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May 5, 2017

Committee Chairs Release Joint Conference Committee Reports; Negotiate With Governor

Last Friday Senate Majority ‎Leader Paul Gazelka (R-Nisswa) and Speaker of the House Kurt ‎Daudt ‎‎(R-Crown) announced the ‎framework of a joint FY 18-19 biennial budget agreement. On Monday, Finance ‎committee chairs followed suit and began rolling out and adopting “compromise” budget ‎bills. These bills reconciled many of the differences between the House and Senate proposals passed earlier in the month and constitute a single legislative budget proposal.

However, instead of “closing ‎up” the budget bills, repassing them, and sending them to Gov. Dayton for his likely veto, legislative ‎leaders announced their intentions to keep the bills “open” ‎as they negotiate with Dayton. ‎The governor had previously insisted that the House and Senate work ‎out their differences and come to a ‎single legislative position on the budget before he and his ‎commissioners would negotiate individual ‎initiatives.

Legislative leaders have been meeting with Gov. Dayton throughout the week and those negotiations are expected to continue over the weekend. While Dayton and legislative Republicans remain divided over a number of issues, it appears to many Capitol insiders that there is uniform agreement over the need to pass omnibus tax and capital investment bills for the first time since 2014. The Legislature and governor have until May 22 to reach a budget deal and avoid the need for a special legislative session.

House Capital Investment Committee Passes $600 million Bonding Bill
This week the House Capital Investment Committee, chaired by Rep. Dean Urdahl (R-Grove City), released and passed an approximately $600 million bonding bill. The bill is a significantly scaled back version of the nearly $1.1 billion capital investment package passed by the House of Representatives in the waning moments of the 2016 legislative session. That proposal never made it to Gov. Dayton’s desk as it failed in the Senate, at least in part, as a result of a broader controversy surrounding the Southwest light rail transit project. The 2016 bonding bill, along with a vetoed tax proposal, remained the focus of negotiations over the terms of a potential special session throughout last summer and fall.

As passed out of committee on Wednesday night, the House proposal (HF 892) contains approximately $36 million for facilities on the campuses of state colleges and universities, $40 million for flood mitigation and dam repair, and $238 million for various road and bridge projects. House Democrats were critical of the bill and argued that its lack of funding for important state projects, including the Minnesota Security Hospital in St. Peter, Minn., would lead to delays that would only increase the cost of those projects. Throughout the nearly four and a half hour hearing, accompanying testimony from the public and state agencies as well as amendments related to specific projects offered by Democrats, Chair Urdahl repeatedly commented on the likelihood that the final bonding bill would be larger than the current proposal and include funding for a number of additional infrastructure projects. The committee eventually passed the bonding bill and referred it to the House Ways & Means Committee which is expected to take it up sometime early next week.


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Larkin Hoffman provides counsel to a wide variety of ‎organizations, from ‎small businesses and nonprofits to  Fortune 500 companies, in ‎many areas of practice including ‎corporate and governance matters, litigation, real ‎estate, government relations, labor and employment, intellectual property, ‎information technology, ‎franchising and taxation. The firm also serves the needs of individuals in many ‎areas ‎including trusts and estates, personal injury and family law.


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