2024 Faegre Drinker Legislative Session Recap

At a Glance

• After extensive negotiations between Minneapolis legislators, the governor and ride-sharing companies, an agreement was reached in the final hours of session keeping both Uber and Lyft in the state. 
• The “Taylor Swift” bill requires ticket sellers to show the total cost of a ticket, including all fees, from the first time a consumer clicks on a potential seat, rather than waiting until check-out to see the total price. 
• After years of debate, Minnesota became the 18th state to enact a comprehensive consumer data privacy law.
• A key change generating controversy is a provision to last year’s law legalizing cannabis creating a vetted lottery system for distributing cultivation and retail licenses.
• The Packaging Waste and Cost Reduction Act requires producers to pay half of recycling costs beginning in 2029, with that threshold increasing in the following years.
• A new law aims to combat employer misclassification fraud by making changes to the general worker misclassification statute as well as specific changes related to the construction industry.
• Starting January 1, 2026, health plans are prohibited from applying prior authorization to treatment of chronic conditions under certain circumstances, as well as for treatment of outpatient mental health and chemotherapy.

The 93rd Minnesota Legislature finished its business against a backdrop of chaos at midnight on Sunday, May 19, 2024, passing a 1430-page, 73-article omnibus bill that had been constructed earlier in the day. This massive omnibus bill covered a number of policy areas including taxes, transportation, energy, agriculture, labor, housing, health, higher education, and health and human services. It authorized numerous supplemental appropriations and enacted a significant number of new policy provisions. This approach was necessary to pass a session’s worth of work for the Minnesota Democratic-Farmer-Labor Party (DFL) controlled government trifecta, as its agenda became bogged down in the final days over an ethics complaint filed against Senator Nicole Mitchell (DFL-Woodbury) after being charged with a felony for breaking into her stepmother’s home, an unsuccessful attempt to pass the Minnesota Equal Rights Amendment, legislation keeping Uber and Lyft in the state, and the inability to reach a bipartisan agreement on a capital investment bill.

It didn’t start out that way. After a 2023 session producing a record $73 billion state budget and numerous new laws enacting the DFL trifecta’s progressive agenda, the 2024 session was supposed to be relatively quiet. When the legislature convened on February 12, legislative leadership intended to focus on a capital investment bill — always a priority in the second year of the biennium — and policy tweaks to legislation passed in 2023. Instead, over the next four months the legislature enacted a number of significant new laws, including new consumer protections, business data privacy changes and environmental protections. They also authorized approximately $477.5 million in supplemental appropriations and funded a fix benefiting counties after the U.S. Supreme Court invalidated the state’s tax forfeited property law. 

Passage of the massive omnibus bill caps the most consequential biennium in the last five decades. From the state’s budget to policy initiatives, the DFL trifecta expanded the size of state government and addressed a backlog of DFL priorities that had been blocked by divided government for nearly a decade. This included increasing the size of the state’s budget 38%; authorizing billions in new taxes for transportation, transit and housing; and authorizing a new paid family and medical leave program. The end-of-session omnibus bill can be viewed in its entirety here.

Business, Commerce & Technology

Uber/Lyft

If there was a business issue dominating attention at the Capitol this session, it was legislation keeping Uber and Lyft in the state. After the Minneapolis City Council passed an ordinance earlier this year significantly increasing per-mile and per-minute charges, both ride-hailing companies had threatened to end operations in Minneapolis and the greater metropolitan area. These departures would have had significant economic and other implications for the city, region and state.

After extensive negotiations between Minneapolis legislators, the governor and ride-sharing companies, an agreement was reached in the final hours of session keeping both Uber and Lyft in the state. This agreement guarantees drivers statewide $1.28 per mile and 31 cents per minute with a $5.00 minimum before tips. These new rates are estimated to result in an approximately 20% increase in driver pay. Like the state’s minimum wage, these rates will increase with inflation. The law also includes changes to insurance coverage requirements and protections against driver deactivations. The agreed-upon rates were nearly identical to what Minneapolis Mayor Jacob Frey had proposed months earlier to resolve the impasse.

