It has been another busy week at the Capitol. Today, the Senate hits the first deadline to get bills past policy committees. Let’s take a moment and look at some of the latest headlines:
Ensuring Minnesota Law Enforcement Has Resources To Keep Public Safe
On Monday, the Senate passed my legislation funding the Law Enforcement Operations Account (LEO), securing resources for emergency law enforcement operations tied to extraordinary and unplanned emergency events. The resources can be accessed by state and local law enforcement following an emergency declaration or when the Minnesota State Patrol requests assistance for state properties, particularly the Minnesota Capitol.
No matter where you live, Minnesotans deserve to have the confidence to believe that their elected government leaders are taking every available step to keep them safe and protect them from violence and unrest. The Senate is passing fair legislation that ensures Minnesota is prepared to provide adequate public safety and ensure the preservation of life, safety, and property.”
The Law Enforcement Operations Account will be funded with a $20 million appropriation from the General Fund. Applications for the funds can then be made by both tribal or local entities and are not exclusively limited to law enforcement. Fire services, emergency medical services, and other governmental operations can also apply for funding for their needs. Eligible costs include mutual aid, overtime, food, lodging, damaged or destroyed equipment, and emergency management costs. Jurisdictions experiencing the emergency qualify for reimbursement up to 75% of their expenses, and assisting jurisdictions can receive the full 100%.
Applicants have 90 days following the event to request funds. All applications will be reviewed by a five-member reimbursement panel consisting of the Commissioner of Public Safety, two sheriffs, and two police chiefs, who will evaluate the requests and make binding recommendations for reimbursement from the account.
Additionally, the legislation excludes riot costs from the Disaster Assistance Contingency Account. Over the past year, Governor Walz raided 70% of the account to provide Hennepin County roughly 12 million to help rebuild public infrastructure, undermining the spirit of the fund. Under the reform, the account would be only eligible for natural disasters and some human-made disasters like dam or bridge failure.
Relief bill helping local employers and works through the pandemic
On Thursday we passed a bipartisan PPP tax conformity bill, which will provide substantial relief to small businesses by ensuring they are not penalized for keeping their employees on the payroll through the COVID-19 pandemic. Last year, the federal government passed the Paycheck Protection Program (PPP) to be an emergency measure to help small businesses keep their employees on payroll. Unfortunately, struggling business owners are now facing large state tax bills on these loans.
The PPP loans were meant to serve as lifelines for thousands of struggling Minnesota businesses that were just trying to keep their workers employed during the pandemic. These loans are not taxed at the federal level or by any other states in our region, but inexplicably are in Minnesota. With the pandemic’s effects still looming, our local and small businesses are just trying to stay alive, and by taxing them, we’re going to harm the folks that employ our neighbors and families. Minnesota cannot delay this relief. We must take action now.
Last year the federal CARES Act established the PPP program for small businesses experiencing hardship and revenue losses resulting from the COVID-19 pandemic. Under the program, loans would be forgiven if they were utilized to fund qualified costs, and 60% of the loan proceeds were used for payroll costs. The federal government made it clear that forgiven PPP loans were not considered taxable income at the federal level, but they are at the state level according to Minnesota Law.
This bill will bring Minnesota into federal tax conformity so that these forgivable loans are not subject to state taxes. Additionally, the bill will give some small businesses greater flexibility to file as C-corporations, reducing their tax burden. If the bill is not signed into law, Minnesota small businesses will be forced to pay millions on PPP loans meant to keep businesses alive. Without action, many of these struggling small businesses will have sizable state tax bills due on March 15. Twenty-five other states, led by Governors of both parties, have already acted on PPP tax conformity.
In addition to small business PPP tax relief, the legislation will provide tax relief for struggling Minnesotans who received expanded federal unemployment benefits. This added relief will be good news to the thousands of Minnesotans left unemployed during the pandemic through no fault of their own.