On Tuesday, Governor Walz released his supplemental budget recommendations. In the economic development space, his recommendations include:

GMNP Update - March 19, 2026

 
GMNP Update: A Newsletter for Members of the GMNP
 

GMNP WEEKLY UPDATE

 

Dear GMNP Members,

 

On Tuesday, Governor Walz released his supplemental budget recommendations. In the economic development space, his recommendations include:

  • A policy change for the Innovative Business Development Public Infrastructure (IBDPI) program that would provide a 10-year sunset of development restrictions. 
  • Codifying language for the Pathways to Prosperity program and Drive for Five. 
  • $10 million in funding for Operation Metro Surge response – partially forgivable loans.
  • Additional appropriation from the Workforce Development Fund of $3.5 million for the Service to Success program. 
  • Social media tax on tech companies with over 100,000 monthly users in Minnesota. Revenue generated by this tax is dedicated to a DEED account in the special revenue fund that supports workforce development initiatives targeted at workers who experience job loss due to artificial intelligence. Revenue is projected to be $46.6 million in FY27 and $194.2 million in the FY28-29 biennium. 
  • No cuts to programs based on the state’s improved revenue forecast. 

In tax recommendations, notably, the Governor recommended:

  • A significant increase to the Child and Dependent Care Credit included increasing the amount a family would receive for a child under 5 by an additional $3,000, increasing the income threshold at which the credit begins to phase out, and increasing the percentage of expenses taken into account for the credit. 
  • Conformity with most federal tax changes included in H.F. 1. A notable exception was his recommendation not to adopt changes to allow full expensing of domestic research and experimental expenditures or tax benefits for investments in newly designated Opportunity Zones.

In response to the Governor’s supplemental budget recommendations, House Speaker Lisa Demuth has already said that the social media tax is off the table. 

 

Also notable this week, many bills in the House failed to make it out of committee based on party-line votes. Some of those bills needed to be referred to other committees for consideration, and others were headed to the Floor. A list of bills that failed to get out of House committees includes bills around changes to Paid Leave requirements and a new way to recommend appropriations from the workforce development fund.    

 

Best, 

 

Darielle Dannen

Executive Director, Greater Minnesota Partnership

 

SIGNIFICANT HAPPENINGS THIS WEEK

Tuesday 3/17/26  

  • Senate Local Government Committee – Heard two key bills we are monitoring:
    • S.F. 4296 (Maye Quade) – Requires public hearings and disclosures prior to approval of data centers.
      • Multiple constituents testified in favor of this bill from projects around Monticello, Hermantown, and Rosemount, citing their opposition to data centers and desire for more extensive public notification when the development of a data center is proposed. Sen. Ann Johnson-Stewart expressed her support for greater public input on local projects and said she is not opposed to data centers but is opposed to NDAs. Sen. Mark Koran shared his concerns about this bill and cited local concerns about solar gardens and similar projects, explaining that there is sometimes a need for early conversations to be kept nonpublic. Sen. Andrew Mathews also shared the need for NDAs for business discussions and spoke about the work his community has done to find revenue replacements for a power plant that is closing. Sen. Steve Drazkowski shared his concerns with both bills. The bill was passed to the Senate general orders, as amended, 8-2.
    • S.F. 4379 (Maye Quade) – Prohibits municipalities from entering nondisclosure agreements.
      • Sen. Mark Koran flagged that state agencies are allowed to use NDAs and asked how this would be reconciled with this bill. The Committee adopted the A-1 amendment, which changes the bill's enactment date. The Minnesota Chamber testified with concerns about the bill’s expansive nature, which could chill early business conversations with local governments. The Sierra Club testified about the environmental challenges from data centers and their concerns about the large social media companies behind them. The bill was tabled as there was not enough time for member discussion. Bill discussion continued on Thursday.

