Jobs and Economic Development

Jobs and Economic Development Omnibus Budget Bill

After not receiving its budget target until the end of session, the Jobs and Economic Development Committee worked out their budget bill in the working groups that met before the special session was convened on June 14. The joint net General Fund target was raised to $130 million, up $30 million from the Senate Republican target, which includes $155 million in business assistance and investments in equity and business expansion.

There are significant policy and budget items that were not included in the final bill such as Sick and Safe Time, Paid Family and Medical Leave, alterations to wage theft legislation, aid to rebuild Minneapolis/St. Paul, and no funding for refinery safety. (SF 9)

Notable items in SF 9 include:

Main Street Economic Revitalization Program – $80 million

The money (grants and loans) is made available to partner organizations to provide loans and grants for real property and capital improvements. The money targets eligible projects that are designed to address the greatest economic development and redevelopment needs that have arisen in the community surrounding real property since March 15, 2020.

Loans are guaranteed for 80% of the loan amount for a maximum period of 15 years. Loans are capped at $2 million and 10% of the loan amount is placed in a guaranteed trust fund. Should the loan guaranteed trust fund expire with funds in it, those funds cancel to the General Fund.

The grants made available will be distributed in up to three rounds. During the first round no more than 50% of the grants can be awarded (application date before September 1, 2021). Grants are capped at $750,000 and may be used to finance no more than 30% of an eligible project. Grants are contingent on projects securing matching funds.

Main Street COVID-19 Relief Grant Program – $70 million

Businesses who have not received previous funding from the state for COVID-19 relief shall receive preference for these funds. Grants will be distributed based on employee count: six or fewer FTEs, $10,000; more than six but fewer than 50 FTEs, $15,000; 50 or more, but less than 100, $20,000; and businesses with 100 or more FTEs, $25,000.

Of the $70 million appropriation, $18 million must be awarded to businesses that have six FTEs or less. $10 million of the appropriation is designated for minority owned businesses. While veteran-owned businesses and women-owned businesses will receive $2.5 million each.

Grants are also made available to businesses renting space to other businesses. These businesses must have a cultural emphasis and at least 12 tenants that are primary businesses with fewer than 20 employees. They must employ 200 FTEs or less and were impacted by the COVID-19 outbreak. Grants under this section will be capped at $300,000 distributed in amount proportional to the number of tenants. $3 million in total is made available for grants in this area.

Equity funding

Approximately $32.524 million from the Workforce Development Fund is used to provide workforce development training, business assistance, and job expansion especially targeted at underserved and underrepresented communities. Funding from the program is generated by an assessment on all taxable wages (up to $32,000).

Unemployment Changes (Students and Seniors)

Minnesota is one of the remaining states that makes a social security deduction for some workers collecting unemployment insurance. DFLers would have preferred for this change to occur immediately and even retroactively. However, Senate Republicans and business interests wanted to delay these benefits for an extended period. The Senate DFL negotiated that the benefits would kick in July 2022.

Students were also unable to collect unemployment insurance. The pandemic highlighted this inequity as students are now more dependent on employment than ever to support their household or to save for college. Benefits for students will also phase in July 2022.

Nursing and Pregnancy Workplace

Nursing and pregnancy workplace accommodation laws were strengthened this session. Nursing and lactating employees are required to receive paid time to express breast milk at work. Additionally, more workers are allowed to request pregnancy accommodations. The change will apply to employers with 15 or more employees (previously 21). They will also be eligible on their first day of employment. These changes are effective January 1, 2022.

Public Housing – Fire Sprinkler Requirement

Automatic sprinkler systems must be installed in existing public housing where at least one story for human occupancy is 75 feet or more above the lowest level of fire department vehicle access. Automatic sprinklers must be fully operational by August 1, 2033.

Child care

Local communities looking to increase the number of childcare providers will receive $5 million. To qualify grant recipients must obtain 50% from nonstate sources. Approximately, 50% of this appropriation must go to providers outside the metropolitan area. Minnesota Initiative Foundations shall receive $3 million to help plan community solutions that guides decision making to sustain and increase the supply of quality childcare.

NOTE: See the Tax Section for more information on Targeted Business Grants, Frontline Worker Payments, and the Orientated Strand Board production invective program.

Paid Family and Medical Leave Bill

Governor Walz and DFLers pushed for the Paid Family and Medical Leave bill throughout the legislative session. However, Senate Republicans refused to act on the proposal or even give the bill an information hearing. As a result, the Paid Family and Medical Leave Bill did not pass. Senate Republicans have refused to act on this proposal for several sessions leaving parents and families stranded when they need to help the most and especially during a global pandemic that has left many struggling.

Given the pandemic and the impact it has had on families, we understand now, more than ever, how important it is to spend time with sick family members or ensuring a parent have the time to recover and to nurture a new family member. (SF 1205)

Sick and Safe Time

A proposal that would have provided one hour of paid sick and safe time for every 30 hours worked failed to get the support of Senate Republicans. Had this language been approved by Senate Republicans employees would be able to take time off for: illness, care for family members, absence related to violence (sexual assault, domestic abuse, or stalking), closure of a business due to weather or public emergency or closure of a family members school district, or a determination by health care provider that an employee or family member is at risk of infecting others with a communicable disease. (SF 29)

Refinery Worker Protections

Senate DFLers offered an amendment to ensure skilled workers performed critical tasks at oil refineries which would ensure the safety of workers and the surrounding community. This amendment was adopted on the Senate floor on a bipartisan vote of 50–17. After this language was adopted Senate Republicans sent the bill back to the Finance Committee to remove this provision. As a result, a few Senate Republicans undid the entire work for the Senate body. Because of this maneuvering, the language was removed that would have protected workers and the areas surrounding oil refineries in Minnesota. (Amendment to SF 9)