May 9, 2022
Supplemental Appropriation Bills Head to Conference Committee
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Two Weeks Until Constitutionally Mandated Adjournment
Last week the Minnesota Senate and House of Representatives passed their remaining omnibus supplemental appropriation bills. These proposals will head to conference committee where five members from the House and five members from the Senate will work to reconcile the differences. The conference committee schedule for the remainder of session can be found here.
Among the omnibus bills passed last week was the House of Representative’s omnibus tax bill. Now that the House has passed its tax bill the Senate can proceed with passing the entirety of Senate Republicans’ tax proposal, a portion of which was tabled back in April. The bill was tabled because the Minnesota State Constitution requires that all tax bills must originate in and first be passed by the House of Representatives.
With only two weeks remaining, it is notable that neither the House DFL nor Senate Republicans have released a biennial public works borrowing package, colloquially known as a “bonding bill.” Bonding bills must also originate in the House and must pass both bodies with a 3/5th majority vote (81 votes in the House, 41 votes in the Senate). With neither bill released publicly, it remains to be seen how legislators can reach a bipartisan compromise and pass a bill prior to the May 23, 2022 deadline to adjourn.
House DFL Passes Omnibus Tax Bill
On Wednesday, May 4, 2022, the House passed H.F. 3669 (Marquart, DFL, Dilworth), the House’s omnibus tax bill on a vote of 69-62. With Minnesota currently experiencing the largest surplus in the state’s 164-year history, many legislators have taken to debating potential reforms to the state’s tax code. Those debates have led to the House DFL and Senate Republicans taking divergent approaches to tax relief. Senate Republicans attempt to provide broad tax relief for all payers, while the House DFL attempt to target relief for lower income and working Minnesotans. Here are some key provisions from H.F. 3669:
- H.F. 3669 will cost $1.6 billion in the current biennium and an additional $1.6 billion in the next biennium.
- H.F. 3669 includes a $3,000 childcare tax credit for each child under the age of 5 years old and direct rebate checks of $325 to parents for each child under the age of 16 years old.
- H.F. 3669 also includes a social security tax exemption for elderly residents. Single filers making less than $59,000 a year and joint filers earning less than $75,000 in total household income will be exempt from paying any tax on social security income. In contrast, the Senate Republican proposal contains an across-the-board exemption for social security income.
The Senate heard a portion of the Senate Republican’s tax plan (S.F. 3692 – Nelson) on the floor in April. H.F. 3669 will advance to the Senate floor for discussion. On Monday May 9, 2022, Senate Republicans are expected to roll out their entire tax bill, S.F. 3692 authored by Sen. Carla Nelson (R- Rochester).
Senator Michelle Benson Drops out of Governor’s Race
Last week, Sen. Michelle Benson (R- Ham Lake) announced the suspension of her gubernatorial campaign in a statement released on social media. The announcement comes just two weeks before the Minnesota Republican state convention which is set to take place in Rochester on May 13 - 14, 2022. As the former Chair of the Senate Health & Human Services Committee, Sen. Benson has served in the Senate since 2010 and was the running mate of former gubernatorial hopeful Sen. Dave Thompson in 2014. Sen. Benson stated that she will not join the campaign of any of the other six Republican challengers to Governor Tim Walz.
Important Dates to Remember
- May 13-14, 2022: Republican State Convention in Rochester - All statewide constitutional offices endorsed. (No US Senate race)
- May 20-22, 2022: DFL State Convention in Rochester - All statewide offices endorsed. (No US Senate race)
- May 23, 2022: Session’s Constitutional Mandated Adjournment
- May 17 - May 31, 2022: Candidate Filing for all constitutional offices and the MN House and Senate
- August 9, 2022: Primary Election
- November 8, 2022: General Election
Federal Update
The House and Senate are in session this week, and the political firestorm over abortion – ignited by a looming decision by the Supreme Court that is expected to lead to Roe v. Wade being overturned – will move to center stage on the Senate floor.
Small Businesses Worry Final Aid Package will Leave them in the Dust
As Congress attempts another, final round of COVID-19 aid for small businesses, many owners and industry representatives worry they’ll be left out.
Competing House and Senate bills are largely focused on backfilling a depleted grants fund for restaurants, bars and other food and beverage service companies that didn’t get money in an initial $28.6 billion round last year.
But other sectors hit hard by local restrictions and customers staying home would see relief as well.
The biggest challenge, aside from convincing enough Republicans to back more largely un-offset spending, is deciding how to allocate the limited dollars lawmakers are willing to provide outside of the restaurant fund.
The Senate bill would devote $8 billion to a select few industries, such as gyms, buses and ferries, border-area businesses, and staging, lighting, sound and other live-event service providers.
The House-passed bill would create a $13 billion industry-neutral grant program for other businesses.
Tune into Budget Hearings on Foreign Aid, Pandemics and Space ‘Guardians’
House lawmakers are back this week and with them comes more hearings on President Joe Biden’s request for fiscal 2023. Biden’s senior officials will make more than two dozen appearances across the two chambers. Here are a few to tune into:
- USAID: The U.S. Agency for International Development budget gets a doubleheader Wednesday with Director Samantha Power testifying to the House State-Foreign Operations Appropriations Subcommittee in the morning and to Senate Foreign Relations in the afternoon.
Wrapped into the $67.6 billion fiscal 2023 request for the State Department and USAID (and smaller, related foreign policy offices) is a request for $682 million in new Ukraine democracy-related funding, to “counter Russian malign influence” and meet “emerging needs” related to security, energy, disinformation and other issues.
There’s also $4.7 billion for USAID’s International Disaster Assistance account, according to the budget request.
- NIH: Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, testifies Wednesday to the House Labor-HHS-Education Appropriations Subcommittee on the National Institutes of Health budget request.
Fauci shook up recent health budget hearings with a PBS interview in which he said the U.S. was “out of the pandemic phase.” He will be joined by NIH acting Director Lawrence A. Tabak and directors of institutes for cancer, drug abuse and child health.
- Space Force: Leaders of the newest branch of the armed forces testify to the Senate Armed Services Strategic Forces Subcommittee on Wednesday and the House Defense Appropriations Subcommittee on Friday. The latter hearing includes Chief of Space Operations John Raymond.
Raymond told Senate Armed Services last week that the service has more applicants than it can accept. The success can be explained, in part, by the Space Force's approach to the well-being of its 14,000 servicemembers, called guardians, Raymond said, emphasizing mental health and healthy lifestyles year-round along with physical fitness.
- Mental Health: Leaders of the House Energy and Commerce Committee announced Friday that they had come together on a bipartisan mental health and substance use policy package to reauthorize a number of expiring programs tied to the fiscal year. Chairman Frank Pallone Jr., D-N.J. and ranking member Cathy McMorris Rodgers, R-Wash., said they look forward to marking up the legislation this week.
- Climate Conundrum: Senators pursuing what remains of an emerging package of energy and climate legislation have discussed steps to speed offshore wind permitting and a new tax on products imported from countries with weaker limits on carbon emissions.
Please reach out to any of the Larkin Hoffman Government Relations team members with any questions.
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