Wednesday 3/18/26 

  • House Housing Finance and Policy Committee – Heard the Agency policy bill which includes the technical change to the State Housing Tax Credit (SHTC) that would allow recipients of Workforce Development Housing Fund to wave the income requirements of the SHTC, H.F. 4207 (Howard). The bill was referred to the Tax Committee. 
  • House Workforce, Labor and Economic Development Committee – Heard two key bills we’re monitoring:
    • H.F. 3843 (Baker) – Report to the legislature recommending appropriations from the workforce development fund.
      • Rep. Emma Greenman and Rep. Dave Pinto both expressed their appreciation for the structural changes that this bill includes but expressed their opinions that the bill doesn’t seem fully fleshed out yet. Rep. Dave Baker expressed that doing something in this way is one of his top priorities and he will continue to work to refine it. The bill failed to move out of committee and was laid over.
    • H.F. 3597 (Mueller) – Certain S Corporations exempted from Paid Leave law.
      • The bill was tabled, and the motion to move the bill out of committee failed.

Thursday 3/19/2026  

  • Senate State and Local Government Committee – Held additional discussion about a key bill we are monitoring: 
    • S.F. 4379 (Maye Quade) – Municipalities prohibition from entering into nondisclosure agreements.
      • The Committee adopted two amendments to the bill, the A-1 (adopted in the prior hearing) and A-2. The A-2 amendment narrows the application of the bill to economic development projects financed in whole or part with the municipality’s tax revenues, financial obligations or taxing powers. This amendment also expands the application of the bill to include school districts, housing and redevelopment authorities, economic development authorities, and port authorities. The bill author expressed a willingness to continue to refine the bill. Sen. Andrew Matthews offered an A-3 amendment that would apply this prohibition to all of state government. The A-3 amendment failed.  Sen. Matthews raised concerns about the bill. Sen. Heather Gustafson expressed a willingness to consider additional adjustments to the bill. Sen. Mark Koran also shared concerns about the bill and shared how NDAs are an important tool in early economic development conversations. The bill was sent to the Judiciary Committee.
 

SIGNIFICANT UPCOMING HEARINGS

Monday 3/23/26  

Tuesday 3/24/26  

 Additional hearings are likely to be posted throughout the week.

 

KEY BILLS WE'RE WATCHING

 

HEARINGS

If you are interested in watching a hearing, most hearings will be viewable online and the easiest way to find the link is to visit the Legislature’s website here and click on the day you’d like to watch a hearing. Then you will be able to click on the committee and the links to the hearing broadcast. Many of the hearings can be found on YouTube as well in the respective Senate and House YouTube channels.

 

COMMITTEE DEADLINES / KEY DATES

Legislative Breaks:    

  • Easter/Passover/Eid Recess 
    • Begins on: March 27 at 5:00 p.m. 
    • Legislative activities resume on: April 7 at 8:00 a.m. 

Committee Deadlines:   

  • Friday, March 27 at 5 p.m.: Committees must act favorably on bills in the chamber of origin and committees must act favorably on bills, or companions of bills, that met the first deadline in the other body.
  • Friday, April 17 at 5 p.m.: Committees must act favorably on major appropriation and finance bills.
  • Session is scheduled to end on May 18th
 

MONTHLY LEGISLATIVE DEBRIEF SESSIONS

If you found this update helpful and are interested in learning more, make sure you join GMNP's monthly Legislative Debrief Sessions!

 

Each debrief session will feature a Capitol activity update, a review of GMNP’s policy priorities, and an open dialogue with GMNP Executive Director Darielle Dannen to hear your insights, feedback, and opportunities for increased involvement during the 2026 legislative session.

These sessions are meant to be informal discussion-based conversations among GMNP members.

Sessions will take place on the last Friday of each month during the legislative session (with the exception of May). All meetings will be held virtually via Zoom from 12:00pm-1:00pm.

 

Visit GMNP's event calendar on our website for details and registration.

 

CONTACT & CONNECT

Darielle Dannen, Executive Director

darielle@gmnp.org

(651) 259-1908

 

Emma Nelson, Membership & Operations

emma@gmnp.org

(651) 259-1936

 

Alex Wildfang, Media & Communications

ahwildfang@flaherty-hood.com

(651) 259-1917

 

Visit us online at www.gmnp.org

 
 

The Greater Minnesota Partnership advocates for public policies and investments that stimulate prosperity throughout Greater Minnesota.

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