) said the bill contains compromise language so he no longer opposes the provision. However, Sen. Debbie Johnson (R-Ham Lake) said cities in Anoka County do not support the bill, but do support the amendment. The amendment failed 11-48. Senjem offered a second amendment relating to mandates. The proposal creates a legislative commission on unnecessary mandates to study the issue, Senjem said. Pogemiller opposed the amendment and said the work is better done in committee. The amendment failed 30-35.

Belanger said, "We are faced with the biggest deficit in state history and now we are faced with the biggest tax increase in state history. This is an unprecedented increase. "Given the governor's position that he will not sign any bill with tax increases and he cannot go back on that pledge," Belanger said. Other Republican Senators spoke against the bill because of the tax increase provisions.

DFLers spoke in support of the bill, particularly the education funding and property tax freeze provisions. Pogemiller said, "I don't think the governor has a plan that can pass the Legislature. It is time for a bi-partisan plan. The governor has tax increases, but they are concealed taxes-higher tuition, increased fees and property taxes." Hottinger said, "This debate is a fundamental one in deciding what sort of state we want to have." He said the bill is balanced and combines the tax increases with truly significant cuts. "The cuts were too extreme, the damage too deep. This is the vote about the future of Minnesota-education, economic recovery and jobs," Hottinger said.

The bill gained final passage on a 35-31 roll call vote.

Joint and several liability involves the tort law concept under which multiple defendants who are liable for a damage award may be responsible for paying the proportion of the share of the award owed by another defendant who is unable to pay. Under current Minnesota law, a defendant is liable for the entire award if the defendant is responsible for more than 15 percent of the damages, or is liable for up to four times the percentage of liability if the defendant is liable for 15 percent or less of the damages.

S.F. 1462, carried by Sen. Don Betzold (DFL-Fridley), was the first measure heard on the issue. The bill aggregates damages, so that a plaintiff may seek relief if the aggregate fault of defendants is greater than the fault of the plaintiff. The bill also raises the threshold for joint and several liability to either 50 percent, situations of conspiracy or intentional torts. Employers are also granted protection for providing references to employees, under the bill. Betzold said that many employers are afraid to give references because they fear being sued if they say the wrong thing. Many employers are advised to limit their references to confirm dates of employment, he said. Current practice harms good employees, he said, who deserve glowing references. The bill also provides, however, a cause of action for employees if an employer knowingly provides false or defamatory information with the intent to harm the employee. Betzold said the aggregation provisions of the bill put Minnesota in line with 46 other states. The measure also includes provisions relating to bad faith insurance practices.

"This is not tort reform, this is not civil justice reform," said Sen. Geoff Michel (R-Edina). The bill actually creates a new way to sue businesses, he said, specifically insurers. Sen. Julianne Ortman (R-Chanhassen) said the bad faith provisions are bad policy. We've never had a bad faith claim against insurers in this state, she said, and it is wrong to suggest that an insurer could pay benefits and still get sued. Insurance premiums will increase and reinsurance will be hard to come by, she said. With new litigation, the bill also puts a serious burden on the courts, Ortman said. Sen. Linda Scheid (DFL-Brooklyn Park) said there has been no public clamor for bad faith claims legislation. Increasing the number of lawsuits against insurance companies is bad for the vast majority of consumers, she said. In California, the cost of auto insurance became so high that residents repealed the state's bad faith claims law in a referendum. Other states with bad faith claims laws have imposed the provisions only after a pattern of bad action emerge, she said, but no such pattern exists in Minnesota.

However, Betzold said that 44 other states allow consumers to sue insurers acting in bad faith. What good does it do a consumer with a valid policy and a valid claim to wait months to get payment, he said. There are instances where insurers don't pay promptly and people suffer, Betzold said. He also said those who are pushing for the joint and several liability standard to be set at a fault threshold of greater than 50 percent are being unreasonable. Getting a jury to determine a party is 51 percent liable is essentially asking a jury to find a defendant 80 percent liable, Betzold said. A person who gets injured ought to be compensated; it offends centuries of jurisprudence to make it impossible for people to get recovery, he said.

The bill was defeated on a 25-40 vote.

Members next took a message from the other body on S.F. 872, sponsored by Scheid. The bill, as it left the Senate, related to purchase money mortgages. However, the other body amended the bill, removing the purchase money mortgage language and replacing it with joint and several liability provisions. Scheid said the language was similar to S.F. 95, which she also authored. Changes in joint and several liability are a matter of fairness, she said. People agree that it is fair for companies to pay for the damage that they cause, Scheid said, and that it is unfair for companies to be required to pay for damage they have not caused. Current law creates a second victim, the party left standing, the one with deep pockets, she said. The concept of joint and several liability has been defeated, or the threshold increased, in 38 other states, she said. "It is time to pass a reasonable, common sense approach to discourage lawsuits against parties with only a marginal connection to the damage," Scheid said. She moved to concur with the House amendments.

Betzold moved not to concur and to appoint a conference committee. Because the motion is higher than the motion to concur, the motion not to concur was considered first. Sen. Warren Limmer (R-Maple Grove) spoke against the Betzold motion. "There are times when things go to conference committee and it is like the roach motel," he said, "you check in, but you don't check out." We need to vote on this issue tonight, Limmer said. The motion not to concur failed, 28-37. The motion to concur was approved and the bill was repassed on matching 43-22 roll call votes. Sen. Dave Kleis (R-St. Cloud) moved to reconsider the final vote. The motion was defeated, 17-46.

