Omnibus tax bill headed to floor

The omnibus tax bill awaits action by the full House, likely May 5.

House Taxes Committee Chairwoman Rep. Ann Lenczewski (DFL-Bloomington) said the bill contains a number of provisions introduced as individual bills and repackaged in HF3149. The committee approved the bill April 29 and the House Ways and Means Committee did the same one day later.

Major provisions include:

• a new Homestead Credit State Refund that restructures three existing property tax refund programs and divvies out the refunds based on ability to pay;

• increased local government aid to cities, counties and townships;

• subjecting some development projects in tax increment financing districts to pay a corporate franchise tax;

• preventing new businesses from entering the Job Opportunity Building Zones (JOBZ) program and creating new penalties for those that breach the requirements of the program;

• a new border city capital investment credit;

• increasing taxes on machinery at utility companies;

• changes to the Green Acres program;

• subjecting the Minneapolis-St. Paul International Airport and Holman Field in St. Paul to state property taxes;

• a property tax credit for cabins leased on government-owned land;

• changes to the “rural vacant land” classification;

• increasing the eligibility for a senior property tax deferral program;

• exempting Central Corridor Light Rail Transit line and Northstar Corridor Rail construction materials from sales tax;

• a moratorium on local sales tax referendums for three-and-a-half years;

• increasing collection on June accelerated sales taxes for alcohol and tobacco; and

• imposing a mortgage and deed tax to create an environmental response fund for Anoka, Dakota, St. Louis, Hennepin and Ramsey counties.

Amendments added in the tax committee include:

• a tax credit for investment in a research and development company, paid for by using some funds from the current R and D credit program;

• a provision to allow counties to buy into and invest in wind energy projects, called Community-Based Energy Development;

• a program to preserve aggregate deposits from development until the land is mined; and

• a sales tax exemption for construction materials used for low-income housing projects.

The Senate passed and tabled its tax bill, SF2869, sponsored by Sen. Tom Bakk (DFL-Cook), April 3.

Because the Senate bill is different, the two bodies are expected to go to conference committee, where lawmakers will have to compromise on at least one issue — the Mall of America expansion. The Senate version contains a provision to subsidize the expansion, but the House excludes it. Both bills freeze JOBZ so that new businesses wouldn’t be able to enter the program, but the governor and several members from both parties are strong advocates for expanding the program.