Thread by @uptakemn

House Ways and Means Committee will be meeting at 10:30 am to review American Rescue Plan Act of 2021 expenditures for Minnesota. Discussing HF1203 (Wolgamott), HF39 (Carlson) and HF7 (Olson, L.).

You may also watch along here if you'd like:

Meeting is about to begin. House Ways and Means Committee

Chair: Rep. Rena Moran (65A)
Vice Chair: Rep. Liz Olson (07B)

Taking roll call.

Quorum present. Minutes from March 17th meeting approved.

Chair Rena Moran: today's meeting will be about funds expected to be received from American Rescue Plan Act just passed in US Congress.

"We're still learning indicators about what it means for the American Rescue Plan for MN , we don't have all those answers right now." - Chair Moran

State Budget Director at Management and Budget is presenting: "we are at the very early stages, we don't yet have guidance from federal govt about much of the bill. I know there are questions, we will do our best to provide answers."

Our goal is to provide overview of types of funds available via American Rescue Plan. We sent to the legislature on Friday a 20-day advisory commission request to review the federal funds, highlighting where we have estimates of funding we will receive for leg review.

Estimates of MN allocations based on Federal Funds Information for States analysis. State fiscal relief fund: $2.5 billion, Local fiscal relief fund $2.1 billion, Capital projects $178 million.

Total of State and Local Fiscal Recovery funds - $4.88 billion (Minnesota)

Available uses: respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses and nonprofits or aid to impacted industries such as tourism+

Provide premium pay for essential govt workers. Replace revenue losses due to the COVID public health emergency relative to revenues collected in the most recent full fiscal year of the govt. Investments necessary in water, sewer, broadband

Restriction of use: state territory shall not use the funds provided under this section to directly or indirectly offset a reduction in the net tax revenue.

There's not clarity about what "indirectly offset a reduction" means.

Restriction on funds being deposited in any pension funds. Dollars will be available 60 days after state certifies.

Funding is for "critical capital projects directly enabling work, education and health monitoring."

MDH estimates Minnesota will receive $85 million for vaccination funds, $751 million for testing and $17.5 million for genomic sequencing. These are estimates based on previous funding but not exact or yet confirmed by federal gov't

State administered:
-emergency rental assistance: MHFA estimates $150 million state/$50 million local
-obligated by 10/1/2022 but available til 2025

Homelessness assistance program estimate of $31 million

Homeowner assistance fund estimate $55 million

State small business credit initiative, with portion allocated to support shoe owned by disadvantaged communities. est $50 million.

Est $3.5 mill for a navigator program to assist eligible business and improve access to assistance programs .
^Not all of this will be state mngd

Federally administered: FFIS estimates $6.3 billion will flow to people in MN via stimulus checks. Additional relief through tax changes.

Timeline for US Treasury distribution to states is unknown, but they must do so within 60 days of state certification. We have no Treasury guidance available now. There will be new reporting requirements which'll require new processes + procedures to ensure we report accurately

to federal govt.

Rep Pat Garofalo (R 58B) - You list a total of $8 billion. the LAC process is advisory, it's more notice than authorization. Of this amount, how much will require authorization from the legislature? What does the Walz admin believe needs to be authorized by the legislature?

Britta Reitan, of MN Management and Budget - there is a 20 day process. The LAC process provides authority if these funds are put on hold, the 20 day process allows the legislature to act as a full body on those funds and put funds on hold for review and put it for appropriation

if that's the direction leg chooses to go. It creates a window of time btwn now and legislation where there is time to allocate those funds thru the legislature.

Rep Garofalo - I appreciate that (repeats the question again, twice). How much does the Walz administration believe it needs legislative authorization?

Budget rep provides the same response.

Rep Garofalo: I appreciate that and mean this respectfully, I'd like you to say then at the end of legislative session this administration is planning on spending the money without legislative authorization.

Chair Moran - we're not gonna go do this circle.

