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Legislative Update: February 19, 2019

Posted By Administration, 11 hours ago

EDAM Secures Authors for DEED Program Funding Requests – Prepares for Hearings

EDAM has been working with our partners, including the Association of Metropolitan Municipalities, to secure authors and seek hearings on legislative proposals to establish funding levels for a number of key programs administered by the DEED.  

On Monday, February 18, the Senate Jobs and Economic Growth Finance and Policy Committee heard Senator Paul Utke’s bill, Senate File 1076, which sets funding levels for the Minnesota Investment Fund, Job Creation Fund and Redevelopment Program. At the Senate Jobs Committee hearing, Sam Richie of the Fryberger law firm testified on behalf of EDAM in support of Senate File 1076.  

Senator Utke’s bill was co-authored by Senator John Jasinski, Senator Paul Anderson, Senator Rich Dreheim and Senator Paul Goggin.  

The bill seeks $10,500,000 in each year of the biennium for the Minnesota Investment Fund, $10,500,000 in each year of the biennium for the Job Creation Fund and $6,000,000 of the biennium for the Redevelopment Program.

A somewhat different approach was taken on the House side.  A separate bill was introduced establishing the funding level for each of the programs.  

House File 1185 was authored by Representative Anne Claflin (DFL-So. St. Paul).  This is the bill that sets the funding level at $10,500,000 for each year of the biennium for the Minnesota Job Creation Fund.  Representative Claflin’s bill was co-authored by Representative Bob Gunther, Representative Hodan Hassan, Representative Rob Ecklund, Representative Tim Mahoney, Representative Barb Haley, Representative Mike Sundin and Representative Robert Bierman.

House File 1184 was authored by Representative Erin Koegel (DFL-Spring Lake Park).  This is the bill which establishes a $6,000,000 funding level for the Redevelopment Grant and Demolition Loan Program.  This bill had essentially the same set of co-authors as Representative Claflin’s bill.  

House File 1186 was authored by Representative Zack Stephenson (DFL-Coon Rapids).  This is the bill which establishes a funding level of $10,500,000 in each year of the biennium for the Minnesota Investment Fund.  Again, the co-authors for Representative Stephenson’s bill were virtually the same as for the other two provisions.

With the Senate Committee hearing Senator Utke’s bill this week, we expect an early hearing on the House Files – perhaps even next week.   We will keep you informed of our progress on these issues. 

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Legislative Update: February 11, 2019

Posted By Administration, Monday, February 11, 2019
EDAM Works with Economic Development Partners on Legislation to Fund DEED Programs
EDAM is working with some of our economic development partners – in particular Metro Cities – to prepare legislation for introduction which would provide funding for the 2020-2021 biennium.  Three bills have been prepared in the House to target funding to particular programs.  One bill would provide $6 million each year of the biennium for the Redevelopment Grants and Demolition Loans Program.  The Chief Author of this bill will be Representative Erin Koegel (DFL-Spring Lake Park).  The co-authors on the bill are Representative Hodan Hassan (DFL-Minneapolis) and Representative Rob Ecklund (DFL-International Falls).  We will be finding additional co-authors for the measure in the coming days from both the DFL and Republican Caucuses.

A bill to provide $10.5 million in each year of the biennium for the Minnesota Investment Fund will be authored by Representative Zack Stephenson (DFL-Coon Rapids).   Again, Representative Hassan and Representative Ecklund will be co-authors and we will find additional co-authors before the bill’s introduction next week.   

The third bill on which we are working is to provide $10.5 million per year for the Job Creation Fund.  Representative Anne Claflin (DFL-South St. Paul) is the Chief Author of this bill.  Again, Representatives Hassan and Ecklund co-authored the bill and we will also seek additional co-authors for this measure.  

The approach on the Senate side will be somewhat different.  A bill is being prepared  which will include funding for all three of these programs in a single bill.  The Chief Author for the measure will be Senator Paul Utke (R-Park Rapids).  We will report to you when we know who the other co-authors will be on the bill.

As soon as the bills are formally introduced, we will be submitting hearing requests and lining up witnesses to testify on behalf of these funding levels.  We also hope to identify grants or loans that have been awarded in the legislative districts of members of the House and Senate Committees.  We will pursue this information as soon as we have the hearing requests in on the bills.  

Department of Employment and Economic Development Overview
One of the highlights of last week was the presentation by DEED Deputy Commissioner Kevin McKinnon to the House Jobs and Economic Development Finance Division regarding Department Programs.  

Deputy Commissioner McKinnon’s presentation described Business Assistance Programs, Minnesota Trade Office functions and Community Assistance Programs.  Of special note was the portion of the presentation focused on Community Finance Programs such as the Contaminated Clean-up Grant Program, Redevelopment Grant Program, Greater Minnesota Business Development Public Infrastructure Grant Program and Transportation Economic Development Infrastructure Program.  

