This is what Sarah and Joe, our government relations team at the Capitol sent us as at the closing hours of this session:

Following is a general wrap-up about the final days of session.  We will prepare a MLBA Legislative Wrap-up in the next week or so.

The 2013 Legislative session adjourned at midnight on Monday, May 20th – right at the constitutionally mandated deadline.

The final days were filled with long hours of debate and many delays as they worked until the early morning hours the last three days.  The Omnibus Taxes bill was approved by the conference committee on Saturday night  and includes an income tax increase of 2% on married filers over $250,000, an increase in cigarette taxes, increases in corporate taxes, and sales tax changes.  The bill passed the House on Monday and was passed by the Senate in the final hour of session.

Over the weekend, agreements were also reached on the omnibus legacy funding bill, the environment and natural resources finance bill, the state government finance bill,   The final conference committee reports can be found at this link:  https://www.revisor.mn.gov/reports/conference/

After originally defeating an $800 million bonding bill, an agreement was reached to pass a scaled down bonding bill in the final hours of the session.  The bill was reduced  to a bill of $176 million in bonding.  Included in the bill is the Capitol renovation and a related parking facility, the Minneapolis Veterans’ home, flood mitigation, wastewater funding.   The bonding bill was passed by a vote of  121-10 in the House and passed the Senate by a vote of 57-6.

The legislature approved $1.5 million  in general fund dollars to match federal disaster relief for Southwest Minnesota to assist the community due to damage from the ice storm in April.   

One of the most controversial bills to pass this session was the bill to allow child care workers and personal care attendants the right to vote to become a union.  The Senate debated this bill for a record-setting 17 hours earlier in the week.  The House debated the bill in fits and stops over the last three days, Republicans in the House had prepared over 100 amendments and offered 19 before a vote was taken.  The Capitol was filled with those supporting and opposing the bill, chanting, singing, and sleeping in the hallways.   The proposed bill to increase the state’s minimum wage did not pass this session.  The House was proposing an increase up to $9.50/hour and the Senate was proposing an increase up to $7.50/hour.  In the end, agreement could not be reached between the House and Senate.  This bill will likely be back next session.

Legislators, staff and lobbyists are all ready for some time away from the Capitol.  Everyone who spends time at the Legislature has a love of public policy and politics, but with most things – too much is not always good.   The Legislature will reconvene on February 25, 2014.

Once again, thank you for your support and your commitment to the MLBA!

Frank Ball
MLBA Executive Director
651-772-0910

Liquor Tax Increase: Late Thursday night, the Governor and DFL Leaders announced that the proposal to increase the liquor tax was no longer in play for this session and will not be included in the Omnibus Tax Bill conference committee report.

Minimum Wage: The conference committee that will work out the details between the House and Senate minimum wage bills has not met. There are various comments in the press and talk in the halls regarding the status of a minimum wage bill, its prospects for passage this session, and what the final wage increase will be. The difference between the House and Senate bills is:

Enactment Date :: House :: Senate
August 1, 2013  :: $8.00 :: $7.25
August 1, 2014  :: $9.00 :: $7.50
August 1, 2015  :: $9.50 :: $7.75

Earlier this week, the Senate Majority Leader, Sen. Bakk, told the press that he was comfortable waiting until next year for a minimum wage bill if the conference committee was unable to find agreement. However, today, he told the press that he thinks a bill is likely to pass this session.

General Capitol Update

Mother’s Day Budget Deal: On Mother’s Day, the Governor and DFL Leaders announced agreement on a global budget proposal and tax plan which gives direction to the conference committees that have been working all week to bring resolution to the budget bills. The agreement was further refined on Thursday evening to give more clarification. The agreement calls for a 2% tax increase on the top 2% of income tax earners, an increase of $1.60/pack on cigarettes, dropping of the proposed liquor tax increase, no sales tax expansion to clothing or consumer services, a sales tax exemption for cities and counties, an upfront capital equipment tax exemption, property tax relief, and no surcharge on the incomes over $500,000 to repay the K-12 education school shift (this will be partially repaid using excess revenue in the current biennium.)

“Love is the Law”: On Monday, the Senate passed the bill to authorize same-sex civil marriages in the state of Minnesota. The Capitol was again filled as supporters and opponents watched the debate on the Senate Floor. The bill became a law when Governor Dayton held a bill signing ceremony on the south lawn of the Capitol on Tuesday, making Minnesota the 12th state in the nation to allow same-sex marriage. The Capitol Security force estimated over 6,000 people braved the 98-degree heat to be present and watch the bill signing. The general feeling at the Capitol is that the tide turned rather quickly on this issue since the vote was taken two years ago to place a proposed Constitutional amendment on the ballet to prohibit on same-sex marriage. That proposed amendment was defeated in the November 2012 general election, and six months later same-sex marriage is now legal in Minnesota.

Unionization of Day Care Providers: The Senate endured a record-setting 17-hour debate on a bill, the “Family Child Care Providers Representation Act” would allow independent day care providers, who receive a public subsidy, to organize a union. The Minnesota House has scheduled this bill for consideration on Saturday. Over 100 amendments to the bill have been pre-filed and the House Republicans have stated that they will equal if not surpass the length of the Senate debate.

