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May 30, 2023

Minnesota Update

Governor Walz Signs Budget and Other Priorities into Law
The week immediately following the end of the 2023 legislative session was filled with ceremonial bill signings as Democratic Gov. Tim Walz and DFL-legislators sought to celebrate a record-setting $72 billion state budget. On Wednesday May 24, 2023, Gov. Walz held a ceremonial bill signing of the “One Minnesota” budget as legislative leaders and other supporters of the budget joined Gov. Walz on the Capitol steps. This budget is the single largest budget in the state’s history with twelve different bills making up the appropriations for the next biennium.

In addition to the state budget, Gov. Walz has signed high profile initiatives, including the paid family and medical leave bill, into law in the last week.  This afternoon, Gov. Walz will hold a ceremonial bill signing for H.F. 100, making Minnesota the 23rd state to legalize recreational marijuana use.

Productive Session for DFL Majorities
Prior to the start of the legislative session, leaders of both DFL caucuses laid out an extensive list of policy and budget priorities.  Many legislative Democrats saw one-party DFL control of state government as a rare opportunity to move forward several high-profile initiatives. The state budget was their main priority as it is constitutionally required that the state establish a biennial budget. However, their agenda also included initiatives centering on abortion rights, employment and labor issues, gun control, legalized recreational cannabis, voting rights, climate change, prescription drug prices, education, housing affordability, health care, and infrastructure.

Gov. Walz’s First Veto
Having worked with a divided legislature during his first term in office, Gov. Walz and his administration generally had to resolve policy and budget disputes prior to legislation landing on his desk for signature or veto.  As a result, Gov. Walz made it through his first four-year term without ever vetoing a bill.  That changed last week when Gov. Walz vetoed H.F. 2369 (Hassan)/S.F. 2319 (Fateh), a bill that sought to regulate the ridesharing industry and increase pay for drivers.  Opposed by major transportation network companies, including Uber and Lyft, the bill was passed in the final days of session.  In vetoing the bill, Gov. Walz stated that he didn’t believe the legislation was ready to become law and he was concerned that the bill would have made the state one of the most expensive ride-sharing states in the country.  Gov. Walz committed to addressing concerns in the industry and issued an executive order establishing a task force to work on the issue during the interim.

Federal Update

The House returns for a Wednesday vote on the debt limit deal. Manchin heads a hearing on the electric grid. And Senate Foreign Relations is scheduled to take up a U.S.-Chile tax treaty. Here’s your Federal CapWatch for Tuesday, May 30.

Deal Reached: House lawmakers return to Washington to vote on a debt limit deal that McCarthy and Biden reached over the weekend.

Electric Grid: Senate Energy examines the reliability of the U.S. power grid in a hearing that could also look at permitting.

Tax Treaty: Senate Foreign Relations is scheduled to mark up a tax treaty with Chile.


White House: The president and first lady return to the White House from Wilmington, Del.

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

Senate: Convenes at 3 p.m. and is expected to vote at 5:30 p.m. on confirmation of Darrel James Papillion to be a U.S. district judge.

Committees: Senate Budget holds a hearing on the debt limit Wednesday.

Also Wednesday, the ambassador-at-large for global criminal justice testifies to Senate Foreign Relations on Russian atrocities in Ukraine, and Senate Judiciary holds a hearing on immigrant workers.

Full Briefing:

House Returning for Wednesday Vote on Debt Limit Deal
House GOP leaders plan a Wednesday vote on their deal with the White House to suspend the debt ceiling until 2025 and set a framework for passing the annual appropriations bills. Republicans have called votes on a series of suspension bills Tuesday to get lawmakers back to Washington after the long Memorial Day weekend. The Rules Committee meets at 3 p.m. Tuesday to set parameters of debate on the bill, and the chamber is expected to vote Wednesday night after stock markets close. The 99-page, released Sunday, would cap discretionary spending, claw back some pandemic aid and tax enforcement funding, toughen work requirements for safety-net programs, streamline energy project permitting, and more.

House GOP leaders reached the deal with President Joe Biden on Saturday. The breakthrough could avert an economic crisis if Congress passes the legislation this week. Treasury Secretary Janet L. Yellen has warned lawmakers that the government may be unable to pay all its bills beginning June 5, unless the nation's $31.4 trillion statutory debt ceiling is lifted. Assuming House passage Wednesday, Senate Democratic leaders would immediately start the process of calling up the measure. Majority Leader Charles E. Schumer, D-N.Y., told senators in a letter over the weekend to "prepare for potential Friday and weekend votes."

Senate Energy to Examine the Reliability of the Electric Grid
Senators on the Energy and Natural Resources Committee, led by West Virginia Democrat Joe Manchin III, this week examine the reliability of the U.S. power grid. Witnesses for the hearing on Thursday have yet to be announced, but senators could explore the issue of federal permitting. Congress has sought a solution to the lengthy delays in developing the infrastructure needed to produce and transport energy, including on the electric grid.

The debt limit deal House GOP leaders reached with the White House aims to streamline energy project permitting. It would greenlight the Mountain Valley Pipeline to transfer natural gas from West Virginia to Virginia, a win for Manchin and Sen. Shelley Moore Capito, R-W. Va. The project has faced criticism from environmental groups and is years behind schedule, in part due to permitting delays and court challenges. House Natural Resources ranking member Raúl M. Grijalva, D-Ariz., criticized the deal, saying it would roll back key environmental protections in the National Environmental Policy Act.

"NEPA is not the problem when it comes to energy project delays. The reforms we actually need are fully staffed permitting offices, transmission project reforms, and strong early engagement that prevents conflicts down the road," Grijalva said in a statement.

US-Chile Tax Treaty Scheduled for Markup
The Senate Foreign Relations Committee is scheduled to take up a tax treaty with Chile on Thursday. The committee action could tee up the measure for Senate approval, more than a decade after it was originally signed by President Barack Obama in 2010. The markup follows GOP tax writers and the Treasury Department clearing up a disagreement over some of the language attached to the treaty that is meant to adapt it for the 2017 GOP tax law.

Businesses took issue with some of the Treasury's tax phrasing, and Senate Finance Committee Republicans were sympathetic to their concerns. Ultimately, Republicans and Treasury agreed to keep working on the language to resolve concerns for future treaties but made no changes to the Chile text. One possible challenge to Senate approval that could also delay Thursday's markup is Kentucky Republican Sen. Rand Paul’s perennial opposition to tax treaties. After the markup, it's unclear how soon the tax treaty would make it to the Senate floor. Majority Leader Charles E. Schumer, D-N.Y., has indicated he wants to get it over the finish line, and Finance Chair Ron Wyden, D-Ore., wants to see it taken up quickly.


The Larkin Hoffman Government Relations Team
    Margaret Vesel

Matthew Bergeron

Andrew Carlson
Peter Coyle
  Bill Griffith Grady Harn 
Megan Knight

  Peder Larson
Lydia Lodoen
Robert Long

  Gerald Seck    Brandan Strickland  
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