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Update: May 13, 2004 6:30 p.m.
The committee, chaired by Sen. Richard Cohen (DFL-St. Paul), also adopted the division report from the Transportation Policy and Budget Division concerning the appointment of Lt. Governor Carol Molnau and sent the recommendation to the full Senate. Cohen explained that the motions were purely procedural in nature.
The panel reconvened after the floor session and advanced a technical Dept. of Finance bill. H.F. 2446, sponsored by Cohen, authorizes principles, criteria and procedures for consolidating and eliminating funds and accounts. In addition, the measure makes other technical and clarifying changes to provisions related to the budget process. The bill was sent to the Senate floor.
S.F. 1666, sponsored by Sen. Dan Sparks (DFL-Austin), provides an appropriation for purchasing voting equipment in accordance with the federal Help America Vote Act (HAVA). The measure appropriates $26.4 million from the HAVA fund to the secretary of state for grants to counties to purchase electronic voting systems equipped for individuals with disabilities. Sparks said the bill is aimed at providing every voter an opportunity to vote in private without assistance. In addition, the measure appropriates $11.6 million to purchase optical scan voting equipment. However, the bill requires that all voters be provided an opportunity to verify their votes, to change their votes or correct any error before their ballot is cast, produces a permanent paper record of the ballot. The measure also requires electronic voting systems to accept and tablulate a marked optical scan ballot. The measure was advanced to the Senate floor.
Committee Chair Richard Cohen (DFL-St. Paul) authored a bill, S.F. 2732, making changes in education and human services appropriations to reflect the most current budget forecast. Cohen said the measure is a technical bill that contains no changes in policy.
Sen. LeRoy Stumpf (DFL-Thief River Falls) offered an amendment providing for the buy back of the shift of K-12 funding. The amendment specifies that when the reserve account reaches $653 million and the cash flow account reaches $350 million, any other monies will be used to buy back the shift. "Both the department and the governor recommend the amendment," Stumpf said. The amendment was adopted and the bill was sent to the full Senate.
The panel spent the balance of the hearing discussing a bill, S.F. 1907, creating an administrative remedy for violations of fair campaign practices in state and local elections. Sen. Linda Higgins (DFL-Mpls.) offered an amendment deleting provisions relating to expanding the membership of the Campaign Finance and Public Disclosure Board and shifting the administrative remedy from the board to the Office of Administrative Hearings. The amendment was adopted.
Most of the debate on the bill centered on a change that makes investigation into a violation by county attorneys permissive, rather than mandatory. Higgins said the Office of Administrative Hearings can provide a cheaper, more expedited process for investigating complaints. Members were concerned about the policy changes in the bill with the amendment and about the costs associated with the bill. The panel laid the measure over for further discussion.
At the bill's previous hearing, Sen. Thomas Neuville (R-Northfield) offered an amendment proposing a second constitutional amendment, defining marriage as between one man and one woman, to the bill. Sen. Dallas Sams (DFL-Staples), chief author, had withdrawn the bill from consideration at that point. When the bill reappeared before the committee, Neuville withdrew his amendment. He said the proposal was admittedly unrelated to the bill, but that Sams had accepted an unrelated proposal in an earlier hearing. The bill originally dedicated funds only to environmental purposes, Neuville said, and the measure should have stayed that way. Neuville said sporting groups prefer the original version of the bill. He noted that many Senators, including himself, signed pledges saying they would vote against any unrelated amendments to the bill. The marriage amendment was offered out of frustration with the system, Neuville said. "I haven't got very many options left," he said, to get the marriage amendment heard.
Sen. Pat Pariseau (R-Farmington) offered two amendments. One reduces the dedicated amount and restricts the funding to environmental purposes. She said unrelated purposes should not have been added to the bill, regardless of what groups could bring voters to the polls in support of the constitutional amendment. Sen. Richard Cohen (DFL-St. Paul), committee chair, said the amendment eliminates dedicated funding for parks and trails and zoos. The amendment makes the bill a non-Metro Area proposal, he said. The amendment was defeated on a 3-13 roll call vote. The other amendment prevents dedicated funds from being spent to infringe on individuals' rights to hunt, fish, trap game or own firearms. Sen. Steve Murphy (DFL-Red Wing) said the language is unnecessary because the rights are already constitutionally protected. Other committee members said the language could create problems if two environmental groups disagree over land use. The amendment was defeated, 7-10.
Sams offered an amendment removing language providing that the dedicated funds cannot supplant existing funding for the arts. The amendment was adopted.
In other action, the committee approved S.F. 1904, carried by Sen. Charles "Chuck" Wiger (DFL-North St. Paul). The bill, which clarifies public transit crimes and railroad grade crossing stop requirements, was advanced to the full Senate.
Sen. Steve Kelley (DFL-Hopkins) sponsored S.F. 1774, the omnibus education policy bill. The proposal had been considered by the committee before, but was laid over because the Department of Education raised fiscal concerns over provisions in the measure. Sen. Satveer Chaudhary (DFL-Fridley) offered an amendment, on Kelley's behalf, resolving the fiscal issues, primarily by postponing the eighth-grade administration of the basic skills test during the 04-05 school year. The amendment was adopted. The panel, chaired by Sen. Richard Cohen (DFL-St. Paul), also adopted four technical amendments suggested by Kelley.