Budget Bills: The Legislature has approved three omnibus budget bills and they have been sent to the Governor for his signature – seven more to go! The Omnibus Economic Development Finance bill provides funding for the Department of Commerce, Department of Employment and Economic Development, the Department of Labor and Industry, Explore Minnesota Tourism, the Minnesota Film Board, and the Minnesota Investment Fund. The bill includes an extension of unemployment benefits for workers involved in a lockout situation. The bill includes provisions from the Omnibus Energy Policy bill and language relating to solar energy standards.
The Omnibus Public Safety and Judiciary Finance bill provides funding for the Department of Corrections, Department of Public Safety, the courts, and battered women’s programs. The bill also contains a provision supported by gun control advocates and the National Rifle Association to upgrade the computer data base for civilly committed and dangerous individuals. This bill provides $3 million of increased funding for battered women in response to the number of domestic violence homicides and disappearances in Minnesota in 2013.
The Omnibus Higher Education Finance bill provides $250 million increase to the U of MN, MnSCU and the state’s tuition assistance program. Tuition is stabilized or :frozen” at the both systems. The bill includes the “Dream Act” which allows high school graduates who lack legal documentation to pay in-state tuition rates. The bill provides funding for the Teach for America program which Governor Dayton has opposed and may line-item veto when the bill reaches his desk.

Bonding: The House of Representatives took up the Omnibus Bonding bill on the Floor today, Friday. The bonding bill requires approval of 3/5th of the members or 81 votes in order to pass. This means that if all the DFL House members vote yes, eight Republicans are also necessary in order to pass the bill. For months, Republicans have said that they do not support a large bonding bill this session. The bonding bill agreed to by the Governor and DFL leaders provides $800 million in general obligation bonding, including over $110 million for the Capitol renovation. It also includes over $200 million for higher education, $20 million for flood mitigation, $15 million for parks and trails, over $90 million for roads, bridges and transit, as well as funding for regional civic centers, the Minnesota Children’s Museum, the Minnesota Zoo, the Minnesota Historical Society, and other local or regional projects. The bill was defeated by a vote of 76-56, with only three Republicans voting “yes”.

Final Days: The deadline for the 2013 legislative session is Monday, May 20th at Midnight. The Legislature has scheduled Floor sessions for Saturday, Sunday and Monday as they work toward the deadline. The final conference committees will wrap up their work and the final budget and tax bills will need to be passed before midnight on Monday.

MLBA – 651-772-0910

Liquor Issues Update

 Minimum Wage: The Senate passed the bill providing an increase in the state’s minimum wage on Wednesday. While there was discussion and debate about the concept of a tiered wage for tipped employees, the amendment was not offered on the Senate Floor. Several Republican Senators gave impassioned speeches about the detrimental effect this bill will have on many bars and restaurant. In the end, pressure from union and labor folks was too strong and the DFL was not willing to consider the tiered wage provision. The House and Senate bills each increase the minimum wage, but at different rates:

House Senate

August 1, 2013 $8.00 $7.25

August 1, 2014 $9.00 $7.50

August 1, 2015 $9.50 $7.75

The House bill provides a further increase indexed to inflation after the 2015 increase, the Senate does not include this language. Both bills also contain language that employers must grant unpaid leave of absence for the birth or adoption of a child for up to 12 weeks (current law is six weeks of unpaid leave). A conference committee has been appointed to work out the differences between the two bills. The members of the conference committee are:

 House Conferees:

Rep. Ryan Winkler (DFL, St. Louis Park) – (651) 296-7026 rep.ryan.winkler@house.mn

Rep. Jason Metsa (DFL, Virginia) – (651) 296-0170 rep.jason.metsa@house.mn

Rep. Jeanne Poppe (DFL, Austin) – (651) 296-4193 rep.jeanne.poppe@house.mn

Senate Conferees:

Sen. Chris Eaton (DFL, Brooklyn Center)-651 296 8869 Dose not take e-mail.

Sen. Jeff Hayden (DFL, Minneapolis)-651 296 4261 sen.jeff.hayden@senate.mn

Sen. David Tlomassoni (DFL, Chisholm) 651 296 8017 sen.david.tomassoni@senate.mn.

Please contact members of the conference committee and urge them to support the Senate’s position with the lower increase and without the inflation index.

Omnibus Liquor Bill: The Governor signed the Omnibus Liquor bill into law on Tuesday, May 7th. Minnesota Laws 2013 Chapter 42 provides changes to the state’s liquor laws. The law contains a number of noncontroversial provisions, not included in the law are provisions to allow Sunday sales of liquor, expanded sale of alcohol at the University of Minnesota athletic events, or other issues opposed by the MLBA and MMBA. The House defeated an amendment to allow Sunday sales of liquor by a vote of 21-106.

Liquor Tax Increases: The decision to increase liquor taxes or not will be decided as part of the negotiations with the Governor and DFL leadership, and in the Omnibus Taxes Conference Committee. MLBA and MMBA are participating in a coalition of liquor industry representatives to oppose the tax increases. Many of you have received poster and post cards to display at your businesses. Banners and posters will be greeting the Governor and Senate Tax Committee Chairman, Sen. Rod Skoe, at the fishing opener in Park Rapids this weekend.

General Capitol Update

The Governor’s Fishing Opener has been a Minnesota tradition since 1948 and is scheduled for this weekend in the Park Rapids area. Local tourism officials, the Governor, State and local elected officials are hoping to find a spot of open water in order to “wet a line”. To kick off the fishing season, Governor Dayton is launching a “Best Minnesota Fishing Opener Photo” contest for his new Facebook cover photo. If you are out this weekend, all you need to do is submit a photo you have taken during fishing opener weekend in Minnesota. You can submit your photo entry to the Governor’s office by Friday, May 17, 2013 at dayton.media@state.mn.us Good luck!

