Serious Negotiations

The Minnesota legislative session is required to end within ten days. At the beginning of the week, legislative leaders announced that they had given themselves a goal of having a broad global agreement on key issues and budget targets by Friday (today). Following such an agreement, conference committees would need to finalize details within their individual bills.

On Tuesday, Senate leadership publicly shared a document that explained its opening offer to the House for a global agreement on key end-of-session issues. In the days since, there have been no other offers or counteroffers that have been made public. Quiet negotiations such as those happening now is typically a sign that the legislative leaders are conducting serious negotiations.

COVID Restrictions Nearly Gone

Yesterday, Governor Tim Walz announced a three-step plan to nearly eliminate all COVID-19 restrictions and protections by July 1. The announcement helps to ease tensions between Republicans and the Governor, and should help to advance budget negotiations. The highlights of the announcement include:

• May 7: At noon, limits on outdoor activities end, except the mask requirement remains for large venues with more than 500 people; and the existing early mandatory closing time for bars and restaurants ends.
• May 28: Capacity and distancing limits end, except face coverings are still required indoors and for outdoor events that exceed 500 people; businesses must only abide by a minimal universal state guidance document.
• No later than July 1: Once 70% of Minnesotans aged 16 years and older are vaccinated, but no later than July 1, the remaining face covering and business guidance requirements will end.

Remaining in place will be the eviction moratorium, the ban on price gouging, and eligibility exemptions for people who receive state services.

Making a Statement

This week, the Senate passed a bill that has been a priority of the Republican majority for a number of years. On a vote of 34-32, S.F. 173, authored by Sen. Scott Newman (R-Hutchinson) which would require that voters show identification, was approved. The House will not take up the bill, though it is expected to vote on the adult-use cannabis bill next week (which the Senate will not advance).

Sign and Release Warrants

On Thursday, the House of Representatives passed H.F. 2539, the Sign and Release Warrant Bill, authored by Rep. Jamie Long (DFL-Minneapolis).  Rep. Long said the bill is a response to the death of Daunte Wright, who was in the process of being arrested due to an outstanding warrant when he was shot. H.F. 2539 would allow officers who find a person who has missed a court date, for certain gross misdemeanors or misdemeanors, to simply provide notice of a new court date and have the person sign an acknowledgment of the notification. Republicans argued that the new sign and release process included too many gross misdemeanors. The bill passed along party lines, 73-59, with most DFLers voting for the bill and Republicans voting against.

Governor Speculation

Earlier this week, it was reported that Senator Michelle Benson (R-Ham Lake) is considering running for governor in 2022. Sen. Benson, who is chair of the Health and Human Services Finance and Policy committee, joins Senate Majority Leader Paul Gazelka (R-East Gull Lake) and Senator Carla Nelson (R-Rochester) in those speculated to be eying the seat. None are expected to make a final decision until after the legislature adjourns.

And the Census Says…

Minnesota found out this week that it will keep all eight congressional seats. It has been hypothesized for decades that Minnesota was likely to lose a seat, but we have continued to hold on to it. However, this year was likely the closest margin yet. If New York had counted an additional 89 people, it would have retained the seat that it is losing, and Minnesota would have lost a seat.

Can it Function?

No, the Campaign Finance and Public Disclosure Board cannot currently function due to a lack of board members. A full board consists of six members, and while Governor Tim Walz recently appointed four new members to fill the board positions (two members were confirmed previously), only one of the four was approved by the legislature. Because of the inaction on the other three appointees, Gov. Walz must appoint new members and the board cannot meet until he does so.

Telehealth Moves Forward

This week the Senate passed a bill to modernize Minnesota’s telehealth laws. Even though the existing statutes were put into place only a handful of years ago, many experts believe the pandemic advanced the implementation and use of telehealth by many years. Negotiations are continuing on details of the legislation, with the primary areas of discussion being whether payment parity (which currently exists in law) will be fully maintained and whether or not a sunset should be included to force the legislature to address the issue again within a couple years.

Conference Committees Begin

Five members from each legislative body have been appointed to serve as conferees on the more than a dozen major appropriations bills that need to pass before the end of session. With the constitutionally-mandated end to the legislative session just a little more than two weeks away, much remains to be done. Conferees are beginning to hammer out policy details, but final decisions won’t happen until leadership agrees to final budget targets.

Anticipating Another Dial Turn

Governor Walz stated this week that he is likely to announce further loosening of restrictions sometime soon. As COVID-19 case numbers and resulting hospitalizations continue to decline, many Minnesotans are anxious to see a further return to life as it was prior to the pandemic.

In this edition of WIT AND WISDOM OF WINTHROP, our Employment Litigation Newsletter, look for information on our new mediation practice, the upcoming Paycheck Protection Program forgiveness application deadline, how to avoid litigation resulting from employees’ social media posts and more!

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Welcome to the first issue of WIT AND WISDOM OF WINTHROP, a newsletter covering topics and issues in employment litigation. Within these newsletters, our team will share recent and upcoming deadlines, descriptions of developing case law that may be relevant to your business, lessons learned from real-life examples, all from the perspective of our employment litigation team with decades of experience.

