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Legislative Update: May 20

Posted By Administration, Tuesday, May 21, 2019
There was a late agreement over the weekend on a two-year state budget announced by the Governor, Speaker, and Majority Leader. They didn’t reach the deal with enough time to spare us from a special session, but they did get there before the clock completely ran out. The overall budget numbers are just a wrinkle, and now it is back to a scramble to determine what will be in and what will get cut out of these budget bills.

Speaker Hortman said that the details would be worked out in a transparent and public process via the conference committees, but none of the major committees have had any public hearings since the agreement was reached. There have been closed door meetings and backroom offers going back and forth, but the path to the end remains unclear at this point.

The budget agreement includes $10 million in new spending for the Jobs and Economic Development Conference Committee, but those resources only go so far for a jurisdiction as broad as this. Out of the Agriculture, Rural Development, and Housing jurisdiction there is $40 million in one-time funding for broadband in FY 20/21 only. Another key component of the budget announcement is that leadership has agreed to a $500 million bonding bill, split with $440 million for general obligation bonds and $60 million for housing infrastructure bonds. This part of the agreement will be interesting to track, as a bonding bill requires a supermajority to pass off either Chamber, meaning minority party votes will be needed in both bodies. House Minority Leader Kurt Daudt has stated that he was not included in the final negotiations and as such has not been asked to put up any votes to help pass a bonding bill.

We will keep track of it all and let you know how things shake out.

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Legislative Update: May 13

Posted By Administration, Monday, May 13, 2019
The Jobs & Energy Conference Committee and all the other Conference Committees working on Omnibus Finance Bills are in a holding pattern – waiting for the Governor, House Speaker and Senate Majority Leader to come to an agreement on spending targets for the Conference Committees. All of the leaders were together this weekend for the Governor’s Fishing Opener and a meeting of the leaders was held at 6:00 pm Sunday evening. Everyone was hoping that the logjam would be broken over weekend so that we could work starting early this week to finalize all of the Omnibus Bills in time for adjournment on Monday, May 20th. But no agreement was reached and negotiations over budget targets resumed Monday morning. We will keep you posted on developments at the Capitol.

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Legislative Update: May 6

Posted By Administration, Monday, May 6, 2019
The House had the gavel last Friday, May 3, and called a hearing to go over their three priorities: paid family leave, sick and safe time, and wage theft prevention. The Senate objected to having a hearing scheduled before their conferees were officially named, and as such only Senator Pratt attended the hearing. He started out with a critique of the process and the fact that the meeting was taking place, but after that they got into a flow and things seemed to have smoothed over. That didn’t last long, however, and after an hour and a half, Senator Pratt and Representative Mahoney got into heated exchange that resulted in Senator Pratt instructing the Senate staff to leave, as did he. The House members then finished a walk through of sick and safe time and wage theft with no Senators present.

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Legislative Update: April 25, 2019

Posted By Administration, Thursday, April 25, 2019
The omnibus Jobs bills finally moved yesterday, Mahoney’s off the House Floor and Pratt’s out of Senate Finance. There were no major changes on the House side to the DEED program funding, but there was an amendment to carve $1,000,000 out of the MIF allocation for 2020 to give to a business in Minnetonka that produces lactic acid/lactate to expand the bioeconomy in Minnesota. The Senate DEED funding levels are still preferred to the House levels, but MIF went from $12.5 million per year to $11.5 million in 2020 and $12.5 million in 2021.

We expect Pratt’s bill to be on the Senate Floor soon, likely this weekend.

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Legislative Update: April 16, 2019

Posted By Administration, Tuesday, April 16, 2019
Our reporting on the Jobs & Economic Development Omnibus Bills has not changed. The Senate has higher funding levels for MIF and JCF along with specific transfer authority to allow for use of unused MIF Funds for Redevelopment projects.

The Legislature began the Easter/Passover break last Friday – returning on Tuesday, April 23. The Jobs Bills are scheduled to be presented on the House and Senate floor upon their return.

Another item we have been tracking is the Angel Investment Tax Credit. The House Omnibus Tax Bill includes $10,00,000 to renew this business finance tool. The description in the House Tax Bill Summary is as follows:
“Allocates $10 million to the small business investment credit (aka “angel credit”) for tax years 2019 and 2020 and reduces the investment threshold for certain targeted businesses.”

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Legislative Update: April 8, 2019

Posted By Administration, Monday, April 8, 2019
Omnibus bills have been assembled and are beginning to make their way through the House and Senate finance committees. The House omnibus jobs bill was heard in the Ways and Means Committee this morning (Monday, April 8) and the Senate omnibus jobs bill is scheduled to be heard in the Senate Jobs committee today (Monday April, 8) and then be heard in Finance later this week.