Same-Sex Marriage: On Thursday, the Capitol was packed to the seams with proponents and opponents of the bill to allow same-sex couples to be married in Minnesota. The House of Representatives amended the bill to add the word “civil” in front of “marriage” in all instances in Minnesota law. This amendment brought additional support to the passage of the bill. After a respectful and emotional debate, the Minnesota House of Representatives approved the bill by a vote of 75-59, four Republicans voted with the majority of Democrats to pass the bill. Two Democrats voted no with the majority of Republicans. The Senate is scheduled to vote on the bill Monday, and then the bill would be sent to the Governor for his signature. If the bill is signed into law, Minnesota will be the 12th state to approve same-sex marriage.

Budget Targets:  The Governor and DFL Legislative leaders have c continued to meet throughout the week in an attempt to reach a global agreement on the tax and spending targets for the state’s budget.  They must reach this agreement before the individual tax and budget conference committees are able to resolve the differences between the various bills and send them back to the House and Senate Floors for final passage.

Outstanding Issues: In addition to the global agreement on budget targets, a number of issues will need to be resolved before the end of the session. Among the outstanding issues are:

· _Size of Income Tax Increase – Increasing income taxes will happen this session. The Governor, Senate and House all include increases in their budget but they differ on the amount.

· _Sales Taxes – The Senate extends the sales tax to a number of consumer products and services, including clothing, as a way to balance the budget and provide new funding for the next biennium. Although the Governor originally supported this concept, he has since expressed his opposition and the House does not support extending the sales tax.

· _Tobacco Taxes – The Governor, Senate and House all propose increases in the tobacco taxes. The House increases the tax to $1.60/pack and the Senate and Governor increase the tax to $0.94/pack.

· _Liquor Taxes – The House Omnibus Tax bill raises $350 million for the biennium through increased liquor taxes. The Senate has remained opposed to increasing the liquor tax and the Governor has expressed opposition, but lately has been softening his opposition.

· _Destination Medical Center – The city of Rochester and the Mayo Clinic have asked the Legislature to help fund a major expansion in the city consisting of buildings and facilities, which would include $3.5 billion in private capital. The House and Senate address the state’s contribution to this project in different ways, which will be resolved in the Omnibus Taxes Conference Committee.

· _Bonding – At the end of the week, there was no action on an Omnibus Bonding bill. The House bill still awaits action on the House Floor and the Senate Capital Investment Committee has yet to assemble a bill or pass one out of committee.

· _K-12 Education Finance Shift Payback – The House DFL campaigned on repaying the $850 million school aid shift that was borrowed from school districts in the past as a way to balance the budget. The Governor and Senate repay the shift in a future biennium. This repayment is larger than the amount proposed for new funding in education, this is a large item that needs to be resolved in order to move the education funding bills forward.

· _Stadium Funding? – Earlier this week, Governor Dayton told members of the press that he would likely bring forward a back-up funding source for the Vikings Stadium, which will be “something you’ve never imagined”. Mmmm, this should be interesting.

Legacy Funding: After previously scheduling the Legacy funding bill for a vote in the House of Representatives on April 20th, the House took another run at it on Friday. The bill was passed with few changes from the way the bill was passed out of the committee earlier in the session. The Senate Finance Subcommittee on Legacy released a bill draft on Thursday which differs considerably from the House version of the bill. The full Senate Finance committee will consider the bill on Monday and then it would go to the Senate Floor. A conference committee will need to work out the differences between the two bills.

Transportation Funding: At the end of the day on Friday, the Senate took up the Omnibus Transportation Finance bill and amended the bill to provide increased funding for highways and transit. The bill provides a 2.5-cent gas tax increase in 2013 and an additional 2.5-cent gas tax increase in 2015. The bill also includes a sales tax increase in the metropolitan area for transit services. The House Omnibus Transportation Finance bill does not include any new funding, so the differences between the bills will need to be resolved in a conference committee.

Next Week: The final seven days of session will begin on Monday. Governor Dayton and the DFL controlled House and Senate is committed to ending the session on time without the need for a Special Session. It is expected that the Legislature will work long days, every day next week as they head into the final day of session – Monday, May 20th at midnight.

MLBA:  651 772 0910

Omnibus Liquor Bill: The House took up the omnibus liquor bill this week which included mainly non-controversial provisions and changes to Minnesota’s liquor laws. Several local government provisions were included in the bill, as well as, language addressing small brewers and samples of alcohol. Not included in the bill was any language allowing expanded alcohol sales at the University of Minnesota sporting events.

The Sunday Sales amendment was offered on the House Floor by Rep. Liebling (DFL, Rochester), Rep. Kahn (DFL, Minneapolis), Rep. Dorholt (DFL, St. Cloud) and Rep. Drazkowski (R, Mazeppa). As in past years, this was a spirited debate on the House Floor. The amendment was defeated by a vote of 21-106.

The omnibus liquor bill was re-passed by the Senate and is headed to the Governor for his signature.

Minimum Wage: After an emotional and spirited debate, the House passed the bill to increase the state’s minimum wage rate on Friday. The bill provides that the minimum wage will increase to $8.00/hour on August 1, 2013, increasing to $9.00/hour on August 1, 2014, and $9.50/hour by August 1, 2015 for large employers (those with annual gross sales over $500,000). Small employers would be required to pay increased wages at the rate of $7.00/hour, $8.00/hour, and $8.50/hour by August 1, 2015. The bill also includes a provision to increase the minimum wage according to inflation annually beginning in November, 2015.

An amendment was offered to provide for a tier-wage or tip credit. The amendment, offered by Rep. Andrea Kieffer (R, Woodbury) a tipped employee must be paid a wage equal to $7.25 per hour so that the wage and gratuities received averages at least $12 per hour for the pay period. If the $7.25 and gratuities do not equal $12 per hour, then the employee must be paid the higher minimum wage. The amendment failed on a tie-vote of 65-65.

