Political Dynamics Affecting Cooperatives and Agriculture

1. Political Dynamics Affecting Cooperatives and Agriculture Dairy Directors Leadership Conference April 6, 2011

2. Wave Election ??

3. Title Wave

4. Leadership LineupMinnesota Governor Mark Dayton (DFL-St. Paul) Amy Koch (R-Buffalo)Senate Majority Leader Kurt Zellers (R-Maple Grove)Speaker of the House New Executive Branch and Legislative Branch Leadership

5. 2011 Political TransformationMinnesota • Control of House switches • Control of Senate switches (1st time since 1972) • Governor’s Office switches Minnesota Senate MN House of Representatives * *There is (1) vacant seat previously held by the DFL scheduled for special election on April 12th.

6. 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

7. MN Senate Committee on Agriculture Budget & Policy Senator Doug Magnus (R-Slayton) Senator Jim Vickerman(DFL-Tracy)

8. House Committee on Ag & Rural Development Policy & Finance Representative Rod Hamilton(R-Mountain Lake) Representative Al Juhnke (DFL-Willmar)

9. Trimming a $5 Billion DeficitMinnesota General Fund Expenditures

10. Trimming a $5 Billion DeficitMinnesota General Fund Forecasted Revenues

11. 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

12. 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.

13. 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

14. 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

15. 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

16. Political TransformationWisconsin Wisconsin Senate • Control of Assembly switches • Control of Senate switches • Governor’s Office switches • 1995—last time GOP controlled both Houses Wisconsin Assembly * *There are 3 vacant seats previously held by the GOP scheduled for special elections on May 3rd.

17. WI Senate Committee on Agriculture Forestry and Higher Education Senator Dan Kapanke (R-LaCrosse) Senator Kathleen Vinehout(D-Alma)

18. WI Assembly Committee on Agriculture Representative Amy Sue Vruwink(D-Milladore) Representative Lee Nerison(R-Westby)

19. 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) Many New Faces

20. 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

21. 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

22. Wisconsin’s Projected 2011-2012 Sources of GPR Revenue

23. How Wisconsin’s Tax Payer Dollars are Spent

24. 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

25. 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.

26. 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.

27. 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.

28. 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