February 26, 2021

Minnesota Legislature – Weekly Recap*

February Budget Forecast– $1.6 Billion Surplus Announced!

According to Minnesota Management and Budget, “Minnesota’s budget outlook is significantly better for this biennium and the next due to an improved U.S. economic outlook that is bolstered by large federal actions that have emerged since November and were not incorporated in earlier projections. There is no longer an anticipated shortfall for FY 2022-23 and we now project a positive balance of $1.6 billion because of a higher revenue forecast, lower state spending, and an increased surplus for the current fiscal year. Improvements to the economic outlook have not been spread equally as unemployment continues to disproportionately impact lower-wage workers.”

While the November Budget Forecast was better than expected, a $1.273 billion budget deficit was still predicted, so today’s news is very welcome. With this new information, the House and Senate will now begin putting together their budget proposals. Governor Tim Walz (D) will also work on a supplemental budget for the middle of March with, one would expect, fewer tax increases. Rumblings are that the Governor does not intend to drastically change his tax increase proposal, which will not go over well with Republicans.

In the November Budget Forecast, the current biennium saw an increase of $400 million. In today’s announcement that increased to around $960 million. Click on the following links for additional information on the budget. 

Current Operating Budget Webpage

February 2021 Budget and Economic Forecast

February 2021 Budget and Economic Forecast Presentation

Click here for a statement from the House and Senate DFL caucuses.

According to a Session Daily article, House Minority Leader Kurt Daudt (R-Crown) said the forecast supports Republican's position of no new taxes. "Minnesota's economy is bouncing back and will continue growing if we let it. Unfortunately, Democrats will continue pushing for completely unnecessary tax hikes that would hurt struggling businesses and families. Raising taxes will slow our economic comeback and make it harder to bring back jobs and paychecks to where they were before the pandemic.”

Vaccine Update

Minnesota continues to work through Phase 1A and populations of Minnesotans age 65+, educators and childcare providers. As of February 23rd, 783,214 first doses have been administered, and 386,256 second doses have been administered. 43% of Minnesotans age 65+ have received at least one dose. 

With 90% of COVID deaths coming from Minnesotans age 65+, Governor Walz announced today that the State will focus on vaccinating 70% of the 65+ population before expanding vaccine eligibility. This spring, Minnesotans with certain health conditions and select frontline/essential workers will be eligible. Later in the spring, eligibility will be expanded to remaining essential workforces, which includes the finance sector, and this summer the vaccine will be available to all Minnesotans. 

Click here for the vaccine guidance from Governor Walz.

Governor Announces Bonding Proposal

On Monday, Governor Tim Walz (D) announced his $518 million bonding proposal for the year. As you may recall, the legislature passed a $1.87 billion bonding bill during the fifth special session in October, which was the largest bonding bill to date. The first year of a biennium is normally focused on the budget and the second is customarily for a bonding bill. With having just passed a bonding bill in the fall, it could be a heavy lift to get the Senate Majority to go along with another one this year.

According to Governor Walz’s Press Release, “the plan invests $518.086 million in infrastructure projects across the state to maintain existing buildings, invest in communities, and ensure that the state can leverage available federal funds. Nearly half of the plan will support asset preservation projects at state agencies and higher education institutions.” Here is a list of the included projects.

Click here for a Star Tribune article on the Governor’s bonding proposal.

Privacy Legislation Introduced this Week

On Monday, Representative Steve Elkins (D-Bloomington) introduced his new privacy bill (HF1492). In 2019, he introduced a bill that was similar to California’s bill and has spent the past two years working on this initiative. Titled the Minnesota Consumer Data Privacy Act (MCDPA), the bill borrows from the EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) and is specifically modeled after the Washington Privacy Act that is currently being considered by the Washington legislature.

There is a lot to take in with this bill. Here are a few things to note:

Scope of the Bill: The bill applies to entities that conduct business in Minnesota or produce products/services that are targeted to Minnesota residents and meet one of these thresholds:

  1. During a calendar year, controls or processes personal data of 100,000 consumers or more, or
  2. Derives over 25 percent of gross revenue from the sale of personal data and processes or controls personal data of 25,000 consumers or more.

Note that the definition of “sale” is not limited to the exchange of personal data for monetary consideration but includes an exchange for “any other valuable consideration.” This is one area that the author acknowledges could be a point of contention for many.

