Minnesota’s new Assisted Living License goes into effect August 1, 2021. With less than five months remaining before the deadline, providers need to act immediately to make sure they are prepared for the new requirements, which are detailed and extensive. Follow our series highlighting some of the more important aspects to be prepared to address.

To discuss any of these questions or any others about the new Assisted Living Licensure, please don’t hesitate to contact us.

1. 1. 1. Have you created the new assisted living resident agreement?
      2. Have you budgeted for the increased licensing fees?
      3. Have you planned and budgeted for the new minimum staffing requirements?
      4. Are you prepared to offer meals and snacks meeting the new statutory requirements?
      5. Do you know when you can terminate an assisted living contract with a resident?
      6. Are you prepared to defend resident terminations through the termination appeal process?
      7. Have you hired your Assisted Living Director yet?
      8. How will you ensure compliance with Minnesota’s new assisted living facility standards?
      9. Is your recordkeeping ready for Minnesota’s new standards?
      10. Are you prepared to transition to the assisted living license?
      11. Are you ready to fill out the assisted living license application?
      12. We all know about the assisted living law change, but have you heard about the new assisted living rules?

1. Have you created the new assisted living resident agreement?
Even if you are already providing comprehensive home care services and have existing resident contracts in place, providers transitioning to the assisted living license will need to create compliant resident agreements to include all of the requirements set forth in the new statute. Sample agreements must be submitted with the assisted living license application. Each current resident will need to sign a new agreement. While many of the content requirements will be familiar, there are new content requirements for, among other things, the right to and process for terminating an assisted living contract.

Minn. Stat. 144G.50.

2. Have you budgeted for the increased licensing fees?
The licensing fee for an Assisted Living License is $2000 plus $75 per resident. The licensing fee for an Assisted Living License with Dementia Care is $3000 plus $100 per resident. While the Minnesota Department of Health has not stated whether the per resident charge will be based upon current census at the time of application or will be based upon licensed resident capacity, the increased fees could be substantial for facilities or campuses with a large number of residents. Likewise, for smaller, home-based facilities, the increased fees could also constitute a significant relative increase in the budget. The stated rationale for the increase in fees is because of the expanded required review and oversight that MDH must perform.

Minn. Stat 144.122

3. Have you planned and budgeted for the new minimum staffing requirements?
The new assisted living statute sets forth certain minimum staffing requirements. Of particular note is that an assisted living facility is now required to ensure that one or more awake staff persons are available 24 hours per day, seven days per week, who are responsible for responding to the requests of residents for assistance with health and safety needs and must be:

• capable of communicating with residents
• capable of providing or summoning the appropriate assistance
• capable of following directions

The awake staff person must be located in the same building, in an attached building or on a contiguous campus and able to respond within a reasonable amount of time.

Minn. Stat. 144G.41

4. Are you prepared to offer meals and snacks meeting the new statutory requirements?
Residents must be permitted access to food at any time. In addition, assisted living facilities must offer to provide or make at least three nutritious meals daily with snacks available, according to the recommended dietary allowances in the United States Department of Agriculture guidelines, including seasonal fresh fruit and vegetables. Menus must be prepared at least one week in advance and the facility must encourage residents’ involvement in meal planning. Food must be prepared and served according to Minnesota Food Code. The facility cannot require a resident to include and pay for meals in their contract.

Minn. Stat. 144G.41

5. Do you know when you can terminate an assisted living contract with a resident?
Terminating an assisted living contract is always a difficult decision. Minnesota’s new assisted living law creates new steps and considerations that must be completed before such a decision is made. Before issuing a notice of termination to a resident, you must schedule a meeting with the resident, the resident’s legal representative, and the resident’s designated representative to explain the reasons for the proposed termination and identify and offer reasonable accommodations or modifications, interventions, or alternatives to avoid the termination or enable the resident to remain in the facility.

