The clock is ticking and there's no senate floor action planned for the rest of the day today. 

A $160 million Democratic house bill to close a loophole in the voter-approved estate tax law that benefits heirs of married couples has yet to be passed by the Republican-controlled senate. The Republicans have cued up a version of their own—it amends the estate tax (passed in 2006 by 62 percent of the voters) to create a new loophole for family businesses, but would increase the rate on higher incomes to keep it revenue neutral (a little class war from the GOP?).

However, that version, the Republican senate leadership says, won't get a vote until the house signs off on a batch of non-budget policy bills such as some business-friendly changes to the workers' comp program, an education reform bill that would allow principals to reject teachers that have been assigned to their schools, and a bill to lower regulations on high-interest payday loans.

The bill is worth $160 million because if the legislature doesn't pass it, the Department of Revenue will have to mail refund checks starting on Friday.

The bill is worth $160 million because if the legislature doesn't pass it, the Department of Revenue will have to mail refund checks to estates that succesfully sued over the married couples loophole, which the court agreed exists.

If the bill to close the loophole passes, not only will DOR void the refunds (saving the state $160 million right now), but it will also bring in $160 million in the next biennium (the matching number is a coincidence) ... or $133 million if you go with the GOP version ... and $78 million in the following biennium ... or $30 million if you go with the GOP version. (Again, the Republican version may increase the rate—for estates over $9 million—to make it revenue neutral, matching the $160 million and $78 million, but legislative staff hasn't had time to crunch the numbers on that yet.)

Afternoon Jolt

But here's the possible Jolt: The legislature only has until Friday morning to pass this bill. On Friday, 10 estates, which are first in line for refunds, are going to court. And if the legislature hasn't fixed the loophole at that point, the judge will force DOR to mail refunds to those 10 estates, worth $13 million.

Maybe you don't think $13 million is Jolt-worthy?

Well, then, here's the real Jolt. Even if the legislature reaches a deal after Friday, the estates that make up the remaining $147 million in refunds will have a pretty good case that they should get their money too despite any subsequent fix. Simply put (and a lawyer will certainly find a legal way to say this too): If the heirs of 10 estates get their $13 million back, why shouldn’t the heirs of all eligible estates gets theirs too.

The clock is ticking and there's no senate floor action planned for the rest of the day today.