Assistant Education Commissioner Pat Olson said the department has several policy and fiscal concerns regarding a testing change in the bill. She said the Measures of Academic Progress (MAP), which the measure uses to replace the Minnesota Comprehensive Assessments (MCA), are not a good accountability tool. The MAP does not measure against grade-level standards, Olson said, as required under federal law. She also noted that the savings projected are questionable, since not all districts have the necessary infrastructure to implement the computer-administered tests. Kelley said the federal education department has approved a version of the MAP test for accountability measures in Idaho. Many districts are administering the MAP test on their own, he said, and would not need to spend money on two tests, resulting in savings.
S.F. 3057, carried by Sen. Keith Langseth (DFL-Glyndon), is the omnibus bonding bill. Langseth said the measure is comparable to recent bonding bills in its size. Sen. Mark Ourada (R-Buffalo) expressed disappointment at the amounts allocated to the Capitol Area Architectural Planning Board (CAAPB) and the Northstar Commuter Rail project. Langseth said CAAPB received most of its requests, except for those that require cash appropriations, instead of bonds. Fully funding the Northstar request of $37.5 million, he said, will require trimming back the proposal because it is already pushing against the 3 percent bonding limit. However, Langseth said, the project is in the bill to express Senate support. Funding the rail line is a done deal if the other body includes three members who support the project on the conference committee, he said. "If it isn't done, it won't be because of the Senate," he said.
Sen. David Knutson (R-Burnsville) said he was disappointed at the low amounts set aside for the Minnesota Zoo. Langseth replied that he had earlier heard from Senators in the Minority Caucus that the bill was too large. Only by having a decent-sized bill, he said, will there be any flexibility for negotiations with the other body. Recommendations from the budget divisions totaled a far higher figure than the amount included in the bill, Langseth said. Knutson said the key was to prioritize what the state needs to spend on. The zoo is an asset of statewide significance, he said, that deserves more funding than it has gotten in recent years. We need more and broader discussions regarding our priorities, Knutson said.
An amendment, offered by Sen. Dennis Frederickson (R-New Ulm), clarifying that funds provided for wastewater infrastructure projects can be used for loans as well as grants was adopted. S.F. 3057 was advanced on a 16-3 roll call vote.
The final bill considered was S.F. 2313. Sponsored by Frederickson, the measure raises the borrowing limit for the Public Facilities Authority to $1.25 billion, from $1 billion. The bill also allows the authority to engage in interest swaps and other financial arrangements.
Sams withdrew the bill after Sen. Thomas Neuville (R-Northfield) offered an amendment providing a second constitutional question in the bill. The amendment proposed a constitutional amendment defining marriage as the union of one man and one woman. Sams said the new language went beyond what he intended for the bill and that he was withdrawing the measure.
In earlier action on the measure, committee members, chaired by Sen. Richard Cohen (DFL-St. Paul), considered two other amendments offered by Neuville. One amendment removed language providing that the dedicated funds cannot replace current general fund spending for the environment and arts. Sams spoke against the amendment, saying the focus of the bill was to provide new money for the targeted programs. The other amendment separated the constitutional question into two issues: dedicated funding for the environment and dedicated funding for the arts. The amendment also redirected some of the arts funding to clean water activities. Sen. Jane Ranum (DFL-Mpls.), said S.F. 401 attempts to improve the overall quality of life in Minnesota, which is determined by both the environment and arts. Both amendments were defeated.
The panel advanced four other pieces of legislation to the Senate floor. S.F. 2020, authored by Sen. Dan Sparks (DFL-Austin), provides an exception to the nursing home construction moratorium for a facility in Austin. Members had approved the bill at a previous hearing. The committee adopted, at Sparks' request, a technical amendment providing clarifying language. S.F. 2216, sponsored by Sen. John Marty (DFL-Roseville), is the Department of Revenue housekeeping bill. H.F. 2040, carried by Sams, provides for wastewater treatment technology certification. Sen. John Hottinger (DFL-St. Peter) sponsored S.R. 156, a resolution expressing support for the revitalization of the Dakota and Ojibwe languages.
Lisa Thorvig, commissioner, PCA, spoke in support of the policy contained in the bill. She said that although only 8 percent of the state's rivers and 14 percent of the state's lakes have been tested, 40 percent of those tested do not meet water quality standards. "It is of particular concern for Minnesota," Thorvig said, "because the state has so much surface water." Thorvig said, though, that the agency and the administration did not support Marty's proposal for funding the program. Thorvig said the total cost to clean up the state's surface waters will be between $600 million and $3 billion. Mike Robertson, representing the Minnesota Chamber of Commerce, also spoke in support of the policy in the measure but against the proposed funding source.
An amendment was adopted providing for the allocation of funds required by the measure. Sen. Pat Pariseau (R-Farmington) moved to divide the amendment and urged members not to adopt the language relating to the allocation of funds. However, members adopted both portions of the amendment. The bill was approved and advanced to the Tax Committee.
The other environmental bill sparking debate was the omnibus game and fish bill. H.F. 2368, carried by Sen. Tom Saxhaug (DFL-Grand Rapids), contains a number of provisions relating to hunting and angling. The bill modifies deer hunting provisions and fees, modifies the restriction on the importation of cervidae carcasses, modifies turtle license requirements, provides for the suspension of game and fish licenses and permits for violations, prohibits taking albino deer, requires public education regarding lead fishing tackle, changes terminology relating to waterfowl refuge provisions and authorizes a season on mourning doves.