Termination can only occur in limited situations, and some examples include nonpayment of rent or services, violation of the assisted living contract, conduct that threatens the health or safety of the resident or another individual in the facility, and illegal conduct. Notices of termination have strict requirements as well.

Minn. Stat. 144G.52.

6. Are you prepared to defend resident terminations through the termination appeal process?
Once you have fully complied with the resident termination process, including the required pre-termination meeting and inclusion of the required contents within a notice of termination, you must understand the resident’s appeal rights. Minnesota’s new assisted living law provides additional safeguards for residents, which allows them to appeal the termination of an assisted living contract.

An appeal may be initiated on very broad grounds, such as if there is a factual dispute as to whether the facility had a permissible basis to initiate the termination; the termination would result in great harm or the potential for great harm to the resident as determined by the totality of the circumstances, except in circumstances where there is a greater risk of harm to other residents or staff at the facility; the resident has cured or demonstrated the ability to cure the reasons for the termination, or has identified a reasonable accommodation or modification, intervention, or alternative to the termination; or the facility has terminated the contract in violation of state or federal law.

Appeals are heard by an Administrative Law Judge assigned by the Minnesota Office of Administrative Hearings, and the facility carries the burden of proof to establish that the termination was permissible in certain circumstances.

Minn. Stat. 144G.54

7. Have you hired your Assisted Living Director yet?
As you start preparing and applying for the new assisted living license, you need to consider who will (and has the required training and qualifications to) act as your facility’s Licensed Assisted Living Director. As part of the application process, you must submit the names, e-mail addresses, telephone numbers, and mailing addresses of all owners, controlling individuals, managerial officials, and the Assisted Living Director.

Licensed Assisted Living Director is defined as a person who administers, manages, supervises, or is in general administrative charge of an assisted living facility, whether or not the individual has an ownership interest in the facility, and whether or not the person’s functions or duties are shared with one or more individuals and who is licensed by the Board of Executives for Long Term Services and Supports.

Minnesota rules for Assisted Living Licensure are currently being finalized. Once the rules are published, the details regarding the education, training, and other requirements for Assisted Living Directors will be set forth in more detail.

Minn. Stat. 144G.08, subd. 6 and 144G.12

8. How will you ensure compliance with Minnesota’s new assisted living facility standards?
As you may have experienced from prior surveys by the Minnesota Department of Health, there were already strict requirements for ensuring resident safety through policies and procedures, record keeping, and overall resident treatment consistent with the applicable standard of care. As of August 1, 2021, these standards are changing, and you must be prepared from day 1 for a survey from the Department of Health.

The Department of Health may refuse to grant a provisional license, refuse to grant a license as a result of a change in ownership, refuse to renew a license, suspend or revoke a license, or impose a conditional license if the owner, controlling individual, or employee of an assisted living facility for various reasons. Your facility may also be subject to fines and other types of discipline based on the determined level and scope of the violations.

Minn. Stat. 144G.20, 144G.30, and 144G.31

9. Is your recordkeeping ready for Minnesota’s new standards?
Your facility should already have policies and procedures in place to prevent the illegal disclosure of a resident’s protected health information to comply with HIPAA, HITECH, and the Minnesota Health Records Act. With that being said, Minnesota’s new assisted living law requires that each facility establish and implement written procedures to control use, storage, and security of resident records, as well as establish criteria for release of resident information.

In addition, there are robust requirements to ensure a full and complete resident treatment record, and strict requirements for providing access to records.

Minn. Stat. 144G.43

10. Are you prepared to transition to the assisted living license?
If you currently hold a comprehensive home care license and a housing with services registration, there are big changes that you must consider. You need to act fast to determine whether you will provide “assisted living services,” as defined by Minnesota law, under an assisted living license, or whether you meet an exception to assisted living licensure.

Depending on your current ownership structure, you will need to determine how to transition not only your license, but also your service plans and assessments, employees, background studies, enrollment as a Minnesota Health Care Provider, and more. Based on your decisions, you may also be required to give your residents statutorily required notice of any such changes.

