Legislative Updates

On Thursday, March 11, President Biden signed the American Rescue Plan, a $1.9 trillion COVID relief package that will send $1,400 checks to most Minnesotans, provide resources for reopening schools, improves vaccine distribution to rural communities, increase the child tax credit and otherwise address the public health and economic needs of the country. This package is important for the state legislative session because it provides nearly $5 billion to Minnesota’s state, local and tribal governments. For context, Minnesota’s last biannual budget was approximately $48 billion. The stimulus payments and other initiatives aimed at jumpstarting the economy also improve the state budget officer’s revenue estimates (i.e. from collecting more taxes on purchases), contributing to a one-time projected surplus of $1.6 billion going to into the upcoming two-year budget cycle. This shot-in-the-arm from the federal government will make it more likely that legislators can deliver on MFU priorities like broadband development, meat processing and biofuels infrastructure—all of which require new spending.

Related to previous COVID relief, and important to MFU members who received forgivable Paycheck Protection Program (PPP) loans, the Minnesota Senate passed legislation that would conform with federal law and make sure that farmers and others won’t owe income tax on those relief funds. Senator Tom Bakk (I-Cook) led the $438 million package, which passed on with bipartisan support (55-12) in the Senate, though some DFLers raised concerns that, while important, the package should have done more for workers. MFU shared testimony in support of conforming with federal tax law—and doing so ahead of the end of session—because many farmers are already filing their taxes.

“PPP loans helped many of these farmers other rural small businesses cashflow their operations and retain employees through the ups and downs of the pandemic,” MFU President Gary Wertish shared in written comments. “This would provide needed relief to farmers and others, many of whom have seen their operations negatively impacted by the COVID-19 pandemic.”

The proposal still needs to be approved by the Minnesota House and signed by the Governor. On Monday, the House declined to suspend the rules to take up a vote and referred the Senate-passed package to the House Tax Committee where Chair Marquart (DFL-Dilworth) has been working hard to develop consensus around a similar proposal. PPP loans, which are forgivable if used for payroll and eligible expenses and are available to sole proprietors (which includes many farmers), are still available to new applicants until March 31. Since these loans are administered through local lenders, a good first step is to contact your lending agent to confirm that they work with Small Business Administration (SBA).

Also in the tax committee, MFU shared testimony in support of expanding a tax exemption for capital equipment purchases to meat processing plants. This initiative, brought forward by Rep. Swedzinski (R-Ghent), is another way to support the development of new small and mid-scale processing plants, for whom startup costs is a key concern. This type of an initiative would pair well with present and proposed state and federal investments in meat processing.

In the House Agriculture Committee, Chair Mike Sundin (DFL-Esko) heard legislation that would reauthorize cooperative development grants at the Minnesota Department of Agriculture (MDA). Vice Chair Samantha Vang (DFL-Brooklyn Center) introduced this legislation, which was brought forward by MFU. Mirroring a similar program that was available at the MDA some years ago, this proposal would allow the department to make grants to farm cooperatives of up to $50,000 for startup costs including of organizational development, financing, marketing analysis, and other investments need to start a processing or marketing agricultural products.

In introducing the bill to the committee, Vice Chair Vang shared how this initiative will help Minnesota farmers who are “growing new, often high-value crops, for which the market and supply chain is still emerging.” She is a champion for Minnesota’s industrial hemp industry in Minnesota.

MFU member and founding member of the Perennial Promise Growers Cooperative, Ben Penner, shared how this proposal would help his cooperative get off the ground and build a sustainable market for perennial grains developed by the University of Minnesota’s Forever Green Initiative. Miah Ulysse, representing 40 Acres Coop, talk about how his could help the black-owned hemp cooperative add value to their products through processing. The bill will be considered for inclusion in the Agriculture Omnibus Finance bill—the final end-of-session package that funds MDA.

On Monday, Chair Sundin’s committee held the first hearing of the Governor’s budget recommendations, which form the basis for the Ag Omnibus Bill. MFU shared strong support for increasing access to meat processing, investing in climate-smart agriculture, helping stations upgrade their pumps to use higher blends of biofuels, supporting land access and farm transition, and a number of other important initiatives.

“While agriculture is the foundation of Minnesota’s economy—generating $112 billion in economic impact and supporting more than 430,000 jobs—our budget for MDA makes up less than 1% of the state’s overall budget,” said President Wertish in written comments. “We support growing that investment in farmers and rural communities.”