The agreement preempts local governments from passing ordinances regulating ride-hailing companies, including specific nullification of the Minneapolis ordinance. It also retains the independent contractor classification for drivers. The legislation takes effect January 1, 2025. A copy of the law can be viewed here.

Ticketing Transparency & Junk Fees

The legislature prohibited speculative ticketing for sports and entertainment events and required greater ticket transparency. Known as the “Taylor Swift” bill because of its origin responding to issues fans encountered obtaining tickets to her Eras tour, this legislation requires ticket sellers to show the total cost of a ticket, including all fees, from the first time a consumer clicks on a potential seat, rather than waiting until check-out to see the total price. The Taylor Swift bill further prohibits speculative ticketing — i.e., selling a ticket on the secondary market without having the ticket in the seller’s possession. Finally, this legislation requires reporting regarding the use of bots to purchase large amounts of tickets. The law can be viewed here.

The legislature also placed restrictions and prohibitions on service charges and undisclosed fees that can be tacked on to the end of a transaction. The law requires any mandatory fee or surcharge to be disclosed in the advertised or listed price for goods and services. The goal of the legislation is to provide transparency in the marketplace, where it is estimated by Consumer Reports that the average American family spends thousands annually on junk fees. The law does not apply to fees that are preempted by federal law. The law can be viewed here.

Both laws go into effect January 1, 2025.

Internet/Privacy

Following national trends on regulating social media and protecting consumer data, the Minnesota legislature considered many proposals, with a few crossing the finish line.

One that passed with bipartisan support regulates a common social media practice referred to as “mommy run accounts.” Based on a similar law passed in Illinois, this bill prohibits making money from internet images / social media accounts featuring children under the age of 14. The minor would have to appear in the video content at least 30% of a 30-day period. There are exceptions for models and child actors already covered under the state’s labor laws.

For children 14 and over, the law requires that money be deposited in a trust account until the minor turns 18. It imposes civil penalties and is enforceable by the attorney general. A copy of the law can be found here.

After years of debate, Minnesota became the 18th state to enact a comprehensive consumer data privacy law. The “Minnesota Consumer Data Privacy Act” imposes obligations on “controllers” — individuals and corporate entities that determine the purpose and means of processing personal data — who either conduct business in the state or produce products or services targeted to state residents and who, within a calendar year, either control or process the personal data of at least 100,000 Minnesota consumers or control or process personal data of 25,000 Minnesota consumers and derive over 25% of gross revenue from the sale of data. Certain legal entities, primarily those covered under federal law, are exempt from the Minnesota law.

Controllers must provide notice with specific disclosures to Minnesota consumers. Minnesota consumers are also provided several rights with respect to their data including: 

• To confirm whether a controller is processing personal data about the consumer and to access the categories of personal data processed by the controller
• To correct inaccurate personal data concerning the consumer, taking into account the nature of the data and purposes of processing
• To delete the consumer’s personal data
• To obtain a copy of personal data that the consumer previously provided to the controller, where the data processing is conducted by automated means
• To obtain a list of the specific third parties to whom the controller disclosed the consumer’s personal data or, if not available, a list of the specific third parties to whom the controller has disclosed any consumers’ personal data

Consumers also have the right to opt out of the sale of their personal data, the processing of their personal data for targeted advertising, and the use of their personal data for profiling, in furtherance of automated decisions that produce legal or similarly significant effects concerning the consumer.

The law takes effect on July 31, 2025. Nonprofit corporations and postsecondary institutions are not required to comply until July 31, 2029. A copy of the law and a summary can be found here and here.

Cannabis

A number of updates were made to last year’s law legalizing cannabis. These updates are aimed at modifying the cannabis licensing and regulatory framework, with a particular emphasis on enhancing social equity, improving patient care and streamlining industry oversight.

A key change generating controversy is a provision creating a vetted lottery system for distributing cultivation and retail licenses. This system replaces the current points-based approach agreed to last session and is intended to reduce potential biases by pre-screening applicants before entering them into a random drawing. Additionally, the bill provides significant support for social equity applicants by offering them pre-approval opportunities this fall, allowing them a head start in the licensing process as well, and protecting them from financial exploitation.