Minn. Stat. 144G.191

11. Are you ready to fill out the assisted living license application?
The assisted living license application is coming soon! The Minnesota Department of Health has stated that it expects to post the application on or around May 1, 2021. If you currently hold a housing with services registration and a comprehensive home care license and plan on providing assisted living services on or after August 1, 2021, you must apply for an assisted living facility license no later than June 1, 2021. Check your Improved Customer Service Delivery Portal for updates, and please reach out to our team with any questions.

12. We all know about the assisted living law change, but have you heard about the new assisted living rules?
The Minnesota Legislature delegated authority to the Minnesota Department of Health to adopt rules governing assisted living facilities. On January 19, and 20, 2021, the Minnesota Department of Health held a remote-access public hearing on the proposed rules for assisted living licensure. The hearing provided interested persons the opportunity to testify regarding the proposed rules.

These rules will impact how your facility operates just as much (if not more than) as the assisted living law itself. Minnesota Rules Chapter 4659 further details and sets forth standards for, among many other topics:

• staffing;
• training;
• discharge planning and resident appeal rights;
• initial assessments;
• checklist disclosure of services;
• emergency disaster and preparedness plans; and
• much, much more.

As the license transition date approaches, let us know how we can help you be prepared for the August 1, 2021, transition date.

Minn. Stat. 144G.09, subd. 3; Minn. R. C. 4659.

The Corporate Transparency Act (CTA) was passed by Congress on January 1, 2021, as part of the National Defense Authorization Act of 2021. The CTA is the most significant update to the U.S. anti-money laundering laws since the passage of the USA PATRIOT Act twenty years ago. When implemented, the CTA will require certain businesses domiciled or registered to do business in the United States to report “beneficial ownership” information with the Financial Crimes Enforcement Network (FinCEN) of the United States Treasury Department (Treasury).

The CTA’s primary purpose is to bring transparency to so-called “shell” companies and to aid law enforcement in combating money laundering, terrorism financing, organized crime and other financial crimes, but the CTA’s obligations will have a significant impact on many legitimate operating companies. In particular, the CTA’s obligations are likely to directly impact small and newly formed businesses that have few employees or that lack significant revenue.

The reporting requirements under the CTA are not yet effective, but are expected to go live when Treasury’s implementing regulations take effect. While there is no specific guidance on when this will occur, the CTA requires Treasury to finalize the rules prior to January 1, 2022. Once effective, existing reporting companies will have up to two years to submit reports on their beneficial owners, and new reporting companies will need to report at the time of formation or registration.

Reporting Companies – Who needs to report?

The CTA defines a “reporting company” as any corporation, limited liability company, or other similar entity that is (i) created by the filing of a document with a secretary of state or a similar office under the law of a State or Indian Tribe or (ii) formed under the law of a foreign country that is registered to do business in the United States.

The scope of the definition as it relates to “other similar entities” will be further defined in Treasury’s final CTA regulations, but it is expected to also include limited partnerships, business trusts, and possibly some general partnerships, consistent with FinCEN’s existing customer due diligence requirements under the Bank Secrecy Act.

In light of the purpose of the CTA, Congress has established exemptions from reporting for several categories of entities that are already required to disclose beneficial owners or that are unlikely to be used for illicit purposes.

The exemption with perhaps the broadest impact will be for large private companies. Companies will not be subject to the reporting requirements if they:

• have more than 20 employees on a full-time basis,
• report gross receipts or sales of more than $5 million in the previous year’s tax returns (including subsidiaries and operating affiliates), and
• have a physical presence in the United States.

