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2021 Special Session

$1.7 billion omnibus employment and economic development law aims to boost economic recovery

The omnibus employment and economic development law will spend $1.7 billion on programs ranging from helping businesses recover from COVID-19 restrictions and civil unrest to subsidizing child care so new parents can work.

The appropriations for the 2022-23 biennium are 11.3% above 2020-21 biennial funding.

The new law sets budgets and policies for the Department of Employment and Economic Development, Department of Labor and Industry, Bureau of Mediation Services, and Workers’ Compensation Court of Appeals.

Of the total appropriation, $423.5 million will come from the General Fund, $130 million will come from the workforce development fund, $117.1 million will come from the workers’ compensation fund and $92.8 million will come from the special revenue fund.

The law also specifies how the state will spend $694.3 million in federal COVID-19 funds and requires the Department of Employment and Economic Development to apply for $70 million from the American Rescue Plan Act of 2021 to fund the department’s Border-to-Border Broadband Development Grant Program that expands broadband service in Greater Minnesota.

[MORE: View the spreadsheet]

The law, effective July 1, 2021, unless otherwise noted, is sponsored by Rep. Mohamud Noor (DFL-Mpls) and Sen. Eric Pratt (R-Prior Lake).

$150 million for economic revitalization programs

The law will appropriate $80 million to DEED to distribute grants and guaranteed loans for projects that “address the greatest economic development and redevelopment needs” of a community that have arisen since March 15, 2020, meaning that business damaged by last year’s civil unrest would be eligible.

Grants and loans need to be proportionally distributed between the Twin Cities metropolitan area and Greater Minnesota.

Another $70 million will be appropriated to DEED to fund businesses affected by the pandemic. Minnesota businesses employing fewer than the equivalent of 200 full-time workers will be eligible for grants, and priority will be given to businesses that did not receive previous state assistance under certain other economic relief programs.

Grant funds must be used for working capital to support payroll expenses, rent or mortgage payments, utility bills, and other similar expenses. (Art. 1, Secs. 2, 20; Art. 2, Secs. 5, 22)

Other appropriations in the law

Appropriations to DEED include:

• $32.7 million for extended employment services for persons with severe disabilities;

• $20 million for the Minnesota Investment Fund for job creation, efficient use of public transportation and existing infrastructure, provision of affordable housing, community rebuilding, crime reduction, blight reduction and community stabilization, and property tax base maintenance or improvement;

• $16 million for the Job Creation Fund;

• $14.3 million for the Pathways to Prosperity Competitive Grant program;

• $12.9 million for State Services for the Blind;

• $9.9 million for the Business Development Competitive Grant program;

• $8.4 million for the Minnesota Job Skills Partnership program;

• $8.1 million for the Minnesota Youth program;

• $8 million for grants to local communities to increase the number of quality child care providers;

• $5 million for LAUNCH Minnesota;

• $2 million for rural career counseling coordinators;

• $2 million for the Minnesota Emerging Entrepreneur Loan program;

• $1.1 million for the Northeast Entrepreneur Fund, a small-business administration microlender and community development financial institution in northern Minnesota; and

• $1 million to the Minnesota Film and TV Board for a film production jobs program. (Art. 1, Sec. 2)

Appropriations to the Department of Labor and Industry include:

• $4.9 million for wage theft prevention;

• $2.5 million for general apprenticeship programs;

• $2.2 million for youth skills training grants;

• $1.8 million for the department to perform information technology project services and support system upgrades;

• $450,000 for the Helmets to Hard Hats Minnesota initiative;

• $400,000 for a career and technical educator pilot project at Winona State University and Minnesota State College Southeast;

• $302,000 for prevailing wage enforcement; and

• $200,000 for a labor education and advancement program to expand and promote registered apprenticeship training for minorities and women.

The new law also appropriates $4.8 million to the Bureau of Mediation Services and $4.6 million to the Workers’ Compensation Court of Appeals. (Art. 1, Sec. 3)

New and modified labor, workplace and unemployment policies

Policy provisions in the new law include:

• effective Jan. 1, 2022, requiring employers to provide new mothers with reasonable accommodations for health conditions related to pregnancy or childbirth, and to provide paid break times to express breast milk;

• requiring high-rise public housing buildings to be retrofitted with automatic sprinkler systems to meet current building codes;

• requiring automatic sprinkler systems in a place of public accommodation if, on or after Aug. 1, 2008, the facility was constructed, added to, or altered, and the facility has an occupant load of 300 or more;

• permitting high school students to qualify for unemployment insurance;

• effective July 3, 2022, expanding options for individuals to receive unemployment benefits while undergoing workforce training;

• effective July 3, 2022, eliminating the Social Security old age and Social Security disability offset from unemployment benefits; and

• determining that a leave of absence is presumed to be due to COVID-19 – and therefore involuntary – for applicants for unemployment benefits applying between Dec. 27, 2020, and Sept. 4, 2021. This is effective retroactively from Dec. 27, 2020. (Art. 3, Secs. 3, 5, 10; Art. 4, Secs. 1-4, 7)

2021 Special Session: SSHF1/SSSF9*/SSCH10

New Laws 2021

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SF0009* / HF0001 / CH10
House Chief Author: Noor
Senate Chief Author: Pratt
Effective Dates: See chapter summary in the file link above.
* The legislative bill marked with an asterisk denotes the file submitted to the governor.