President Wertish also gave strong testimony in support of increasing the state’s biofuel blend rate from 10 to 15% in the coming years. He explained to House Commerce Committee members that this provides important benefits to not only farmers, but also urban and suburban residents who will experience improved air quality and lower prices at the pump.

In the Senate, Chair Torrey Westrom’s (R-Elbow Lake) committee heard a proposal to increase funding for Minnesota’s Farm-to-School programs, which can strengthen local markets for producers all while introducing young people to nutritious food. This legislation, led by Senator Mike Goggin (R-Red Wing) seeks an additional $4 million for successful programs currently serving students and farmers at MDA.

MFU has also shared testimony in support of these initiatives and others, including making Community Solar more available to farmers, establishing an special license plate to pay for ag education, funding the emerging farmers working group and funding reimbursements for producers who experience wolf and elk depredation.

Minnesotans received encouraging news at the end of February when the state’s Office of Management and Budget (OMB) released an updated forecast estimating the difference between state revenues (i.e., taxes and fees) and state expenditures (i.e., state staff salaries, grant programs and tax credits). The forecast showed a projected $1.6 billion surplus, a much brighter picture than the $1.27 billion deficit projected in November.

While this is certainly good news, officials were quick to note that this is likely a short-term surplus due to lower spending on state services during the current budget cycle and higher projected revenues going forward, thanks to a likely $1.9 trillion federal stimulus package that is still under negotiation. To put that surplus in perspective, last biennium’s budget came in at around $48 billion. Still, there are opportunities to make short-term investments that will have long-term positive impacts for agriculture.

MFU priorities earned hearings in key House and Senate committees. In early March, Senate Agriculture Committee Chair Sen. Torrey Westrom (R-Elbow Lake) and his committee heard Sen. Andrew Lang’s (R-Olivia) bill that would invest $1 million in local meat and poultry processing facilities across the state and to start new plants. This proposal reflects an investment outlined in the Governor’s budget. MFU Executive Committee Member Josh VanDerPol testified about what this investment could mean for his farm business, Pastures ‘a’ Plenty. President Gary Wertish added in written testimony that this is a “top concern” for MFU members across the state.

“[This investment will] help new and existing meat and poultry processors expand their capacity to provide needed relief to farmers who are wondering how they will bring their animals to market,” President Wertish said. “At MFU, we continue to hear from farmers who are considering building their own plants, in large part due to their frustration with trying to find slaughter capacity near their farm.”

Legislation to move the state’s biofuel blend standard from 10% to 15% (SF 1178/HF 1433) was put forward by Governor Walz, carried by Chair Westrom and Rep. Luke Frederick (DFL-Mankato), and supported by MFU and others. In committee hearings, President Wertish gave strong testimony referencing not only market benefits for many farmers, but also the opportunity to reduce greenhouse gas emissions.

Bipartisan legislation to make needed investments in broadband development across the state (SF 22; HF 14) was also heard in both houses.

“Family farmers rely on the internet to connect with customers, monitor market trends, educate themselves on the latest farming methods, and make use of modern farming technology—it’s increasingly essential to running a farm business,” said President Wertish in written testimony. “High speed internet isn’t a luxury—it’s a need.”

Finally, one bill that has only received formal hearings in the House so far is an effort to reauthorize the state’s Farmer-Lender Mediation program and extend the timeline for farmers from 90 to 120 days. This legislation (SF 1329; HF 80) is championed by Rep. Lippert (DFL-Northfield) in the House and Sen. Kent Eken (DFL-Twin Valley) in the Senate. Rep. Lippert has heard from constituents and others about the importance of this program—it can help farmers and lenders find mutually agreeable ways to resolve agricultural debts. MFU strongly supports this program and President Wertish testified multiple times on how it helps level the playing field for farmers who are facing extreme financial stress.

MFU has weighed in on a host of other issues including creating a public buy-in option for health care, strengthening energy conservation, expanding the Beginning Farmer Tax Credit, creating a special agricultural license plate to fund ag education, federal tax conformity and supporting county fairs.

The start of February brought colder weather and ramped up legislative work, both on the state and national level. In Minnesota, the state legislature dug into details of Governor Walz’s budget proposal, and on the federal level, Congress held confirmation hearings for key cabinet officials, including former Secretary Tom Vilsack for USDA, and advanced another COVID relief package through key procedural hurdles.