In addition to the exemption for large private companies, the CTA also exempts the following types of business from reporting:

• public companies,
• banks, bank holding companies, and savings and loan holding companies,
• federal and state credit unions,
• entities registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934 including broker dealers, and exchange or clearing agencies,
• registered investment companies and investment advisors,
• insurance companies,
• public accounting firms registered with the Public Company Accounting Oversight Board,
• public and financial market utilities,
• pooled investment vehicles operated or advised by certain entities that are exempt from reporting under the CTA,
• nonprofit organizations exempt from tax and described in Section 501(c) of the Internal Revenue Code of 1986, including certain charitable trusts, non-profits and political organizations,
• certain inactive entities in existence for over one year that are not directly or indirectly owned by a non-US person, and
• entities owned or controlled by one or more entities exempt from reporting.

The primary purpose of the CTA may be to target illicit shell companies, but the impact will be widely felt by many small businesses, which are unlikely to fall within the scope of the current list of exceptions.

Who is a Beneficial Owner?

The CTA defines “beneficial owner” to mean, with respect to an entity, an individual who, directly or indirectly, through any contract, arrangement, understanding, relationships, or otherwise:

• exercises “substantial control” over the entity, or
• owns or controls not less than 25% of the “ownership interests” of the entity.

A beneficial owner does not include:

• a minor child, if the information of the parent or guardian of the minor child is reported,
• an individual acting as a nominee, intermediary, custodian, or agent on behalf of another individual,
• an individual acting solely as an employee of a reporting person and whose control over the economic benefits from such entity is derived solely from the employment status of the person,
• an individual whose only interest in a reporting company is through a right of inheritance, or
• a creditor of a reporting person, unless the creditor exercises substantial control over the entity or owns or controls not less than 25% of the ownership interests.

Information Reported

Under the CTA, any “reporting company” will be required to report the following information to FinCEN for each of the reporting company’s “beneficial owners” and for the individual who filed the application forming or registering the reporting company:

• the full legal name,
• date of birth,
• current address, and
• unique identification number from an unexpired passport, driver’s license, other acceptable identification document, or FinCEN identity number.

Once reported, the information will need to be updated within a year of any changes. The information will not be publicly accessible, but will be available to federal, state and international law enforcement agencies and to financial institutions for customer due diligence.

Failure to comply with the CTA could result in (i) civil penalties of up to $500 for each day that the violation continues, and (ii) a fine of up to $10,000 and imprisonment for up to two years or both. The unauthorized disclosure of information collected under the CTA carries the same civil penalty, but carries a higher criminal penalty of up to $250,000 and up to 5 years of imprisonment or both.

Looking Ahead

Attention now turns to Treasury to draft regulations implementing the CTA. While Treasury has been instructed to implement the CTA in a manner that minimizes the burdens on reporting companies to the greatest extent practical, there is no doubt that this legislation will have a great impact on many businesses.

The attorneys at Winthrop & Weinstine will be on the lookout for Treasury’s regulations and can assist in reviewing any impact the CTA may have on your business. To discuss the CTA’s reporting requirements that may apply to your business, please reach out to Joel Johnson or your Winthrop & Weinstine attorney.

Billions for Minnesota, With a B

This week, the federal government passed another stimulus bill, totaling nearly $2 trillion, and directing more than $4.8 billion in aid to Minnesota, along with direct checks to individuals, an extension of unemployment insurance, and many other provisions. Of the $4.8 billion, more than half ($2.577 billion) will go directly to the state, while the remaining funds will be allocated to counties ($1.109 billion), cities and other municipalities. Allocation details are available here.

Billions in One-time Spending

While many legislators and lobbyists alike have already imagined millions of ways to spend the billions in federal money, it is important to note that it is only temporary funding. This means that it is best used to only pay for one-time costs, not ongoing budget items. Therefore, Governor Tim Walz and others may continue to suggest that a tax increase is still needed to fund expenses into the future.

Billions for the Supplemental Budget

Governor Walz will release his updated budget request to the legislature next week (rumor is that it will be on Thursday). He had released an earlier version prior to the February forecast, but the revised version will be changed based on the significantly improved economic numbers and the influx of federal cash. Additionally, on March 21, he will have an opportunity to promote his new budget as he delivers the State of the State address from the Mankato classroom where he once taught.

