Legislative Update – May 10, 2022

Lawmakers are in the final stretch as now less than two weeks remain until the state legislature’s constitutional adjournment on Monday, May 23rd. The Governor and legislative leadership have so far been clear that a special session—which is typically used to strike an end of session deal—is off the table. When the legislature adjourns, lawmakers go home to make their case to voters.

Conference committees have begun meeting to work out compromises, including agriculture on Monday, to work out compromises on budget jurisdictions. When thinking about the short timeline they have to make a deal, it’s important to note that the timeline is even more constrained than it might seem. That’s because once deals are struck between committee chairs, lawyers who work for the legislature need time to craft that compromise into legislative text. That can result in an unfortunate log jam if much of the deal-making is left until the final hours.

The upshot here being that it’s important to convey urgency to legislators (and to thank staff!).

While we’re focused on what’s left to do at the legislature, it’s helpful to remember what they’ve passed into law so far this session. Here’s a short list of what they’ve passed so far:

  • Replenishing the unemployment insurance (UI) trust fund ($2.7 billion) – late last month the legislature approved a deal to refill the fund which was drawn down during COVID-19. This averted a mandatory tax increase on around 130 thousand business. Following months of negotiations throughout session, allocates the remainder of the $1.1 billion in federal American Rescue Plan Act funding, and takes a bit out of the state’s $9.25 billion budget surplus.
  • Approving essential worker pay ($500 million) – as part of the deal on UI, the DFL caucus worked to secure $750 checks for workers who were put at risk for COVID during the height of the pandemic and meet certain income requirements. Frontline industries include long-term care and home care; health care; emergency responders; public health, social service and regulatory service; courts and corrections; child care; public education; food service; retail; temporary shelters and hotels; building services; public transit; ground and air transportation services; manufacturing; and vocational rehabilitation.Details and updated information on the application process can be found here.
  • Extending reinsurance ($700 million) – in March, the legislature approved another three years of the state’s reinsurance program, which pays insurance companies for a portion of their most expensive claims in an effort to keep costs lower on the individual market.Both parties agreed that it was warranted in order to avoid potential rate increases this fall, but many—particularly in the DFL—argue that a more long-term solution is needed. MFU has advocated hard for creating a MNcare ‘buy-in’ option that would allow farmers and others to purchase coverage from the state.
  • Stopgap funding for bird flu ($1 million) – in April, the House and Senate acted quickly and nearly unanimously to expedite $1 million to respond to the High Path Avian Influenza (HPAI) outbreak across the state. The disease, which is spread from wild birds, is a threat to both large commercial operations and small backyard flocks. The state has been working hard to find the disease, depopulate infected barns, educate the public on biosecurity, and minimize the effects of the outbreak on trade.On Monday, Commissioner Thom Petersen shared that they would need more support to continue to manage the disease. You can learn more about the HPAI outbreak and how you can help at the Board of Animal Health (BAH).

So, that’s a short list of what they’ve been able to accomplish. So what’s still left on the table? Here are a couple issue’s MFU is working on in the final days of session:

  • Drought relief – since September, the administration and legislative leaders have been talking about a plan to deliver $5,000 to $10,000 ‘Rapid Response Grants’ to livestock and specialty crop producers who can demonstrate financial hardship due to last summer’s drought.After the House passed Chair Mike Sundin’s (DFL-Esko) bill on March 10 and the Senate followed suit on March 31, passing a version led by Chair Torrey Westrom (R-Elbow Lake). Despite largely aligned provisions for agriculture, little public progress to develop a compromise proposal.Only one formal conference committee hearing has been held, with the gavel now in the hands of the Senate. The main different between the two proposals remains the $13 million the House included for the Department of Natural Resources (DNR), championed by House Environment Chair Rick Hansen (DFL-South Saint Paul).MFU continues to get calls from members who are waiting for this relief. Members can also contact members of the conference committee to urge them to get a deal done. They include: Sen. Torrey Westrom (R-Elbow Lake); Sen. Bill Weber (R-Luverne); Sen. Andrew Lang (R-Olivia); Sen. Gary Dahms (R-Redwood Falls); Sen. Kent Eken (DFL-Audubon); Chair Mike Sundin (DFL-Esko); Rep. Samantha Vang (DFL-Brooklyn Center); Rep. Rick Hansen (DFL-South Saint Paul); Rep. Rob Ecklund (DFL-International Falls); Rep. Paul Anderson (R-Starbuck).

    One piece in the ag provisions that MFU has worked to engage on constructively is around eligibility. Both the House and Senate proposals limit who can apply for this relief to a certain number of counties that were hardest hit by the drought according to official data sources. However, what we’ve heard from members is that the effects were disparate and don’t track cleanly onto a county map. We’ve requested that farmers from across the state be able to apply for relief, a change that will also make it easier for Department of Agriculture (MDA) to administer more quickly.

  • Agriculture budget – MFU is continuing to make the case for a strong supplemental budget for agriculture and Monday’s conference committee hearing represented a major step forward.“While agriculture is the foundation of Minnesota’s economy—generating $112 billion in economic impact and supporting more than 430 thousand jobs—the budget for MDA makes up less than 1 percent of the state’s overall budget,” said MFU President Gary Wertish in written comments to the committee. “Reaching a deal on a strong, proportional supplemental budget will help implement lessons learned in the past year to build an agriculture system that is more distributed, resilient and fair.”Though the Senate’s bill is much smaller—$5 million compared to about $60 million—both houses are well-aligned in prioritizing meat processing, soil health, agriculture emergency preparedness, reauthorizing cooperative development grants, and support for emerging farmers.The important action necessary for striking a final deal lies with House and Senate leadership who need to provide the conference committee with a spending ‘target.’ This essentially lets the committee know what portion of the overall budget they’re allowed to spend. That’s important, because without a shared understanding of the overall budget number, it’s hard to do the work of dividing it up between programs. With the consult of their caucus, Senate Majority Leader Jeremy Miller (R-Winona) and House Speaker Melissa Hortman (DFL-Brooklyn Park) need to agree to provide the ag committee and others with targets in order for the real work of crafting a bill to begin.
  • Taxes – finally—and because it includes MFU priorities and is central to final budget deal—MFU has been engaged on a supplemental tax bill. Last month, House Chair Paul Marquart (DFL-Dilworth) rolled out a $1.6 billion tax proposal that expands the child tax credit, eliminates the income tax on Social Security benefits up to $750,000, and expands the renters tax credit. The House bill also includes number of priorities for MFU and leaves room for spending on other jurisdictions.Important for MFU, Marquart’s bill would expand the Beginning Farmer Tax Credit (BFTC) by expanding the sale of agricultural assets to family members and proving the Rural Finance Authority (RFA) with funding to better administer the program and do outreach to emerging farmers. It would also repeal the sales tax on fencing equipment retroactive throughout the drought, expand the Ag to School tax credit to from 70 to 85 percent will help more communities benefit from this successful program, and fund Soil and Water Conservation Districts (SWCDs) through a new local government aid program that will provide them with the stable, long-term funding they need to best assist our family farmer members in meeting their on-farm conservation goals.In the Senate, Chair Carla Nelson (R-Rochester) updated her caucus’s proposal with some property tax and other provisions. Overall, it’s much more expensive. The original bill,, which was passed in April, cost approximately $8.4 billion over the next three years with $3 billion in income tax cuts in the first year. For agriculture, on Monday, the bill was updated with an aligned provision to repeal the sales tax on fencing equipment, offer property tax relief for land held in riparian buffers, and increase the homestead valuation limit to $2.5 million.