Sen. Sandra Pappas (DFL-St. Paul) moved to delete the sections of the bill establishing a season on mourning doves. "Mourning doves are familiar at bird feeders, are a symbol of peace and are considered song birds," Pappas said, "and I don't believe we should hunt them." Saxhaug said that many other states have a season on mourning doves without harming overall populations or causing environmental damage. Members also discussed the propriety of the Finance Committee making policy changes to a bill. The amendment failed on a divided voice vote. The bill was approved and sent to the full Senate.
In other action, the committee, chaired by Sen. Richard Cohen (DFL-St. Paul), advanced a variety of other bills to the Senate floor. S.F. 1835, carried by Sen. Michelle Fischbach (R-Paynesville), provides for a review of hospital moratorium exceptions. S.F. 1957, sponsored by Sen. Mee Moua (DFL-St. Paul), modifies vehicle certificate of title provisions affecting dealers. H.F. 1961, authored by Sen. Leo Foley (DFL-Coon Rapids), expands the crime of first degree murder to include causing the death of a minor while committing child abuse, when the perpetrator has engaged in a past pattern of child abuse upon a child. S.F. 2020, carried by Sen. Dan Sparks (DFL-Austin), provides an exemption to the moratorium on nursing home construction to allow for the construction of a 60-bed facility in Austin.
S.F. 2112, authored by Sen. Linda Higgins (DFL-Mpls.), authorizes an exception to the prohibition on asset transfers for charitable gifts when the donor has an established relationship with the charity. S.F. 2573, sponsored by Sen. Scott Dibble (DFL-Mpls.), codifies the transfer of the planning office to the Dept. of Administration, authorizes forward pricing for energy purchases and reinstates the Small Business Procurement Advisory Council. S.F. 2613, carried by Sen. Sheila Kiscaden (IP-Rochester), makes changes to provisions relating to the Minnesota Comprehensive Health Association (MCHA). Members adopted an amendment, offered by Sen. Wesley Skoglund (DFL-Mpls.), deleting a provision setting an income limit for terminated employees who are unable to continue coverage to enroll in MCHA. S.F. 3036, sponsored by Sen. Linda Berglin (DFL-Mpls), is a resolution memorializing the Center for Medicaid and Medicare Services to designate the state of Minnesota as a single-state region under the Medicare Modernization Act.
S.F. 401, authored by Sen. Dallas Sams (DFL-Staple), provides that the question be placed on the ballot this November and specifies that a fraction of a percent of the sales tax be dedicated to the environment. Sams offered an amendment that specifies the proceeds from the sales tax be used for arts and cultural purposes, in addition to natural resource programs. Sams said, "The environment and the arts are the first to get cut during difficult economic times. We must have a steady source of revenue for investment in our natural resources and cultural programs in order for Minnesota to remain the gem it is." Sams said cultural events and environmental programs are at the heart of the state's identity.
Supporters of the measure argued that over the course of the past several years, environmental and arts programs have been particularly hard hit by budget cuts brought about by state budget shortfalls. Opponents, though, said the bill creates a funding source for one area at the expense of other crucial program areas such as education and health care. Several committee members, led by Sen. John Hottinger (DFL-St. Peter) and Sen. Wesley Skoglund (DFL-Mpls.), argued that removing a percentage of the revenue generated by the sales tax from the general fund would leave a hole that would have to be filled by cuts in other programs.
Members adopted the amendment including the arts and cultural programs as recipients of the sales tax revenue, but laid the bill over for further consideration. Committee Chair Richard Cohen (DFL-St. Paul) said that an updated fiscal note necessitated by the amendment had not yet been completed and that the committee needed all the information available before voting on the proposal.
In other action, the panel advanced a variety of bills to the Senate floor. S.F. 653, sponsored by Sams, requires multiline telephone systems to provide caller location for purposes of the emergency 911 telephone system. Sams offered an amendment specifying that the measure requires the new technology when companies install new systems, rather than making companies revamp existing systems. The amendment was adopted and the bill advanced to the full Senate. S.F. 1721, carried by Sams, modifies prior authorization requirements, establishes requirements for provider contracting and modifies provisions for claims payment. The bill was also advanced to the full Senate.
S.F. 1974, carried by Sen. Jim Vickerman (DFL-Tracy), extends the availability of appropriations from the Minnesota future resources fund and the environment and natural resources trust fund. S.F. 2437, authored by Sen. Ann Rest (DFL-New Hope), provides for more complete implementation of the statewide central computerized filing system for recording liens on agricultural products. Under the bill, the county recorders are phased out, but may apply for and become a designated satellite office supporting the secretary of state's computerized filing system. S.F. 2895, sponsored by Sen. David Senjem (R-Rochester), authorizes local units of government to request fiscal impact notes on rules proposed by a state agency that will result in costs of more than $50,000. Members adopted an amendment providing that the governor may waive the requirement for impact notes under specific circumstances. All three measures were advanced to the full Senate.