Millions in Relief to Business (Not Yet)

As had been promised by Senate Majority Leader Paul Gazelka, on Thursday the Senate passed S.F. 263, authored by Senator Tom Bakk (DFL-Cook), which exempts forgivable Paycheck Protection Program (PPP) loans from income tax. The bill had broad support, passing by a margin of 55-12. The House has advanced a similar bill in committee, which is laid over for possible inclusion in the tax omnibus bill. At this point, the House and Senate have not agreed on if, when, or how to advance this issue.

Millions of COVID Updates

Today Governor Walz released updated guidance that will take effect at various times in the next month. Included in the guidance is reinforcement that masking and social distancing are still required in certain circumstances. However, various restrictions on work and gatherings (indoor and outdoor) are lifted or lessened. Beginning on April 15, the requirement that workers “who can work from home, must work from home” is lifted, however employers are “strongly encouraged to allow employees…to work from home.”

Earlier in the week, Governor Walz announced that nearly 70% of Minnesotans aged 65 and older have received at least one dose of the COVID-19 vaccine. Due to hitting this milestone, the next two tiers of individuals are now eligible to receive the vaccine. This group consists of approximately 1.8 million people, and constitutes roughly 40% of Minnesota adults. Looking at the infographic below, individuals who are within the yellow areas are now eligible, and state leaders indicated that the next tiers are likely to be eligible sometime in April (if available vaccine doses increase as hoped).

Congress has authorized a promising grant program for restaurants, bars, breweries, food trucks and caterers, with grants awarded based on the recipient’s decline in revenues during 2020. The Restaurant Revitalization Fund Grant program is part of the American Rescue Plan Act of 2021, which was signed into law on March 11, 2021. Continue reading for a summary of the grants authorized by this legislation as of the time of its signing; we expect that there may be modifications to the program terms, as regulations or guidance are forthcoming.

Restaurant Revitalization Grants

What is it? A $28.6 billion program providing cash grants to restaurants (including bars, breweries, caterers and food trucks) that experienced reduced revenue in 2020.

How much can I receive? Cash grants will equal the amount by which the recipient’s gross receipts decreased in 2020 as compared to 2019, minus the amount of any PPP loans received by the restaurant. The grant is capped at $10 million for each recipient, or $5 million per restaurant location.

Who qualifies? An “eligible entity” is any business in which the public assembles to be served food and drink, including restaurants, food trucks, food carts, caterers, bars, and brewpubs. Gross receipts from 2020 must be lower than those in 2019 for a grant to be generated. Restaurants are ineligible if they (i) had more than 20 restaurant locations (aggregated with affiliates) as of March 10, 2020, or (ii) are publicly traded. Grant recipients will need to make a good faith certification that the uncertainty of current economic conditions makes necessary the grant request to support the ongoing operations of the eligible entity (you may recognize this certification requirement from PPP applications).

How can I get the funds? The Treasury Department will be allocating funds to the Small Business Administration (SBA) to administer the program. While details are not yet fully available, this program appears to be direct-to-recipient, similar to the EIDL Advance program (with applications accepted through an online portal from SBA’s site), rather than a bank-administered program like the PPP.

How can I spend the funds? The grant can be spent on essentially all operating expenses that have been incurred as a result of, or during, the COVID-19 pandemic. Specific categories include payroll costs (definition borrowed from PPP), rent or mortgage payments, utilities, maintenance, supplies, food and beverage costs, certain supplier costs and other operational costs. Grant funds must be spent by December 31, 2021 or returned.

How will this be taxed? Not only is the grant excluded from gross income, but the business will be able to deduct expenses paid with grant funds from their gross income.

We will continue to monitor for additional information as it is released; if you have questions please feel free to contact any member of our team.