Chair Moran: What I'm hearing is it's an opportunity to do this work in partnership that we have a role to play in allocating these dollars and if that doesn't happen during regular session, at end of session Governor has power to disperse this money as he chooses, but we...

..don't want that to happen, we want to be part of this process.

Rep Garofalo- He (governor) does NOT have the power to do that. That's the opinion of this admin, that's not how I interpret the reading of the statute. We need to know the administration's position on this issue+

$8 billion in the absence of legislative authority, they want to do that with only the guidance of federal law. That's just what they said, they're using the LAC process which is advisory, and at the end of session, the Governor can spend this money. -Garofalo

Reitan - It has been now submitted thru the 20 day process, that starts the process during leg session. For federal funds following leg session, where the specific purpose of those dollars were clear thru federal law, those can be spent...

And for flexible funds, we'd come back thru legislature thru 10 day process.
We'd continue to use LAC process if these are not appropriated thru the legislative process.

Rep Garofalo: this process acts the governor to act unilaterally, is that correct?

Reitan - at the conclusion of the legislative session, we'd act on the proposals submitted thru the 20 day process. Where we need to clarify purpose we'd do so thru 10 day process, which to your point is advisory.

Rep Garofalo: I'm just wondering if there's any DFLers who have any problem with one dude who's deciding how to spend $8 billion? Or maybe it's just a Republican thing? Any DFLers who have a concern about this?

Chair Moran: I think it'd be helpful if you do [express that you do] not agree with Reitan's response. There's opportunity for you also to go into a meeting with the Governor about the LAC process. She's responding to your questions as best as she can.

Garofalo: Reitan has answered my questions. I have no complaints about her, my question is to DFLers on the committee.

Rep Moran: we're not going to respond to that question.

Rep Tina Liebling (DFL 26A) - The impact on insurance premiums. As we know now there are federal subsidies that help pay for insurance premiums for policies purchased on MNSure, they're sliding scale and go up to 400% of federal poverty level...

Members know that people with higher incomes are often struggling to pay premiums because they're high. Federal bill fixes the problem at least for 2 years. Do you have that information?

Reitan - I'm not prepared to speak on that in detail, we can find someone who has depth of knowledge in that area and can get those answers for you.

Rep Liebling-the federal bill caps premiums at 8.5% of a person's income. This would be so helpful for people struggling w/ this

Rep John Petersburg (R 24A) - I'm still confused about the answers we got for Rep Garofalo's questions. It appears to me that all these funds coming to MN and legislatures' responsibility is only to project itself to these decisions if it chooses to but otherwise..

..otherwise, it's up to discretion for the agencies who have applied for $. Are any of these funds coming to the state that require legislative approval before they're spent? It sounds like if we don't do anything positively they'll get spent according to the whim of the agencies

Reitan - MN Statute 303005 addresses the receipt and spending of federal dollars. LAC process is in place for state agencies to provide info about the federal funds, it's different when the legislature is in session which is why we made sure we got info to the legislature by the

...by the 20 days in advance of the 3rd deadline (statutory reference). We got the 20 day request in (last) Friday. What that does is put the federal funds into the legislative process and legislature can request to put those funds on hold during session and+

weigh in on the expenditure of those funds during the legislative process. Can be done thru passing language that directs the spending of those dollars.

Rep Petersburg: Just us putting it on hold doesn't change where it gets spent, correct?

Reitan: putting it on hold keeps it on hold through session so legislature has time to act.

Reitan: Federal Fund Statute in MN says the federal funds will be spent unless the legislature acts to either prevent that spending, or to put some specifications around that spending during the legislative process.

Rep Petersburg: I guess that is the answer we have. It's like the emergency orders, the power is there until we take it away, the spending is there unless we decide to take it away, which eliminates and reduces our ability to have real input b/c if we have issues that are still

disagreed by end of session it'll just get spent anyway.