Members also discussed a bill providing partial conformity with federal government tax laws relating to health saving accounts as provided for in the Medicare Prescription Drug, Improvement and Modernization Act. S.F. 1602, sponsored by Sen. Brian LeClair (R-Woodbury), would allow the same tax benefits for health savings accounts that are allowed under federal law. LeClair said the measure would have a revenue impact of $3.2 million. Members advanced the measure to the Tax Committee without recommendation.
Finally, members sent H.F. 2671 to the Senate floor. The bill, sponsored by Sen. Mark Ourada (R-Buffalo), makes policy changes to provisions governing motor carriers. Ourada said the measure has no fiscal impact and requested the bill be sent to the full Senate.
Members did advance two bills to the Consent Calendar. S.F. 2196, sponsored by Sen. John Hottinger (DFL-St. Peter), extends the expiration date of the supportive housing and managed care pilot project until 2007. S.F. 2241, carried by Sen. Jane Ranum (DFL-Mpls.), appropriates $117,000 to the commissioner of administration for the purpose of completing the small agency infrastructure and electronic government services projects funded through the technology enterprise fund and underway, but not completed, when the technology enterprise fund language was repealed. Ranum offered, and members adopted, an amendment specifying that any outstanding balance from the expired technology enterprise fund be transferred to the general fund.
Several other measures were approved and advanced to the full Senate for consideration. S.F. 1836, sponsored by Sen. David Knutson (R-Burnsville), simplifies various filing procedures and requires electronic business registration in the Office of the Secretary of State. Knutson said the bill is designed to simplify and modernize corporate filing procedures. A dairy modernization bill, S.F. 1941, is aimed at encouraging beginning milk producers to continue dairy farming, said Chief Author Steve Dille (R-Dassel). The bill provides for dairy modernization loans for the acquisition, construction, or improvement of buildings or facilities or the acquisition of equipment for dairy animal housing, confinement, animal feeding, milk production and waste management.
S.F. 2869, authored by Sen. Sheila Kiscaden (IP-Rochester), modifies license fees for radioactive and nuclear material used in the medical, research and industrial fields. Kiscaden also authored a bill, S.F. 2351, that establishes and modifies credentialing requirements for speech-language pathologists, audiologists, occupational therapists, speech-language pathology assistants, physician assistants, registered nurses, advanced practice registered nurses, dentists, dental hygienists, dental assistants, dental aides, podiatrists, alcohol and drug counselors and licensed professional counselors.
Sen. Dennis Frederickson (R-New Ulm) carried a bill, S.F. 2793, that makes a number of modifications in the off-highway vehicle provisions enacted last year. The measure provides an exemption from rulemaking, extends the availability of the off-highway damage account, modifies decal requirement, clarifies the requirement for off-road vehicle registration, modifies restrictions on the operation of all-terrain vehicles and modifies trail designations on consolidated conservation lands.
The bill includes several proposals heard by the Transportation Policy and Budget Division, including provisions relating to additional revenue generation tools for rest areas, toll facilities planning, hybrid and low-emission vehicle toll exemptions, prohibitions on the use of cell phones by young drivers, driver education, unattended children left in vehicles, new booster seat requirements for children between the ages of four and nine, motorized scooter operation, primary enforcement of the seat belt law and the creation of a state aviation plan. The measure also includes recommendations from the governor for capital projects funded with trunk highway dollars.
Most of the discussion centered on amendments to the package offered by committee members, chaired by Sen. Richard Cohen (DFL-St. Paul). Murphy offered, and the panel adopted, an amendment providing a process for persons whose provisional drivers' licenses were revoked to have the license reinstated. (A similar amendment was adopted, Mon., Apr. 19, to S.F. 2851 on the Senate floor.) Another Murphy amendment allocates any revenue from a new fee imposed on vehicles carrying forest products to the trunk highway fund and a bridge inspection and signing account in the special revenue fund. The amendment was also adopted.
Sen. David Knutson (R-Burnsville) offered an amendment removing sections of the bill relating to vehicles carrying forest products. The bill allows vehicles hauling raw or unfinished forest products to travel a direct route from the place of production to the nearest 10-ton highway with a permit and without regard to most load restrictions. The only restrictions the vehicles must observe, under the measure, are seasonal restrictions, bridge and road postings and a 90,000-pound weight limitation that is increased to 98,000 pounds during the winter months. Knutson said that exempting one industry from the traditional load limitations on our roads sets the state on a slippery slope. He also noted that there are sound reasons for having load restrictions in the first place. Mathew Hodapp, State Patrol Troopers Association, said the increased load raises several safety concerns.
Murphy said the exemption is intended to match Wisconsin's load limitations and does require the vehicles to have an extra axle to redistribute the weight. Betsy Parker, MnDOT, said the proposed change is better for roads than current law. If the same amount of forest product, or even up to nine percent more forest product, is carried under the new language, she said, there will be less damage to roads than there is now. The department does not object to the language, Parker said, in part because the forest products industry is the only group offering to add an axle to its vehicles and pay a new permit fee. Wayne Brandt, representing Minnesota Forest Industries and the Minnesota Timber Producers Association, said all timber-rich states and Canadian provinces, except Oregon, have higher weight limits than Minnesota. The industry estimates that the new weight restrictions will mean 40,000 fewer truck trips per year, he said. The reduced number of trips, Brandt said, means a decreased safety risk. A motion to table the amendment was defeated on an announced 5-10 divided voice vote and the amendment was defeated.