The bill transfers the Office of Medical Cannabis to the new Office of Cannabis Management (OCM) in July of this year instead of next spring. This early transition aims to consolidate resources, adopt already-established cultivation rules, and utilize existing inspection and enforcement personnel for more efficient oversight.

Lastly, the bill eliminates the current restriction prohibiting bars and restaurants from serving a THC beverage and an alcoholic beverage to the same person within five hours. A copy of the law can be found here.

Energy/Environment & Climate

Permitting Reform

Permitting reform continued to be a focus at the legislature as it enacted two initiatives aimed at streamlining permitting requirements for clean-energy infrastructure projects as well as other projects requiring environmental review.

The first, the “Minnesota Energy Infrastructure Permitting Act” (MEIPA) is the culmination of more than nine months of negotiations by a broad group of stakeholders to improve the state’s energy permitting process. Last session, the legislature passed legislation requiring utilities to get 100% of their electricity from carbon-free sources by 2040. To meet this goal, the state will need to approve a number of new large-scale energy projects including wind, solar and battery storage. To this end, MEIPA allows utilities proposing wind or solar facilities intending to meet the state’s carbon-free energy standard to avoid a full Certificate of Need and instead apply for a more condensed approval process.

MEIPA also significantly reduces the number of transmission line projects required to obtain a Certificate of Need. Transmission lines directly interconnecting renewable-energy storage systems to the grid are exempt as well as low-voltage and lines less than one mile long.

Permitting reform was also included in the Omnibus Environment bill and is intended to speed up the review of any project that needs an environmental worksheet or an environmental impact statement. 

A copy of the law can be found here.

Extended Producer Responsibility (EPR)

Minnesota is now one of five states in the nation establishing an extended producer responsibility (EPR) law. The Packaging Waste and Cost Reduction Act, which was incorporated into the Environment Omnibus bill, requires producers to pay half of recycling costs beginning in 2029, with that threshold increasing in the following years. The adopted provision also includes deadlines for appointing a producer responsibility organization and advisory board (PRO) by 2025; from there, producers would have to register with the PRO by July 2026. A needs assessment is set to be the basis for forming recycling and waste reduction targets, and the PRO will have to submit a stewardship plan by October 2028. A copy of the law and summary can be found here and here.

Labor & Employment

After passing sweeping labor and employment-related bills in 2023, including Paid Family Medical Leave, Earned Sick and Safe time, and a prohibition on noncompetes, the business community was hopeful lawmakers would take the year off. Instead, there was continued momentum to further regulate the relationship between employer and employee.

Worker Misclassification

An initiative strongly supported by the Minnesota attorney general and the commissioner of Labor and Industry, this new law aims to combat employer misclassification fraud by making changes to the general worker misclassification statute as well as specific changes related to the construction industry.

Effective July 1, 2024, this comprehensive law does the following:

• Creates an Intergovernmental Misclassification Enforcement and Education Partnership to allow state agencies to share information and coordinate investigations.
• Increases the penalties for repeat offenders, including the ability to initiate a “stop work” order.
• Changes the independent-contractor test for those performing building construction or improvement services.
• Creates a private right of action for victims of employer misclassification fraud.

Many of these recommendations came out of a task force of the attorney general, which continues to confer and investigate issues surrounding worker misclassification and definitions of independent contractor. A copy of the law can be viewed here.

Paid Family Medical Leave (PFML) and Earned Sick and Safe Time (ESST)

The legislature passed modifications to the Paid Family Medical Leave and the Earned Sick and Safe Time laws that passed in 2023. For the most part they included clarifications and language intended to improve implementation and compliance with both programs. A significant new substantive change increases the payroll tax for the PFML program established last year at 0.7% and to 0.88% in 2026. This is expected to result in a $300 million dollar increase per year to employers required to participate in the program. The ESST law can be reviewed here and PFML here.