As always, and though now via phone and Zoom, MFU is working hard to make sure that legislators, cabinet officials and other policymakers understand the needs and perspectives of family farmers and rural communities.

At the start of this month, the Minnesota House and Senate agriculture committees spent committee time considering the budget proposals brought forward by Governor Walz. These proposals will form the basis for the agency funding and policy bills, which will be formally released in the coming days. They also reflect the Governor’s “opening offer” on budget negotiations with the House and Senate. The Governor’s budget includes many of MFU’s key priorities, including investing in small and mid-scale meat processors, funding for broadband buildout across the state, investments in biofuels, farm transition and investments in climate smart agriculture.

While the state’s budget is limited due in large part to the need to balance spending with revenues each biennium, many of these proposed investments could leverage additional federal dollars, maximizing their impact and bringing more investment to the state. For example, as part of the $900 billion COVID-19 relief package passed in December, Congress approved a modified version of the RAMP-UP Act which invests $60 million in upgrading custom exempt and ‘equal to’ processing facilities to federal inspection standards. This bill was a top priority for National Farmers Union (NFU) and was championed by then-Chair Collin Peterson (D-MN7), Senator Amy Klobuchar (D-MN). The $1 million for meat and poultry processing in the Governor’s budget could help match these federal funds, attracting more investment to Minnesota.

Similarly, the Governor’s proposed investments in biofuels infrastructure will leverage federal investment and could help serve as a match for federal dollars. We were pleased that he submitted a letter to President Biden last week in support of the biofuels industry, on behalf of the Governors’ Biofuels Coalition which Walz chairs.

In Minnesota, much of the conversation about the budget has centered on how to make up for a projected $1.28 billion budget shortfall going into the next two years. The Governor proposes closing the gap through a mix of tapping the state’s reserves, carrying over some funding from the current budget, and increasing taxes on the 0.7% of the highest income earners in the state (couples earning over $1 million annually), and some corporations.

Those families in lower tax brackets would see a modest decrease in their tax liability under the Governor’s plan.

Next week, the Legislature will receive an updated forecast estimating the difference between state revenues (i.e. taxes and fees) and state expenditures (i.e. state staff salaries, grant programs and tax credits). This will revise the December forecast estimating a $1.28 billion shortfall and will provide the basis for budget negotiations going forward.

Coming soon after the February forecast is the first legislative deadline on Friday, March 12. Prior to this deadline, most policy bills need to have been approved by at least one committee or they’re no longer up for consideration. This helps legislators, advocates like MFU, and members of the public narrow their focus to a smaller number of proposals. This is particularly important given that well over 1,000 bills have been introduced so far this session—and more are coming.

Instead of voting to approve a measure, committees can also lay the bill over for possible inclusion—if you watch the agriculture committees, you’ll see them take this tack often, including for MFU priorities. This means that the committee has considered the proposal and could add a version of it to the omnibus finance or policy bill. This is what was done with Rep. Lippert’s (DFL-Northfield) bill to lend more time to farmers who are subject to farmer-lender mediation, the first bill heard by the House ag committee.

On the federal level, the Senate Ag Committee considered the nomination of Agriculture Secretary Tom Vilsack, who has been re-nominated to serve in that post by President Biden. As part of the hearing, Senator Klobuchar (D-MN) confirmed his strong support for biofuels and Senator Smith (D-MN) asked him about his plans equitably administer programs and make sure that underserved producers are supported by the USDA. If you want a window into the early days of the new USDA, you can watch the full hearing here.

Also in Washington, progress continues on President Biden’s $1.9 trillion stimulus package, which includes larger stimulus checks, additional aid for folks who are unemployed, and funding to ramp up vaccinations. Important for agriculture and as highlighted by National Farmers Union, the bill includes $16.1 billion in support for farmers, farm workers, people facing hunger, meat processors and others.

Progress on this package is also important for state legislative work given that Biden has proposed sending significant funding to state and local governments, schools and others.

Now a full three weeks in to the state legislative session, legislators, the Governor and Lt. Governor, Commissioners and staff are hard at work holding virtual committee hearings, debating policy proposals, and starting the craft the states next two-year budget. Similarly, MFU has been hard at work making members’ voices heard on priority issues including health care, the agriculture budget, climate change, biofuels and broadband.