Rep Rick Hansen DFL 52A - Would bonding amount be applicable to natural resources betterment of buildings for helping with mitigating any disease transmissions? Ex: if a state park building's been shuttered and needs capital improvements, would those funds be eligible for that?

Reitan - I can't say definitively yes, b/c all we have in terms of those capital projects dollars is what's written in the bill, a limited number of words to define what those dollars can be used for. But if improving buildings to make them more safe in terms of disease

transmission that seems in line with intended purpose of funds.

Rep Hansen - on aid to museums and shuttered venues:

1. In last year's pandemic response there was money provided to MN Zoo and am wondering if it's eligible for this money?

2. The Science Museum - was unable to get some of the aid the zoo had, but we had state obligation to the museum and they've been denied their insurance payment for operating costs so they're in dire need for funds. Are they eligible?

Reitan - You'll see from the LAC submission the Zoo intends to seek the shuttered venue funding, they would be eligible and likely same for Science museum but the latter is administered thru federal govt so they have to apply via federal govt.

Rep Mohamud Noor (DFL 60B) - Director Reitan, you addressed nontaxable income for UI. We've talked about the PPP, the two programs were Restaurant Revitalization Fund, and Save Our Stages. Those are listed as nontaxable grants. How are we addressing that in our budget process?

Reitan - You're saying they're nontaxable at federal level?

Rep Noor- correct.

Reitan - I don't have that level of detail, would have to direct you to Dept of Revenue in terms of what's needed to make that true @ state level as well.

Reitan - There may be some conformity language need to be put in place to make that happen.

Rep Tim Miller (R 17A) - Question for Chair Moran - I have concerns and have had concerns all session about legislative involvement. Do we have a commitment from you to ensure leg involvement in the spending of this $8 million?

Rep Miller (cont) - I'm hearing that the House and Senate can reach out (to the Governor) and say we're going to get control over this, so can we get that commitment from you (Chair Moran) that we're going to be doing that this session?

Chair Moran - I believe it's important for legislature to be involved in spending the session. Really important role so you have my commitment to whatever extent that is, that my obligation and responsibility is to us as a legislative body that we're a part of that process.

Rep Miller - My concern is that it is $8 billion. Spending constitutionally originates thru the House. I know with these specific circumstance, where that money is coming from, it may not be the case. But with $8b I hope this goes thru the legislative process--ie,

first the House then the Senate, then an agreement with the Governor.

I hope we can do that as a legislature, even talking bipartisan, we say the legislature needs to be involved the way it should be.

This is an opportunity for us to do it, I hope we can get a commitment from the majority leadership in the House.

Rep Jamie Becker Finn (DFL 42B) - Want to clarify we keep saying '$8 billion' but the slides that were shown to us show a lot of those funds are going directly to cities and counties, just wondering if Director Reitan could clarify.

Reitan: Management & Budget - Funds that'll go directly to local govt, in many cases we don't have control of that. Over $2 billion does flow to locals. The funding that flows in transit $ goes to Met Council, not thru State Treasury. Same with higher ed, $ direct to institutions

Chair Moran - I hope members, if you have further questions, will follow up w/our nonpartisan staff or dept. The budget resolution we're considering tmrw will be based on the February forecast which didn't account for funding provided by American Rescue Plan Act

since those numbers weren't available at the time.

Moving on to HF 1203 (Wolgamott): COVID 19 workers' compensation claim presumption extended.

Rep Dan Wolgamott (DFL 14B) - HF 1203, extending sunset from May 1 to Dec 31 2021. I'm proud this bill has received unanimous support from the Workers Compensation Advisory Council.

A2 amendment to HF 1203 was moved.

Vice Chair renews motion to adopt amendment. Motion prevails, amendment is adopted.

Rep Tony Albright R 55B - are you familiar with HF 2253?

