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2024 Legislative Session Wrap-Up

The DFL Trifecta Biennium & The House of Labor

The setting: January 2nd, 2023, the in-coming DFL majorities met for a massive pre-session fundraiser, collecting on every lobbyist and interest group that hoped to be a part of the DFL trifecta biennium that was set to launch. The location, the labor temple in St. Paul, which is typical, however, the speeches from leadership foreshadowed their approach. “We stand in the house of labor and it’s labor who brought us the trifecta,” said Speaker Hortman, with in-coming Senate Majority Leader Kari Dziedzic and Governor Walz following suit with similar accolades and nods to the labor agenda that few fully grasped. The Speaker laid down a marker, noting a paid family and medical leave plan would certainly pass into law. The only question was, to what extent would this group of legislators, with a one vote majority in a Senate that was almost half full of freshman members, push a progressive agenda to the Governor’s desk.

As this legislative cycle fades into the rearview mirror, it’s now very clear that the house labor ran the table on almost every item they brough forth. New statewide mandatory benefits programs for employees are the law, including PFML, ESST, Unemployment Insurance was expanded to cover hourly school employees as a nationwide experiment, and administrative regulations around preventing worker “misclassification” in the construction industry were expanded. In the background of these new programs is an expansion of agency authority to investigate and regulate business and industry. Minnesota is now 14 years into DFL administrative authority across state agencies.

Attention now turns to the implementation and compliance work employers must undergo with the new slate of laws. The November general election is moot, to a large degree, as it relates to the 127 chapters of new laws that Governor Walz has signed since he remains in office until the 2026 election cycle. A return to divided government in January 2025 would certainly slow the flow of government regulations and mandates, but it likely wouldn’t result in a repeal of anything that passed during the DFL trifecta biennium.

November Elections

The state House was set to be the only play for the GOP to bring their voice and agenda back to the political structure in the state capitol. However, with Sen. Kelly Morrision (DFL Minnetonka) resigning her seat to run for Congressional District 3, the state Senate is also up for grabs this fall. There was potential for an additional Senate seat to be up, but Sen. Nicole Mitchel (DFL Woodbury) is resisting calls from her own party to resign amidst her trial over felony burglary charges she’s facing in Becker County. The on-going saga of her trial will continue to make news in the months to come, but it remains to be seen how much, if at all, her situation will impact voters. Afterall, it’s Biden versus Trump in November and Presidential politics always dominates the narrative and drives most of the voter interest, or lack thereof.

U.S. Sen. Amy Klobuchar is likely heading towards re-election as the GOP struggles to find viable candidates for statewide office, failing to claim a statewide office in nearly two decades (2006 Pawlenty for Governor). The Congressional races are largely uncompetitive, but for CD 2 (south metro) and CD 3 (west metro) where the DFL is hoping to hold court and the maintain the current 4-4 split across Minnesota’s 8 seats.

 

Policy – what was at stake for Builders during the 2024 session?

 

Fortunately, many of the regulatory proposals’ builders had concerns about did not pass into law, including:

  • Restrictions on corporate residential home ownership
  • The establishment of a ‘Paint Council’ and painter labor regulations
  • A mandate to add a residential EV Charging infrastructure code
  • Allowing cities to charge fees for parks as part of building permits
  • Expanding the contractor recovery fund to include pools/pool contractors

 

Unfortunately, two policy initiatives supported by builders also failed to pass, including:

  • Statewide Building Code This is work in progress for future sessions and building support or at least neutrality among rural counties needs to be pursued.
  • Restrictions on the residential zoning authority of cities, commonly referred to as the “Missing Middle” legislative effort. The League of MN Cities vehemently opposed this legislation, possibly hurting some of their other agenda items.

 

Residential Energy Codes: This bill passed and while we were successful in amending the original 80% reduction in energy savings to 70%, and pushed out the mandate to 2038, it’s still concerning that the legislature has taken direct action on building codes.

 

Worker Misclassification: This bill passed and while we were successful in pushing out the effective dates for compliance, the DLI Commissioner has expanded authority to enforce broad work stoppages as the agency investigates claims of misclassification.

Builders Association of Minnesota Letter

BAM Letter to the Members of the Climate and Energy Finance and Policy Committee

The following is a letter drafted to Representative Kraft, Chair Acomb, and Members of the Climate and Energy Finance and Policy Committee,

 

April 2, 2024

Dear Representative Kraft,

 

The Builders Association of Minnesota is writing to express our concerns about the proposed legislation that mandates a 70% reduction in energy consumption for new home construction HF 4242. While we strongly support energy efficiency initiatives, we believe the current 70% target may be unrealistic and counterproductive.