Last week, MFU members joined meetings with Governor Walz and Lt. Governor Flanagan, Attorney General Keith Ellison, Senate Ag Chair Torrey Westrom, House Ag Chair Mike Sundin, Commissioner of Agriculture Thom Petersen and other policymakers as part of MFU’s Virtual Lobby Days. Meetings held over three days provided an important opportunity to talk about issues that are important to farmers, their families and their communities.

In the meeting with Commissioner Petersen, MFU members learned more about the department’s response to COVID-19 and shared the importance of expanding access to meat and poultry processing across the state, new investments in climate smart agriculture, and support for new and emerging farmers. We were glad to see some of those conversations about meat processing picked up by the media here and here.

In the Governor’s budget proposal, which was released on Tuesday, these priority issues and others were put forward as the Governor’s opening position for budget negotiations that will continue throughout the session. Reflecting MFU’s priorities, we saw the governor propose:

• $1 million for meat processing grants, plus $220,000 to expand access to inspection
• $150,000 for assisting in farm transition and funding to expand the Department’s Farm Link program
• $100,000 for farmer mental health programming
• $4 million for biofuels infrastructure, paving the way for E15 and higher blends
• $500,000 to spearhead a Climate Smart Farms Project to help farmers invest in climate solutions
• $6 million for the Minnesota Agricultural Water Quality Certification Program
• $3.9 million for the Forever Green Initiative
• $2 million for the Ag Best Management Practices Loan Program to help farmers make upgrades needed to incorporate cover crops, conservation tillage or precision agriculture
• $40,000 to help hire an additional Farm Advocate
• $50,000 to make sure the state’s hemp licensing program works for farmers
• $50 million for the Border-to-Border broadband grant program

The Governor’s $52.4 billion budget proposal, which can be found here, also invests in getting bars, restaurants and other small businesses back on their feet, kids back in the classroom and helping families who’ve been most hurt by COVID-19. To make these investments, the Governor proposes a 1.5% tax increase for those earning over $1 million dollars and other revenue generating measures aimed at high income earners.

“Not every Minnesotan was impacted by the COVID-19 pandemic equally. We know the COVID-19 pandemic hit our working families, small businesses, and students particularly hard. They need our help,” Walz said. “The budget I am unveiling today will make significant strides in helping those Minnesotans stay afloat.”

Senate and House Republicans were quick to push back on the budget, beginning the long debate that needs to conclude with a final budget by the deadline at the end of June.

Also on the docket today was a first hearing of a bill to expand MinnesotaCare with a public option—a top priority for MFU. During a meeting with bill author Rep. Jennifer Schultz (DFL-Duluth) last week, MFU members shared how expanding MinnesotaCare with a public option would help family farmers by giving them needed options to purchase healthcare. Rep. Schultz’s bill would also eliminate the “family glitch” that prevents spouses of people with employer sponsored coverage from purchasing health insurance on the individual market—even if the employer-sponsored coverage is unaffordable. MFU member Cindy VanDerPol voiced the support of the organization in addition to sharing her own story about lacking meaningful access to affordable health coverage. MFU President Gary Wertish also submitted formal testimony, which you can read here.

“As small business owners, family farmers disproportionately purchase health insurance on the private market and are hit hard by high premiums and lack of choice between health plans in rural areas,” he said. “Our members believe strongly that everyone deserves affordable, comprehensive health coverage when they need it. . . . We can and must do better.”

Finally, the House and Senate Ag committees met virtually last week to hear testimony about Farmer-Lender Mediation, which ensures that farmers get a fair shake when working to resolve agricultural debt—in some cases, the program helps keep farmers in crisis on the farm. In both hearings, President Wertish testified about the importance of the program and the strain that COVID has put on farmers, lenders and the mediation program as a whole.

That’s why we were eager to see Rep. Todd Lippert (DFL-Northfield) champion a bill to stretch out mediation timelines from 90 to 150 days, recognizing that it would give needed breathing room to farmers who are working through extreme financial difficulty. What farmers and mediators have found is that it’s much harder to come to a mutually beneficial resolution over the phone or Zoom, given the high-stress nature of negotiations. Not only that, but mediations often require procuring tax documents, having land surveyed, drawing up deeds, appraising equipment and a host of other functions, all of which take longer when working remotely.