The final bill was approved on a vote of 68-62. The Senate will likely consider the bill in the next two weeks. Please contact Senate and House members urging them to support the tiered wage for tipped employees. The votes are very close in the Senate, as they were in the House.

Liquor Taxes: The Senate omnibus tax bill was passed this week on the Senate Floor. Unlike the House omnibus tax bill, an increase in liquor taxes is not included in the Senate bill. If liquor taxes are included in the final tax bill will be decided through negotiations between the Governor, Senate and House leadership. We continue to participate in a coalition to oppose the increased liquor taxes. We encourage you to call members of the House and Senate, and to encourage your customers to also make calls.

General Capitol Update

It was a record setting week in the state – at least when it comes to May snowfalls in Minnesota. Not a record anyone was hoping to set. A sure sign of Spring is the number of yellow school buses lined up in front of the Capitol is growing each day and the halls are crowded with excited school students taking tours of the Capitol. It is always great to hear the ooohs and ahhhs as they enter the House or Senate Gallery and get a look at the Legislature down below.

Taxes: The Senate passed the omnibus tax bill on Monday, after a small hiccup and initial defeat of the bill. The Senate bill increases income taxes, lowers the sales tax rate and extends it to clothing and other currently exempt items, and increases the tobacco tax. When the vote was taken on the bill, it first was defeated by a vote of 32-34. The Senate DFL took an immediate recess to caucus; they returned to the Floor and reconsidered the vote. The omnibus tax bill then passed 35-31. Passage of the bill set the stage for the omnibus tax conference committee to begin working to resolve the differences between the two bills. The first meeting of the conference committee was held on Wednesday night and several provisions were adopted. The conference committee will meet over the weekend, but major decisions are dependent upon agreements being reached between the Governor and leadership of the House and Senate. The two bills are very different and the obstacles will be great to resolve.

Budget: The majority of the budget bills have passed the House and Senate and conference committees have been appointed. The major conference committees are: omnibus health and human services finance; omnibus K-12 education finance; omnibus higher education finance; omnibus environment, natural resources and agriculture finance; omnibus jobs, commerce and housing finance; omnibus state government finance; and omnibus public safety finance. The finance conference committees must wait for a budget target before making final decisions, but work is progressing on adopting policy provisions and discussing the differences between the House and Senate bills.

Bonding, Legacy & Transportation: While there were a couple of committee hearings in the Senate on some of the Legacy funding items, no action was taken in putting together a Legacy funding bill this week. The House Legacy funding bill continues to sit on the House Floor awaiting movement on the more controversial issues in the bill before a vote is taken. The Senate Capital Investment committee held a hearing this week regarding Department of Corrections and Department of Veterans Affairs bonding requests. The committee will hold additional hearings next week. An omnibus bonding bill has not been assembled in the Senate and the House bill is awaiting action on the House Floor. The omnibus transportation funding bill is stalled in the Senate where a hearing scheduled for Thursday was cancelled. The House and Senate Transportation committee chairs had both hoped to assemble funding bills which included additional funding for roads and transit. However, the Governor has stated his strong opposition to a gas tax increase. The House omnibus transportation bill was passed at a base level of funding with no increases. However, the Senate omnibus transportation bill contains increased funding and is awaiting action in the Senate taxes committee where it is sitting.

Gun Control: Earlier this session, both the House and Senate held hours and days of committee hearings, taking testimony from proponents and opponents on gun control issues. The hearings demonstrated the high level of controversy on this issue that broke across party lines. Earlier this week, the Speaker of the House stated that the issue is done for the session and there will be no action in the Minnesota House to implement any gun control measures. This was met with extreme disappointment by the bill authors who had hoped to implement greater background checks, close “loopholes” and pass other gun control measures this session.

Next Week: When the Legislature reconvenes on Monday, they will have exactly two weeks left to finish the work of the session. By law, the session must end on Monday, May 20th. So, the Governor and legislative leaders will continue to negotiate the overall budget and tax targets, and the House and Senate conference committees will continue meeting to resolve the differences in the omnibus budget bills. And, hopefully, there will be no more snow!

To that end, a liquor coalition of the Minnesota liquor industry has commenced a massive public relations campaign designed to inform the public of the negative consequences of this bill.  Your local beer distributor will soon be delivering to your store a poster (to be prominently displayed in your business), a packet of flyers (to be distributed to your customers), and a packet of postcards to the Governor (to be filled out by your customers, dropped in a box, picked up by your local beer distributors, and delivered to the Governor).

Please make sure to give each of your customers a copy of the flyer and encourage each of your customers to fill out the postcard.  It only takes a few seconds.  We would also encourage you and your employees to immediately contact your legislators and the Governor to urge them to oppose this Bill.

Omnibus Liquor Bill: There was no action on the Omnibus Liquor bills this week. The bill has already passed the Senate and it is possible it will be considered on the House Floor next week.

Minimum Wage: There was no action in either the House or Senate on the minimum wage bills this week. The House bill, HF 92, proposes an increase to the minimum wage which would reach a top level of $9.95/hour by 2015. The Senate bill, SF 3, proposes an increase to $7.75/hour by 2015. Labor interests are pushing for a wage of $10.55/hour. This week the Senate Majority Leader, Sen. Tom Bakk, spoke to Minnesota Public Radio and it was reported that he stated a minimum wage increase will pass this year, but it will not be as high as the House bill or as the Labor request. We continue to work with other interested groups, including Hospitality Minnesota, to urge legislators to support a tiered wage for tipped employees. These policy bills have been put off as the House and Senate were working on the budget bills, but are likely to be considered in the next week or two.

