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January 17, 2023

Minnesota Update

Minnesota Legislature Continues Quick Start  
The Minnesota Legislature kept up its quick early-session pace last week as they advanced a number of substantive proposals, including sending the first bill of the legislative session to Gov. Tim Walz for his signature.  

Federal Tax Conformity
With strong bi-partisan support, the Minnesota Legislature passed an approximately $100 million federal tax conformity package and sent it to the governor just in time for the changes to be incorporated in the state’s 2022 tax forms.  The Minnesota Department of Revenue had stated that January 12, 2023, was the deadline for the bills signature if it hoped to avoid the cost and delays associated with needing to reprint all of the state’s tax filing materials.  Carried by first-time chairs of the tax committees, Sen. Ann Rest (DFL-New Hope) and Rep. Aisha Gomez (DFL-Minneapolis), H.F. 31 brings the state’s tax code into conformity with the federal government on 46 tax code provisions that have been amended by Congress since 2019. Updates mostly pertain to deductions and credits, including charitable contribution deductions, the dependent care credit and working family credit, and property tax refunds. The bill also included language that would avoid the imposition of state taxes on student loan forgiveness and forgivable loans for the hospitality industry, which includes restaurants and performance venues affected by the pandemic. 

Adult Use Cannabis
Authored by Rep. Zack Stephenson (DFL-Coon Rapids), H.F. 100 would legalize the adult use of cannabis in Minnesota and expunge petty misdemeanor related marijuana crimes for certain individuals. Released to the public and introduced last week, H.F. 100 was heard in the House Commerce Finance and Policy Committee on January 11, where the committee heard substantive testimony in both support and opposition to the bill before approving the measure on a voice vote and re-referring it to the House Judiciary Finance and Civil Law Committee. During the bill’s presentation, it was noted that the bill could have as many as a dozen committee stops to make because of the complexity of the legislation and the many areas of state government it has the potential to impact. The Senate companion, S.F. 73, was introduced by Sen. Lindsey Port (DFL-Burnsville) and referred to the Senate Judiciary and Public Safety Committee.  

Budget & Revenue Update 
Minnesota Management and Budget (MMB)announced last week that general fund receipts for the end of 2022 were $217 million higher than what was included in the November 2022 forecast, largely as a result of a higher-than-expected corporate tax collection. MMB will release an updated February forecast next month, which will be the benchmark for the state’s biennial budget discussions.  

Legislative Deadlines 
Last week, legislative leaders announced a series of committee deadlines that will guide the Minnesota Legislature’s process as they move through the session.  The deadlines are as follows: 

  • March 10, 2023: 1st Committee Deadline - committees must act favorably on bills in the house of origin.
  • March 24, 2023: 2nd Committee Deadline - committees must act favorably on bills, or companions of bills, that met the first deadline in the other house.
  • April 4, 2023, at 5:00pm: 3rd Committee Deadline - committees must act favorably on major appropriation and finance bills.
  • April 4, 2023, at 5:00pm-April 10, 2023: Legislative Recess

 Important Dates to Remember:

  • January 24, 2023: Governor Walz releases his proposed budget
  • TBD, February 2023: Updated budget forecast from MMB 
  • May 22, 2023: Deadline to adjourn legislative session
The Larkin Hoffman Government Relations Team
    Margaret Vesel

Matthew Bergeron

Peter Coyle
Bill Griffith
  Grady Harn  Megan Knight
Peder Larson

  Lydia Lodoen
Robert Long
Gerald Seck 

    Brandan Strickland    
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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.