Tune In

Downtown Minneapolis is preparing for Minnesota’s first live broadcast, high-profile trial. Jury selection is set to begin on Monday in the trial of former Minneapolis police officer Derek Chauvin. Chauvin is accused of second-degree murder and second-degree manslaughter in the killing of George Floyd in Minneapolis last summer. Opening statements are scheduled to take place on March 29. Additional officers will face trial at a later date.

Who Pays?

The death of George Floyd last summer led to days and weeks of civil unrest in Minneapolis, and to a lesser extent St. Paul. Blocks of businesses were burned or otherwise damaged, and a police precinct building was looted and destroyed. On the eve of the trial, the Minnesota legislature is still grappling with who should pay for the costs of the additional public safety officers who respond to such events. With concern that a similar response may be needed during the Chauvin trial, leaders in the House, Senate and Governor’s office are expected to continue negotiating. Senate Majority Leader Paul Gazelka (R-Nisswa) expressed hope that a compromise would be reached and the agreement could be approved in the Senate on Monday.

The Final Holdout

Minnesota is the only state that has not exempted forgivable Paycheck Protection Program (PPP) loans from being taxed. A bill to do just that is the top priority of the Senate, authored by the House Tax Chair, Rep. Paul Marquart (DFL-Dilworth). However, the House and Senate have so far taken different approaches to getting the bill passed. The House had a hearing on it, but laid it over for possible inclusion in an omnibus bill later in the session. The Senate has passed it out of committee and hopes to get it signed into law as a stand-alone bill prior to March 15. Likely in a bid to win House support to pass the bill quickly, the Senate added a provision that would also exempt unemployment checks that individuals received from the Federal Pandemic Unemployment Compensation (FPUC) program from taxation.

March Madness

The approach of legislative deadlines always brings about the most frantic weeks of committee action in the Minnesota legislature, and this year is no different. Several committees met into the evening this week, with more evening hearings scheduled for next week—and likely the following couple weeks as well. The first committee deadline is next Friday, March 12. The second deadline is set for one week later, on Friday, March 19. The legislature will go on break after March 26, resuming work on Tuesday, April 6, and the final deadline is on Friday, April 9. The legislative session must end by May 17.

Vaccines—Who’s Next?

Following last week’s updated timeline for when different categories of individuals can expect to be eligible for vaccination, the Minnesota Department of Health released additional vaccination guidance this week. The updated guidance includes more detailed information on specific medical conditions and essential worker categories.

The news of the week is the arrival of the always long-awaited February Forecast. However, with just two weeks before the first deadline, several other issues are making headlines as well.

State Economic Forecast is Good News

Minnesota Management and Budget today released a new state economic forecast, showing a $1.6 billion surplus for the FY 2022-2023 biennium. The projected surplus in FY 2022-2023 is a major improvement over the December 2020 forecast, which predicted a $1.27 billion deficit for the same time period. In the next few weeks, Governor Tim Walz is expected to release supplemental budget recommendations that reflect this improved forecast. The House and Senate will begin assembling their respective budget plans as well.

Bonding Back on the Table

Just a few months after finally passing a bonding bill, the Governor has made recommendations for additional capital investment projects. Consisting of projects totaling over $500 million, approximately half relate to state agency and higher education asset preservation, $150 million is for rebuilding efforts due to last summer’s civil unrest, and $100 million is tagged for housing infrastructure. Typically the legislature focuses on capital investments in the second year of the biennium.

Telehealth Hearings Begin

The pandemic forced the medical industry to quickly transition from in-person to remote service delivery. While telemedicine has existed for several years, utilization has sky-rocketed over the last year, and both patients and clinicians have become much more comfortable with it. Much of this growth was only possible due to various pandemic-related waivers and modifications. Legislation is now moving through the House and Senate to update existing statutes to allow for the continuation of expanded use of telehealth.