Rep Wolgamott- Yes I hope it gets passed. However there's an urgency here. I've heard from public safety workers they want to make sure this is a priority. I'm moving forward with this bill with language agreed to by WCAC

Rep Albright - Am at a loss of why you'd press for 1203 when the provisions were already in HF 2253 and will be moving quickly in both chambers from what I understand. We had assured this bill would pass into law, so why is this bill (HF 1203) necessary?

Rep Wolgamott - This is a time sensitive thing, these benefits would expire by May 31, I was responding to the needs of workers in my district and all thru the state, to have multiple paths to make sure we help our frontline workers.

Rep Albright - Does HF 2253 not attend to the needs that frontline workers need? Why does it do anything less than 1203? I'd dare say it does more. It's not a race. My understanding is 2253 will be passed as quick/sooner than 1203 with consideration of the provisions that are...

...in the bill that aren't in yours.

Rep Wolgamott - I've made a commitment to frontline workers. I share your optimism for that other bill, happy to vote for it, but if it gets tied up for some reason, this bill (1203) speaks to our values. I'm standing up for my constituents

Rep Mike Sundin (DFL 11A) - would be terrific to pass the Wolgamott (1203) bill, put in on the general registry in case there's a hang up with the other bill. It's still there and will satisfy the needs of frontline workers.

Rep Wolgamott - We want to make it clear that we value frontline workers, that's why I'm authoring this bill.

Chair Moran - we in the House are the majority, we value these values and the bill... will move out of the Ways and Means committee today.

Chair Moran - I don't know how we can continue to direct questions that to me seems like we're moving in a circle. His statement has been clear to me about why he's worked hard on this bill. We need to move this bill. I'm going to move on. My hope is that it won't be the same q'n

Rep Peggy Scott (R 35B) - We have deadlines. I understand you're getting this bill heard in the House but it's not moving in the Senate. I understand the urgency, there's already another bill that contains these same provisions. There's plenty of time to get that bill through.

Rep Albright - I serve as the minority liaison to the WCAC and parts of what Rep Wolgamott said are truthful. The others scatter a bit in terms of the intent of what the WCAC has done. Rep Sundin and I serve on that as the liaisons to the House for purposes of legislation...+

+that is agreed to by both Labor and Management. Deliberations on March 10th for approval for assembly of HF 2253. WCAC did not approve 1203, it approved HF 2253. HF 2253 scheduled to be heard in the Labor and Industry committee Wednesday, and in Senate on Wednesday...+

Rep Albright - This bill will be moved very quickly. If it's that much of an emergency I suggest that members might take this up today, prudent to take up a resolution & suspend the rules and pass HF2253 today if it is that important Rep Wolgamott? You'd have my complete support.

Chair Moran - I'm going to end by saying as Chair of the Ways and Means Committee, I made a decision to have this bill heard in committee today. I believe today you'll also hear HF 2253 in this committee today.

Rep Liebling (DFL 26A) - Things being "duplicitous" is very common in the legislature, we do this all the time. Putting things in a lot of different places is MO. Nothing new there. I find it amazing that Republican members here seem to be arguing we shouldn't do something+

..if the other body isn't doing it, when we spend hours on the House floor with Republican members trying to bring bills that we didn't have ready in the House and that seemed to be no problem for them! So I don't know why they can't take a bill from us and pass it,

because that's sure what Republicans in the House want to have happened. I find that without merit.

Chair Moran - we're going to move this bill out of this committee. Taking votes now on whether to move bill HF 1203 as amended be recommended for placement on the General Register

Motion prevails, HF 1203 as amended is recommended for placement on the General Register.

Now discussing HF 39 - Rehire and retention precautions provided for laid-off workers during emergency
Vice chair moves A3 amendment.

Motion prevails amendment adopted.

Rep Andrew Carlson (DFL 50B) - Hospitality employees have been hit by COVID19, born brunt of massive layoffs due to pandemic. At hotels, laid off workers are 90% POC and mostly women. HF 39 protects workers.

Rep Garofalo R 58B- I'll be voting no on this bill, encourage my colleagues to do the same. The best way to get workers is to reopen the economy and alleviate restrictions currently imposed.