Certain types of businesses and data are exempt under the MCDPA. For example, it does not apply to governmental entities, federally recognized Indian tribes, or personal data that is regulated under HIPAA, Gramm-Leach-Bliley, the Fair Credit Reporting Act, or the Family Educations Rights and Privacy Act. The GLBA exemption is appreciated but may be too narrow.

While a Private Right of Action is not currently in the bill, it is expected to be offered as an amendment if the bill receives a hearing in the House Judiciary and Civil Law Committee.

The MBA is still reviewing the bill. The author has asked for a hearing in the House Commerce Committee. The MBA has been part of a larger coalition working and communicating with the author on this issue, including a meeting at the MBA office. The Senate version will be authored by Senator Karla Bigham (D-Cottage Grove).

Farmer-Lender Mediation Receives Another Hearing in House Agriculture

On Monday, the House Agriculture Committee, once again, took up the Farmer-Lender Mediation bill (HF80). The current bill was heard last month, and the intention of the bill was to extend the mediation timeline to 150 days for a set amount of time to address COVID. The bill was laid on the table only to be taken up this week and vastly amended.

The bill that was drafted to address COVID, now would extend ALL mediations an additional 30 days. The bill would also push the sunset out to 2027. The sunset was not set to expire until June 30, 2022. Representative Todd Lippert (D-Northfield) stated that a few testifiers at the previous hearing said the current 90-day timeframe wasn’t long enough.

The MBA, MN Farm Credit Services and ICBM all testified at the hearing with concerns to a 30-day extension without a thorough discussion of the current mediation process. At this time, the University of Minnesota-Extensions has a no in-person policy, which would impact the timeline and we have heard they are lacking in their remote access.

Mark Miedtke, Citizens State Bank of Hayfield and former MBA Chair, testified at the hearing. Miedtke served on the 2016 Farmer-Lender Mediation Task Force and spoke of the extensive conversations with all the stakeholders that resulted in changes and a longer push out of the sunset. When discussing whether there needed to be an additional 30 days added to the mediation, Miedtke stated that the bankers are working with their customers before, during and after the mediation making added time unnecessary. He expressed support of the legislature pulling together another group to study the mediation process and how to better the program, especially in light of COVID.

Representative Paul Anderson (R-Starbuck) spoke against the extension, also speaking of concerns with UM-Extensions inability to meet in-person. He pushed for more understanding of why there was a need for an extension other than the word of a few people. He also said it may be time to relook at the program for improvements.

Farmer-Lender Mediation has been in law since 1986 with very few changes, it really is time to re-evaluate what is needed. The bill passed on a party line vote and was sent to the House Commerce Committee for a hearing on Wednesday. Though, the Chair did state at the end that this will likely not be the last they see of this bill. Click here for the bill summary.


  • On Tuesday, the House Higher Education Committee heard a bill (HF1493) that requires student loan servicers to be licensed by the Department of Commerce, follow certain procedures relating to the servicing of loans, and outlines misconduct. This bill allows the commissioner to examine student loan servicers, revoke licenses, and issue civil penalties. The bill has been around for two years and in 2019 the MBA successfully had financial institutions removed from the bill, which is consistent in this bill. The bill passed committee and was sent to the House Commerce Committee. Click here for a Session Daily article on the bill.
  • On Tuesday, the Senate tax committee heard the Governor’s tax proposal (SF961), which has many provisions that are problematic, including a fifth-tier income level, an increase in the corporate tax rate and moving the estate tax law back to the $2.7 million threshold. In last week’s Political Insight, we gave a more thorough summary of the bill. Click on the link for a House summary of the bill. The bill was laid over for possible inclusion in an omnibus bill. As mentioned previously, the Senate majority has major concerns with the tax increases and other proposals in this bill. The bill does bring in approximately $972 million into the General Fund.
  • On Tuesday, the House Housing Committee heard a bill, HF896, that would allow manufactured homes in manufactured home parks that are member owned—such as by a nonprofit or housing cooperative—to have the manufactured home be valued as an improvement to real property. The intent of the author is to help create additional mortgage products for these types of homes. Click on the links for a handout and presentation by Northcountry Cooperative Foundation, which is pushing the bill. The MBA attended meetings on the topic last session to learn more about the intent of the author. We mentioned to the previous author that mortgage products are heavily regulated, and this change may not have the desired result. We commend the legislature for looking for more affordable housing options. We are concerned that if this bill passes, there will be an expectation that financial products will be available, which remains to be seen. The bill was laid over for possible inclusion in a future omnibus bill.