Requiring Salary Ranges in Job Postings

Effective January 1, 2025, employers with 30 or more employees are required to include the starting salary range and general description of benefits or other compensation for an available position on any job posting. This law does not include a requirement to post job openings. A copy of the law can be found here.

Health Care 

With little new supplemental appropriations to work with, the Health and Human Service committees instead focused on policy issues, dealing with provider licensure, scope of practice, health care mandates, reducing medical debt, eliminating prior authorization and health maintenance organization governance issues. In addition, there were dueling proposals and spirited debate on how quickly the state can implement a government-run public-option health care system in Minnesota. Highlights of the Omnibus Health and Human Services bill include:

Health Insurance Coverage Mandates: New mandates applying only to the fully insured market requiring first-dollar coverage for maternity care including labor, delivery, postpartum and prenatal care for two years. Additional mandates require coverage of abortion, gender-affirming care, orthoptics and prosthetics, medication therapy management, rapid whole-genome sequencing, intermittent catheters, and scalp hair prosthesis. These mandates go into effect on January 1, 2025.

Changes to Prior-Authorization Requirements: Starting January 1, 2026, health plans are prohibited from applying prior authorization to treatment of chronic conditions under certain circumstances. In addition, prior authorization is prohibited for treatment of outpatient mental health and chemotherapy. This law applies to all public and private health care programs.

For-Profit HMO Changes: Until 2017, HMOs were required to be nonprofit and based in Minnesota. In 2017, the legislature allowed for-profit HMOs to operate and be licensed in Minnesota. This year, the law was changed again, prohibiting for-profit HMOs from administering managed-care contracts in Medicaid or the State Employee Group Insurance Program. They are still allowed to operate in the fully insured market.

The Health and Human Services Omnibus bill can be viewed here.

Other New Laws 

• Moratorium on State and Local Government Lobbyist Registration and Reporting: Lobbyist registration and reporting for individuals attempting to influence official actions of most political subdivisions is stayed until June 1, 2025. The moratorium gives the Minnesota Campaign Finance and Public Disclosure Board time to complete a legislatively mandated study of various definitions enacted last session related to local government lobbyist registration and reporting. The board must make recommendations for the legislature to consider during the 2025 session. The moratorium does not apply to individuals attempting to influence Metropolitan Governmental Units — counties in and around Minneapolis, St Paul and surrounding areas; cities in these metropolitan counties with a population exceeding 50,000; the Metropolitan Airports Commission; and other specified regional commissions. These individuals must still comply with state lobbyist registration and reporting requirements. A copy of the law can be found here.
• Historical Horse Racing Ban: One of the final pieces of legislation to pass this session was stand-alone legislation banning historical horse racing machines at Minnesota’s racetracks. The Minnesota Racing Commission abruptly approved these games at their April meeting, angering many legislators who felt the commission overstepped their authority in approving the new gambling machines. This legislation also places limitations on the commission’s rulemaking and other authority moving forward. A copy of the law can be found here.

Unfinished Business

As session expired, the legislature was unable to address several issues that it had focused on during the 2024 session including:

• Taxes: Despite a $3.7 billion surplus, the legislature failed to provide any significant tax relief. In addition, once the tax conference committee report became the last-minute vehicle for the massive omnibus supplemental budget bill, many provisions carried in the Minnesota House and Senate were jettisoned. Key provisions that were not adopted include: a corporate erosion study examining worldwide combined reporting; decoupling from the federal “Safe Harbor” worker-misclassification protection; requiring companies with incomes of $250 million or more to publicly disclose their tax filings; establishing a new tier of sales tax exemption on large-scale data centers; and removing the sunset on the Hennepin County sales tax used to fund the Twins’ stadium, redirecting the proceeds to funding for Hennepin County Medical Center, North Memorial Hospital and capital improvements at Target Field.
• Ballot Initiatives: In the final hours of session, the House of Representatives debated putting two proposals before Minnesota voters. 
  