On the House side, the Minnesota Investment Fund and Job Creation Fund are both funded at levels lower than those requested by EDAM and supported by a variety of other organizations interested in DEED program funding.

MIF and JCF were both funded at $5.5 million per year for each year of the 2020-2021 biennium. These numbers where then increased slightly up to $6.9 million for MIF and $6.77 for JCF during the markup of the House omnibus bill.  The request level had been $10.5 million per year for each of the programs for a total of $21 million per program.

Even more disappointing is the fact that the House spreadsheet does not indicate a line-item for the Redevelopment Fund.  This had been the lead talking point for meetings with key legislators and testimony before the House and Senate Jobs Finance Committees.  The lack of a specific line-item for redevelopment funding will limit the state and local response to redevelopment opportunities where buildings or worn-out infrastructure needs to be removed or replaced.  

Things are a little better on the Senate side, with Chair Pratt including MIF funding at $12.5 million per year and JCF funding at $8 million per year. The Senate bill also includes no funding for the Redevelopment fund, but does allow DEED to transfer money from the MIF account to the Redevelopment Fund.  

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Legislative Update: March 29, 2019

Posted By Administration, Monday, April 1, 2019
We have done our work and presented our arguments on economic development priorities and now we have to see what the Legislature will do on funding levels for the DEED programs for which we have advocated.

The biggest challenge we face is with the budget targets that are assigned to the Jobs and Economic Development Finance Committees in the House and Senate. The Committees were given their respective budget targets last week.

The House Jobs and Economic Development budget target for the 2020-2021 biennium is $333,820,000. That’s an increase of $83,785,000 above the base which was set following the February budget forecast.

This provides some room for inclusion of funds for DEED programs. EDAM had advocated for funding of $10.5 million in each year of the biennium for the MIF Program and $10.5 million in each year of the biennium for the JCF Program. We also specifically supported a legislative proposal to establish a
$6 million per year funding level for the Redevelopment Fund.

Things will be significantly tighter on the Senates side. The Senate Jobs and Economic Growth Committee has a target for 2020-2021 of $218 million. This is well below the House target which will prove very challenging for inclusion of all of the DEED funds for which requests have been made.

It appears that the House and Senate are going to be very different in their funding levels on almost all of the budget categories. The only areas of the Senate budget which show any increase over the current biennium are in the K-12 Education Budget, Higher Education and Health and Human Services. Virtually every other category of funding is either flat or a reduction in spending from the base budget.

Everyone is now expecting there to be dramatically different funding levels and Conference Committees are going to be particularly challenging. There is already talk of a Special Session and the prospect of a state government shutdown in July if the House and Senate can’t come to terms.

We will be closely monitoring the Jobs and Economic Growth Committees and the Conference Committee that is formed to resolve House and Senate differences. We will provide weekly updates on this process as it proceeds through April and into May.

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Legislative Update: March 25, 2019

Posted By Administration, Monday, March 25, 2019
This past Tuesday, March 19, the House Jobs and Economic Development Committee heard three bills which addressed funding levels for DEED programs. House File 1184, authored by Representative Erin Koegel (DFL-Spring Lake  Park), established funding in the amount of $6 million for each year of the biennium for the Redevelopment Account. House File 1185, authored by Zack Stephenson (DFL-Coon Rapids), established the funding level of $10.5 million for each year of the biennium for the Minnesota Investment Fund.  House File 1186, authored by Representative Anne Claflin (DFL-South St. Paul), would establish a funding level of $10.5 million for each year of the biennium for the Job Creation Fund.

Testimony was presented at the hearing in support of these bills by Charlie VanderAarde of Metro Cities. Bill King of CIRRUS Aircraft in Duluth testified in support of the Minnesota Investment Fund which provided a grant allowing CIRRUS to remain and grow in Minnesota. Deanna Kuennen, Community and Economic Development Director for the City of Faribault, spoke on behalf EDAM generally and focused more specifically on both the Minnesota Investment Fund and Job Creation Fund which Faribault has secured for business and job growth opportunities in their community. Monte Hilleman of the St. Paul Port Authority testified about the essential role that DEED’s Redevelopment Funds play in preparing land for new business development and job created where dilapidated buildings and outdated infrastructure once stood  

All of the bills were laid over for possible inclusion in the Omnibus Jobs and Economic Development Finance Bill.

