Legislative Update 2015-2016

• The bill that would prohibit subcontractors from the “duty to defend” general contractors on lawsuits did not pass this session. However, some of the biggest general contractors want to work with subs to resolve this issue before net session.
• A workers comp reform bill did pass. All parties agree including labor, medical association and hospitals and the Dept of Labor and Industry. It was the first major reform in almost 20 years. Could result in long-term insurance rate reductions in excess of 3% per year.
• The building code surcharge fee was reduced from $5 per permit to $1.
• A small bonding bill was passed that included the final phase of remodeling the State Capitol.
• We defeated several bills including a sales tax on fiber installations, specialty licensing, and solar grounding.

Issues to be dealt with in 2016:

• Capital investment bill (bonding): Guess you could also call this a jobs bill—probably in the $850M range. Both the IR and DFL have scheduled tours around the State in order to consider over $3B in requests. There is a lot of discussion about using some of the surplus cash for capital projects which could significantly increase the total package to more than $1B.
• Tax bill: No tax bill passed in the 2015 session, which means it is still in the conference committee. With a $1.9B projected surplus, a significant tax relief bill should pass. Look for property tax relief, more federal conformity on deductions and perhaps some corporate tax relief. The governor and the Senate DFL remain opposed to eliminating the 2% income tax surcharge that was added two years ago to wage in excess of $100,000. Both the House and Senate are up for election next year so look for ma lot of political posturing by all parties.
• Transportation bill: Since it failed to pass last session, there will be a major fight between transit vs. road advocates and between metro vs. outstate communities. Governor Dayton announced on December 3, 2015, that he is no longer going to push for a gas tax increase. This is big news and should set the stage for a more amicable legislative session. Work scheduling and mandatory Paid-Time-Off will again be pushed by the governor and the Senate democrats. The House Republican Majority will remain opposed.
• Health care reform will also be on the docket with several legislators attempting to undo MN Care. I don’t see any reform happening.
• Significant new dollars will be promoted by the governor for early childhood education.