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Minnesota Legislature punts on bonding, transportation

Brian Johnson
BridgeTower Media Newswires

MINNEAPOLIS — Minnesota transportation advocates and supporters of an off-year bonding bill are in wait-until-next-year mode after walking away from their state’s 2019 legislative session empty-handed.

Gov. Tim Walz and the Minnesota Legislature agreed to a $48 billion two-year budget before the special legislative session ended early Saturday morning, but lawmakers couldn’t find enough common ground to take action on transportation funding or a plan to sell bonds for public works projects.

Late in the session, the governor and Republican leaders announced a comprehensive budget deal that offered $500 million worth of general-obligation bonds for public works. In the end, the clock ran out on bonding, which can’t be approved without the assent of a two-thirds “super-majority” in the House.

“Although a $500 million bonding bill would’ve been a nice cherry on top of the legislative sessions, historically there is an appetite to save larger infrastructure bills for the second year of the biennium,” Laura Ziegler, director of government affairs for the Associated General Contractors of Minnesota, said in an email.

“It became clear at the end of the regular session, and then special session, that a bonding package in a budget year was not going to garner the necessary super-majority votes within the looming deadline,” she added.

Bonding supporters had reason to be hopeful in February, when Walz released a $1.27 billion bonding recommendation. But GOP leaders balked at the size of the governor’s request. Large bonding bills are usually reserved for even-numbered years.

Similarly, Walz proposed to raise the gas tax by 20 cents a gallon over four years to help pay for $7.3 billion worth of transportation work during the biennium. But the gas-tax proposal fell flat at a time when the state was looking at a $1 billion surplus.

Bonding and transportation weren’t the only matters of interest to the Minnesota construction industry. During the recent legislative session, lawmakers also considered bills related to retainage, wage theft and prevailing wage.

Retainage refers to a state law that allows owners to withhold 5 percent of payments owed to subcontractors to ensure a project will be completed properly. The Minnesota Subcontractors Association says some contractors have to wait months or years to be paid in full.

A “retainage reform” proposal, signed into law as part of a bigger jobs bill, now requires retainage in Minnesota to be released within 60 days after the substantial completion of a project.

The language applies to all construction projects in the state, both public and private, and covers contracts signed on or after Aug. 1, 2019, according to the MSA.

Lawmakers also approved a wage-theft bill, a big priority for labor unions. Wage theft occurs when an employer “avoids paying or fails to pay wages earned by its employees,” according to the Minnesota Department of Labor and Industry.

Adam Hanson, director of government affairs for the Associated Builders and Contractors of Minnesota and North Dakota, said the bill gives the Department of Labor and Industry and the attorney general authority to “punish employers who intentionally commit wage theft.”

From ABC’s perspective, the most important provision in the bill is the “intent to commit fraud” language, Hanson said in an email. Without that, “an honest payroll mistake by an employer could trigger new criminal penalties,” Hanson said.

ABC also successfully pushed back against a bill that would have required contractors on private wind and solar projects to pay prevailing wages starting next year, Hanson said.

 

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