Lastly, we’ve posted PDF versions of each of the letters we’ve submitted to the Legislature as written testimony. Here they are:

Letter in support of Conservation Improvement Program/ECO Act

Letter in support of Ag License Plate bill

Letter in support of MinnesotaCare public option bill

Letter in support of Border-to-Border Broadband Grant funding bill

Letter on climate change impact on farmers

At noon on Tuesday, Jan. 5, Minnesota’s regular legislative session officially began.

This event is made less notable by the fact that legislators have convened for a special session every month since the last regular session adjourned in May. But the day did mark the swearing in of newly elected legislators, the start of negotiations on the next two-year budget and renewal of regular committee work.

As always, with leadership and help from you, MFU will work hard to make sure that Minnesota’s family farmers have a voice in shaping policies that affect their farms, families and communities. Though opportunities to participate in conversations at the Legislature will be virtual for the foreseeable future, including our annual Lobby Day, we plan to take every opportunity to make our members’ voices heard – be that by joining Zoom committee hearings, submitting written testimony or contacting elected officials by phone, email and social media.

As it was in 2019-2020, the Legislature is divided. In the November election, Republicans maintained a slim majority in the Senate, as did DFLers with a narrowed majority in the House. That dynamic aside, legislators and DFL Governor Tim Walz are unified in needing to address the public health, economic and social consequences of the COVID-19 pandemic. Additionally, legislators will be tasked with developing the next two-year budget (2022-23) and redistricting legislative maps following the 2020 census.

Though rhetoric can be divisive – and there are certainly strong differences of opinion among elected officials – there is much reason to be hopeful that they will be able to come together and deliver for people across Minnesota. Budget negotiations were successful in 2019 with a similar political dynamic. And since the start of the pandemic, legislators united in passing a bonding bill and multiple state aid packages aimed addressing the some of the worst effects of COVID-19.

Agriculture, in particular, has remained a bright spot of bipartisan work throughout the pandemic with legislators approving some relief for farmers and other businesses, new investments to expand local meat and poultry processing and changes to the Rural Finance Authority (RFA) to make sure farmers affected by COVID-19 could have access to low-interest disaster loans. Given the real challenges many farmers are facing – as well as the opportunities the state could help them pursue – we hope this year will be no different.

Approving a budget for the Minnesota Department of Agriculture (MDA), making our agriculture markets more resilient, fixing the bottleneck in local meat processing, expanding the use of biofuels and a host of other issues will be the purview of the House and Senate Agriculture Committees. Senator Torrey Westrom (R-Elbow Lake), who previously served as the Senate Ag Finance Committee Chair, will resume that role again this session. Last session, he helped secure funding for local meat processing, a top MFU priority.

“I am proud to be able to once again chair the Senate’s Ag Committee. I grew up on a farm. I have lived in Greater Minnesota my entire life,” said Sen. Westrom. “I know how important agriculture is – not just to the numerous small towns that make up most of Minnesota’s 87 counties, but to our state as a whole.”

Newly-elected Sen. Erin Murphy (DFL-St. Paul) will take on the role of Minority Lead. On the committee, she plans to use her role on the committee to work to build strong rural families, end hunger and champion economic justice. Sen. Murphy has previously served as the Majority Leader while in the state House.

In the House, Representative Mike Sundin (DFL-Esko) will be chairing the Ag Committee. He previously served on the ag committee, represents Carlton and parts of Pine and St. Louis counties and grew up on a dairy farm in Koochiching County.

“In addition to ensuring we all have something to eat on the kitchen table, agriculture is part of our state’s economic backbone, and the industry has been facing significant challenges,” Chair Sundin said. “I look forward to tackling this work in a committee that is traditionally one of the most bipartisan in the entire House.”

Leading minority members on the House Ag Committee is Rep. Paul Anderson (R-Starbuck), a farmer and active MFU member. He worked hard with MFU to develop grain indemnity fund and plans to continue championing moving the state’s ethanol blend rate up from E10 to E15. In 2019, we awarded him

MFU plans to work with the Legislature, the Governor, state agencies and others to make health care more affordable, to make sure everyone has access to high-speed internet, tackle climate change and make sure our state is an inclusive and affirming place for everyone. All these issues were defined as priorities by MFU members and ratified as Special Orders by delegates to our State Convention in November.

As always, if you have any questions, thoughts, or concerns about MFU’s legislative work, don’t hesitate to reach out to me.