Liquor Taxes: The House Omnibus Tax bill includes a significant increase in the tax on alcohol, raising over $350 million during the two-year budget biennium. The Senate tax bill does not raise the alcohol tax. We are participating in a coalition of interested parties to oppose the increase. A public relations campaign has been initiated which includes radio and social media advertising. Posters and postcards are being delivered to retail locations. These will then be delivered to the legislature.

General Legislative Update

Countdown: The Legislature continues to work toward the May 20th deadline for the end of session. This week Governor Dayton held a closed door, no-staff meeting with House Speaker Paul Thissen and Senate Majority Leader Tom Bakk to discuss the broad budget and tax issues that need to be resolved in order for the session to conclude on time. One of the first items that will need to be resolved is the size and scope of any tax increases. No decisions were reached at this meeting, but it was the first step in the process.

Taxes: The House of Representatives passed the omnibus tax bill on Wednesday by a vote of 69-64, all Republicans and four House DFL freshmen voted no on the bill. The vote on the bill came after nine hours of debate where few amendments were offered or adopted, but the debate on the final bill passage took many hours. The Senate DFL majority tax plan was passed out of committee this week and will be considered on the Senate Floor next week. The House, Senate and Governor all differ on their approach to generating revenue and a tax plan. The following chart is a breakdown of the different proposals:

K-12 Education Finance: The House and Senate approved budget bills to fund K-12 education this week. While there are differences between the two bills, both bodies provide funding for all-day kindergarten, and add funding to the state’s general education funding formula – although at significantly different levels. Repayment of the K-12 education funding shift is included in the House bill, but the Senate delays the repayment. Several House Republicans joined DFLers in voting for the bill; in the Senate, a couple of DFLers voted against the bill together with all Senate Republicans.

Higher Education Funding: The House passed the omnibus higher education finance bill on Thursday with praise for the committee chairman, Rep. Gene Pelowski (DFL, Winona), who held a series of hearings this session which scrutinized both public higher education systems. The bill funds the state’s public universities and colleges at a level which will freeze tuition at those institutions and require the institutions to submit detailed budget reports. The House bill provides that approximately 80% of the funding will go directly to students. The Senate passed its omnibus higher education finance bill last week which also increases funding to both institutions, but only freezes tuition at the University of Minnesota not at the MnSCU colleges. These differences will be worked out by the conference committee.

Bonding and Legacy Funding: Two bills that attract a lot of attention from the lobbyists and others who spend time at the Capitol are the omnibus bonding bill and the legacy funding bill. Both of these bills provide funding for many specific projects, all across the state of Minnesota. The legacy bill includes funding for the outdoors, clean water, parks and trails, and arts and culture. The omnibus bonding bill funds projects for state agencies, as well as, many local projects including civic centers, cultural projects, waste water improvements, historical projects, and higher education facilities. Both of these bills are currently stalled in the House of Representatives. The omnibus bonding bill is the only bill that the DFL majority cannot pass on its own, the bill requires a 3/5th majority to pass – or 81 votes. The DFL has a majority of 73, so eight Republican votes are needed for passage. The Senate is still working on assembling the legacy and bonding bills through the committee process. So, the wait continues.

Next Week: The Senate will take up the omnibus tax and omnibus transportation bills next week, completing the work on the budget bills. The majority of work will then transition to the joint House and Senate conference committees to resolve the differences between the bills. The Governor and legislative leaders will continue meeting to set targets for the tax and budget bills.

Omnibus Liquor Bill: The Omnibus Liquor bill was passed on the Senate Floor on Tuesday, April 16th. The bill, SF 541 (Sen. Metzen) contains a number of non-controversial provisions that modify the state’s liquor laws. The bill does not contain provisions that have that have been of concern to the MMBA or MLBA. The Sunday Sales issue was not offered as an amendment on the Senate Floor and is not included in the bill. The bill will be considered on the House Floor within the next two weeks.

Liquor Tax Increases: The House Taxes Committee has included a sizeable increase on liquor taxes in the Omnibus Tax bill which would raise over $300 million in the next two years. The bill will be headed to the House Floor next week. While the proposed increased has been portrayed as an increase of 7-cents per drink, it is actually a 600% increase in the taxes on beer. Alcohol taxes are among the most regressive taxes and Minnesota’s current liquor taxes are the highest in the region and among the highest in the nation. The MLBA and MMBA are part of a coalition of representatives from all three-tiers of the alcohol system. This includes the brewers – both large and small, beer wholesalers, liquor distributors, Teamsters, retailers, hospitality industry, and others. We have developed a grass roots, consumer outreach, media and lobbying plan with the members of the coalition. The Senate Omnibus Tax bill does not contain an increase in liquor taxes.

Minimum Wage: The bills to increase the minimum wage continue to sit on the House and Senate Floors, no action was taken on those bills this week. The bills propose different rates of increase in each body, but neither provides for a tiered wage or acknowledges a tip credit. We are working together with members of Hospitality Minnesota and the Minnesota Restaurant Association to urge legislators to support an amendment on this issue.

General Legislative Update

Boston Marathon: The tragic bombing at the Boston Marathon on Monday touched the Minnesota Legislature as people at the Capitol quickly learned that Senator Scott Dibble and former state Representative Larry Hosch had traveled to Boston to run the marathon. They both finished before the bombs exploded and on Tuesday, when he returned, Senator Dibble asked for a point of personal privilege on the Senate Floor to talk about his experience, and both the House and Senate took a moment of silence to honor and respect all those affected by the tragedy.

