SF1936 (Legislative Session 94 (2025-2026))
Additional tax enactment on certain corporations with high principal executive officer to median worker pay ratios
Related bill: HF1041
AI Generated Summary
Purpose
- The bill would impose an additional corporate franchise tax on certain corporations that have a high principal executive officer (PEO) to median worker pay ratio. It would also disqualify those same corporations from receiving state subsidies and grants.
Main Provisions
- Additional tax: Creates or applies an additional tax under the corporate franchise framework to corporations with high PEO-to-median worker pay ratios. The tax is referenced under section 290.06 subdivision 1, paragraphs b to j.
- Grant disqualification: Adds a new Subdivision 7 to Minnesota Statutes 2024 section 16B.981 to establish disqualification from eligibility to receive grants.
- A corporation that is subject to the additional tax (under 290.06 subdivision 1, paragraphs b to j) would be ineligible to receive a grant.
- The grant-issuing agency may require any additional information to determine eligibility.
Significant Changes to Existing Law
- Adds Subd.7 to 16B.981, linking grant eligibility to a corporation’s tax status.
- Establishes that companies paying the additional tax due to high CEO-to-median worker pay ratios cannot receive state subsidies or grants.
- Requires grant-issuing agencies to collect and review information to verify eligibility.
Implementation Notes
- The bill refers to an existing tax framework in section 290.06 subdivision 1 (paragraphs b to j) for defining which corporations are subject to the additional tax.
- The exact pay ratio threshold and calculation are defined in the referenced tax provisions, not in this summary.
Practical Effect
- If a corporation’s pay ratio triggers the additional tax, that company would be barred from receiving state grants or subsidies, ensuring grant funds go to those not subject to the additional tax or with different compensation practices.
Terminology (key phrases from the bill)
- corporate franchise tax
- additional tax
- high principal executive officer to median worker pay ratio
- principal executive officer (PEO)
- median worker pay
- section 290.06 subdivision 1 paragraphs b to j
- Minnesota Statutes 2024 section 16B.981
- Subd.7
- Disqualification from eligibility to receive grants
- grants
- state subsidies and grants
- the agency may require any additional information
Relevant Terms - corporate franchise tax - additional tax - high PEO-to-median worker pay ratio - principal executive officer (PEO) - median worker pay - CEO pay ratio - 290.06 subdivision 1 (paragraphs b to j) - Minnesota Statutes 2024 section 16B.981 - Subd.7 - disqualification from eligibility to receive grants - grants - state subsidies and grants - agency may require additional information
Actions
| Date | Chamber | Where | Type | Name | Committee Name |
|---|---|---|---|---|---|
| February 27, 2025 | Senate | Action | Introduction and first reading | ||
| February 27, 2025 | Senate | Action | Referred to | Taxes |
Citations
[
{
"analysis": {
"added": [
"Subd. 7: Disqualification from eligibility to receive grants for corporations subject to the additional tax under 290.06 Subd. 1(b)–(j)."
],
"removed": [],
"summary": "Adds a new Subdivision 7 to Minnesota Statutes 2024 section 16B.981 to disqualify a corporation from receiving state grants if the corporation is subject to the additional tax under Minnesota Statutes 290.06, Subd. 1, paragraphs b to j. The agency may require additional information to determine eligibility.",
"modified": []
},
"citation": "16B.981",
"subdivision": "Subd. 7"
},
{
"analysis": {
"added": [],
"removed": [],
"summary": "References the existing Minnesota Statutes 290.06, Subd. 1, paragraphs b to j, which define the additional corporate tax that triggers the grant disqualification mechanism described in 16B.981 Subd. 7.",
"modified": []
},
"citation": "290.06",
"subdivision": "Subd. 1"
}
]Progress through the legislative process
In Committee