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Legislative Update: March 9

Posted By Administration, Monday, March 9, 2020

The fourth week of the 2020 Session is in the books and legislative priorities are starting to emerge as committee deadlines loom to help narrow the focus of lawmakers. House and Senate leaders agreed to extend the first policy committee deadline from March 13th to March 20th, but second and third deadlines remain unchanged (March 27th and April 3rd, respectively).  Both chambers are on pace to set new records for the number of bills introduced this biennium, so deadlines will cull the list of active bills, which is welcome news for lobbyists and staff. On the other hand, deadlines usually equate to long committee agendas and evening hearings.  


A number of legislative priorities we anticipated to be in play during 2020 have indeed been moving through the committee process, such as paid family leave and a large bonding bill in the House, and tax and regulation cuts in the Senate, but an unanticipated priority has also emerged: the state’s preparedness to address potential fallout from the spread of coronavirus. Governor Walz welcomed Vice President Pence to 3M last week to meet with executives and discuss the company’s efforts in producing facemasks utilized by health workers and others in slowing the spread of the virus. At the state level, health officials have requested an additional $21 million to help tackle the spread of the virus here in Minnesota. That bill (S.F. 3813) has been moving quickly through the Senate, with a vote expected on the Senate floor early this week. As if to highlight the need, state officials announced the first two confirmed cases of COVID-19 in Minnesota over the weekend.


The coming week will provide insight into what kind of supplemental appropriations might be in play for the 2020 Session as Governor Walz is set to release his recommendations on Wednesday March 11th. These recommendations will provide the framework for committee action on potential supplemental spending, the best possible chance for funding to the DEED Redevelopment account until the next budget year in 2021. EDAM lobbyists met last week with House Jobs and Economic Development Finance Division Chair Representative Tim Mahoney to reinforce our request that supplemental budget funds be directed to the Redevelopment Grant Program. We informed Representative Mahoney that funding for the DEED Redevelopment Grant Program was identified as the top economic development priority in the EDAM survey conducted early this year. Chair Mahoney was receptive to our request, but informed us that he needs to wait and see what kind of budget target his Division receives, a decision which will be shaped by House Leadership and Governor Walz’s recommendations.


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Legislative Update: March 2

Posted By Administration, Monday, March 2, 2020

As the calendar flips to March, things are finally starting to happen at the Minnesota State Capitol! Twice a year, in November and in February, state budget officials provide an economic forecast as a guidepost to lawmakers as they make taxation and spending decisions. The November forecast helps shape expectations before the legislative session begins, and the February forecast finalizes the financial position of the state showing either a surplus or deficit. The November forecast had shown a $1.3 billion surplus, but slower than expected sales tax receipts in January raised fears that a slow down may be on the horizon.  


The February forecast was released on Thursday, February 27 and shows the projected surplus has actually grown slightly – up $181 million – for an official 2020 surplus of $1.5 billion. Now that lawmakers know the true total on the bottom line, the supplemental budget process can begin in earnest.


The next major date for the legislative session is March 11th, when we expect Governor Walz to release his supplemental budget proposal, which will show how he would like to use the existing surplus. Democrats and Republicans held dueling press conferences to discuss the February forecast, with Democrats advising investments in one-time programs and cautious fiscal planning for future economic slowdowns while Republicans reiterated their top priority of returning the surplus to Minnesotans in the form of tax relief.


The committee schedule has been fairly quiet thus far, but now that the budget forecast has been finalized session can really start to ramp up. After Governor Walz’s supplemental budget recommendations are released, his Commissioners will make appearances in House and Senate Committees to advocate for those recommendations. This is where we will learn the budget priorities of House Democrats and Senate Republicans.


We will be bringing you weekly legislative updates from here on out, so watch this space to keep up to date on activity at the state Capitol between now and the end of May.


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Legislative Update: May 28

Posted By Administration, Tuesday, May 28, 2019
The Legislature convened Special Session at 10:00 am on Friday and used up pretty much every second of the time outlined by Governor Walz and adjourned just before 7:00 am on Saturday morning. The DEED budget was part of Special Session Senate File 2 (link here). The Minnesota Investment Fund is appropriated $11,970,000 for FY 2020 and 2021, with the base then set at $12,370,000. The Job Creation Fund is set at $8,000,000 per year. There is not money for the Redevelopment Grant Program, but the language providing DEED authority to transfer money from MIF to Redevelopment is included and can be found of page 7 of S.F. 2.

Additionally, the Angel Investment Tax Credit has been funded with $10,000,000 of one-time money. One-time funding was also provided for the Border to Border Broadband fund for a total of $40,000,000 with $20,000,000 in each FY 2020 and 2021. We expect Governor Walz to officially sign all of the budget bills this week, possibly as soon as today.

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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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