Other provisions in the bill reclassify public safety radio communications operators as essential state employees and create a separate bargaining unit for the operators. Sen. John Hottinger (DFL-St. Peter) offered an amendment deleting the sections. He said he had concerns regarding the "creep" of essential employee designation. The designation, Hottinger said, is usually a bargained issue, though the Legislature does have the right to act unilaterally. Murphy noted the classification is desirable because if state employees go on strike, then state troopers have to be pulled off the road to act as dispatchers. Julie Bleyhl, AFSCME, said the establishment of a separate bargaining unit and the reclassification substantially decrease the employees' bargaining power. The amendment was adopted.
In other action, committee members approved four other bills. The measures were all sent to the Senate floor. H.F. 1838, carried by Sen. Julie Rosen (R-Fairmont), permits motor carriers to operate articulated buses up to 61 feet in length. Sen. Sandra Pappas (DFL-St. Paul) sponsored S.F. 2696, the omnibus liquor bill. S.F. 1866, carried by Sen. Linda Scheid (DFL-Brooklyn Park), ratifies 10 state labor agreements and compensation plans. S.F. 2154, authored by Sen. Gary Kubly (DFL-Granite Falls), requires state agencies to use E-85 fuel in flexible-fuel vehicles. The measure penalizes state agencies if they do not use E-85 fuel for at least 75 percent of the fuel they purchase for flexible-fuel vehicles.
S.F. 2038, carried by Sen. Wesley Skoglund (DFL-Mpls.), contains the recommendations of the Joint Subcommittee on Claims. The bill appropriates over $100,000 in claims payments in FY 2005. It includes payments for claims for injuries suffered by persons performing community service or sentence-to-service work or incarcerated in correctional facilities. The measure also approves payments for three claims against the Dept. of Natural Resources (DNR): one relating to a moratorium on the raising of sunken logs, one related to trespass fines and one related to drainage tiles.
The drainage tile claim, also known as the Bode claim, generated the only discussion on the bill. S.F. 2038 authorizes payment of $27,000 to reimburse the Bode family for tiling destroyed by the department in 1992 and 1993. The bill also settles a point of dispute about the Bode farm by stating that a wetland on the farm is not a public waters wetland. Skoglund said the subcommittee has dedicated more time to this claim over the years than to any other claim. Legislators have gone out to visit the farm and examine the land, he said. The central point of the dispute between the state and the family is if the wetland is larger than 10 acres, he said. A wetland larger than 10 acres falls under state jurisdiction and cannot be drained.
The language determining that the wetland does not fall under state jurisdiction is what caused the veto last year, Skoglund said. He offered an amendment replacing the provision with language requiring an administrative law judge to determine if the wetland is a public waters wetland. Deputy Commissioner Mark Holsten said the courts have long sided with the DNR on both process and substance. The amendment only delays any final decision, he said. "It is not a pleasurable thing for any of us," he said, to be still be disputing the land and the claim. The DNR has tried to resolve the issue and offered mediation to the Bodes, Holsten said. Skoglund said the Bodes have indicated they intend to replace the drainage tile. The department, he said, has indicated it will go to court to prevent retiling the farm. An administrative hearing is a faster, cheaper way through the process, Skoglund said. However, Sen. John Hottinger (DFL-St. Peter), whose district includes the Bode farm, said that both sides are so dug in, there may never be a final resolution. "I am not sure either side is willing to let the other side 'win,'" he said. Hottinger said the only resolution may be to pay the claim. If the dispute continues after that, he said, "so be it." The amendment was adopted.
Sen. Pat Pariseau (R-Farmington) offered an amendment changing the language of the claim payment. The bill provides that the payment is to settle the claim relating to tiling. The amendment, which Pariseau offered for Sen. Dennis Frederickson (R-New Ulm), provides that the payment is for expenses incurred during the pendency of appeal of the public waters hearing panel. Craig Lindeke, counsel to the claims subcommittee, said the language effectively describes the tile installation without explicitly using the word "tile." Hottinger said the amendment appears to assign no blame to either party. The amendment was adopted on a divided voice vote. S.F. 2038 was sent to the full Senate.
In other action, committee members, chaired by Sen. Richard Cohen (DFL-St. Paul), approved three other bills. S.F. 1803, sponsored by Hottinger, enacts the Uniform Limited Partnership Act of 2001 recommended by the National Conference of Commissioners on Uniform State Laws. S.F. 806, authored by Sen. Don Betzold (DFL-Fridley), requires the chief administrative officers of the seven major retirement systems to jointly contract with a consulting actuarial firm. Both bills were advanced to the Senate floor. S.F. 676, also carried by Betzold, is the omnibus pensions bill. It was re-referred to the Tax Committee.
The bill, carried by Committee Chair Richard Cohen (DFL-St. Paul), consists of the supplemental budgets approved by the six budget divisions. It appropriates $42.8 million in FY 04-05 to fund nursing student grants, National Guard re-enlistment bonuses, National Guard tuition reimbursement, tax collections, civil legal services, crime prevention efforts and health care programs. The bill is designed to have no net general fund impact, so the measure also reduces appropriations in other budget areas, increases fees, transfers money from other funds into the general fund and anticipates additional revenue from new tax compliance efforts.