Broadband Update

Three different bills related to broadband were heard and laid over for possible inclusion in the Senate agriculture and economic development omnibus bill. Though they differed on specifics, each would provide funding for broadband expansion for the next biennium.

Vaccination Timeline

On Thursday, Governor Walz unveiled an expected timeline for when Minnesotans can expect to be eligible to receive a COVID-19 vaccine. The next phase, consisting of individuals with specific high-risk health conditions and food-processing plant workers, will begin when approximately 70 percent of Minnesota seniors aged 65 and older have received the vaccine (estimated to be by the end of March). Further details are in the infographic below and here:

Minnesota is now the latest state to take strides towards enacting an omnibus consumer data privacy law.  On February 22, 2021, the “Minnesota Consumer Data Privacy Act” was introduced as HF 1492 by Rep. Steve Elkins (DFL) and Rep. Mohamud Noor (DFL) in the Minnesota House of Representatives.

The proposed Minnesota Consumer Data Privacy Act (“MCDPA”) is largely based on the 2021 version of the proposed Washington Privacy Act (SB 5062), and bears many similarities to the Virginia Consumer Data Protection Act (“CDPA”). Virginia’s CDPA was recently passed by the Virginia legislature and is headed for Gov. Ralph Northam’s desk this week, where it is expected to be signed into law. The MCDPA shifts Minnesota’s privacy debate away from the California Consumer Privacy Act (“CCPA”) model, and towards the approach making headway through the Washington legislature in 2021. While a different CCPA-styled privacy bill was introduced in Minnesota in January 2021 (HF 36) by Rep. Noor, he is now a co-sponsor of the proposed MCDPA. The MCDPA is now the primary candidate to become Minnesota’s omnibus consumer privacy law.

As introduced, the MCDPA would apply to companies doing business in Minnesota, including those that provide products or services to Minnesota residents, so long as these companies: (1) process personal data of at least 100,000 consumers; or (2) generate more than 25% of their gross revenue from the sale of personal data, while also processing the personal data of at least 25,000 Minnesota consumers.  The MCDPA would also govern a wide range of activities related to the processing of consumer personal information, including creating a variety of consumer data rights. For example, the bill gives consumers a variety of consumer privacy rights, including the right to verify, correct, delete, access, and opt-out of processing of their personal data.  It also sets forth the time frames and other conditions for companies to respond to these consumer requests, and further provides requirements for data protection assessments and consumer privacy notices.

Enforcement of the MCDPA is by civil action brought by the attorney general, with injunctive relief available, as well as civil penalties of up to $7,500 for each violation. Like the proposed Washington Privacy Act, the proposed MCDPA does not currently include a private right of action. However, that may change during the course of the legislative session, as this is likely to be a hotly contested aspect of the bill, and amendments for a private right of action are already in the works.  Moreover, while the proposed MCDPA does not specifically address facial recognition, a separate bill on that topic is expected to be introduced later this session by co-sponsor Rep. Mohamud Noor.

The proposed MCDPA would add many layers of consumer privacy obligations to companies doing business in Minnesota, and is being closely watched by industry observers. Businesses across the country handling consumer personal data should continue to closely track developments with this bill during the next several weeks as it works its way through the legislative process.

With only three weeks until the first legislative deadline, higher profile legislative initiatives have started moving through committees and, in some cases, been voted on by the full House or Senate. Next Friday, February 26, the long-awaited February forecast will be released at 2:00 p.m. The legislature must base the budget on the February forecast.

Adult Use Cannabis

The House committee on Commerce Finance and Policy advanced H.F. 600 (Rep. Ryan Winkler, DFL-Golden Valley) on a party-line vote to the next committee. The bill seeks to legalize recreational marijuana use for adults aged 21 and older. While similar bills have been introduced in the past, this is the first time a recreational cannabis bill has cleared a committee in Minnesota. The Senate is unlikely to take up the legislation.

