When a bill to conform the state’s income tax deductions for 2012 to federal changes was returned to the House with a Senate amendment, the measure went from its previous full bipartisan support, to calls for a conference committee to have the Senate measure stripped.
Passed off the House floor last week in a 127-0 vote, HF6*/ SF119 was amended by the Senate to include changes to the Iron Range Resources and Rehabilitation Board — provisions that had not been heard in the House Taxes Committee. The Senate passed the bill 66-0 last week.
In a 109-19 vote on Monday, the House concurred with the Senate’s changes. The amended bill now goes to the governor.
“The Senate is rolling us over. What the Senate did here is wrong. They put a couple of poison pills on here, and we don’t have to take this from the Senate,” Rep. Greg Davids (R-Preston) told Rep. Ann Lenczewski (DFL-Bloomington), who chairs the House Taxes Committee and sponsors the bill. Davids, the previous tax chair, called for a conference committee to remove the amendment.
“I understand your frustration and I share some of it,” Lenczewski responded.
The IRRRB receives funding from the mining companies in lieu of property taxes and then disperses it as grants to Iron Range communities. The board sought changes that included a shift in the board’s composition: Instead of having 10 elected and three appointed positions, the board would be comprised solely of senators and representatives who have at least one-third of their district in the taconite assistance area.
The board has not yet been seated because redistricting threw into question its representation composition, said Rep. Carly Melin (DFL-Hibbing). She sponsors HF351, which addresses the IRRRB issue and was recently approved by the House Jobs and Economic Development Finance and Policy Committee and sent to the House Government Operations Committee.
“I understand this is a bump in the road, and I’m not happy about it,” Lenczewski said. She said that this provision was insignificant compared to the need to get the tax conformity bill passed quickly.
The bill, sponsored in the Senate by Sen. Rod Skoe (DFL-Clearbrook), would conform Minnesota’s individual income tax and corporate franchise tax to most of the federal changes for tax year 2012 only, including the extensions of the higher education tuition and educator classroom expense deductions; and the ability of those age 70 ½ years or older to transfer up to $100,000 from an individual retirement account or Roth IRA directly to a qualified charity.
The bill also would allow airline employees who received bankruptcy payments to retroactively roll over the payments into a traditional IRA in the year the payments were received.
The tax conformity changes are a result of the American Taxpayer Relief Act of 2012, which was enacted at the end of December, and the Federal Aviation Administration Modernization and Reform Act of 2012.