By Amanda Bilek, senior public policy director for the Minnesota Corn Growers Association
The Minnesota Corn Growers Association (MCGA) along with our agricultural and business partners have been strong advocates for full conformity on Section 179. During the fifth special session of the Minnesota Legislature last week, HF 1 passed with a strong bi-partisan vote, and the bill included full conformity on Section 179 beginning in tax year 2020. The bill also included a provision to retroactively fix tax increases for like-kind exchanges under Section 179 expensing in 2018 and 2019, which are the years federal Tax Cut and Jobs Act changes were effective for federal purposes.
Conformity on Section 179 has been a priority for MCGA the last three years and MCGA appreciates all members of the legislature who voted in favor of this bill and have supported Section 179 conformity. The tax provisions in the HF 1 provided $208 million in tax relief—a much needed infusion for farmers and businesses across Minnesota.
In the end, HF 1 passed the House by 100-34 and the Senate by a vote of 63-3. It wasn’t just the tax provisions that lead to a wide bi-partisan margin in support of the bill.
In addition to the tax provisions, HF 1 also contained the capital investment bonding bill. The capital investment package included $1.36 billion in general obligation bonding. Of the total capital investment, $700 million is for road and bridge projects with $300 million for Trunk Highway bonds, $75 million for Local Road Improvement Grants, $5 million for township roads and $30 million for Local Bridget Replacement Project. There are also over 40 specific road and bridge projects throughout the state funded.
The bill also included $20.7 million to the Minnesota Department of Agriculture for renovations and updates to the joint laboratory for the Minnesota Departments of Health and Agriculture. Finally, there was also over $300 million for community wastewater infrastructure projects throughout Minnesota.
We appreciate all the hard work that was put in to bring this bill together and deliver much needed tax relief for Minnesota farmers by finally conforming to Federal Section 179 expensing in addition to the capital investment projects for local communities.
Another development at the state level was an announcement by the Walz administration on October 19th to use a $7.7 million of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide financial support to agricultural producers, meat processors and farmers impacted by the COVID-19 pandemic.
$5.7 million of the total package will be used to provide direct payments to turkey and pork producers to compensate for market disruptions due to COVID-19. Another $1 million is dedicated to cost-share aid to expand or open meat processing facilities and other funding covers assistance for local food systems and Farm Business Management scholarships. MCGA had advocated for funding for biofuels infrastructure using a part of the CARES funding, similar to other agriculture states, such as Iowa and Nebraska, but it was determined to be an ineligible use of the federal CARES funds. We are glad to see direct aid for pork and turkey producers included in the final package.