In other action, members approved the omnibus pensions bill, S.F. 190. Betzold, chief author, said the other body appointed its members to the Legislative Commission on Pensions and Retirement (LCPR) very late. The appointees from the other body were also interested in a very limited agenda, he said, and rolled their pension provisions into the omnibus state government appropriations bill. If the House wants to maintain its limited scope, Betzold said, the Senate members of the LCPR have agreed that they would prefer not to have any pensions legislation at all this year. Members considered several amendments to the bill, many technical in nature, and with little discussion. One amendment, offered by Sen. Dean Johnson (DFL-Willmar), did spark some discussion. The amendment provides for the creation of a task force to study the creation of a voluntary statewide firefighter retirement plan. The amendment was adopted. S.F. 190 was granted final passage 60-3. Betzold moved to lay the bill on the table; the motion prevailed.

This is a very contentious issue with a lot of concern for damage to the environment and with a lot of concern on the part of the riders about places to ride, Marty said. Marty quoted an editorial in the Bemidji Pioneer that said the proposal provides a good middle ground. Sen. Carrie Ruud (R-Breezy Point) said the bill is a true bipartisan effort. "We are trying to put trails on the ground and to protect the environment," Ruud said. She said the bill also appropriates money for education and enforcement. "We believe we have come to a balance here that is reasonable and responsible," she said.

Ruud offered an amendment specifying that an ATV used for agricultural processes may, if necessary, be driven in the ditch area of the road. Marty offered two amendments to address concerns and clarify language. The first clarifies that a road authority may provide approval for ATV use for all or part of the public road right-of-way within its jurisdiction at a single hearing. Marty said that some local units may declare all road right-of-ways open, while others may have select road right-of-ways declared open. The amendment clarifies that only one hearing is necessary, Marty said. Sen. LeRoy Stumpf (DFL-Thief River Falls) said an easier transition would be for counties and road authorities to just close the right-of-ways they want closed and have all others be open to ATVs. Sen. Dennis Frederickson (R-New Ulm) said he supported the amendment because it leads to consistency and simplicity in the hearing process. Frederickson also pointed out that the effective date of the bill is 2004, which gives local units time to prepare their plans. The amendment was adopted.

Sen. Steve Dille (R-Dassel) offered an amendment specifying that ditches and roads are open, unless the local units of government close them. Sen. Claire Robling (R-Jordan) spoke against the amendment. "I have seen way too much damage from irresponsible riders. I think it is important to have the roads and ditches closed, unless designated as open," Robling said. She also said that the ruts left by ATVs provide a breeding ground for disease-bearing mosquitoes. "I thought people would be more responsible, but it has not happened. It is time to close the road ditches," Robling said.

Sen. Rod Skoe (DFL-Clearwater) said, "It is important to remember the bill applies to the entire state. People in my area use the ATVs for agricultural use. I would propose we take a slower path as we travel down this restrictive path." Sen. Pat Pariseau (R-Farmington) said the model the authors used is the same as that used for snowmobiles. Marty said, we have tried to come up with an approach that is consistent with other recreational vehicles. Sen. David Tomassoni (DFL-Chisholm) said the closed unless posted open has the potential to close down the ATV industry in the state. Frederickson countered that the approach in the bill is most appropriate. "I agree that there has been too much damage already," Frederickson said. Dille said, "I am sure in many parts of the state there aren't any problems, so why should we make local units of government have hearings to open roads." Marty clarified that the local governments do not have to post the ditches open, but there must be a hearing to determine which ditches and roads are open to ATV use. Ruud added that the trails and information are posted on the Internet, just like snowmobiles. The amendment failed.

Stumpf offered an amendment specifying that north of Highway 2 road right-of- ways would be open unless local jurisdictions declared them closed, while the area south would be closed unless the local government unit specified them open. Ruud argued against the amendment and said there must be consistency throughout the state. The amendment failed.

Marty offered a second amendment that postpones the effective date for the certification of riders until July 1, 2005 and moves other effective dates to the sections of the bill to which they apply. The amendment was adopted.

Bakk offered an amendment specifying that until the earlier of Jan. 1, 2006, or when rules are adopted, the formal designation of a motorized trail that is used by motorized recreational vehicles at the time of designation, the rerouting of less than one mile of motorized trail or the designation of existing public or forest roads for motorized recreational vehicle use are exempt from environmental review. Bakk said the amendment gives the Dept. of Natural Resources the authority to manage existing trails. Frederickson spoke against the amendment and said the issue is quite controversial and the language in the bill provides an appropriate balance. The amendment failed on a 25-38 roll call vote.

Stumpf said, "We have a thriving industry in ATV use and if this legislation passes we are going to close off that use." He said it is going to be a tremendous reduction in trails and I think in the end we are going to see people crying for change. Ruud countered that the DNR's mission is to protect the environment in cooperation with the citizens of the state and the bill allows the department to do so. "I invite the industry to step up and cooperate because the bill will help the industry thrive and survive," Ruud said.

The bill was granted final passage on a 52-11 roll call vote.

Sen. Steve Murphy (DFL-Red Wing) moved to reconsider the vote on S.F. 794, the bill authorizing additional dry cask storage at the Prairie Island electricial generation facility, which had been granted final passage at a previous floor session. Murphy said the bill needed to be amended in order to make some technical corrections. The motion to reconsider was adopted. In order to do so, Murphy moved reconsideration of an amendment adopted. The motion was adopted and Murphy then withdrew the amendment. In its place Murphy offered another amendment that is technically correct. The amendment provides that legislative ratification is not needed for that part of a certificate of need that authorizes the fabrication of spent fuel storage casks. Another portion of the amendment relates to service disconnection. Finally, the amendment provides any certificate of need for additional storage of spent nuclear fuel for a facility seeking a license extension must address the impacts of continued operations over the period for which approval is sought. The amendment was adopted and the bill was again granted final passage.