The bill contains reductions from the carry-forward and agency cuts of 5 percent, Cohen said. He added that small agencies and the Historical Society were not cut because those agencies took disproportionate cuts last year. The bill cuts $81.611 million for the biennium. The measure also contains a five-day transfer from the health care access fund to the general fund and then a transfer back to the health care access fund to eliminate any negative unrestricted balance in the general fund. The measure estimates the amount to be $3.835 million. The bill also contains provisions outlining the parameters for budget forecasts and specifies that inflation must be added into budget calculations. "The governor and Legislature made a mistake in removing inflation. It's not realistic to not include inflation in the calculations," Cohen said.
A section of the bill limiting agency heads to one deputy commissioner sparked considerable discussion. Sen. Dennis Frederickson (R-New Ulm) said the provision goes beyond the governor's recommendation and is not good public policy. Cohen responded that the fiscal difficulties of the state mean hard choices. "This is not a perfect bill, but these are tough times," Cohen said.
Another portion of the bill prohibiting agencies from spending any money for travel outside the state or from contracting or paying for meeting space outside state facilities also sparked discussion. Sen. Cal Larson (R-Fergus Falls) moved to include the judicial branch and the Minnesota State Colleges and Universities in the travel prohibitions. He argued that it was unfair to subject the executive branch to the restrictions and not the judicial branch. Cohen said the Legislature has been operating under a travel ban and the bill is an attempt to equalize the hardship. He added that the bill does not prohibit travel, it just prohibits state reimbursement. Members divided the amendment and took separate roll call votes. The portion of the amendment to include the judicial branch in the travel restrictions failed on an 8-11 roll call vote and the portion that included the MNSCU system failed on a 6-13 roll call vote.
Members adopted an amendment, offered by Cohen, specifying the Supreme Court may not certify a vacancy in the position of judge in the District Court before June 30, 2005. Cohen said the amendment delays filling vacancies and saves money.
The bill was approved and advanced to the Tax Committee on a 12-7 roll call vote.
Tough times call for tough measures, said John Gunyou, who served under Gov. Arne Carlson. Using shifts and other accounting gimmicks, he said, compromises the long-term financial health of the state. He said Wall Street bond analysts saw through much of the slight-of-hand used to resolve the FY 04-05 shortfall in 2003 and downgraded the state's formerly best-in-the-nation credit rating. Minnesota still has a structural budget problem, Gunyou said, and will spend about $1.4 million a day more than it will collect in revenue in FY 05-07.
However, Sen. David Knutson (R-Burnsville) said that shifts are a legitimate budgetary move. Shifts help us even out budgetary blips, he said, and are a tool that many administrations have used. Jay Kiedrowski, finance commissioner for Gov. Rudy Perpich, said previous shifts were used to buy time for permanent changes to take effect. The current budget response, he said, has no permanent changes. Kiedrowski said the message he and Gunyou bring to the Legislature is not partisan, but is simple: either cut spending or raise more revenue.
The two former commissioners also discussed a broad range of issues related to state budgeting. Gunyou and Kiedrowski rejected the idea of a separate forecasting agency supervised by the Legislature, saying Minnesota's transparent, single-source forecasting is a model for other states. The pair also urged policymakers to consider the long-term costs and benefits of programs, rather than just their two-year impact, and various methods of decreasing the volatility of state revenue.
In other action, members of the Finance Committee took action on S.F. 1801. Sponsored by Sen. Ann Rest (DFL-New Hope), the bill provides various tax incentives in an international economic development zone to promote the development of a regional distribution center. S.F. 1801 was forwarded to the Tax Committee.
S.F. 1639, sponsored by Sen. Linda Scheid (DFL-Brooklyn Park), provides for the removal and disposal of unauthorized or abandoned vehicles on private property used for servicing vehicles. S.F. 2680, carried by Sen. Yvonne Prettner Solon (DFL-Duluth), specifies the duty of care of bus drivers to passengers. Both measures were re-referred to the Judiciary Committee.
S.F. 2178, authored by Sen. Michael Jungbauer (R-East Bethel), requires notice and a public hearing before the closure of a municipal airport. S.F. 2263, authored by Sen. Julianne Ortman (R-Chanhassen), makes a number of technical and housekeeping changes in provisions relating to transportation. S.F. 1798, authored by Sen. Charles "Chuck" Wiger (DFL-North St. Paul), provides that a county or town board must not make final payment on any road construction or improvement contract until the engineer has certified to the county board or town board that the work has been done. S.F. 2399, carried by Sen. Sharon Marko (DFL-Cottage Grove), repeals authorization for private toll roads and bridges. S.F. 2397, sponsored by Sen. Scott Dibble (DFL-Mpls.), requires the commissioner to prepare a toll facilities plan and prohibits noncompete provisions in facility development agreements that restrict or prohibit public transit. All five measures were re-referred to the State and Local Government Operations Committee.
All of the following bills were advanced to the Senate floor.
