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Minnesota Update

Legislature Works Toward Third Bill Deadline
The legislature worked vigorously last week toward Friday’s second policy deadline. Now the task at hand is putting together and passing their omnibus budget bills. Committees will work long hours putting together detailed budgets for their budget areas that must pass their respective body by third deadline, which is Tuesday, April 4 at 5 p.m. Each committee has been given a target spending amount they must meet as part of the overall budget and all committees have to work together to meet a total spending goal. The third deadline leads up to spring break for the legislature, which will run until April 10.

Global Budget Agreement Reached
On Tuesday, March 21, 2023, Governor Walz and democrat leadership in the Senate, and the House announced an agreement on joint spending amounts for each committee and the overall spending target. This is usually done closer to the end of session, so lawmakers are confident they will have a budget wrapped up by adjournment in late May. However, House Minority Leader Lisa Demuth (R-Cold Spring) said that the targets show the DFL is just going on a spending spree instead of proposing a responsible budget with permanent tax relief. The proposed $65 billion budget is the largest in state history, and $17.8 billion of that makes up targeted spending from the General Fund on different areas of the budget. The targets for each area are:

Paid Family Leave Continues to Move
Supporters of creating a paid family leave policy in Minnesota held a rally recently at the Capitol. Gov. Walz supports this legislation and hopes to get it done by the end of the 2023 legislative session. The current proposal sets up a paid family and medical leave insurance plan that requires mandatory participation and is funded by a 0.7 percent payroll tax. Last week, an amendment was adopted to the Senate version of the bill that would cap the benefits at the lesser of 12 weeks, or 12 weeks minus the number of weeks within the same benefit year that the applicant received benefits for family, safety, or medical leave plus 8 weeks. The amendment would also provide the “construction industry” as defined in the amendment an exemption from certain employment protections under the bill including maintenance of insurance coverage and rights to reinstatement as long as the waiver is set out in a collective bargaining agreement.

A recent fiscal note was released for this bill which projects cost to the state as $1.5 billion in the outset of the program for IT infrastructure, outreach, business process infrastructure, and other administrative and implementation costs. If enacted, the 0.7 percent payroll tax begins on July 1, 2025.

Senate Continues to Work on Bonding Bill
The House and Senate continue to re-work their proposal and the Bonding Committee met last week to hear more bills for possible including in a different version of the bonding bill that will need the required 60 percent of the Senate, or forty-one votes, to pass. This will require more work across the aisle in hopes of passing a bill by the end of the legislative session in May. A bonding bill is likely to be part of the overall budget compromise.

Legislative Deadlines

The following are a series of committee deadlines that will guide the Minnesota Legislature’s process as they move through the session:

• April 4, 2023, 5:00 p.m.: 3rd Committee Deadline - committees must act favorably on major appropriation and finance bills.
• April 4, 2023, 5:00 p.m. to April 10, 2023: Legislative Recess
• May 22, 2023: Deadline to adjourn legislative session.
  

Federal Update 

Good afternoon. House Republicans are bringing their energy bill to the floor. The Senate votes on amendments to repeal authorizations for military force against Iraq and lawmakers could punish executives for bank failures.

Schedules
White House: Biden hosts the Small Business Administration’s Women’s Business Summit.

House: Convenes at 2 PM to consider measures under suspension of the rules, with roll call votes postponed until 6:30 PM.

Senate: Convenes at 3 PM to resume consideration of the bill (S 316) to repeal the 1991 and 2002 authorizations for the use of military force against Iraq. At 5:30 PM, the Senate is expected to vote on agreeing to a motion to invoke cloture on the bill.

Also of note, Senate Minority Leader Mitch McConnell, R-KY, finished inpatient physical therapy on Saturday. “I’m going to follow the advice of my physical therapists and spend the next few days working for Kentuckians and the Republican Conference from home," McConnell said in a statement. "I’m in frequent touch with my Senate colleagues and my staff. I look forward to returning in person to the Senate soon.”

Committees: Former Starbucks CEO Howard Schultz testifies Wednesday to Senate Health, Education, Labor, and Pensions on the company’s responses to union organizing.