Third Committee Deadline: At midnight on Friday, April 19th, when the third committee deadline will have passed, the Legislature will have reached another mile-marker of the 2013 legislative session. This means that committees must act favorable on major finance and appropriation bills by this date. The deadline does not apply to the House and Senate committees on Capital Investment, Ways and Means or Finance, and Taxes.

Budget Bills: This past week the House and Senate began debating the first of the major budget bills on the Floor of each body and continued the work of assembling other bills in committees. The House has passed the Omnibus Jobs, Commerce and Housing finance bill (HF 729), the Omnibus Environment, Natural Resources and Agriculture Finance bill (HF 976), the Omnibus Public Safety finance bill (SF 671) and the Omnibus Judiciary finance and policy bill (HF 1160). The Senate has passed the Omnibus State Government finance (SF 1589) the Omnibus Higher Education finance bill (SF 1236) and the Omnibus Environment, Economic Development and Agriculture finance bill (SF 1607). The House and Senate will both be in session on Saturday, April 20th to continue passing omnibus budget and finance bills.

Transportation Funding: When Governor Dayton expressed his opposition to a gas tax increase last week, it appeared that any prospect of increased funding for highways or transit was done for the session. This week, new life entered the transportation funding world as the Senate put forth a funding bill which proposes to reduce the current gas tax by 6-cents and impose a gross receipts tax of 5.5% on gas at the wholesale level. These changes would provide a net $225 million increase in transportation funding. Proceeds of the tax increase would be used to fund the newly created “Corridors of Commerce” highway improvement plan which addressed highway needs on roads where economic competitiveness can be measured, along with other criteria. The bill also provides a ½ cent sales tax increase in the metropolitan area for transit, and allows counties to impose a wheelage tax. The House transportation funding bill does not include the gross receipts sales tax on gasoline.

Taxes: The House DFL laid out their tax plan for the session and the omnibus tax bill was passed by the House Taxes committee on Wednesday. The bill includes a 0.5% surcharge on the top earners in the state (income above $500,000) which would raise $1.2 billion in tax years 2013 and 2014. The surcharge would “blink off” when the remaining $850 million on the school aid shift is paid back. The state income tax is permanently increased on joint filers earning $400,000 or more and single filers earning $226,000 or more. The bill also includes increases on tobacco and alcohol taxes, a sales tax on luxury boxes and suites at sporting events, and a tax on sports memorabilia. The bill differs from the Senate omnibus tax bill which proposed a reduction in the state sales tax rate and an expansion of those items which would be subject to the sales tax. The omnibus tax bills will be debated on the House and Senate Floors next week.

Public Official Compensation: The Senate Omnibus State Government Finance bill contains the recommendations from the citizen-legislator Compensation Council to increase legislator pay to 33% of the governor’s salary. The annual salary for legislators would increase from $31,140 to $40,890. The governor’s salary would increase from $120,000 to $128,000. If this provisions remains in the final legislation, this would be the first increase in legislator pay since 1999. The pay increase would not take effect until 2015 – after the current legislative session ends. The Minnesota Constitution prohibits any pay increases from taking effect until the next legislative session. As this point, the House had not included this provision in any omnibus budget bill.

Next Week: Most budget bills will be passed off the House and Senate Floors by the end of next week, setting up the process for conference committees to be appointed and begin the work of resolving the differences in the bills that have been passed by both bodies. There are four weeks left before the Constitutionally mandated last day of session – Monday, May 20, 2013.

If you have questions or comments, please call us at 651 772 0910.

 Liquor Issues Update

Sunday Sales: The House Commerce Committee held an informational hearing last week on two bills relating to allowing Sunday sales of liquor. The first bill, HF 521 (Kahn), would allow liquor stores to be open all days expect for on Christmas Day. The second, HF 912 (Garofalo) would allow liquor stores to be open on the Sunday of the 2014 Super Bowl – February 2, 2014. Testifying in opposition to the bill were MMBA and MLBA lobbyist Joe Bagnoli and MMBA Board Member and Lakeville Liquor store manager, Brenda Visnovec. The Teamsters and Minnesota Beer Wholesalers Association also testified in opposition. Testifying in support of the bill was a liquor store owner from the city of Wanamingo. A vote was not taken on the bill, but it is likely that when the omnibus liquor bill is considered on the House Floor an amendment will be offered and put up for a vote.

Minimum Wage: The House and Senate committees have both passed bills through the committee process to the Floor of each body. We continue to work with legislators and Hospitality Minnesota to gain support for a tiered wage or tip credit proposal.

Liquor Taxes: On Friday, the Senate Taxes Committee held a hearing on the bill to increase liquor taxes and to dedicate the receipts of the taxes to programs addressing chemical dependency.  Testifying in opposition to the bill were:  MLBA Board member and owner of the Loon Café in Minneapolis, Tim Mahoney; MLBA and MMBA lobbyist, Joe Bagnoli; Teamsters representative; Dalheimer Distributors; Capitol Beverage Sales; Minnesota Restaurant Association; Minnesota Grape Growers Association; and the brewers.  The majority of the testimony in support of the bill was from social agency and county agencies addressing issues related to chemical dependency.  No vote on the bill was taken.

General Legislative Update

The House and Senate budget committees and divisions held long hearings, many into the night, as they worked to assemble budget bills. The third committee deadline, when all budget bills must be through the committee process looms, at the end of next week on Friday, April 19th.