S.F. 1910, authored by Sen. Mark Ourada (R-Buffalo), makes technical corrections to conform state law to amended federal regulations relating to truck driver hours. S.F. 1788, sponsored by Sen. Dave Kleis (R-St. Paul), requires some applicants for license renewal to pass examinations and requires physicians to report driving-related physical or mental conditions to the commissioner of public safety. The bill specifies that an applicant must pass a written examination after incurring a conviction for one or more moving violations since the last previous license renewal and that an applicant must pass a road test after incurring three or more moving violations or after having been found at fault in two or more crashes. S.F. 1813, sponsored by Betsy Wergin (R-Princeton), allows volunteer firefighters to display blue lights on private motor vehicles. S.F. 1592, carried by Wiger, enacts the Safe School Zone Law and makes clarifying and technical changes.
S.F. 1584, sponsored by Wiger, prohibits the sale and unauthorized use and ownership of mobile infrared transmitter devices to change traffic lights. S.F. 1674, authored by Sen. Brian LeClair (R-Woodbury), removes the length limitation from the definition of residential roadway. S.F. 1852, sponsored by Sen. Mady Reiter (R-Shoreview), requires vehicles to wait at railroad crossings until the roadway is clear. S.F. 1729, authored by Sen. Bob Kierlin (R-Winona), prohibits leaving a child under the age of nine unattended in a passenger vehicle. S.F. 457, sponsored by Sen. William Belanger (R-Bloomington), exempts garbage trucks and recycling vehicles from weight restrictions. S.F. 1954, authored by Sen. Ann Rest (DFL-New Hope), deletes the requirement for Regional Development Commission or Metropolitan Council approval of projects funded from the state transportation fund. S.F. 1953, carried by Rest, repeals the requirement that designation of natural preservation routes on county state-aid highways be reviewed by an advisory committee.
S.F. 2395, sponsored by Sen. Steve Murphy (DFL-Red Wing), provides that a peace officer assigned to a bomb squad unit may operate any vehicle or combination of vehicles while engaged in bomb squad duties. S.F. 2144, sponsored by Murphy, provides that a provisional license holder may not operate a motor vehicle with more than one passenger, except family members, or between the hours of midnight and 5 a.m. S.F. 2611, authored by Sen. David Knutson (R-Burnsville), prohibits the operation of a motor vehicle with a child between the ages of four and eight not properly fastened in a booster seat. S.F. 555, carried by Sen. Tom Saxhaug (DFL-Grand Rapids), allows the two-way operation of snowmobiles on either side of highway right-of-way when authorized by the commissioner of transportation
S.F. 2709, authored by Sen. Jane Ranum (DFL-Mpls.), requires a chapter on aviation planning in the state transportation plan. S.F. 2805, sponsored by Sen. Sean Nienow (R-Cambridge), prohibits young drivers from using cell phones. S.F. 2851, carried by Wergin, prohibits the issuance of a provisional driver's licenses to a person who has incurred a conviction for a crash-related violation. S.F. 2550, authored by Murphy, makes violation of the seat belt law a primary offense and requires all passengers to wear seat belts.
The committee approved the appointment of Ingison as commissioner of finance. Ingison, who had served as state budget director, was appointed to replace Dan McElroy, who was named the governor's chief of staff.
The panel also heard a bill restricting the ability of companies that have contracts with the state from subcontracting the work overseas. S.F. 1792, sponsored by Sen. Thomas Bakk (DFL-Cook), requires that state agency contracts for services be performed by United States citizens or by individuals authorized to work in the United States. The bill does not apply to a contract for legal services entered into by the attorney general, a contract entered into by the State Board of Investment or a contract relating to the importation of prescription drugs from another country. The measure also requires employers who have reduced the number of Minnesota jobs by more than 100 employees during the year to report to the commissioner. Further, the measure prohibits employers that have a net loss of 100 or more jobs caused by outsourcing the jobs overseas from providing goods and services under contract with the state for seven years. Bakk said no one knows how many jobs have been sent overseas and it is important to gain information about the issue. Tom Hesse, Minnesota Chamber of Commerce, and Kent Allin, Dept. of Administration, both expressed concerns with provisions in the bill. The measure was amended and approved at a brief hearing Wed., March 17. The bill was forwarded to the full Senate.
A bill clarifying the division of proceeds of sale of state bond financed property was also approved and sent to the full Senate. S.F. 2097, sponsored by Sen. Jane Ranum (DFL-Mpls.), specifies that if property is financed or bettered by state bond proceeds and then sold, the calculation of the share contribution by each entity of the value of the property is its fair market value at the time the betterment began. The bill was re-referred to the Capital Investment Committee.
In other action, Tom Stinson, state economist, summarized the budget forecast and said at this time there is a $160 million shortfall. Stinson added that the shortfall is $25 million less than the shortfall shown by the November forecast. He also said the forecast of economic growth differs little from the forecast of one year ago. Stinson also spoke on the effects of the U.S. economy on Minnesota's economy. Ingison also spoke on the budget reserve and trends in state spending. Ingison said the forecast projects a $460 million shortfall for the FY 2006-2007 biennium. She also emphasized that the shortfall does not include inflation. The February forecast is available online.
S.F. 2295, authored by Committee Chair Richard Cohen (DFL-St. Paul), limits state agencies to one deputy commissioner each and eliminates all assistant commissioner positions. The measure also eliminates 125 positions in the unclassified service that were authorized by the Legislature in 2003 and limits the salaries of agency employees to 88 percent of the agency head's salary. Out of state travel is banned, under the bill, and state agencies may not spend money on holding meetings or conferences at non-state-owned facilities. The bill also reduces the executive branch's budget by $10 million in FY 04 and $10 million in FY 05. "This is an effort to be more equitable," Cohen said, in trimming the state budget. He said the forecast to be released Feb. 27 is likely to top $300 million in projected shortfall for the current biennium. The bill does not solve the state's budget problems, but it is a significant start, Cohen said.
