Good morning and welcome. My name is Orin Chowry and I'm the chair of the Intergovernmental Relations Committee. At this time, I'm going to call to order our regular meeting for Tuesday, June 9th, 2026.

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Let the record reflect that we have a quorum.

Thank you, Chair Chowy and council members. Um yes, this resolution before you is to approve a special law that the legislature passed as part of the omnibus pensions bill uh during the last session. Uh this special law is specifically for um to address a parah issue related to a former public works employee.

Um based on the way parah acrals work, this employee should have been um had deductions starting in 20 uh 16 through 2022 for his service. Um but the information was not consistently reported to parah. Um it was identified through an audit and um the city worked with PAR to remedy as much as we could administratively but the only way to ensure the employee could get the credit for 2016, 2017 and 2018 was through this special legislation.

Um so we worked with PAR um and Representative Jordan carried the bill. It went through the pensions committee and was ultimately included in the pensions bill. So just to kind of get it across the finish line um we do need this final step. It's just in statute that council or the local governing body must approve a special law for it to go into effect.

Thank you, Madam Chair. Director Dpinka, the way you describe this is that it is a special law that will benefit one person. Can you help me understand how um either we've also changed laws or are doing different things to make sure that um this doesn't happen again. I think what you're saying is we need a special law to fix this one thing retroactively, but we've figured it out going forward. Is that accurate?

Chair Chowry, Council Member Palmasano. Um, yes, we needed the special law to fix this one thing. This is not entirely unusual in the pensions bill. Um, it's something that, you know, there was another special law for somebody in a different part of the state in this omnibus pensions bill as well. So, this is um correcting this one very specific issue. Um, but but yes, um, going forward um, ideally something like this won't be needed again.

Our next and final item is a presentation related to state and federal updates since we last met. I would like to take a moment uh to say congratulations to our IGR team for another great legislative session. Thank you all for your hard and dedicated work. I know it was really tough um coming into this legislative session and at the end of it we were able to get some big wins for Minneapolis which is great. So thank you for all of your work.

Uh thank you chair, members of the committee. Uh my name is uh Steve Huer. the interim director for the intergovernmental relations department. Um, so yeah, thank you for your your kind words, chair. It was a um a very, you know, interesting legislative session. Um, and the uh the federal work that is continuing to happen um will be uh gone over by Lauren Olsen from our department. So I'll turn it over to her.

Good morning, Madame Chair and council members. I'm Lauren Olsen, senior government relations representative, and I am going to provide you with an update on some of the things that are going on in Washington.

Uh, so first we'll just talk about the status of the reconciliation bill that's under debate still. Um, the Senate recently took action to approve a version of the bill which primarily focuses on funding um, ICE and CBP. There was a lot of discussion about the potential of that bill including other things. Um, where it landed is a bit more focused. Um, however, it is for 3.5 years worth of funding for those agencies so that this issue theoretically would not need to come back to the body um during the rest of the Trump administration.

Um, another topic that came up with reconciliation was this uh the what is often referred to as the anti-weaponization fund, but it is the a proposed $1.8 million settlement with the IRS that would have created the the settlement fund. I think people are very familiar with this. Um, uh so in this was obviously not included in reconciliation. There was attempts during reconciliation process to try to even prohibit such a fund from being made or to limit if the fund were to be made limit how it could be used like like for example not used for January 6th people convicted with associated with January 6 2021 those efforts uh failed uh in that process.

Um, the fiscal year 2027 budget process, the normal annual appropriations process is going on. The fiscal year ends September 30th. As you know, it is very common for Congress to take more time in order to adopt their budget for the fiscal year very easily moving into you know the winter or next the following spring. But the they will need to use continuing resolutions if they don't have a budget by September 30th.

Um, so let's just start with Homeland Security bill coming out of the house. um mark it's come out of subcommittee and now it's u being marked up but what's what's in it so far includes um more money for custom border patrol and funding for ICE. I just want to pause here for a second. I'll definitely be curious to see if the fact that they're they're working a reconciliation bill also that would fund these agencies. So, I'll be curious to see if uh if they do pass a reconciliation bill that funds these agencies for three and a half years, whether they're still funding these agencies again through this normal appropriations as well.

Um, another bill is the uh labor health and human services education bill. Um, it would reduce the overall spending in that category by 3%, cut department of ed by 10%. I think a notable uh proposal in here is that it would cut two billion from related to operating the ACA insurance marketplace. So obviously that would potentially have a negative effect on people knowing about their opportunities and having opportunity to participate in that program.

Um, within the appropriations process, there is potential for earmarks. As you know, what the city does is identify projects that might qualify for the kind of the niche requirements of earmarks and then we submit all those um via our members of Congress and they narrow them down once we provide them with a list.

Um, some of the other work that needs to be done, there'll be a lot of discussion about the Foreign Intelligence Surveillance Act uh this week or so. Um, I think a lot of people are aware have been hearing about that. Um, the section 702 expires on June 12th without further action by Congress. It allows for warrantless surveillance of certain foreign um communications, but um there's significant concerns, including on both sides of the aisle, about the the potential that the communications of Americans gets caught up in that and that results in warrantless um spying on Americans.