No further discussion. Moving to taking roll on HF 39.

HF 39 as amended is recommended to be placed on the General Register.

Moving on now to HF7 (Olson) -Earned sick and safe time provided, rulemaking authorized, civil penalties imposed, reports required, and money appropriated.

Rep Liz Olson (DFL 7B) - We want MN to be a caring state. Everyone gets sick. They should be able to stay home for their health, health of a loved one and for all of us. The workers least likely to earned sick and safe time are workers preparing/serving our food with only 25%...

...of access for food service workers. More than a dozen states similar proposals have passed, access to earned sick and safe time. It benefits employers thru recruitment and retention, less workers coming to work sick, leads to productivity and overall wellness.

BAsed on best practices learned from other states, we appropriate $300K each fiscal year to community orgs to do education and outreach to workers.

Rep Garofalo (R 58B) - Share more about the FTEs?

Rep Olson - Most of it is for enforcement and outreach education.

Rep Jim Nash (R 47A) - I don't know if you've had your own company, I'm a recovering business owner. When you own a business, as you start the business you don't get paid, you hope for an employee and you can guarantee you still won't get paid on a regular basis because you make

sure to have that employee taken care of. Your bill is sending a message in this time of hopeful recovery to business owners on places in Waconia and my district; the state is saying we're glad you survived but now we want you take a bigger burden in taking care of your+

employees with tons of time off, that left to their own devices the business owners will already ensure they retain their employees anyway. You also have the PPP loans that haven't been dealt with. It just goes too far.

When you try to bring a business into life, this is the kind of bill that's a punch in the mouth. This'll be catastrophic to them. It's a well intended bill, Rep Olson I've always said I know your compassion. We know according to the chair that budget bills are a moral contract,

this is not a highly moral bill. This will penalize people who own businesses, will be damaging in the long run.-Rep Nash

Rep Peggy Scott (R) - I noticed there are grants to get the word out to employees thru community organizations. Some of that money should be available to small biz that'll be reading thru this bill who'll have to hire outside counsel to interpret the language and requirements.

Why wouldn't you divide that $ equally btwn small biz and community orgs?

Rep Olson-Yes it says employee outreach, but in other places , when in Minneapolis they did similar grant program it was split 2:1 for worker an business outreach. That's the spirit we want to support both

Rep Scott - I appreciate you saying that but it's not written in the bill.

Rep Garofalo - There's two different MN's right now. There's the government and the private sector. The government of MN has never had more money just sitting around, never.

You had the surplus, money in budget reserves, money coming in from the federal govt. Governm't is flush. Lots of money to spend on whatever the Governor wants to spend it on. Gov't has never had more money sitting around in its coffers. The private sector's a different situation

[Private sector's] been reeling from shut downs, from gov't prohibitions on commerce and activity, it's hurting. What we see from this and other bills is failure to recognize the stress on our small businesses in MN. Amazon, Target Walmart have never been doing better.

They were able to say open and get rich, that's why their share prices have skyrocketed during shutdowns. Public sector financing vs private sector financing, there's a failure to recognize the difference between those two entities.

I see my DFL friends coming forward with bills about how it's worked in Minneapolis or California, I don't think that's a good idea to reference those places for our state. I'll be voting no, encourage my colleagues to vote no.

(HF7) We don't have concerns about this bill becoming law, it's not going to happen. -Rep Garofalo

Rep Olson - The people that have [borne] the brunt of the pandemic are the frontline workers, who need this benefit. We have a moral responsibility to provide for them, that's what this bill does. The ones at the frontlines are taken care of.

I renew motion that HF7 be recommended to be placed on the General Register. (Olson)

Votes taken.

Motion prevails. HF7 is recommended to be placed on the General Register.

Meeting again tomorrow at 5pm to review Governor's revised budget recommendation and to adopt our budget resolution.

House Ways and Means Committee is adjourned.