Taxes: On Thursday, the Senate Tax Reform division rolled out a major tax proposal, which includes many of the provisions originally proposed by Governor Dayton, but later withdrawn by the Governor. Included in the Senate proposal is a move to reduce the state’s general sales tax rate to 5.677%, down from the current 6.5% rate. The bill also reduces the Constitutional Amendment sales tax rate from .375% to .323%. Making the overall sales tax rate 6.0%, down from 6.875%. The Senate tax plan would tax clothing over $100, and expand the sales tax to tattoos, over-the-counter drugs, dance lessons and other things. Although much of the Senate’s proposal was originally included in the Governor’s budget bill, the Governor’s office stated that he is not interested in supporting the Senate’s sales tax proposal. On the same day the Senate released this tax plan, the Minnesota Management and Budget department announced that the state collected 6.0% – or $145 million more than projected in the February Forecast. Receipts from each of the three major taxes exceeded projections. This announcement had Republicans in the House and Senate questioning the need for tax increases in the omnibus budget bills. The House Taxes committee is expected to release its omnibus tax bill next week.

Stadium Financing: Just when it seemed like the debate over a Vikings stadium was done – it has resurfaced at the Capital with the focus on the funding source. The 2012 legislature passed the bill to build a new stadium for the Minnesota Vikings and provided that the revenue source for the stadium would be implementation of electronic pull-tabs, to be operated by bars and charitable gaming organizations. However, the actual revenues that have been generated are falling far below the projections. The first payments due by the state are scheduled for August 2013. Many legislators are expressing concerns that if electronic pull-tab revenues do not pick-up, the state’s general fund will end up paying for the stadium. As a result, a proposal has surfaced this week to implement a sales tax on professional sports memorabilia, jerseys, etc. and a sales tax on luxury box suites. These new taxes would be used to cover the gap in the stadium funding. The proposals would be included in an omnibus tax bill at some point this session. The major league sports teams expressed opposition to this proposal saying that their fans should not be charged for a new Vikings stadium.

Transportation funding: The House and Senate Transportation Finance committee chair’s (Representative Frank Hornstein and Senator Scott Dibble) were preparing to release their plans for increased transportation funding this week when Governor Dayton threw them for a loop. During a press conference, Governor Dayton was asked a question about his support for a gas tax increase. He replied that he does not support a gas tax increase and that he believes the public also does not support an increase. This created a set-back for the House and Senate Transportation committee chairmen as they were both planning to roll-out transportation funding bills to include an increase in the gas tax for highway projects and an increase in the sales tax for transit funding. As a result, both the House and Senate have proposed omnibus transportation bills with a “status quo” level of funding. At the committee hearings on these bills, a long line of both highway funding and transit funding advocates lined up to testify and express their disappointment in the lack of new and increased funding for transportation.

Next Week: The House and Senate are expected to begin passing the omnibus budget bills on the Floor’s of each body next week. Committee debate and work will continue on other budget bills and the House is expected to unveil its tax proposal. A Saturday Floor session is being rumored for the next of next week.

If you have questions or comments, please call us at 651 772 0910

MLBA  Capitol Update for March 22, 2013

Second Committee Deadline: The second policy committee deadline is at midnight on Friday, March 22nd. After this date, a bill that has not been passed by the appropriate policy committees in the House and Senate are considered to have not made the committee deadline timeframe. In order for a bill that missed deadline to more forward, it would need to be considered by the House or Senate Rules Committee. This is a way to “thin out” the large number of bills that are introduced each session, but may not have legislative support.

MNsure: The Legislature completed it’s work on the bill to establish a Minnesota health insurance exchange and Governor Dayton signed the bill into law on Wednesday. That same day, it was announced that the health insurance exchange will be branded as “MNsure”. By April 30, the Governor will appoint six MNsure board members to serve with Department of Human Services Commissioner Lucinda Jesson. That will be done through an open application process. Insurance providers will begin placing plans on the exchange website beginning in October, with purchasing set to begin Jan. 1, 2014. Up to 1.3 million residents are expected to purchase insurance through MNsure. The bill passed along mostly party lines – Democrats supporting the bill and Republicans opposing the bill, one House DFL member voted against the bill.

House and Senate DFL Budget Targets: The House and Senate DFL majorities released budget targets for the individual budget committees to follow when assembling the omnibus budget bills. Spending in the current budget ending June 30 is slightly more than $35 billion. The House proposal comes in slightly less than $38 billion while the Senate just tops that figure. The governor’s plan falls in between. The House budget targets propose to add an income tax surcharge on the top income earners and to use those funds to pay back the K-12 education finance shift. The Governor and Senate DFL propose to pay this back in the next biennium. The House and Senate both propose funding for all-day kindergarten programs, and propose additional funding for jobs and economic development. The House and Senate DFL both propose cutting spending on health and human services programs by $150 million. And, both the House and Senate provide debt service for a bonding bill in the range of $750 – $800 million. The details on the budget and targets will be worked out in committees over the next several weeks. The Speaker of the House anticipates that all budget bills will be on the House Floor at the end of April.

High Profile Issues: A number of high profile issues are continuing to work through the committee process in the House and Senate. Among these issues are – funding for a Mayo Clinic/Rochester major expansion, legislation to unionize child care providers, bills addressing school bullying policies, gun control and background check legislation, a re-write of the state’s local government aid (LGA) funding formula to cities, legislation relating to frac sand mining and others. Work on these bills will continue following the legislative break in the first weeks of April.

Next Week: The Legislature will be taking a recess for the Passover and Easter holidays from Friday, March 22 until Tuesday, April 2 at 12:00 p.m.. There will be no Capitol Update Report during the legislative break. When the Legislature returns, the House and Senate budget and finance committees will begin putting together the omnibus budget bills.

Liquor Issues Update, March 15, 2013

Omnibus Liquor Bills - The House and Senate Commerce Committees put together their omnibus liquor bills this past week. The bills are very similar, each bill containing a few additional provisions which are not in the other bill.