Um, I also want to acknowledge kind of some notable um changes in leadership that you've probably heard about as well. Um, the acting attorney general, Todd Blanch, uh, was actually nominated yesterday to become the permanent attorney general, which mean there will be a hearing on that. Bill Py has been named the acting director of national intelligence. Um, he is currently the head of the Federal Housing Finance Agency. Um in that role he has um looked into the books to um identify claims about mortgage fraud against individuals, you know, like Leticia James and others. Um, so I think there's some concern from members on both sides of the aisle too that that he might utilize his role and his access to data to um uh you know try to potentially uh basically go after people the president doesn't like.

Yeah. Thank you so much Miss Olsen. Does anyone have any questions on the federal update? I'm not seeing any. So, I think we are good. Thank you so much for the presentation.

Thank you, chair. Uh, good morning, council members. Chair Chowy. My name is Indiri Felana, government relations representative. Um, I will be continuing on with the presentation. Um, beginning with the economic growth, labor, and property tax relief slide.

So, as part of the tax bill that passed by the legislature, there was $125 million um in one-time funding or onetime property tax relief um as part And this is an increase to the 2025 Homestead credit um refunds. It's a 15% increase. Um, so eligible homeowners must make less than $143,000 a year um to receive the um tax credit. Um, and then homeowners don't need to take any extra steps to receive the um tax credit. They can expect or to to receive the increase, I should say. They can expect their refunds in late summer and early fall.

Uh, our bill to add the North Loop to the downtown taxing boundary um for the downtown liquor and restaurant taxes made progress this session. This is a proposal that we've been working on for many years. Uh, it had hearings in the House and Senate and was included as part of the Omnibus Senate tax bill. However, unfortunately, it wasn't a part of any of the final agreements and it did not make it through.

Currently in state law, if a property owner wants to proceed with reszoning from from a residential zoning district to a commercial zoning district, they must obtain 2thirds of of signatures from the nearby property owners. And this rule only applies to cities of the first class, so Minneapolis, St. Paul, Rochester, and Duth. So our bill would have repealed this state law to make us kind of equal with all the other 800 and something odd cities in the state. And we had a hearing in the Senate on this bill and it was included as part of their omnibus bill. But unfortunately did not make it into the final bill that passed. So something that we will continue to work on.

So affordable housing and homelessness. Um, there was $100 million that was appropriated for housing infrastructure bonds this session. And these bonds are issued through the state's housing finance agency, MHFA. And the funds are used for new construction, acquisition, or rehabilitation of permanent rental housing. There isn't a specific amount that comes directly to the city or that's allocated directly to the city. Uh, however, there are many projects in the city that benefit from this program.

The legislature approved $40 million one time for the family homeless prevention and assistance program. And this is to assist those impacted by staggering rent increases. So $38 million of the $40 million comes from unused funds from a court settlement dealing with tax forfeited lands.

And then these funds provide supportive and financial assistance for families, youth individuals experiencing homelessness or who are at risk of becoming homeless. Direct financial assistance may include covering rent, utility payments, or other housing costs.

There were $13 million in total approved by the legislature this year for supportive housing program. 9 million of that of the 13 million moved in a separate bill that that the legislature approved earlier this session. And then this state funding is to fill a federal funding gap for HUD's continuum of care program grantees who are at risk of losing or who are at risk of losing a lion share of their funding due to program changes that happen midcycle in the midcycle. just during the granting cycle.

So the continuum of care program, it funds shelters, permanent supportive housing, and other responses to homelessness. It runs through Henipin County. And it's the federal government's largest pool of funds for housing homeless people. So last year the federal government began limiting how much money communities can spend on supportive housing programs, which then created the gap.

So once again, this was an area of focus for legislators this session, zoning and land use reform. There was a bill called the Starter Homes Act that would essentially pre-empt all cities zoning authority. And the bill did like a slew of things. The House held a few hearings on the bill this session, but it did not receive a hearing in the Senate. And once again, legislators were not able to come to an agreement, so this bill did not pass.

Prohibition on private equity ownership of single family homes is something else that was worked on again this session with the goal of limiting private equity companies from owning a certain number of single family homes. Over the years, there have been different iterations of this bill. When it was first introduced a couple years ago, the the number was 10. In the bill this year, that number started at 50 and then it grew to 99. The bill did not have much bipartisan support. So once again, with the current makeup of the legislature, it did not get really far.

And the shelter fiscal cliff. So there wasn't much movement on the bridge to shelter legislation that we've been working on with Henipin County over the last few years. And as a reminder, this is legislation that would provide specific funding for specific services such as 247 operations at existing shelters and shelter diversion programming and housing focused case management. So so that bill would have filled the fiscal cliff. There are often funding gaps in these areas. So, that's why this bill was was of such importance. But unfortunately with the many different competing interests this year and lack of available funding, the bridge shelter bill did not receive a hearing actually this year but did not move.

So there was no energy omnibus bill this year due to a lack of agreement between Senate and House and the Senate chair and the House co-chairs. But there was an environment omnibus bill that passed. Not too many items of note affecting the city was included in the final bill. It was relatively light. So the legislature approved funding for a nuclear energy study as part of the tax bill to explore the possibility of building new nuclear plants in Minnesota.

The sentiment was generally that she thought that a broad sanction package could actually be harmful to civilian population. She wasn't sure that was the best approach and she just thought in general that sanctions can be a broad a broad sanction package can be counterproductive and I don't want to put words in her mouth but I wanted to share what the sentiment.