House Foreign Affairs on Wednesday hears from inspectors general from the Defense Department, State Department, and U.S. Agency for International Development on oversight of assistance sent to Ukraine. Senate Environment and Public Works hold a Wednesday hearing on the EPA's "good neighbor" rule limiting the number of toxic emissions that can be blown over the state. Members of Biden's Cabinet are back on the Hill for another jam-packed week of budget hearings.

House GOP to Bring Energy Bill to the Floor
House Republicans are driving their signature energy bill to the floor, with a vote on passage teed up for the end of the week. They're pitching the legislation as a salve to high gasoline and electric costs, though it remains hazy how quickly and aggressively the measure would lower prices. The bill contains no obvious provisions to help consumers, like direct subsidies or tax credits. Instead, Republicans said they hope to spur domestic oil and gas production, which they contend would lower prices and produce some knock-on benefits. The package would accelerate permitting under the National Environmental Policy Act, require more oil and gas lease sales, eliminate climate programs at the EPA, and speed approval of liquefied natural gas, or LNG, exports, among other provisions.

House Rules meets Monday to consider the bill, with over 140 amendments filed. According to the office of Majority Leader Steve Scalise, R-LA, consideration of the energy measure could begin as early as Tuesday, with final votes for the week Thursday afternoon. To have any shot at achieving their policy aims, Republicans will need to convince Democrats of the merits of the bill. But it's already looking "dead on arrival" in the Senate.

Senate Continues Down a Path to Repeal the 1991 and 2002 Authorizations of the Use of Military Force (AUMFs)
The Senate picks back up Monday afternoon with debate on bipartisan legislation to repeal two authorizations for the use of military force against Iraq. The bill (S 316), introduced by Sens. Tim Kaine, D-VA, and Todd Young, R-IN, would rescind both the 2002 authorization for use of military force against Iraq and the 1991 AUMF against Iraq ahead of the Gulf War. It earned bipartisan support in a 67-28 procedural vote last week and seems poised to pass the Senate. Senators plan to vote on invoking cloture on the measure Monday, followed by six additional amendment votes.

Amendments on the floor last week suggested that some senators still have significant reservations about the bill’s consequences for current U.S. security needs, including whether rescinding the two Iraq AUMFs could diminish U.S. latitude to address Iranian-backed militias operating in Iraq.

House and Senate Could Look at Punishing Bank Executives
Lawmakers in both chambers examine the federal government's response to the Silicon Valley Bank and the Signature Bank collapse in hearings this week. The Senate Banking, Housing, and Urban Affairs Committee kick off Tuesday with testimony from Federal Reserve, Treasury, and Federal Deposit Insurance Corporation representatives. The same panel of witnesses is back on the Hill on Wednesday to take questions from the House Financial Services Committee. The hearings fall amid President Joe Biden's calls for legislation that would allow regulators to claw back executive bonuses and stock sale proceeds from the lead-up to the SVB collapse. Democrats and Republicans are unlikely to come together to tighten bank regulations, but members of both parties say they’re open to legislation that would punish executives for their role in the bank failures.

Budget
President Joe Biden wants to see a Republican budget before resuming fiscal talks with Speaker Kevin McCarthy, R-CA. But Republicans say their budget will be delayed as they urge negotiations over raising the debt limit.

On the Radar: FAA Nominee Pulls Out
President Joe Biden will need a new pick to lead the Federal Aviation Administration. Nominee Philip Washington withdrew over the weekend, Transportation Secretary Pete Buttigieg said in a tweet on Saturday night. "The partisan attacks and procedural obstruction he has faced are undeserved but I respect his decision to withdraw and am grateful for his service," Buttigieg wrote. Washington, CEO of Denver International Airport since June 2021 with a background in transit management, was criticized by Republicans for his lack of aviation experience. His nomination was also held up by assertions that, as a 24-year Army veteran, he would need a waiver from Congress to serve in the civilian leadership position.

Matthew Bergeron

This newsletter is provided as a service to our clients and firm associates. While the information provided in this newsletter is believed to be accurate, it is general in nature and should not be construed as legal advice.