We will be following-up with the Committee Chair and key Committee Members to request that funding on par with these request levels is included in the final House Bill.

Earlier this Session, the Senate Jobs and Economic Development Committee heard Senate File 1076 authored by Senator Paul Utke which proposed the same funding levels for each these programs – but did so in a single bill. We will also be following-up with the Senate Chairman Erik Pratt and key Committee Members to seek their support for the funding levels requested in Senator Utke’s bill.  

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Legislative Update: March 18, 2019

Posted By Administration, Monday, March 18, 2019
The Legislative session has shifted gears after last week’s committee deadline requiring policy bills be heard in their committee of origin. The focus will now change from moving bills through committee to setting budget targets. The majority of bills that made deadline have been laid over for possible inclusion in omnibus bills. Once budget targets are set and agreed to by leadership, committee chairs will begin to assemble their omnibus bills.

One of EDAM’s legislative priorities for 2019, the Angel Investment Tax Credit, had a hearing in the House Jobs and Economic Development Finance Division on Tuesday, March 12th. House File 1268  is authored by Representative Kotyza-Witthuhn and would reinstate the Angel Investment Tax Credit for up to $20 million per year. The bill faced some tough questioning from Chair Mahoney, who chief authored the authorization of the program when it originated.

Chair Mahoney is unhappy with the lack of geographic diversity with respect to the Angel Investment Tax Credit. He would like to see the program benefit more than the western Twin Cities suburbs, where much of the tech and health care businesses in the state are located. He has indicated he would support an amendment that would cap the amount of money that can be invested in the metro area and require investors to look to other areas of the state. The hearing was long and often heated, with Chair Mahoney expressing frustration with committee members and DEED staff for not addressing this issue to date.

The bill was laid over for possible inclusion, but there is clearly still work to be done before the chair is satisfied with the legislation.

Hearings are scheduled Tuesday, March 19th for House Files 1184 (Redevelopment), 1185 (JCF), and 1186 (MIF). EDAM will testify to the importance of these vital programs and hopes to have funding for all three included in the committee’s eventual omnibus bill. 

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Legislative Update: March 4, 2019

Posted By Administration, Monday, March 4, 2019

Economic Development Day at the Capitol

EDAM, along with partner organizations MAPCED, SBDC, Minnesota Brownfields, and Metro Cities organized and participated in Economic Development Day at the Capitol on Tuesday, February 26th. The event drew participants from around the state to get involved in the legislative process and advocate for the importance of local tools to address economic development and community revitalization with our elected officials.

Participants spent the morning listening to and asking questions of key legislators responsible for the economic development budget at the Capitol. Department of Employment and Economic Development Commissioner Steve Grove spoke to the group about his Agency’s mission, his budget priorities, and some of the challenges of transitioning from private industry to state government. Deputy Commissioner Kevin McKinnon then stood for questions and explained some of the challenges in seeking increased funding with split legislative control of the House and Senate.

Senator Paul Anderson (R – Plymouth) talked about the importance of reinstating the Angel Investment Tax Credit program, a priority shared in Governor Walz’s budget. He talked about the success of the program in the past and highlighted the importance of getting funding back into the budget in 2019.

Senator Eric Pratt (R – Prior Lake), chair of the Senate Jobs and Economic Development Growth Finance and Policy Committee, discussed budget priorities for the Senate Republican Caucus and how DEED funding bills will be treated in his committee. Senator Pratt thanked participants for their willingness to raise the profile of the DEED programs and to advocate for these important tools.

Senator Jeremy Miller (R – Winona), President of the Senate, talked about how priorities are established for the budget and what that means for the economic development funding requests this Session. He discussed how the priority typically placed on education and health care funding leaves less state dollars to be invested in other priority areas, such as economic development and housing. Senator Miller, who served as the Chair of the Senate Jobs and Economic Development Growth Finance and Policy Committee for the past two years, was named EDAM’s 2019 Elected Public Official of the Year and accepted his award during his appearance.

Representative Tim Mahoney (DFL – St. Paul), Chair of the House Jobs and Economic Development Finance Division, talked about the challenges of assembling a budget with divided government and shed light into how his committee will interact with Representative Gene Pelowski’s Greater Minnesota Jobs and Economic Development Finance Division. Chair Mahoney also discussed some potential issues he sees with the Angel Investment Tax Credit, specifically the limited geographical distribution of beneficiaries to the program.

At the conclusion of our morning program, participants attended individual meetings with their lawmakers to further advocate for economic development general and DEED program funding specifically.

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