HF1041

HF1041 (Legislative Session 94 (2025-2026))

Corporations with high principal executive officer additional tax imposed to median worker pay ratios, and companies disqualified from receiving state subsidies and grants.

Related bill: SF1936

AI Generated Summary

Purpose

To raise revenue by imposing an additional tax on certain corporations with a high ratio of principal executive officer pay to the median worker pay, and to prevent those same corporations from receiving state subsidies and grants.

Main Provisions

Adds an additional corporate tax targeting companies that have a high chief executive officer (principal executive officer) pay relative to the median worker pay.
Establishes a disqualification from eligibility to receive state grants for corporations that are subject to the additional tax, meaning they would be ineligible for grant funding.
Requires the grant-awarding agency to collect and review additional information as needed to determine eligibility.
The authority for the additional tax comes from Minnesota Statutes section 290.06, subdivision 1, paragraphs b to j, and the new grant-disqualification rule is added to Minnesota Statutes 16B.981, subdivision 7.

How this changes current law

Creates a new link between tax policy and access to state funding: corporations subject to the new tax can no longer receive state grants or subsidies.
Expands the set of criteria used to decide which corporations can qualify for state financial assistance by adding a governance/ compensation-related condition.
Gives grant-awarding agencies explicit authority to request more information to determine whether a company should be disqualified.

Administration & Implementation

The grant-awarding agency is empowered to require additional information to determine whether a corporation meets the disqualification criteria.
Implementation details (how the ratio is calculated, thresholds, and which corporations are affected) would be defined as the bill’s provisions referenced (section 290.06 subdivision 1, paragraphs b to j) and related statutory guidance.

Relevant Terms - additional tax - corporate franchise tax - principal executive officer pay ratio - CEO-to-median worker pay ratio - median worker pay - high pay ratio - grants - subsidies - disqualification from eligibility to receive grants - grant-awarding agency - Minnesota Statutes 16B.981 - Subdivision 7 - section 290.06 subdivision 1, paragraphs b to j - eligibility criteria - state funding restrictions - information collection for eligibility

Bill text versions

Introduction PDF file
Introduction PDF PDF file

Actions

Date	Chamber	Where	Type	Name	Committee Name
February 17, 2025	House		Action	Introduction and first reading, referred to	Taxes
February 19, 2025	House		Action	Author added

Citations

[
  {
    "analysis": {
      "added": [
        "New subdivision specifying grant eligibility disqualification based on tax status."
      ],
      "removed": [],
      "summary": "Adds Subd.7 to Minnesota Statutes 16B.981 to disqualify a corporation from receiving state grants if it is subject to the additional corporate tax under section 290.06 Subd.1(b)–(j).",
      "modified": [
        "Modifies grant eligibility criteria under 16B.981."
      ]
    },
    "citation": "16B.981",
    "subdivision": "Subd.7"
  },
  {
    "analysis": {
      "added": [
        "No new tax created; relies on existing 290.06 Subd.1."
      ],
      "removed": [],
      "summary": "The bill references the existing additional tax under Minnesota Statutes 290.06 Subd.1 (paragraphs b–j) as the criterion for disqualification from grants for corporations; no new tax is created by this bill.",
      "modified": [
        "No direct modification to 290.06 in this text; the provision uses it to define eligibility."
      ]
    },
    "citation": "290.06",
    "subdivision": "Subd.1"
  }
]

Progress through the legislative process

17%

In Committee