The Big Picture With only seven weeks to go until adjournment, our divided legislature continues to be far apart on how to best use the historic $9 billion surplus to hasten the economic recovery and to address our state’s needs. There is increased speculation that the parties may not reach agreement and may leave much of the surplus until next year. Given that 2022 is not a traditional budget year, the legislature technically does not have to pass finance bills or spend the surplus. Our continued advocacy work this session is centered around two principles:
Unemployment Insurance Trust Fund Despite early statements of support from both Senate republicans and the governor to address the $2.7 billion needed to repay the federal government and refill the Unemployment Insurance Trust Fund, resolution has been elusive. While the Senate has already passed the bill by a wide bipartisan margin, House democrats continue to hold out for agreement on frontline worker pay beyond the $250 million agreed to last session. We continue to work with a coalition of business organizations to push for resolution of the UI Trust Fund ASAP and block significant payroll tax increases.
Restaurant Revitalization Fund Tax Free Our work at the Minnesota Legislature is paying off as yesterday our bill making Restaurant Revitalization Funds tax free was included in the release of both the House and Senate Omnibus Tax bills. We have testified in multiple committees and engaged you as members in direct action to get to this point. Thank you for going to bat! The bills also includes conformity on the EIDL loan advances and the Shuttered Venue Operators Grant that was part of our advocacy efforts.
Left to right: Rep. Paul Marquart (Dilworth), Chair, House Tax Committee; Sen. Carla Nelson (Rochester), Chair, Senate Tax Committee;
and Lead Authors Rep. Dave Baker (Willmar) and Sen. Karla Bingham (Cottage Grove)
Contact the committee chairs, Rep. Noor and Sen. Pratt and ask them to include significantly expanded grant relief for hospitality businesses in need. You can remind them that Wisconsin has passed over $900 million in small business direct grant relief (compared to Minnesota’s $345 million), including $93 million for hotels. Minnesota can do better by businesses hit hard by the pandemic.
Open Wholesale on Liquor This session we have been working with a coalition to ensure open wholesale on liquor. As we reported last week, the courts have ruled the “Coleman Act” unconstitutional due to its “discriminatory treatment” of out-of-state producers. This means that if the legislature does not act to create true open wholesale for all parties, giant out of state distributors will be permitted to use exclusive contracts, likely driving up cost for purchasers of spirits such as our members, and potentially creating further supply chain issues. Thankfully, the judge in the case delayed the effect of the ruling for 60 days, giving the Legislature time to act. While the senate bill has been passed to the floor, the house version awaits action in the Ways and Means committee.
Property Tax Relief Hospitality Minnesota supports the elimination of the state property tax levy. While last session we won an incremental victory by raising the property value exemption, there may be an opportunity to further this work this session. Sen. Nelson (Rochester) has a bill to repeal the tax and is the senate tax chair. While the business community has been focused on UI so far this session, there may be additional opportunities to advance business property tax reform later this session. We have met with both tax chairs on our position and will continue to monitor the situation for opportunities.
Sales Tax Exemption on Restaurant Equipment Building on momentum from last session, we have pressed hard for inclusion of this long-term priority this year. The House Omnibus Tax bill revealed yesterday does include our bill, authored by Rep. Baker (Willmar). The current Senate Omnibus Tax bill does not include our bill, however, meaning there is more work ahead.
Explore Minnesota Tourism Funding Hospitality Minnesota is part of a coalition seeking additional funding of $6 million to EMT for economic recovery grants. The recently released Senate Omnibus Environment committee does not include this provision, but instead directs $1.45 million to EMT to promote large scale sporting and other events. The House Omnibus Environment bill includes our ask, but also raises the investment to $10 million. We will be monitoring this closely as it moves to conference committee.
New Hotel Regulations As we have reported previously, legislation creating an additional and unnecessary bureaucratic licensure structure at the city/town level over hotels (and potentially resorts) was passed to the House Floor. We have been in contact with the Senate committee with jurisdiction over the bill and submitted a letter to key players and the author. The Senate committee has not heard the bill to date. We are closely monitoring the State Government Omnibus bills to see if it is added as an amendment in the coming weeks and will act accordingly.
Border/BWCA Closure Assistance Legislation supported by Hospitality Minnesota to provide $7.5 million in grants to small businesses impacted by the closures of the Canadian border and the BWCA has advanced and has now received a hearing in a Senate committee and is included in the House Omnibus Jobs bill release yesterday. We testified in support of the measure late yesterday and will continue to advocate for its passage. The bills are authored by Sen. Bakk (Cook) and Rep. Ecklund (International Falls).
Protecting the Lodging Tax Unfortunately, provisions to redirect the lodging tax for capital projects in Woodbury and to permanently allow redirection in Plymouth have advanced in the House Omnibus tax bill. We have opposed these measures at every step and will provide additional testimony in the House Tax committee tomorrow. These provisions are not included in the current Senate Omnibus Tax bill.
Resort Spa De-Regulation A bill to de-regulate spas/hot tubs at resorts (as was allowed for Houseboats several years back) has advanced to the Senate floor and has been included in the Health and Human Services Omnibus bill. Sen. Bakk proposes the bill would put resorts with stand-alone single unit spa pools in a room or cabin on an even playing field with cabin rentals and/or vacation rentals. In a Senate hearing, HM member Mindy Fredrikson testified that as a resort owner, the current regulations triple the cost of adding a hot tub to a unit (over $60,000 per), putting resorts on an uneven playing field with short-term vacation rentals that are under-regulated or unregulated in this area under current practice.
Employer Mandates While debates around minimum wage and predictive scheduling have been quiet this session, competing proposals on paid family leave have taken shape with democrats favoring a state-run program funded by a new payroll tax (0.6% split between employer and employee) and mandated on all employers. Similar programs have run into varying problems in Oregon, Washington, and New Jersey. Alternatively, republicans have released a plan that would create tax credits for small businesses seeking to add coverage on the private marketplace. Hospitality Minnesota supports employers adding competitive benefits packages to their employee offerings, but they must be able to do so on a voluntary basis within their financial ability.
On the call, EVP Ben Wogsland advocated for the Fire Marshall to:
Federal RRF Replenishment In what may be the final effort to get the Restaurant Revitalization Fund Replenished at the federal level, we expect the U.S. House of Representatives to bring the bill up for a vote as a stand-alone as early as this Thursday. We believe the votes are there to pass the House, but a wide bipartisan total would dramatically improve the chances of Senate passage, which up till now has appeared unlikely (despite both MN senators supporting us).
New Federal Visa Proposal The National Restaurant Association is supporting a new federal visa proposal that would allow up to 85,000 visa workers to enter the U.S. on 3-year terms on new “H-2C” visa to help fill the workforce shortage in foodservice businesses.
These are some of the key issues we are tracking and working on at the Capitol and federally. Don’t see something you care about, or want more information? We are also happy to help you set up meetings with your legislators and provide you with talking points to move our industry agenda forward. Contact firstname.lastname@example.org
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