May 9, 2018: Capitol News

May 9  

Minnesota Legislative Update

Step Therapy Protocol and Override (HF3196 – Rep. Fenton, Sen. Utke) passes off House Floor unanimously

The Minnesota House of Representatives unanimously passed a bill – HF3196 (Fenton) – establishing step therapy protocol and override for prescription drugs on Monday afternoon. Medical Alley Association is a member of the coalition in support of this bill and submitted a letter for distribution on the House Floor, which can be found here. The bill next goes to the Minnesota Senate, where it is expected to be taken up – and passed – in the coming days. If no changes are made to the bill in the Senate, it will then go to Governor Dayton for his signature.


Senate releases, passes, Omnibus Tax Bill (HF4385 – Rep. Davids, Sen. Chamberlain); heads to conference committee with House version

Last week the Minnesota Senate released and passed its omnibus tax bill. The bill has many similarities with its House companion (such as full conformity with Section 179 Expensing), but does have some key differences:

  • Funds the Angel Investment Tax Credit at $5 million for Calendar Year 2018 (the House funded it at $10 million for 2018)
    • Funding the Angel Investment Tax Credit is the top priority on the 2018 Health Technology Economy Agenda
  • Does not tax foreign repatriated income (the House bill classifies the amount of foreign repatriated income taxed at the federal level as a dividend)
  • Does not reduce the corporate income tax rate (the House reduces the corporate income tax rate from 9.8% to 9.06%)
    • The Senate did, however, include a provision requiring automatic rate reductions in both the individual and corporate income tax rates if certain criteria are met in a state budget forecast
  • The individual income tax bottom tier is reduced from 5.35% to 5.1% (the House bill reduces the 3rd tier from 7.05% to 6.75%)

A full comparison of the two bills, put together by the non-partisan House Research Department, can be found here.

Conference committees were appointed by both sides on Monday. The first meeting is expected to occur midweek. We will keep you updated on all of the developments in the Taxes Conference Committee over the final weeks of session.


Supplemental Budget Bill (SF3656 – Sen. Rosen, Rep. Knoblach)

The House finished passing all the pieces of their supplemental budget bill on Thursday. Those pieces will now be assembled into one bill for a conference committee with the Senate (which passed their supplemental budget bill two weeks ago). Conferees were appointed on Monday and the first meeting was on Tuesday. The conferees began walking through the similarities and differences of the two bodies’ approaches. We are closely monitoring this conference committee and will keep you updated as it moves forward.


Medical Alley Association issues public comments on proposed tariffs on medical technology and components

On Monday morning, Medical Alley Association submitted public comments to the Office of the United States Trade Representative (USTR) regarding proposed tariffs from China on medical technology and related components. These comments can be found here.

These proposed tariffs were announced in April after the USTR completed a Section 301 investigation suspected trade actions by China. This investigation determined that certain policies and practices by the Government of China related to technology transfer, intellectual property, and innovation are unreasonable or discriminatory and burden or restrict U.S. commerce. The report from this investigation – issued in March – did not mention medical technologies. Nevertheless, among the 1,300 products listed for proposed tariffs, there is over $3 billion in medical technology and related components.

The public comment period ends on May 11. The USTR is holding a public hearing on May 15. One of Medical Alley Association’s national partners – AdvaMed – will be testifying at this hearing. Following this hearing, the next step is for the USTR to review the testimony and public comments and make a determination on which products will be included in a final tariff list. There is no set timetable for the USTR to make this determination. We will keep you updated on any decisions made by the USTR on these proposed tariffs on medical technologies.

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