Dairy Directors Leadership ConferenceApril 6, 2011

Political Dynamics Affecting Cooperatives and Agriculture

Wave Election ??

Title Wave

Leadership LineupMinnesota

Governor Mark Dayton (DFL-St. Paul)

Kurt Zellers (R-Maple Grove)Speaker of the House

Amy Koch (R-Buffalo)Senate Majority Leader

New Executive Branch and Legislative Branch Leadership

• Control of House switches

• Control of Senate switches (1st time since 1972)

• Governor’s Office switches

2011 Political TransformationMinnesota

MN House of Representatives

Minnesota Senate

*

* There is (1) vacant seat previously held by the DFL scheduled for special election on April 12th.

2011 Political TransformationMinnesota

In General—Entirely New State Leadership

• New Commissioners and agency leaders appointed by the Governor– i.e Dave Frederickson replaces long-time Department of

Agriculture Commissioner Gene Hugoson

• New Committee Chairs in the House

• New Committee Chairs in the Senate

• New Priorities

MN Senate Committee on Agriculture Budget & Policy

Senator Doug Magnus(R-Slayton)

Senator Jim Vickerman(DFL-Tracy)

House Committee on Ag & Rural Development Policy & Finance

Representative Rod Hamilton(R-Mountain Lake)

Representative Al Juhnke (DFL-Willmar)

Trimming a $5 Billion DeficitMinnesota General Fund Expenditures

Trimming a $5 Billion DeficitMinnesota General Fund Forecasted Revenues

MN Legislative Focus

• Projected General Fund Budget deficit of $5 billion

• Funding will be tight to non-existent for new priorities

• Funding cuts are likely as priorities are redrawn

• Legislators will be more receptive to legislation that does not have a state fiscal impact

Conciliation Court (SF 506/HF868)

• Increase the Conciliation Court Caps – $15,000 (currently $7,500) for claims involving money

and property– $7,500 (currently $4,000) for consumer credit

transactions.

• The caps were last raised in 1994

• Caps no longer reflect current economic realities.

• Significant savings associated with conciliation court proceedings.

Permitting Reform

Passed both houses & signed by Gov. Dayton, despite objections from environmental groups

• 150 day goal for permits• Allows for construction to start before permit is

issued if it does not violate other laws• Allows for the preparation of facility paid for

environmental impact statements• Appeals go directly to the court of appeals• Air & water quality standards can not be more

restrictive than federal standards

Livestock Investment Tax Credit• Builds on success of LIG program

– Increased revenue opportunity– Greater tax base– Demand for more services

• LIG program is funding sensitive

– 2-year appropriation of almost $2 million– 1,000 applications – 90 projects financed– Total investment of $30.74 million– Included in the Omnibus tax bill 1st year no funding– May use unused ethanol dollars in the 2nd year

• Need a more reliable funding/incentive mechanism– Wisconsin tax credit program has leveraged at least $2 billion

in new investments based on a total of $200 million in tax credits claimed

• Was not included in the Omnibus tax bill– Cooperative Network Priority

Leadership LineupWisconsin

Governor Scott Walker (R-Wauwatosa)

Jeff Fitzgerald (R-Horicon)Speaker of the Assembly Scott Fitzgerald (R-Juneau)

Senate Majority Leader

New Executive Branch and Legislative Branch Leadership

Political TransformationWisconsin• Control of

Assembly switches• Control of Senate

switches • Governor’s Office

switches• 1995—last time

GOP controlled both Houses

Wisconsin Senate

Wisconsin Assembly

*

* There are 3 vacant seats previously held by the GOP scheduled for special elections on May 3rd.

WI Senate Committee on Agriculture Forestry and Higher Education

Senator Dan Kapanke(R-LaCrosse)

Senator Kathleen Vinehout(D-Alma)

WI Assembly Committee on Agriculture

Representative Lee Nerison(R-Westby)

Representative Amy Sue Vruwink(D-Milladore)

Many New Faces

Minnesota

• 36 newly elected Representatives (134 total seats)

• 24 newly elected Senators(67 total seats)

• 30% of all members of the Legislature are newly elected

• Nine members are farmers (out of 201 legislators).

Wisconsin

• 33 newly elected Representatives (99 total seats)

• 8 newly elected Senators(33 total seats)

• 30% of all members of the Legislature are newly elected

• Five are farmers ( five out of 132 legislators)

Budget Repair Bill

• Legislation to close $136 million gap in current budget

• Focus of protests in Madison

• Legislation with a fiscal impact requires a 3/5 quorum

• To block a vote—14 Senators went to Illinois

• To force a vote—Senate Organization Committee rules

• Impact on remainder of session unknown

– Agriculture and to a lesser extent, energy policy have been largely bipartisan

Wisconsin State Budget Bill – SB 27/AB 40

• Budget bills—the only bills that must be acted on

• Tackles $3.6 billion structural deficit potential for 2011-2013

• Ends raids on segregated funds

• Includes numerous funding cuts that are certain to draw significant controversy.

• Goal is to have a budget approved prior to July 1st, which is the start of the new biennium – likely to move quicker than normal with one party in control

$1 billion

Wisconsin’s Projected 2011-2012 Sources of GPR Revenue

How Wisconsin’s Tax Payer Dollars are Spent

DATCP in Budget

• Transfers Dairy 2020 & Dairy Manufacturing & Facilities tax credit form DOC to DATCP

• 3 new GPR & 2 Fed position for meat safety

• Eliminated PACE program and conversion fee for re-zones

• Increases “Something Special from Wisconsin funding

• $ 7 million added to SWRM

Other Ag Issues

Dairy/Livestock Farm Investment Credit

• AB 5 and SB 9 would extend dairy and livestock farm modernization tax credit for 2012-2016 tax years. SB 9 has passed Senate and AB 5 has been recommended by Assembly Committee on Agriculture.

• Over $200 million has been claimed to date, representing over $2 billion in new investment

• Cow numbers and milk production increased after years of decline, in part due to credit.

• Wisconsin 2010 Dairy Producer Survey found investment tax credits second most popular government program, (tied with MILC), coming in behind only use value assessment law.

Immigration – status verification

• Rep. Don Pridemore (R-Hartford) has circulated legislation (LRB 111/6) that would require law enforcement officers to determine whether a person who is arrested for or charged with a crime or civil violation is lawfully present in the state if the officer has reasonable suspicion that the person is not lawfully present.

• An officer may not consider a person’s race, color or national origin except as permitted under US & WI constitutions.

• A person who cannot prove lawful presence may be held in secured custody for up to 48 hours to obtain documents.

LRB 1116/1 (continued)

• The proposal requires a law enforcement agency to transport a person who cannot produce documentation to a federal immigration or border patrol agency.

• The proposal prohibits a city, village, town or county from enacting an ordinance or establishing a policy that would prohibit an employee from inquiring whether an individual who receives public services in lawfully present, notifying the federal government of the presence of aliens who are not lawfully present, or acting contrary to or failing to comply with state law regarding arrested persons who are not lawfully present.

• A citizen who believes that a locality is not complying with these requirements may petition for a writ of mandamus requiring compliance.

Raw Milk

• Rep. Don Pridemore (R-Hartford) & en Glen Grothman (R-Westbend)

• Grade A permit & license you can apply for a permit to sell raw milk on the farm to consumers

• Post a sign • Herds under 20 cow do not have to

have a grade A permit or license