 

Balancing Cost and Savings:

Achieving a 70% reduction with cost-effective construction methods is highly challenging. While current code-compliant homes average $500 annual heating bills and under $100 for cooling, a 70% reduction might only save homeowners around $400. This raises the question: How much will construction costs increase to achieve this reduction?

 

Impact on Affordability:

The significant cost increase associated with such a drastic energy reduction standard would have a dramatic impact on our ability to build affordable housing. This could potentially price out many potential homebuyers, particularly those in the lower income brackets. A 7% cost increase could result in $25,000 or more for even modest new home builds, and we think this is underestimated.

 

Focusing on Existing Housing:

Many existing homes, especially older ones, contribute significantly to overall energy usage. Targeting these homes through retrofitting programs or even incentivizing replacement with new, energy-efficient units might yield greater energy savings compared to focusing solely on new construction. Enforcing the current state building code in all our communities is the most straightforward means to achieving more energy efficiency in our homes. 

 

Recommendation:

 

We encourage you to consider incorporating the following elements into the bill:

  • Cost-Benefit Analysis: A provision requiring an analysis of the cost increase associated with achieving the 70% reduction and establishing an acceptable payback period for homeowners.
  • Focus on Existing Housing: Exploring programs geared towards retrofitting and potentially replacing highly inefficient existing homes.

 

Thank you for considering our concerns. I believe a more balanced approach that promotes long-term sustainability and energy savings without jeopardizing affordability is critical. I am available to discuss this matter further and would appreciate the opportunity to collaborate on finding an effective solution.

Sincerely,

 

Grace Keliher

Executive Vice President of the Builders Association of Minnesota

Builders Association of Minnesota Letter

BAM Letter to the Minnesota Department of Health About Lead Rules

The following is a letter drafted to the Minnesota Department of Health

 

September 19, 2023

Dear Minnesota Department of Health,

 

The Builders Association of Minnesota (BAM) is writing to comment on the Proposed Permanent Rules Governing Lead Renovation, Repair, and Paint, dated July 12, 2023.

BAM represents nearly 1200 residential builders, remodelers, subcontractors, and industry partners across Minnesota. We understand the dangers and health effects of lead on children, and we are committed to working with the Department to develop effective rules to protect public health.

We have several concerns about the proposed rules. First, we believe that the Department should adopt the EPA’s Lead Renovation, Repair, and Painting (RRP) Rule by reference. This would simplify the rules and make them easier to understand and comply with. Thirteen other states have already adopted the EPA rule by reference, and we believe that Minnesota should do the same.

Second, we believe that the proposed rules are too prescriptive and burdensome. For example, the rules require that training classes have no more than 24 participants and that hands-on training courses have an instructor-to-student ratio of no more than 8 to 1. These requirements are more stringent than those for K-12 and higher education classes, and they will make it more difficult and expensive to train workers.

We are also concerned about the enforcement of the proposed rules. The rules are complex and contain a wide range of requirements. It is unclear how the Department will be able to enforce all these requirements statewide.

We urge the Department to reconsider the proposed rules and develop a new set of rules that are simpler, more flexible, and easier to enforce. We also urge the Department to increase stakeholder input and interagency cooperation in the rulemaking process.

Specifically, we recommend the following:

  • Adopt the EPA’s RRP Rule by reference.
  • Reduce the prescriptive nature of the rules and give more flexibility to contractors.
  • Develop a clear and complete enforcement plan.

We are committed to working with the Department to develop effective rules to protect public health from lead exposure. We believe that the changes we have recommended will make the rules more workable for contractors and more effective in protecting the public.

Paid Family Leave

All You Need to Know About the Minnesota Paid Family and Medical Leave Law

When does the program start?

Workers will be able to begin taking leave and receiving benefits on January 1, 2026. Workers and employers will begin contributing to the program on that same date.

Who does the law cover?

The law will cover nearly all employees in Minnesota, including both private sector and state and local government employees. It will cover employees regardless of employer size and include both full-time and part-time workers, with a limited exception excluding certain seasonal workers from coverage. Self-employed people will be able to voluntarily opt into coverage.

What kinds of leave does the law provide?