There was also considerable discussion relating to the Minnesota Investment Fund and Job Creation Fund.  

View Presentation

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Legislative Update: February 4, 2019

Posted By Administration, Monday, February 4, 2019

New DEED Commissioner Steve Grove officially took his post on Monday, January 28th. On Tuesday, January 29th he made his first appearance at the Legislature, testifying in Representative Mahoney’s Jobs and Economic Development Finance Division. Commissioner Grove introduced himself and his personal and professional background and then presented, along with DEED staff, an overview of the Agency’s mission and responsibilities.


Commissioner Grove told the committee about his career path that has led him to DEED. He taught English in Japan after college, came back to the United States and worked as a journalist at ABC News, then moved to the west coast and worked at YouTube during its early days before moving to Google. Commissioner Grove and his wife have young twin boys and thought Minnesota would be the best place to raise their family.


Commissioner Grove spoke of three top priorities he sees for his Agency. The first is the talent gap, where we are not seeing enough people seeking work for certain high skilled jobs. The second is income inequality. Commissioner Grove said that while we have a lot to be proud of in Minnesota, we should be embarrassed by our state’s economic data for people of color and that has to change. The final priority Commissioner Grove outlined was for the need to accelerate our innovation economy. This focus on technology and innovation makes sense given the Commissioner’s background, and he even told the Committee that his wife works for a venture capital firm that focuses on investing in technology companies outside of the coasts. He mentioned her employment in this field in relation to the Angel Income Tax Credit, a program he believes in and would like to see come back in Minnesota.

The Commissioner will be busy making the rounds through House and Senate committees in the coming weeks and we will keep you updated as DEED’s priorities continue to form.

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Legislative Update: February 4, 2019

Posted By Administration, Monday, February 4, 2019

New DEED Commissioner Steve Grove officially took his post on Monday, January 28th. On Tuesday, January 29th he made his first appearance at the Legislature, testifying in Representative Mahoney’s Jobs and Economic Development Finance Division. Commissioner Grove introduced himself and his personal and professional background and then presented, along with DEED staff, an overview of the Agency’s mission and responsibilities.


Commissioner Grove told the committee about his career path that has led him to DEED. He taught English in Japan after college, came back to the United States and worked as a journalist at ABC News, then moved to the west coast and worked at YouTube during its early days before moving to Google. Commissioner Grove and his wife have young twin boys and thought Minnesota would be the best place to raise their family.


Commissioner Grove spoke of three top priorities he sees for his Agency. The first is the talent gap, where we are not seeing enough people seeking work for certain high skilled jobs. The second is income inequality. Commissioner Grove said that while we have a lot to be proud of in Minnesota, we should be embarrassed by our state’s economic data for people of color and that has to change. The final priority Commissioner Grove outlined was for the need to accelerate our innovation economy. This focus on technology and innovation makes sense given the Commissioner’s background, and he even told the Committee that his wife works for a venture capital firm that focuses on investing in technology companies outside of the coasts. He mentioned her employment in this field in relation to the Angel Income Tax Credit, a program he believes in and would like to see come back in Minnesota.

The Commissioner will be busy making the rounds through House and Senate committees in the coming weeks and we will keep you updated as DEED’s priorities continue to form.

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Legislative Update: May 29, 2018

Posted By Administration, Wednesday, May 30, 2018
Our update from last week can be amended to include the fact that the Governor vetoed both the Tax and Supplemental Budget bills, meaning only the Bonding Bill will become law (it hasn’t been signed yet either, but also hasn’t been vetoed). This means there are no changes to the DEED programs as had been contemplated in the Supplemental Budget bill and their budget remains unchanged for the remainder of the biennium.

The other major development since Session ended is that Senator/Lieutenant Governor Michelle Fischbach has resigned her Senate seat and has officially been sworn in as Lieutenant Governor. This is significant because it requires a special election to fill her seat, which will determine control of the entire Minnesota Senate (with her resignation, the Senate is tied 33-33). The special election will coincide with the general election in November, which means every elected office in Minnesota is on the ballot this November one way or another: both US Senate seats, all US House of Representative seats, the Governor’s seat, Secretary of State, State Auditor, Attorney General, the entire Minnesota House, and now a special election for the fate of the Minnesota Senate (which isn’t otherwise up for reelection until 2020). Republican Minnesota House Member Jeff Howe has announced he will run for the seat, the district has been a reliable seat for Republicans, but given the stakes of this special election it is all but certain to be a hotly contested and expensive election.

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Legislative Update: May 21, 2018

Posted By Administration, Monday, May 21, 2018
A more detailed report with specific line-item information will be forthcoming in the next few days; however, we wanted to make sure that you had the latest information on economic development matters as the 2018 Session comes to a close.  

