Today, the legislature crossed the 3^rd deadline, meaning all non-tax finance bills must be passed to the Senate Finance Committee or House Ways and Means Committee to remain viable. Nothing is ever truly “dead” at the Legislature, however, and given the scope of the incoming federal American Rescue Plan funds (nearly $8 billion), this session may be unusual in the number and volume of late-developing (post-deadline) policy and spending items.

On March 29, we sent a letter to Governor Walz, policy leaders, counties and cities outlining our industry’s priorities for recovery and use of federal funds. We have followed up with phone calls with the Administration and counties. Several of our priorities have been acted on, and others await action by the Administration and policymakers. Here is an update on the status of our top economic recovery priorities:

We were pleased to see that the House Omnibus Tax bill proposes to exempt the first $350,000 of PPP proceeds from state tax (thanks to Chair Marquart (Dilworth)). 

The Senate has already passed PPP tax-free (big thank you to Senator Bakk (Cook)). This is one of our top priorities this session and would be a huge victory. 

This Wednesday, HM Director of Government Relations Ben Wogsland, and members Bill Foussard (White Bear Country Inn & Rudy’s Redeye Grill) and Brent Frederick (Jester Concepts) testified before the Senate subcommittee on property taxes in support of SF1432, a bill to exempt hospitality businesses from the state levy property tax for the next two years. 

We are hopeful that this will be included in the Senate Omnibus Tax bill, which has not been released yet. Big thanks to our chief author, Senator Nelson (Rochester). Contact the Senate Tax Committee and urge inclusion of SF1432.

We are disappointed that the House Omnibus Tax bill does not yet include this provision, nor has the committee held a hearing on HF1695, and we sent a letter yesterday to the committee chair, Representative Marquart (Dilworth), requesting reconsideration. The House Omnibus bill does, however, include some property tax relief, by raising the exclusion from this tax to include the first $150,000 of market value. Currently for commercial property the first $100,000 in value is exempt. This change would provide an estimated $30 million in tax relief to MN businesses per biennium. 

Frankly, we believe the state should do both. Contact the House Tax Committee and ask it to temporarily exempt hospitality businesses from the state levy by adding HF1695 to the omnibus bill.

While the House Omnibus Tax bill includes modest sales tax exemptions/refunds (up to $1,000) for restaurant purchases in response to COVID protocols, we were surprised it did not include our permanent sales tax exemption request (HF921) given the positive hearing the bill received earlier this session. We sent a letter to the Committee chair Wednesday, asking for reconsideration. You may contact the House Tax Committee and ask it to permanently exempt restaurant equipment purchases from the state levy (just like other manufacturing equipment) by adding HF921 to the omnibus bill. The bill is still in play, given that the Senate has not yet released its tax bill. You may also Contact the Senate Tax Committee and encourage it to include SF1318 in the forthcoming Omnibus Tax bill.  Here are some talking points.

The House tax bill does include another specific sales tax exemption from the tax for certain restaurant purchases to repair or replace equipment destroyed during the protests and unrest during May-June 2020.

Earlier this session, we were pleased to see Governor Walz propose $50 million in no-interest partially forgivable loans (hospitality businesses were mentioned as potential recipients). So far, however, neither body has heard or taken action on this proposal, and there is some belief that the delay may be due to policymakers awaiting guidance on the forthcoming federal American Rescue Plan funds.

In our conversations with government officials in the last 24 hours, there are indications that policymakers may be contemplating targeted as grants rather than no-interest, forgivable loans, which would obviously be preferable and consistent with our letter to Governor Walz and policy leaders. This will be a developing issue in the closing weeks of session and one we will continue to be very active on. The House Omnibus Jobs bill currently includes $50M for grants to certain small businesses with less than 100 employees. One particular item we are keeping an eye on is a provision in the Senate Omnibus Jobs bill that returns $20M to the Department of Revenue for grants to businesses that were left out of special session relief due to errors in NAICS coding.

We were pleased to see that the Senate Omnibus Jobs bill included the ProStart and Hospitality Tourism Management Program grants (big thanks to Jobs Chair, Senator Pratt (Prior Lake) as well as the bill authors Representative Baker (Willmar) and Senator Draheim (Madison Lake)). We were equally disappointed that the grant provision was not included in the House Omnibus Workforce bill released this week, and have sent a letter to the Committee Chair and Ways and Means Committee requesting reconsideration. 

We met with the Department of Employment and Economic Development yesterday to discuss these challenges. The Department’s CareerForce has recently reached out to 15,000 individuals on U/I and they indicate they will be increasing their activity and enhancing their efforts to get people back to work who can work and who are either offered their jobs back or offered positions. They anticipate much more active work in this area in the coming weeks. In addition, the Senate Omnibus Jobs bill includes a provision to make it easier for employers and workers to utilize the Shared Work Plan.

We continue to advocate for safely re-opening (increasing capacity, upping table sizes to 10, extending hours of operation) and are generally optimistic that better days are ahead. However, the current trends in the positivity rate, overall case counts, and hospitalizations over the last month are posing a challenge to any immediate dial turns. The Senate Omnibus Jobs bill includes a provision to allow businesses to open up, however, it faces an uphill climb in the House. Big thank you to Representative Baker (Willmar) and Representative Sandstede (Hibbing) for their work on re-opening earlier this session.

HM supports broadband expansion to create connectivity in all four corners of our state for our businesses and to meet customers’ 24/7 expectations. The House is currently considering a $120M investment over the next two years (HF14-Rep. Ecklund (International Falls).