Minnesota’s law will provide through the Department of Employment and Economic Development and includes:

  • Medical leave to address workers’ own serious health conditions, including pregnancy.
  • Caregiving leave to allow workers to care for a loved one with a serious health condition.
  • Parental leave to provide workers the time to bond with a new child.
  • Safety leave for certain needs when workers or their loved ones experience sexual or domestic violence.
  • Deployment-related leave to deal with the impact of a loved one’s military deployment.

Who will be eligible for benefits?

To be eligible, workers will need to have earned at least 5.3 percent of the state average annual wage in total over the base period—a designated 12-month period prior to the start of leave. Based on the current state average annual wage, workers would need to have earned about $3,684 in the base period to qualify.

Benefits are portable, meaning that income earned across all covered Minnesota employers in the base period counts toward the total. This means that someone who recently changed jobs could count income from their past job as well as their current job, while someone with two jobs could count income from both. In other words, workers keep their eligibility for the monetary benefits, even as they change employers, and could be eligible for monetary benefits as soon as they start with an employer if they were previously eligible.

How much time can workers take?

The legislation breaks benefits into two categories: 1) medical leave, including for pregnancy or recovery from childbirth, and 2) all other kinds of leave, that is parental leave, safety leave, caregiving leave, and deployment-related leave. Workers can receive up to 12 weeks of leave in each of the two categories per benefit year.

Workers who need leave from both categories can take up to 20 weeks total in a benefit year.

What family members can workers use leave to care for?

A family member will include a worker’s spouse or domestic partner, child, parent, sibling, grandchild, or grandparent, as well as many relationships by marriage. The definition of family will also include “an individual who has a relationship with the applicant that creates an expectation and reliance that the applicant care for the individual, whether or not the applicant and the individual reside together,” recognizing that many workers need to care for a loved one to whom they may not have a legal or biological relationship.

Will workers’ jobs be protected while they take leave?

Anyone who was hired at least 90 days prior to their leave, employees will have the right to get their job, or an equivalent job, back following covered leave, regardless of the size of their employer or how many hours they work per week.

Employees who receive health insurance through their employer will be entitled to keep their coverage while on leave.

Employers are prohibited from interfering with employees’ rights or retaliating against employees for using those rights.

How much money will workers receive when they take leave?

Wage replacement rates—the percentage of their own income that workers receive while on leave—will be progressive. Progressive wage replacement balances the need for lower-income workers to receive as high as possible a percentage of their own income while on leave with the need to keep program costs, which are ultimately borne at least in part by workers, affordable.

Workers will receive:

  • 90 percent of the portion of their weekly wages that is less than or equal to 50 percent of the state average weekly wage, plus:
  • 66 percent of the portion of their weekly wages that is more than 50 percent of the state average weekly wage but less than or equal to 100 percent of the statewide average weekly wage, plus:
  • 55 percent of the portion of their weekly wages that is more than 100 percent of the state average weekly wage:

Benefits will be capped at 100 percent of the state average weekly wage. For 2023, 50 percent of the state average would equal $668.50 per week, and 100 percent would be $1,377.00 per week.

How will the state pay for the program?

Initially, the program will be funded through substantial appropriations from the state’s general fund. This initial funding will jump-start the program’s insurance fund, making it possible for benefits to begin at the same time workers and employers begin paying in, without waiting for contributions to build up in the fund.

Going forward, the program will be funded with payroll premiums split evenly between employers and employees. When premiums begin on January 1, 2026, the rate will be 0.7 percent, meaning that employees and employers will each pay 0.35 percent on income up to the maximum income $162,000 (if implemented now in 2023). Rates will later be adjusted annually based on program usage. Employers with fewer than 30 employees will pay a reduced amount, which the fund will absorb; employees at small employers will pay the same amount as those at larger employers.

How will workers access benefits?

Like other state paid leave programs, Minnesota’s new law will create an insurance system. This means that, typically, when workers need benefits, they will apply to the state, which will process their claim and pay benefits out of the state insurance fund. Employers will not need to pay employees while they are on leave.

Employers can request special permission to provide benefits through a private plan.

Notice Requirements
Employers will be required to post a notice prepared by the State regarding paid FMLA benefits. Individual employees must also be issued written notices that contain certain information designated in the statute. These notices must issue at least 30 days from the beginning of the employee’s employment, or 30 days before premium collection begins, whichever is later.

 

Note – This was put together from the bills text and background , BAM Session Report, Center for American Progress, Arthur Chapman Law Firm, and other assorted news stories.

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