The Session ended minutes ahead of the midnight, May 20th Constitutional Deadline. All finance matters - from agriculture to transportation - were addressed in a single Omnibus Supplemental Finance Bill.

The concern with respect to economic development programs is that the House and Senate had both earmarked a significant majority from the Minnesota Investment Fund and Job Creation Fund for particular projects. This would have left very limited resources for the Department of Employment and Economic Development to respond to business development and job creation opportunities that would arise over the course of Fiscal Year 2019.  

In the end, the Conference Committee rejected most of the earmarks for MIF and JCF. This will ensure that the Department has a reasonable opportunity to respond to proposals.

On the bonding front, there were a number of DEED programs that received general obligation bonds. The Omnibus Capital Budget (Bonding) Bill included $5 million for the Business Development Public Infrastructure Program, $3 million for the Transportation Economic Development Program and $2 million for the Innovative Business Development Infrastructure Program.  

There was also a number of local infrastructure grants provided that will be administered by DEED. 

If you have any questions regarding our reports, please feel free to contact the Fryberger office at (651) 221-1044 or send an email to kwalli@fryberger.com, srichie@fryberger.com or dtomassoni@fryberger.com.  

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Legislative Update: May 15, 2018

Posted By Administration, Tuesday, May 15, 2018

Late last night the Supplemental Budget Conference Committee took up the Jobs and Economic Development articles of the Omnibus Supplemental Funding Bill.

Good news - the Conference Committee reversed House and Senate proposals to significantly cut the Job Creation Fund and the Minnesota Investment Fund. As you will recall, the House proposed reducing the Job Creation Fund by $7 million and the Minnesota Investment fund by $5 million and to reduce the base of both programs into the future; the Senate proposed reducing the Minnesota Investment Fund by $2 million. They kept two carve outs to MIF, $1,000,000 for Verso Paper in Duluth and $1,000,000 for a company in Minnetonka. The rest of the earmarked MIF and JCF allocations that were in the House bill were not accepted in Conference.

Ultimately, the Conference Committee agreed to:

  • $15 million from the General Fund for Broadband
  • No reductions to the Minnesota Investment Fund
  • A one-time reduction of $1.5 million to the Job Creation Fund and appropriated that funding to a project in Cambridge, Minnesota
  • No cuts to the base (future funding) of either JCF or MIF.

Here is a link to the spreadsheet, which does NOT reflect the reduction of $1.5 million to the JCF because it was done by amendment during the committee hearing last night. Otherwise, the final column (“Conference”) is what was agreed to by the committee.

Bill Language:
SF3656 Jobs Appropriation Articles
SF3656 Jobs - Unemployment Insurance Articles
SF3656 Jobs - Economic Development Articles

Moving forward, the Conference Committee still has several articles of the supplemental budget bill to consider; it will then go back to the House and Senate for a final floor vote (no amendments are allowed at that point). If the governor receives the bill by Wednesday, he will have three days to sign, veto, or line item veto the bill.  If he receives it within the last three days of session, he has 14 days.  The Governor, House and Senate leadership are meeting this morning to negotiate an overall pathway through the end of session.

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Legislative Update: May 11, 2018

Posted By Administration, Monday, May 14, 2018
We are heading into the final week of the Legislative Session. There is a considerable amount of work that needs to be accomplished in a very short period of time. The House and Senate have both approved Omnibus Appropriations bills which include virtually all of the State Agency accounts. We are specifically watching the Department of Employment and Economic Development provisions which represent a very modest portion of the overall Supplemental Budget.  

Our biggest concern with the DEED provisions is the “earmarking” of funds from the Minnesota Investment Fund and Job Creation Fund. Both the House and Senate Bills earmark funds for specific projects, but the House does so more aggressively – leaving very limited resources available to respond to projects which come forward for funding in FY 2019.

We are also watching the Tax Bill. The Senate and House Conferees are working to assemble a bill that they hope will secure the Governor’s signature. At this point, it is hard to say whether they will accomplish this objective. There are very significant differences on the tax maters between Governor Dayton and Republican Legislative Leaders.  

One provision of significant interest to the economic development community is the inclusion of funding for the Angel Tax Credit Program. This is the program that provides 25% credit to investors who put money into start-up companies focused on high technology, new proprietary technology or new proprietary processes or services.  

The Senate Bill includes an additional $5 million to continue the Angel Tax Credit Program. The House included $10 million for the same purpose. The difference in the funding level will be addressed in the final Conference Committee Report.