  • The first, a constitutional amendment entitled the “Minnesota Equal Rights Amendment,” asked whether the state’s constitution should be amended to “guarantee equal rights under the laws of this state, and shall not be discriminated against on account of race, color, national origin, ancestry, disability, or sex, including pregnancy, gender, and sexual orientation?” Last session in response to the Supreme Court’s Dobbs decision, legislation was passed protecting a woman’s right to choose. This amendment would have guaranteed these protections in the state’s constitution. After several hours of debate, this amendment passed the House. 
  • The House of Representatives also considered a proposal allowing home rule charter or statutory cities, school districts, and counties the option to use ranked-choice voting for nonpartisan elections and municipal elections. This could only be adopted via a ballot initiative presented to voters and only for electing local offices at a general or special election. This proposal did not pass the House.
  • The Senate did not act on either proposal. 
• Sports Betting: After several years of trying, there was still hope in the waning hours of session that the legislature could finally strike a deal establishing a framework for Minnesota to legalize sports betting. A tentative agreement was being considered by interested parties authorizing brick-and-mortar and mobile betting licenses to Minnesota tribes, providing additional funding for the state’s two racetracks, establishing a regulatory framework for fantasy sports, providing tax relief for charities, and addressing problem gambling. Unfortunately, this tentative agreement was never voted on as time ran out.
• Bonding: Typically, the second year of a biennium focuses on passage of a public infrastructure bill, or “bonding bill.” The legislature tried twice during the final week of session to pass capital investment legislation, failing both times. The first attempt, totaling nearly a billion dollars, included significant general obligation bond authorizations. Because bonding bills incurring state debt require a three-fifths majority vote to pass, Republican votes were needed in both chambers. Despite extensive negotiations, agreement was not reached on a bill that could garner the necessary votes. The second attempt, a cash bill totaling $90 million but not needing Republican votes, passed the House of Representatives on the final weekend of session. The Senate was voting on the smaller cash bill as time literally expired on the 2024 session, nullifying the vote and dooming hopes for any additional investments in the state’s infrastructure for the year.

Looking Ahead

With the 2024 legislative session adjourned and the governor and legislative leadership making clear that there will be no special session, focus now shifts towards the November general election. All 134 Minnesota House seats will be on the ballot. The DFL currently controls the House 70-64, a swing of three seats.

Currently 20 members have announced their retirement from the House. Notable retirements include:

• Rep. Jamie Becker-Finn, House Judiciary Finance and Civil Law Chair (DFL-Roseville)
• Rep. Pat Garofalo, House Lead on Ways & Means (GOP-Farmington)
• Rep. Frank Hornstein, House Transportation Chair (DFL-Minneapolis) 
• Rep. David Lislegard, House Property Tax Chair (DFL-Aurora)
• Rep. Michael Nelson, House Labor Chair (DFL-Brooklyn Park)
• Rep. Anne Neu Brindley, House Lead on Health Finance (GOP-North Branch)
• Rep. Liz Olson, House Ways & Means Chair (DFL-Duluth)
• Rep. Dean Urdahl, House Lead on Capital Investment (GOP-Litchfield)

A complete list of retirements can be found on the state website.

The Senate is not on the ballot this year. However, the potential exists for two special elections before the 2025 session. With the DFL maintaining control by the slimmest of margins, 34-33, each of these special elections has the potential to flip control of the Senate. The first is Senate District 45, a western suburban district currently held by State Senator Kelly Morrison (DFL-Wayzata) who is running to replace Representative Dean Phillips in Minnesota’s third congressional district. The second is Senate District 47, an eastern suburban seat currently held by Nicole Mitchell (DFL-Woodbury). Senator Mitchell faces criminal felony burglary charges for allegedly breaking into her stepmother’s home in April. This incident led to an Ethics Committee hearing in the final 10 days of session and calls by Senate Republicans to resign. Since the legislature has adjourned, Governor Walz, the DFL state party chair and members of her own caucus have also called for her resignation.

Upcoming Important Dates

Upcoming important election and legislative dates include:

• June 28: Early in-person and vote by mail for primary election commences.
• August 13: Primary election
• September 20: Early in-person and vote by mail for general election commences.
• November 5: General election
• January 14: 2025 Minnesota legislature convenes in regular session.