HF 746 (Atkins) & SF 541 (Metzen) Omnibus Liquor Bills Identical Provisions:

· _Tap Rooms – Clarifies that cities with municipal liquor operations may issue a tap room license to a brewer.

· _Microdistillery Samples – allows a microdistillery to provide samples of products not to exceed 15 milliliters per person

· _Small Brewers – Allows small brewers who brew less than 20,000 barrels annually to sell not more than 500 barrels off-sale annually in growlers. The previous production cap was 3,500 barrels. Also lowers the self-distribution cap from 25,000 to 20,000 barrels brewed annually.

· _Malt Liquor Educator License – creates a malt liquor educator license modeled after the wine educator license that was created in 2012.

· _Malt Liquor Tastings – allows a charitable, religious or other nonprofit organization to conduct malt liquor tastings in the same manner that current law allows wine tastings.

· _Twin Cities in Motion – technical change in current law which allows a temporary on-sale liquor license for the Twin Cities Marathon, Inc. The name of the organization has changed to Twin Cities in Motion.

• · _Valley Fair – allows the city of Shakopee to issue an on-sale liquor license to Valley Fair.

· _Lowertown Regional Ballpark – allows the city of St. Paul to issue an on-sale liquor license to the St. Paul Saints Baseball Club.

House bill only –

· _Wheeler Field – allows the city of Duluth to issue an on-sale 3.2 malt liquor license to Wheeler Field, a softball and athletic events facility.

Senate bill only –

· _Winnebago Beer Festival – extends the sunset by one year on the special provisions for the Winnebago Beer Festival to December 31, 2013.

· _Sake Brewpup – Clarifies that a licensed brewpub producing sake as of the effective date of the bill and licensed by the city of Minneapolis, may sell growlers off-sale. Requires Minneapolis City Council approval.

What is NOT in the bill?

· _Sunday Sales of alcohol

· _Allowing microdistilleries to sell bottles off-sale or to sell products on-sale in a “tap room”

· _Primary Source

· _Wine in Grocery

· _Shipping beer directly to consumers from out-of-state breweries

· _Expanded sales of alcohol at University of Minnesota venues

Minimum Wage – The minimum wage increase (HF 92, Winkler) passed out of the House Commerce Committee on a party line vote. An amendment was offered that lowered the proposed wage increase from $10.55 to $9.95 per hour by 2015 with an annual increase indexed according to inflation. The Senate Jobs Committee passed two minimum wage bills (SF 641, Sparks and SF 3, Eaton). SF 641 would increase the minimum wage to federal conformity, $7.25 per hour, with no indexing to inflation rates. SF 3 increases the minimum wage to $7.75 per hour, does not include a link to inflation and acknowledges a youth wage. These bills have

General Capitol Update Report

First Policy Committee Deadline - The first policy committee deadline is midnight on Friday, March 15. All policy related bills must have been passed by the relevant policy committees is either the House or the Senate by this deadline. As a result, the committee schedules

Governor’s Supplemental Budget - The Governor’s Supplemental Budget recommendations were released on Thursday and included several revisions relating to his previous tax recommendations. In general, the Governor has withdrawn his recommendation to expand the sales tax base to include business to business services and some consumer services. He also withdrew the proposal to extend the sales tax to clothing. Additionally, he dropped his proposed property tax refund to all homeowners and withdrew the proposed corporate tax rate reduction. The Governor maintained his proposal to raise the income tax on the top 2% of earners and to raise taxes on cigarettes. The Governor’s supplemental budget recommendation also contains debt service for a $750 million bonding bill. The Governor will release a list of bonding priorities in the next two or three weeks.

Health Care Exchange – The House/Senate Conference Committee finished its work to resolve the differences between the two versions of the bill to create a Minnesota Health Care Exchange late on Wednesday night. The House debated final passage of the bill into the morning on Thursday night (Friday morning). The Senate will consider the bill on Monday and after passage it will be delivered to the Governor’s office. Governor Dayton has said he will “enthusiastically” sign the bill into law.

Same-Sex Marriage Bills - The House Civil Law committee and the Senate Judiciary Committee both considered bills to allow same-sex marriage in Minnesota. The bills were passed by both committees along straight party lines, Democrats supporting and Republicans opposing. The bills were passed to the House and Senate Floors. There was a small dust-up on the Senate Floor on a procedural motion to refuse to adopt the committee report and to adopt the committee report. These motions fell along mostly party lines with one Republican joining the majority of Democrats and three Democrats joining the majority of Republicans. This is a likely indication of how the final passage vote will go on this bill in the Senate.

“Dream Act” – The Senate Higher Education Committee took the first step in moving forward the controversial bill known as the “Dream Act” and also called the “Prosperity Act”. The bill would make undocumented students eligible for state financial aid, in-state tuition, and private scholarships. Students would be required to attend a Minnesota high school for at least three years and graduate, file an affidavit with their college or university stating that they will apply to change their immigration status as soon as they are eligible. The bill has yet to be heard in the House committee.

Procedural Motions – The results of the 2012 November general elections provided a DFL majority in the Minnesota House and Senate, with DFL Governor Dayton. As a result, the Republican minorities are exercising their right to try and slow down the flow of business in the House and Senate. They are doing this by offering a variety of procedural motions and objections to standard committee reports, often for about an hour or so each session day. This could make long sessions days even longer.

Next Week – The second policy committee deadline is Friday, March 22 at 11:59 p.m.. Following this date, bills that only address policy issues with no fiscal implications are considered “dead” for the session if they have not passed through the committee process. After this point, work on assembling the budget bills will begin in earnest.