The House and Senate are also working on their respective Bonding Bills. The House Bonding Bill has cleared Committee and is awaiting action on the House Floor. The Senate Bill has been marked-up by the Capital Investment Committee and awaits action in the Senate Finance Committee. Both bills need to be acted upon next week. The challenge they face is that both the House and the Senate established a general obligation bonds ceiling of $825 million which is considerably below the state’s debt capacity and approximately one-half the level recommended by Governor Dayton.  

Both the House and Senate Bills leave out a number of important projects and may struggle to secure the 60% Super Majority required to pass bonding provisions.

Of particular interest to economic development professionals are the Greater Minnesota Business Infrastructure Program – which the Senate includes in its bill at $8 million. Also of interest is the Transportation Economic Development Infrastructure Program (TEDI) at $4 million. One million dollars is included in the Senate Bill for the Innovative Development Infrastructure Program (IBDPI).  

We will continue working on these issues in this final busy week of the Session. Our next report may be the very conclusion of the Session since it will likely be difficult to know precisely where things land until the Legislature adjourns.  

If you have any questions regarding our reports, please feel free to contact the Fryberger office at (651) 221-1044 or send an email to kwalli@fryberger.com, srichie@fryberger.com or dtomassoni@fryberger.com.  

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Legislative Update: May 8, 2018

Posted By Administration, Monday, May 7, 2018

Both the House and Senate have now passed their respective Omnibus Finance Bills which contain funding for the Department of Employment and Economic Development. Both Bills transfer funds from the Minnesota Investment Fund and the Job Creation Fund to other accounts at DEED or for earmarked projects. In both instances, we are seeing a reduction in the level of funding available generally for projects which will present opportunities for business development and job creation. At this point in the process, the Senate Bill retains more of the MIF and JCF funding for yet to be determined projects. The FY’19 funding levels for these programs in the House Bill have been reduced to $1.5 million for MIF and $4 million for JCF. The Senate funding levels for FY’19 would be at $8 million for MIF and $8.5 million for JCF.  

The Senate Tax Bill made its way through Committee and the Floor this week. One of the key provisions from EDAM’s perspective is another round of funding for the Angel Investment Tax Credit. Senator Paul Anderson (R-Plymouth) championed this initiative and was able to convince the Chairman to include the Angel Tax Credit in the Senate Bill. We will now need to work the Conference Committee to retain the $5 million allocation for the Tax Credit Program.

The House Bonding Bill emerged this week and cleared the Capital Investment Committee on Friday morning. The projects of greatest interest to EDAM members would include the Business Development Public Infrastructure Program (BDPI) at $3 million, the Transportation Economic Development Program (TEDP) at $10 million and the Innovative Business Development Infrastructure (IDBPI) at $2 million.  

In addition, the Bonding Bill included a substantial amount of funding for water infrastructure including $20 million to match U.S. EPA Capitalization Grants, $55 million for water infrastructure (which includes the Clean Water Program and the Drinking Water Program) and $45 million for wastewater infrastructure – Point Source Implementation Grants.  

The Conferees have been named for the Omnibus Finance Bills and the Tax Bills.

House:
Rep. Jim Knoblach (St. Cloud)
Rep. Jennifer Loon (Eden Prairie)
Rep. Paul Torkleson (Hanska – District includes New Ulm)
Rep. Pat Garofalo  (Farmington)
Rep. Gene Pelowski (Winona)
 
Senate:
Sen. Julie Rosen (Vernon Center – District includes New Ulm)
Sen. Michelle Benson (Ham Lake)
Sen. Mary Kiffmeyer (Big Lake)
Sen. Warren Limmer (Maple Grove)
Sen. Scott Newman (Hutchinson)

 

We expect that the Senate Capital Investment Bill will emerge by mid-week so that we can compare House and Senate provisions.  

We will keep you informed of all developments of interest and concern to EDAM as the process moves to its conclusion, scheduled for May 21st.  

If you have any questions regarding our reports, please feel free to contact the Fryberger office at (651) 221-1044 or send an email to kwalli@fryberger.com, srichie@fryberger.com or dtomassoni@fryberger.com.  

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Legislative Update: April 30, 2018

Posted By Administration, Monday, April 30, 2018
EDAM was able to get a letter voicing opposition to proposed cuts to economic development funding included in the committee materials for the April 27 Ways and Means hearing on the Omnibus Jobs Bill, but the language dealing with the DEED budget was not amended and remains problematic. The Senate Omnibus Jobs Bill was rolled into the overall Senate Omnibus Supplemental Budget bill,  which passed off the Senate Floor on April  26th. The House will take up their Omnibus Supplemental Bill (which now includes the Omnibus Jobs Bill) on the House Floor this week, at which point Conferees will be named. We will shift our focus from trying to amend the House language to advocating for the Senate position in Conference.

We expect the focus to shift now onto the Omnibus Tax Bills in both House and Senate as well as the potential unveiling of the Bonding Bills in each body.

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