The Senate Omnibus Agriculture bill currently includes a $40M investment though senators are considering an additional $80M utilizing federal funding via the American Rescue Plan. In Wisconsin, Governor Evers recently announced use of $200M from the ARP funds for broadband.

The House Omnibus Labor bill and House Omnibus Workforce bill include a number of labor provisions that are both ill-timed and problematic due to the additional cost and mandates they impose, including earned sick and safe time, paid family leave, “right to recall” for hotel and event employees and a ban on sharing electronic credit cards processing fees on tips with the employees who benefit. HM favors voluntary leave programs with state incentives and supports employer flexibility on credit card fees and worker recall. While these provisions are likely to pass the House, the Senate is unlikely to take them up and has held no hearings to date. Senate Omnibus Jobs bill includes language to streamline statement of earnings requirements under the wage theft legislation enacted last biennium.

HM supports permanent alcohol to-go, such as growlers of tap beer and cocktails to-go. We are working with a new coalition working to modernize state liquor laws.

Sen. Koran (North Branch) and Rep. Olson (Duluth) are carrying the bill, SF1176/HF1192. To date, these bills have been “bottled up” without hearings.

You can help by contacting your legislators and asking them to commit to voting (yes or no) for this and by participating in an upcoming Day of Action April 14.

HM supports an aggressive and comprehensive approach to dealing with invasive species. The House and Senate Omnibus Environment and Natural Resources bills propose $40-55M in funding for mitigation and prevention of invasive species. Read our issue brief.

HM and our allies are fierce defenders of the lodging tax. So far this session we have successfully opposed new efforts to redirect lodging taxes for capital projects in Maple Grove and Woodbury. Plymouth, which was allowed to use some revenue for a capital project last biennium but was capped at 10 years is now seeking to make its change permanent for new projects, which we oppose. The House bill has now been modified to only allow use of funds in connection with the existing project, an improvement. It has not moved in the Senate. Read our issue brief.

Explore Minnesota Tourism’s funding is sustained in both the House and Senate Omnibus Environment and Natural Resources bills and the Senate bill provides for an additional $880,000 for grants for recovery of tourism, meetings and conventions and events assistance. The House bill has $750,000 for an events assistance grant program ($250,000 to Grand Portage).

Tourism advocates in Minneapolis and Duluth are advocating for the ability create new tourism promotion revenue by allowing lodging properties and municipalities to partner to create “Tourism Improvement Districts.” With a majority approval of lodging partners in the “District,” a dedicated fee would be created to fund new revenue for additional promotion. This provision is currently included in the House Omnibus Tax bill.

The City of Roseville is seeking the ability for all municipalities to be able to license hotels within their jurisdiction for the stated purpose of dealing with “problem properties” both public health and public safety concerns. HM believes a local solution is better and submitted comments to the bill author, who subsequently moved to cap any fees at $100, a significant improvement. While this provision is currently in the House State Government Omnibus bill it has not been heard in the Senate.

HM supports a cap on third-party delivery fees to help restaurants with revenue and cashflow.

The House Omnibus Commerce bill has included this provision (big thanks to Representative Stephenson (Champlin), chair of the committee, for including this provision and to the bill author, Rep. Kotyza-Witthuhn (Eden Prairie)).

Read our letter of support to the committee here. The Senate has not taken action on this provision

HM is part of a business coalition opposing legislation (HF1565) that would fund street improvement districts through additional taxes on businesses. Coalition Brief.

There have been several bills introduced this session to create new mandates on food/beverage offerings by restaurants that promote kids’ meals. While the bills are well-intentioned (nutrition and health for children is a laudable goal) we have met with the bill authors to express several concerns about the prescriptive approach. Both Sen. Bigham (Cottage Grove) and Sen. Edelson (Edina) have agreed to hold their bills this session to allow for constructive conversation in the interim. Contact ben@hospitalitymn.com if you would like to be engaged on this.

HM supports a vendor allowance for collecting and remitting the sales and use tax (read our issue brief). Sen. Chamberlain (Lino Lakes) has authored SF100, a bill to do just that. While this has been a multi-year effort, the bill received a hearing in the Senate Tax Committee earlier this session and we are hopeful that it will be included in the broader Senate Omnibus Tax bill when it is rolled out in the next two weeks.

HM supports comprehensive immigration reform. While we were pleased to see the federal government re-open the work visa program earlier this year, it is critical that the federal government raise the caps on J1 and H2B visa workers, which have not been updated since 1992. We are concerned that Secretary Mayorkas is not acting fast enough on this given the current workforce shortage. Contact your federal representatives and let them know that hospitality and tourism businesses need the feds to raise these caps now. In addition, HM also supports reform allowing workers to obtain limited driving credentials (read our issue brief) We are tracking this issue in the Minnesota legislature and are part of the Business Immigration Coalition seeking bipartisan solutions.

HM is part of a business coalition supporting a bill providing targeted COVID-19 liability reforms that would protect businesses and employers from opportunistic lawsuits while still allowing legitimate claims to proceed. Sen. Limmer (Maple Grove) and Rep. Scott (Andover) have introduced SF745 and HF1198. While the Senate File has been passed to the Floor, the House version awaits action.

These are just a selection of the many bills we are tracking for you. If you have questions or ideas about any other legislation or advocacy, don’t hesitate to contact ben@hospitalitymn.com

HM Advocacy Group. We’d like to give a special shout-out to our HM Advocacy Group, who despite an extremely challenging year have gone above and beyond to give their time and energy help shape our agenda and advocate for all of you.

2020-2021 participants include:

And special recognition to our brand-new HM Advocacy Group participants that just joined this year:

If you are interested in getting engaged with the HM Advocacy Group contact ben@hospitalitymn.com

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