If you have employees, supervise employees, are an employee or know employees, there will be something of interest to you!

Click here to read the issue!

In this edition of WIT AND WISDOM OF WINTHROP, our Employment Litigation Newsletter, look for answers to the top three questions we’re seeing from employers about the COVID-19 vaccine, and the status of Van Buren v. United States, in which the Supreme Court is considering the issue of employee misuse of access to information.

Click here to read the issue!

Guilty Verdict

Earlier this week, former Minneapolis police officer Derek Chauvin was found guilty of murdering George Floyd. While officials had feared massive demonstrations with the possibility of violence or property damage, the reality was more akin to celebratory gatherings. Operation Safety Net, the name given to a unified security task force that had been created prior to the trial, has been winding down operations, as barricades and plywood are being removed from buildings.

Omnibus Bills – and PPP Conformity

The House and Senate have been busy this week passing omnibus finance bills on the floor, and have begun appointing members to conference committees to work out the differences between the House and Senate positions. Of importance to many is that both the House and Senate tax bills include federal conformity for Paycheck Protection Program loans, though the House only does so for loans less than $350,000.

Cannabis Legalization

Aside from omnibus bills, very few bills have been moving. An exception is H.F. 600, authored by Rep. Ryan Winkler (DFL-Golden Valley), which would legalize adult-use recreational cannabis. This bill has had four hearings in the last two weeks, and has now been heard in a total of nine different committees. Though there is an expectation that this legislation is likely to pass the House this year, no action is expected in the Senate.

New Commerce Commissioner

Late last week, Governor Tim Walz appointed Grace Arnold as the Commissioner of the Department of Commerce. The Department of Commerce oversees financial, insurance and energy industries in the state. Commissioner Arnold had previously been serving as commissioner on a temporary basis.

Vaccines on the Move

For the first time, some areas of the state are seeing a lessened demand for COVID-19 vaccines. In spite of this, there are still few locations that are seeing appointments go unclaimed, as people remain willing to drive significant distances to secure the shot. Additionally, Minnesota announced earlier this week that they would create mobile vaccination units to try to make vaccination easier for underserved populations.

Minnesota’s Biggest Story

The trial of Derek Chauvin in the death of George Floyd has put Minnesota in the national spotlight for the last few weeks. That trial is wrapping up, with closing arguments scheduled for Monday. Unfortunately, the spotlight was intensified earlier this week when Daunte Wright was shot and killed by a Brooklyn Center police officer approximately ten miles from the location of the trial. Protests have occurred each night since Sunday, and some areas have instituted curfews. With these two events, the National Guard has been called up while Minneapolis and the surrounding areas have been focused on public safety.

The Next Chapter

With the passing of the final deadline last week, the legislature has moved into a new phase. The House has passed each of the omnibus finance and policy bills out of the Ways and Means committee, with only the Tax and Capital Investment bills remaining. The Senate has also been passing omnibus bills out of the Finance committee, but likely won’t finish until near the end of next week. Both the House and Senate have also begun passing the omnibus bills off their respective floors.

Federal Funds Could Throw a Wrench in the Process

While the House and Senate are both passing omnibus finance bills, the final agreements could look very different. Billions of federal dollars will be coming in to the state coffers, but many details, including final amounts, how funds will be broken down, and anticipated guidance on use of funds, are needed prior to finalizing decisions. These details are expected to come into greater focus in early May. Of particular note is that, if the legislature and Governor Tim Walz are unable to agree on how and where to use these federal funds, the Governor will be able to use them at his discretion.

Emergency Powers Continue

Governor Walz acted this week to extend the state’s peacetime emergency for another 30 days. This current emergency order will expire on Friday, May 14. Once the legislature adjourns from regular session, which will happen on or before May 17, the Governor will be required to call the legislature in for a special legislative session if he continues to extend the peacetime emergency.

Vaccine Passports

While the chair of the Senate Health and Human Services committee, Sen. Michelle Benson (R-Ham Lake), has been vocal about her opposition to COVID-19 vaccine passports for a long time, last week, Governor Walz also stated that he has “no intention of doing vaccine passports” in Minnesota. Additionally, this week separate bills were introduced in both the House and Senate regarding related issues. A bill introduced by Rep. Tony Albright (R-Prior Lake), H.F. 2511, would prohibit government-issued vaccine passports and further states that “no entity doing business in Minnesota shall require patrons or customers to provide documentation certifying vaccination or post-transmission recovery to gain access to, entry upon, or service from the business.” S.F. 2424, authored by Sen. Jim Abeler (R-Anoka), would prohibit employers from discriminating against employees in any way based on vaccination status.

Final Committee Deadline

Today marks the final committee deadline—the day when all omnibus finance bills must pass out of committee and advance to the House Ways and Means Committee or the Senate Finance Committee. The only committees exempt from this deadline are the Capital Investment and Tax committees, as well as the Senate Finance and House Ways and Means committees. Next week (and likely spilling over into the following week), omnibus bills will get a last look in these remaining committees.

