Progress on Legislative Priorities
Ensuring Protections for Vulnerable Consumers
Strengthening financial protections for seniors is a priority for our community bank members.
From conversations with the Department of Commerce, we understood that existing broker-dealer statutes increased senior protections and provided more regulatory clarity. ICBM took the lead to draft language to provide similar immunity for community banks. As the session progressed, we learned of another bill that contained immunity language for community banks that report suspected elder financial
abuse in good faith. ICBM became actively
involved in supporting this legislation and assisted in securing a House author for SF 2466/HF 2475 (Housley/Schultz).
The Senate Committee on Commerce and Consumer Protection Finance and Policy heard SF 2466 and laid it over for possible inclusion in its omnibus bill. The bill, however, did not move out of that committee. While we looked for alternate bills to which we could attach the language, we were not successful in that effort.
Improving community banks’ ability to safely report suspected fraud will help stem a crime that affects communities across the state. We are eager to push this important legislation forward next year.
While ICBM obviously wasn’t alone in supporting efforts to bring Minnesota into conformity with the Tax Cuts and Jobs Act of 2017, we did communicate our members’ desire for conformity in meetings with lawmakers. To that extent, we were a part of what became a mostly favorable conclusion.
Gov. Walz signed a bill on May 31 to put the state in almost full conformity with changes made in the federal Tax Cuts and Jobs Act of 2017. The bill will change the starting point of Minnesota’s tax system to federally adjusted gross income, away from federal taxable income. The bill will double the standard deduction and reduce the second-tier income tax rate (individuals who make $26,521 to $154,020) from
7.05 percent to 6.8 percent. It also contains a reduction in the statewide commercial- industrial property tax levy by $77 million in fiscal years 2020 and 2021.
The bill also included no gas tax, no tab fee increases, nor a sales tax increase for transit. Additionally, the provider tax was reinstated at a rate of 1.8 percent, ongoing.
Regulatory Funding: A Small Step Forward
Community banks in Minnesota secured a small victory on leveling the playing field for regulatory funding.
As many of our members know, examination and assessment fees are increasing. Yet, other regulated industries do not pay to fund regulation to the degree that state-charted banks do. A bill was introduced this session to redirect non-depository fees to an MDOC special revenue fund from the general fund. The bill made it to the end of session and was included in the House Jobs Omnibus bill.
While the bill was removed during special session, the legislature did redirect some fees to the special revenue fund that helps pay for state regulation. The result was a small increase of $110,000 in the special revenue fund.
In our conversations with MDOC representatives, ICBM supported the bill because it would lay the groundwork for other industries to pay their fair share. While the language passed into law is a positive step, there is still more to do. At the very least, we are hearing a change in tone from the MDOC. For the first time in our experience, Commerce staff is saying that it supports a level playing field in interactions with Gov. Walz.
Other Bills of Interest for ICBM Members
Credit Union Conversion & Merger
HF 1578/SF 1703 (Kotyza-Witthuhn/Koran) eliminated the super-majority requirements for the conversion, merger or consolidation of credit unions. Our team spoke with MNCUN and did not see any concerns for ICBM members. The bill was signed into law on May 9, 2019.
Elder Abuse Protections
HF 90 (Schultz) was signed into law by Gov. Walz on May 22, 2019. The bill will provide for licensure of assisted living facilities, establish resident rights and consumer protections for residents of assisted living facilities, nursing facilities and housing with services establishments. The bill also makes conforming changes to other statutes related to the licensure of assisted living facilities. The passage of this land- mark legislation demonstrates that protecting seniors from any sort of abuse is still a salient issue at the legislature.
Farmer Mental Health
With the Governor’s signing of Special Session SF 1 (Westrom), $100,000 will be appropriated for community outreach to farmers and to rural mental health services. Another $500,000 will be appropriated to the Minnesota State Agricultural Center of Excellence for statewide mental health counseling support for farm families and business operators. In committee discussion on these proposals, farmer advocates often noted the role of community banks in identifying mental health issues over the course of the lending process. They also noted community banks’ role in assisting families who tragically deal with farm assets following a loved one’s suicide.
PACE Loan Changes
Minor changes were made to the Property Assessed Clean Energy, or PACE pro- gram, in Special Session HF 2 (Mahoney). New construction will now be incorporated into the definition of “cost-effective energy improvements.”
College Savings Accounts
Special Session HF 1 (Davnie), which was signed into law by Gov. Walz, appropriates $500,000 in the 2020-2021 biennium for a grant to the city of Saint Paul to create a college savings account program for every child born in the city starting in fiscal year 2020. Saint Paul is required to administer the program with a qualified financial institution. The city would be the owner of the account, but the beneficiary would be the child.