July 1, 2024

Minnesota's legislature is constitutionally required to adjourn by the third Monday in May—halleluiah!

The legislature introduced over 10,000 bills and it was no small task to keep on top of all of them. Some of the issues we worked on included: taxes including reducing the state general property tax levy, tax appeal data privacy, removing the lobbyist requirement for real estate professionals, adaptive reuse incentives including conversion of underutilized building tax credit, contract for deed changes, and raising the overall awareness of the issues that affect the commercial real estate industry. Our team and members testified several times at the Capitol on a variety of issues. We held multiple one-on-one meetings with legislators and other stakeholders. We also collaborated with local officials on issues from garbage enclosure regulations to sign ordinance changes.

There were hints that the legislature would adjourn early. However, there were several last-minute issues which put a wrinkle in those plans. For example, with a one-vote majority in the senate, Senator Nicole Mitchell from Woodbury was charged with a felony for burglarizing her mother-in-law’s home in Detroit Lakes. Uber/Lyft issues were also brought up by Minneapolis City Council ordinance changes due to the drivers wanting more compensation. Remember, ride share legislation was the only issue Governor Walz vetoed last year or this biennium.

As it turned out, the session ended with the introduction of a 1,430 page omniblob bill covering 73 articles one hour before the session ended at midnight - that obviously no one read - and passed on party lines. It reminds me of the quote from Nancy Pelosi, "We have to pass the bill so that you can find out what is in it."

After finally letting Uber & Lyft into the negotiations, an agreement was reached. Now you pay more for your ride share due to the 20% wage hike. Yippee!

“Junk fees” were banned—all fees must be disclosed in the initial purchase price from concert tickets to restaurants beginning 2025.

Taxes

Despite a $3.7 billion surplus, the legislature failed to provide any significant tax relief. Earlier, the legislature fixed some unintended mistakes from last year’s bill regarding net operating losses for pass-through entities. Several taxes will go up in the future, including the gas tax on January 1, 2025.

• Corporate study examining world wide reporting
• Requirement that corporations over $250 million in revenues make their tax filings public
• Carve out for data centers sales tax exemptions
• Removal of the sunset on Hennepin County’s sales tax for the Twins Stadium
• Land value exclusion property tax assessments (targets surface parking lots)

Met Council LRT Oversight

Light rail projects must have MNDOT oversight and regional sales taxes must have legislative approval.

Contract for Deed

Changes for investor sellers with disclosures and more buyer remedies in case of default. We were successful in excluding commercial real estate from this legislation.

Extended Producer Responsibility (EPR)

Requires producers to pay half the recycling costs and registration.

Worker Misclassification

• Creates an enforcement & education agency
• Increases penalties
• Further scrutiny for independent contractor tests
• More protections for misclassified workers

Labor

• Banned non-competes.
• Paid Family & Medical Leave payroll tax increased 25% to .88% after actuarial analysis was completed showing shortfall. Remember this can go up without legislative approval if it isn’t fully funded. The fees are split evenly between employees and employers.
• Employers with >30 employees must post salary ranges.

Health Insurance

• The legislature went after health insurers by mandating coverage for maternity, abortions, gender affirming care, prosthetics & prohibiting certain prior authorizations.
• MN is second highest for mandates in healthcare in the nation. Another study has shown a correlation that a 5% rise in health care costs produced increases in job losses.

Everyone’s a Lobbyist

• Moratorium on lobbyist registration & reporting delayed until June 1, 2025 for rural communities under 50,000 people.
• Unfortunately, this still includes CRE professionals so make sure you are not attempting to influence government officials without registering/reporting with the Campaign Finance Board.
• The Campaign Finance Board is producing recommendations for the legislature after they were bombarded with registrations.
• If you would like more information or want to provide any feedback please contact Jeff Sigurdson, CFB Executive Director at 651-539-1189 and jeff.sigurdson@state.mn.us

City Comprehensive Plans

Plans can no longer be challenged with environmental lawsuits ending the 4-year dispute with the City of Minneapolis.

Clean Energy

Permitting streamlined and eliminated many required thresholds for utilities. Also a streamlined environmental permitting process was passed.

Data Privacy for Consumers

Protections with Minnesota joining 18 states requiring disclosures and other controller limits on the sale of data.

Additional Items

Minnesota is the first state to ban parents making money off from their children on social media, except for child actors & models who already have protections, and profits are required to be set aside for when they turn 18.

No book bans in public and school libraries based solely on viewpoint, ideas or opinions.

Medical debt no longer reported to credit bureaus and surviving spouse protections added.

Broadband was expanded to rural Minnesota with several labor compliance strings.

Penalties increased for people who buy a gun for someone else who should not have a gun legally (straw purchase).

Cannabis regulations were updated including a lottery system for licensure through the new Office of Cannabis Management (OCM).

Other Bills that Failed to Pass

• Any constitutional ballot questions—Equal Rights Amendment (ERA), full time legislature, ranked choice voting.
• Bonding, including a cash capital investment bill that failed in the Senate due to running out of time.
• Sports betting—tribes and racetracks couldn’t find common ground.
• Increase in density for metro housing required/preempting local government.
• Requiring prevailing wage for TIF projects was successfully stopped.

Scandals

• Feeding Our Future fraud court cases are ongoing, and the Department of Education audit found negligence. A juror bribery attempt was made with $120,000 cash to acquit in first trial.
• Pandemic Front Line Worker fraud—40% of $500 million in payments were made to ineligible recipients reducing the payments from $1,000 to $487. 290 wrongful recipients were deceased.
• Medicaid billing without services from providers.

Election Season is Here!

All MN House members are up for re-election plus one MN senate seat - Senator Kelly Morrison (Lake Minnetonka area), who is running for Congressional District 3 (CD 3).

Out of 134 members in the House, 20 are retiring.

The $700 million State Office Building renovation and addition are underway with House members and staff moving to the Centennial Building. This will add another layer of challenges with a new session beginning in January 2025. There is still a structural deficit of $3.6 billion in the future that the new legislature will inherit because it was not addressed this session.

Dates to Remember

July 25 | Special Post-Session Wrap-Up (Zoom)

August 13 | Primary Election

September 20 | Early voting begins for general election

November 5 | General Election

January 14 | 2025 Minnesota legislature session begins

Feel free to contact us regarding issues affecting you. We appreciate all the involvement from members who reached out about issues or testified at the Capitol. Your voice makes a difference!

Roz Peterson
Public Policy Director | NAIOP Minnesota
roz@naiopmn.org | (612) 708-5281