Action Moves to the Floor

The Senate announced that members should expect to vote on bills every time the Senate meets for the foreseeable future. As committees wrap up their work and the focus shifts to floor action, the same is likely for the House. Expect to see the first floor votes on omnibus bills by the middle of next week. Typically, the bills with smaller budgets and fewer controversial issues make it to the floor first.

Tax Bills in Limbo

Don’t be surprised if the tax bills are the last of the omnibus bills to be passed. As previously mentioned, the tax committees don’t have to abide by the committee deadlines. The House did release its tax bill early in the week, and not surprisingly, it contains several controversial provisions, including a new fifth income tax tier, and limits on federal conformity for Paycheck Protection Program loans. The Senate has yet to release an omnibus tax bill.

New Leader for Republican Party?

This weekend, the state Republican Party will vote for a new party chair. Incumbent chair Jennifer Carnahan is seeking re-election, but is being challenged by state Senator Mark Koran (R-North Branch). Issues in the campaign have included the future strategy of the party, including the role of allies of former President Trump, fundraising and personalities.

Uncertain Future

Minnesota has been proud of its vaccination efforts in the fight against COVID, but in recent weeks the virus has continued to spread rapidly. The state was one of the first to identify the B117 variant spreading among its population, and has since seen a significant increase in cases and hospitalizations. In spite of roughly one-third of Minnesotans being vaccinated, cases have increased approximately 60% in the last two weeks, leaving some to fear more restrictions are on the way, just as the state has been able to open up more.

Gimme a Break!

Following a busy week and a handful of committee hearings today, the legislature will begin its ten-day break. The break officially begins on Saturday, March 27, and lasts until 8:30 a.m. on Tuesday, April 6. While some legislators will enjoy the break, others will be putting the final touches on their proposed committee budget recommendations. By the end of the day on Friday, April 9, nearly all committees are expected to have passed their omnibus budget bills out of committee.

Gimme a Break!

In spite of the legislative break, don’t be surprised if you continue hearing about legislative issues. Traditionally, the legislative break provides an excellent opportunity for elected officials to spend some time back in their districts to hear from their constituents. With omnibus bills on the horizon, advocacy groups often use this time to activate their members and fill local media with political messages.

The House Will Take a Piece

The DFL-led House of Representatives released committee budget targets earlier this week, with a total proposed budget of $52.5 billion. This proposed budget is approximately $300 million higher than the Governor’s revised proposal and $700 million more than the Senate’s target.

Grab Your Kit-Kat Bar

On Thursday, Governor Tim Walz announced that Minnesota would open up COVID-19 vaccine eligibility to all residents aged 16 and over, beginning March 30. For those that haven’t yet been eligible and are anxious to get the vaccine as quickly as possible, be aware that initially the demand is expected to far exceed supply. If you are able to get in to your Thrifty White or other community drugstore, grab a candy bar while you are there and celebrate!

In Other News

The Minnesota Supreme Court this week overturned a third-degree sexual assault conviction in which a man took home an intoxicated woman and allegedly assaulted her. The Court ruled that the statute’s definition of “mentally incapacitated” does not include a person who is voluntarily intoxicated. Anticipating this ruling was likely, the House has been advancing a bill, H.F. 707 (Moller), that would close this loophole.

Busy busy busy!

By the end of today, the Minnesota legislature’s second deadline will have come and gone. At this point, all bills are supposed to have cleared all policy committees. Thus, committees that have no financial jurisdiction have concluded their regular meetings, though they may be called back to hear a provision that missed a deadline or conduct an informational hearing. Finance committees will continue their work next week, before taking a break from March 27-April 5. By April 9^th, the third deadline, all omnibus finance bills will be public.

Who’s in charge?

In an unusual move early in the week, the minority House Republican caucus announced the floor session agenda for the week. They held a press conference to lament their belief that the majority caucus has been the least productive in modern history, and to provide notice that they intended to try to bring four different proposals—creation of the SAFE account, PPP tax conformity, unemployment insurance tax exemption, and in-person summer school program and funding—to the floor throughout the course of the week. Each of the procedural motions to bring up these issues failed.

Paid leave efforts continue in House

House Democrats have continued to advance two proposals through committees that they argue provide more family-friendly workplace environments. One proposal is to require a paid family and medical leave program for most workers in the state; another would require that workplaces provide earned safe and sick time to workers. While it seems these bills have traveled to nearly every committee in the House, the Senate hasn’t had any hearings on either issue.

Senate makes a statement

The Senate announced their budget targets on Tuesday, providing them with another opportunity to highlight their priorities. Included in their $51.9 billion budget proposal is a 40% allocation for education, 31% for healthcare, nearly $600 million for tax relief and a 5% reduction in administrative costs.

Governor revises his budget

As expected on Thursday, Governor Tim Walz released his revised budget proposal, based on the February budget forecast. While the updated forecast showed a dramatic swing from a deficit to a $1.6 billion projected surplus, the revised budget was comprised of tweaks to the original proposal, rather than full-scale changes. The biggest shifts occurred in the tax area, where increases were dramatically scaled back. For example, Walz dropped his proposed tax increase on cigarettes, but the proposal maintains a proposed fifth-tier tax bracket.