"There is a difference between frugality and foolishness," Sen. Dennis Frederickson (R-New Ulm) said, and the ban on out-of-state travel is foolishness. Agency staff often need to leave the state to meet with national officials on transportation or other projects, he said. Similarly, environmental officials need to interact with their counterparts in other states, Frederickson said. There are examples in every state agency, he said, where money spent to travel outside Minnesota is money well spent. Cohen said the state of modern telecommunications is sufficient to enable such meetings and discussion, without state officials or employees leaving Minnesota. He noted that the Senate itself has imposed a similar travel ban and Senators have had no difficulty interacting with Legislators from other states. Sen. Thomas Neuville (R-Northfield) offered an amendment deleting the travel ban and increasing the budget reductions to $12 million each fiscal year. The amendment was defeated, 7-11.
Neuville offered a second amendment including the Legislature in the $10 million cuts for FY 04 and FY 05. The Legislature should share in the reduction, he said, with the constitutional officers and the state agencies. The amendment was defeated on a 6-10 roll call vote. Frederickson offered an amendment deleting provisions eliminating the directors of the Offices of Trade and Tourism and eliminating the 125 unclassified positions. The trade and tourism offices, he said, bring in more money than they cost to operate, he said. Cohen said the bill does not eliminate the offices themselves, but does require the commissioner and deputy commissioner of the Department of Employment and Economic Development to assume more oversight responsibility. The amendment was defeated, 6-10. Members adopted, on a voice vote, an amendment removing a provision restricting special situation salaries to 108 percent, instead of 120 percent, of the salary of an agency head. Sen. David Knutson (R-Burnsville), who offered the amendment, said it was unclear to whom the provision applies.
The bill is transparently political, Neuville said. The issues surrounding the number and salaries of agency heads, and their deputies and assistants, can be dealt with substantively in the budget divisions, he said. The Senate traditionally acts thoughtfully and cautiously, but also quickly, Knutson said. He urged Cohen to give the proposal a full and fair hearing. However, Cohen said his intent is to be proactive toward the impending budget forecast. The Senate has frozen staff salaries, left positions vacant and instituted a travel ban, he said, and the House has acted similarly. The administration has not done so, Cohen said.
In other action, members recommended S.F. 1615 for placement on the Consent Calendar. The measure, sponsored by Sen. Keith Langseth (DFL-Glyndon), reduces the required local contribution for airport projects to five percent. Ray Strege of Short Elliot Hendrickson said a recent change in federal law changed the federal contribution to 95 percent, instead of 90 percent. Federal officials have indicated they cannot provide any funds, even at 90 percent, unless the state changes the local contribution to the lower level. The change has no impact on the state budget, as the state contribution to affected projects is zero.
Committee members also heard a report on fee increases from Mark Misukanis, director of the Senate Office of Fiscal Policy Analysis. He said fees increased, over the base amount, by 16.51 percent for FY 04 and by 19.01 percent for FY 05 for all funds. Fees represented 2.7 percent of total state revenue in FY 03, Misukanis said, and represent 3.5 percent of FY 04 revenue.
Ingison said the budget forecast from November 2003 indicated the state would have a shortfall of $185 million for FY 2004-05. She said that while revenues are down from earlier estimates, FY 04-05 spending is lower for E-12 education and human services. In addition, Ingison said, FY 03 ended with a positive year-end balance that was added to the budget reserve. The reserve is up from $522 million to $631 million, Ingison said.
Ingison said state income tax revenues are down $490 million, $103 million of which is the cost of federal tax compliance. Sales tax revenues were also down, she said, but corporate, motor vehicle and other tax categories were up slightly. The net effect is that revenues are down $407 million. On the other hand, Ingison said state spending is down about $143 million from previous estimates. She said the department, and Legislators will have more information after the February forecast.
Ingison also sounded a cautionary note for FY 06-07. She said current forecasts indicated a $440 million shortfall in FY 06 and a positive balance of $46 million in FY 07.
Ingison presented information comparing Minnesota's budget situation to other states and said that Minnesota balanced its budget in much the same way other states have balanced their budgets-through the use of one-time budget actions, cuts in state spending and reserve fund transfers. She said that the recent positive economic news does not mean that the states' fiscal crisis is over.
American Express Chief U.S. Economist Dan Laufenberg said the U.S. economy expanded at a slow motion pace for much of the last two years, but that the 4 percent growth rate of the fourth quarter of 2003 is probably the rate of growth for the balance of this year. He said business spending is going to pick up in 2004 because businesses have both the means and incentive to expand. He also said that he expects that the economy will continue to enjoy the benefits of low inflation and that job numbers will begin to improve.
Paul Anton, president and chief economist of Anton, Lubov & Associates, Inc., also spoke to the panel. He said that the economy is doing well because of increases in productivity rather than job growth. He also outlined some vulnerabilities in the economy and long-term risks. He said the federal deficit may exert upward pressure on interest rates and downward pressure on the dollar which combined could lead to greater inflation.
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