Mark Your Calendar

Here are some key dates for the 2021 legislative session: 

  • March 12 – 1st Committee Deadline - bills must be out of all policy committees in one body
  • March 16-17 – ABA’s Virtual Washington Summit (more information below)
  • March 19 – 2nd Committee Deadline - bills must be out of all policy committees in both bodies
  • March 27 – April 5 – Legislative Spring/Passover/Easter Break
  • April 9 – 3rd Committee Deadline - bills must be out of all committees except Finance/Taxes
  • May 17 – Session ends – Constitutionally required adjournment date. 
  • May 20 – MBA Minnesota Matters – End of Session Webinar

Next Week (as of Friday morning):

Tuesday           House Climate and Energy Committee will hear a bill on Minnesota Green Finance Authority and the House Commerce Committee will hear a bill (HF1269) regarding garnishments during COVID

Wednesday      House Local Government Division will hear a bill (HF1565) on Street Improvement Fees, House Workforce and Business Development will hear the Adult-Use Cannabis (HF600) bill,  House Commerce will hear the Farmer-Lender Mediation (HF80) bill

Please contact Tess Rice or Therese Kuvaas for any additional information.

For more legislative updates, follow Therese Kuvaas, Government Relations Manager, on Twitter @thkuvaas

Bill Introductions (all introduced on Thursday, February 25):

S.F. No. 1241: A bill for an act relating to taxes; property and local; clarifying provisions relating to mortgage and deed recording or registration fees; repealing the mortgage registry tax and the additional mortgage and deed taxes imposed by certain counties.

S.F. No. 1284: A bill for an act relating to financial institutions; modifying checking account requirements; amending Minnesota Statutes 2020, section 48.512, subdivisions 2, 3, 7.

S.F. No. 1329: A bill for an act relating to agriculture; extending the mediation period for certain farmer-lender mediations.

S.F. No. 1344: A bill for an act relating to civil law; requiring court notice to persons holding liens in tenant remedy actions; amending attorney fee award limitations and lien priority in tenant remedy actions; repealing certain requirements in tenant remedy actions for appointment of administrators; amending Minnesota Statutes 2020, sections 504B.401, by adding a subdivision; 504B.425; 504B.445, subdivisions 3, 4, by adding a subdivision; repealing Minnesota Statutes 2020, section 504B.445, subdivision 8.

S.F. No. 1408/H. F. 1492, A bill for an act relating to consumer data privacy; giving various rights to consumers regarding personal data; placing obligations on certain businesses regarding consumer data; providing for enforcement by the attorney general; proposing coding for new law as Minnesota Statutes, chapter 325O.

S.F. No. 1502/H. F. 1493, A bill for an act relating to commerce; requiring licensure of student loan servicers; prohibiting certain practices in student loan servicing; appropriating money; amending Minnesota Statutes 2020, section 13.712, by adding a subdivision; proposing coding for new law as Minnesota Statutes, chapter 58B.

S.F. No. 1423A bill for an act relating to housing; permitting manufactured homes affixed to certain property to be deemed an improvement to real property; amending Minnesota Statutes 2020, section 273.125, subdivision 8; proposing coding for new law in Minnesota Statutes, chapter 168A.

S.F. No. 1495:A bill for an act relating to motor vehicles; allowing an insurer to apply for a title to a vehicle in certain situations; proposing coding for new law in Minnesota Statutes, chapter 168A.

S.F. No. 1497/ H. F. 1667,:A bill for an act relating to commerce; appropriating money for a financial services inclusion program.

H. F. 1565, A bill for an act relating to local government; authorizing a municipality to establish a street improvement district; proposing coding for new law in Minnesota Statutes, chapter 435.

H. F. 1635, A bill for an act relating to housing; appropriating money for the homeownership education, counseling, and training program.

Registration Now Open for ABA’s Virtual Washington Summit

Due to the pandemic, the MBA is unable to conduct our normal Washington Visit again this year. However, please consider joining us for ABA’s Virtual Washington Summit.

Registrations are now being accepted for the 2021 ABA Washington Summit, a free virtual event to be held March 16-17. At this year’s summit—which all bankers are encouraged to attend free of charge—attendees will hear from lawmakers and regulators on the top issues of the day, including the pandemic response and relief effort, financial inclusion, cannabis banking, fair lending, AML/BSA reform and nonbank entrants into the financial system. Register now.

*Some of the information provided in the Weekly Recap is reported by Cook Girard - MBA’s contract lobbyists