Competing Proposals

Since the death of George Floyd last summer, and the civil unrest that followed, Minnesota elected officials have debated how best to respond to future situations. With the upcoming trial of Derek Chauvin scheduled to start in a few weeks, such discussions have an urgency behind them. On Monday, the Senate passed a bill that would reduce Local Government Aid payments from the state to jurisdictions that have unpaid mutual aid obligations. Also on Monday, the House was expected to take up a bill that would have provided $35 million for anticipated public safety funding needs leading up to, during and after the trial. The bill was pulled from consideration at the last minute due to lack of support. The bill was considered on Thursday, and failed after several D.F.L. representatives from Minneapolis and St. Paul joined the Republicans in opposing the measure.

Court Deadline Update

Last spring, due to the pandemic, Minnesota passed a law extending certain court deadlines and statutes of limitation. That provision was set to expire on February 15. H.F. 114 (Rep. Kelly Moller, DFL-Shoreview) extends that date to April 15, 2021, and was signed into law on February 12.

Paycheck Protection Tax Conformity

House Tax Chair Paul Marquart, DFL-Dilworth, presented a bill in his committee earlier this week that would provide tax relief to businesses that participated in the federal Paycheck Protection Program by conforming Minnesota to federal law. Following adoption of a delete-all amendment, the bill, H.F. 501, was laid over for possible inclusion in the omnibus bill.

COVID-related Announcements

This week, Governor Tim Walz’s administration made news with two announcements. On Wednesday, they announced that all middle schools and high schools could resume at least part-time in-person learning within the next month. On Thursday, the administration announced the launch of the Minnesota COVID-19 Vaccine Connector, where any Minnesotan aged 18 and older can sign up for vaccine information. After submitting their data, individuals are to be notified when they are eligible to receive the vaccine, and provided with possible options for where to obtain the vaccine.

During a frigid week in Minnesota, partisan rhetoric is beginning to heat up. Committees are continuing to hear more bills, and Republicans continue to push Governor Tim Walz to further “open up” business and schools in Minnesota.

Budget Cue

This week saw a continuation of positive state budget news. With January revenues in the books, Fiscal Year 2021 revenues are now $459 million more than what was estimated in the November Forecast. Individual income, sales and corporate taxes each beat expectations. With the upcoming February forecast, which legislators use to set the next biennial budget, being released in early March, this news should be a preface to an improving budget outlook.

Turning the Dials?

Republicans and the hospitality industry have been putting pressure on Governor Tim Walz to adjust the dials on COVID-19 restrictions on businesses. Republicans would like to provide businesses, including restaurants and event centers, with a specific date that they would be allowed to fully re-open, and have proposed May 1 as that date. Governor Walz has been hesitant to make changes, citing uncertainty due to the virus variants that have begun to circulate.

COVID Liability

Introduced earlier this month, S.F. 512, Sen. Michelle Benson (R-Ham Lake) / H.F. 571, Rep. Kelly Morrison (DFL-Deephaven), would shield hospitals, nursing homes and health care professionals from liability over health care decisions made due to the pandemic. The health care industry has been advocating for these protections since last spring, but significant resistance exists from consumer advocates. To date, the legislation has not had a hearing.

Clean Energy First

Legislation referred to as Clean Energy First, H.F. 10, Rep. Zack Stephenson, (DFL-Coon Rapids), which would require new electric generation to be replaced by renewable energy, was approved in the House Climate and Energy Finance and Policy Committee. Passed on a party-line vote in committee, the bill faces an uncertain future in the Senate.

Gazelka for Governor?

Senate Majority Leader Paul Gazelka (R-Nisswa) has long been rumored to be considering a run for governor in 2022. While being interviewed on the radio this week, he made his strongest statement yet about his thoughts on the issue, saying, “Well, I’m at least considering it. I did four years ago and felt like I would best serve the state as the leader of the Senate. I know that this budget cycle is really important for Minnesota. So I told people I’ll make some sort of decision this summer.”