2017 Legislative Session Wrap-Up

How did things shake out for nonprofits and their communities at the end of the 2017 legislative session? Take a look at what we know now and check back for more info on implementation and new content.

 Tax Policy

The final 2017 $650 million tax bill included changes to how social security income is taxed, tax cuts for small business and some aids to local governments. Here’s more on what was and what was not included:

·         The equity and opportunity tax credit was not included -- this would have provided a larger tax benefit for donors to organizations that provide scholarships to students to attend private school than is available for other charitable giving

·         Fundraising sales on leased property was expanded from five days to ten days

·         Expansion of the sales tax exemption to all 501(c)(3)s was not included -- we'll try again next year!

The Minnesota Budget Project and other nonprofit allies advocated for tax policies that expand economic opportunity and contribute to a fair and sustainable tax system.

Positive policy outcomes for Minnesota workers and families include:

  • More low-income Minnesota workers will be able to qualify for the state’s Working Family Tax Credit starting in 2019, when the age requirement for workers without dependent children is lowered from 25-years-old to 21.
  • Minnesota families will be able to better afford child care because of the expansion of the Child and Dependent Care Tax Credit.
  • The final tax bill did not include proposed deep cuts to the Renters’ Credit for lower-income renters.

However, the overall size of the tax bill, and the inclusion of several provisions that grow over time, harms the state’s ability to sustainably fund essential public services or respond to potential large federal funding cuts. In addition, provisions such as estate tax cuts reverse the state’s progress toward a more fair tax system. 

 Nonprofit Corporations – 317A

Minnesota Council of Nonprofits sits on the Minnesota State Bar Association’s Nonprofit Subcommittee. As part of the 2017 legislative session, this Nonprofit Subcommittee proposed technical changes to Chapter 317A, the Nonprofit Corporation Act. MCN participated in this work and supports these proposed changes.  

This new law makes technical, clarifying, and modernizing changes to 317A that:

·         Allows nonprofit directors and members to use electronic voting methods.

·         Clarifies that the role of incorporators to act for the organization is limited to filing articles of incorporation or until the first board director is named.

·         Allows nonprofits to establish an independent special litigation committee of the board.

·         Models the Business Corporation Act in allowing for a simple process to merge a subsidiary into the parent nonprofit corporation by requiring a merger plan and vote of the board.

·         Simplifies and outlines conversion requirements of a corporate entity, providing potential cost savings for nonprofits. 

Early in the 2017 legislative session, the Minnesota State Bar Association’s Nonprofit Subcommittee worked to advance this bill at the Capitol with the support of MCN. To see the actual language, see Session Law Chapter 13 or HF13.


There were not too many changes to the state’s election system this year in the fairly bipartisan Elections bill that was passed by the legislature and signed by the Governor. Here’s a looks a few provisions that were and were not included:

·         Funding was included to update aging voting equipment across the state.

·         The introduction of a provisional balloting system was not included in the final bill.

·         Also not included, was a move of the state’s primary election to June from August.

MCN supports the work of the Census Mobilization Partnership, led by the Minnesota Council on Foundations which advocated for the investment of resources ahead of the Census. The final State Government bill did include an additional $190,000 in funding to support the State Demographer’s office in preparation for the 2020 Census.

Nonprofit Sector Grant Programs

Several nonprofits advocated for direct appropriations to their organizations and programs and many were included in the various budget bills that were passed! A few additional grant programs were also included that may be available sector wide. They include:

·         MCN supported the Nonprofit Infrastructure Program advanced by the Coalition of Asian American Leaders to fund a grant program available to small culturally specific organizations to build capacity. The final Jobs bill included $500,000 for these grants!

·         The final jobs bill also included $500,000 via Minnesota’s Department of Employment and Economic Development for capacity building for small and medium sized organizations in the workforce and economic development sub-sectors.

·         Advanced by the Jewish Community Relations Council, the final Public Safety bill included $150,000 for Supplemental Nonprofit Security Grants, available to organizations that have been approved for Federal Emergency Management Agency’s nonprofit security grants.

Nonprofit Grant Administration

The final state government bill included language that terminates grants if the recipient of the grant is convicted of a criminal offense related to state grant agreements. This language does not apply to organizations, just individuals. MCN and partners advocated for the exclusion of previous versions of grants termination language on the grounds that is confusing, unclear and near impossible to implement.

Nonprofit HMOS

The healthcare premium bill passed early during the legislative session created an opening to for-profit healthcare management organizations (HMOs) to enter the Minnesota marketplace. Currently, all of the state’s HMOs are nonprofit and hold over $7 billion in public assets. MCN, the Office of the Minnesota Attorney General, and a diverse set of stakeholders advocated for robust oversight of any nonprofit HMO conversions. MCN’s position was based on learnings from other states which have allowed nonprofit HMO conversions and the principle that public assets should be used for public benefit and not to line private pockets. After much back and forth, the legislature passed a two year moratorium on HMO conversations in the final Health and Human Services bill.

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