Jay R. Lindgren

Effective January 1, 2024, Minnesota’s lobbying and public disclosure law will vastly increase the number of political jurisdictions that trigger disclosure requirements in a manner that will increase the number of persons and entities deemed a “lobbyist” and a “principal.” Lawyers who interact with governmental units at any level in Minnesota—as well as their clients—should be aware of these new requirements. New and Expanded Definitions For decades, Minnesota’s lobbying disclosure requirements have been limited to those attempting to influence: (1) state legislative or administrative action, or (2) an official action of approximately 30 metropolitan governmental units. Beginning in 2024, registration as a lobbyist will be required for any person attempting to influence the “official action of a political subdivision” of any Minnesota “political subdivision” as defined here. Thus, thousands of new entities are covered by the law: all 87 counties, 855 cities, 331 school districts, and 1,780 townships in the State of Minnesota. The Campaign Finance Disclosure Board has a compiled list of 504 local officials under the current law. This list will grow exponentially under the new law. As applied to non-volunteers, the definition of lobbyist will now include an individual paid more than $3,000 from all sources in any year for the purpose of attempting to influence the official action of a political subdivision by communicating or urging others to communicate with public or local officials. Before these amendments, only attempts to influence legislative action, state administrative action, or the official action of a metropolitan governmental unit qualified as lobbying. In addition to expanding the definition to include all political subdivisions, the legislature also added a definition of what constitutes an “official action of a political subdivision.” It now comprises any action that requires a vote or approval by one or more elected local officials in their official capacity or an action by an appointed or employed local official to make, recommend, or vote on major decisions regarding the expenditure or investment of public money as a member of the governing body. Given the breadth of the new law, many more routine interactions with local governments across Minnesota will trigger lobbying registration and disclosure requirements for many more lawyers and their clients. Who and What is Covered? The definition of official action of a political subdivision includes two parts—one relating to elected officials, the other relating to appointed or employed local officials. The portion of the definition relating to elected officials extends what constitutes lobbying to attempting to influence any action involving a vote or approval by an elected local official. Based on this definition, any agenda item requiring a vote by a local elected board, whether township, city, county, or school board, will require lobbyist and principal registration. Examples of types of activities that may be covered include: Appealing a planning commission’s denial of a conditional use permit or variance to the city council or town board of supervisors, Advocating for subdivision approval before the city council, Requesting that the city council approve a property transfer, Applying for a liquor license from a city council, Seeking a tax abatement, Applying to the city council for a change in the zoning code or comprehensive plan, and Seeking approval of a development agreement or tax-increment financing district from the city council. The second portion of the definition relating to appointed or employed local official is narrower. This portion of the definition of official action would appear to apply to any advocacy to county, city, and other political subdivisions in connection with grants or contracts that involve major expenditures of public money. For instance, applying for an economic development brownfields redevelopment grant from a city or the sale of property to a political subdivision. It is unclear, however, what constitutes a “major decision regarding an expenditure or investment.” The Campaign Finance Disclosure Board is in the middle of a rulemaking process that may clarify the law. Principal Reporting If an attorney, agent, or employee acts on behalf of an entity to trigger individual lobbying disclosure requirements, it will usually also trigger reporting requirements by the client or “principal.” The lobbyist’s client or employer is a “principal” if they spend more than $500 to engage a lobbyist. For these clients, starting in March 2025 for calendar year 2024 and annually thereafter, clients must file a principal report, rounded to the nearest $9,000, detailing their expenses for lobbying as they separately relate to: (1) legislative action, (2) administrative action, (3) rate setting, power plant, and powerline siting action, and (4) official action of a political subdivision. Developers and other clients who routinely interact with local governments may need to report as principals without being aware of this obligation. Conclusion Lawyers’ advocacy on behalf of clients to influence local government decisions may subject the lawyer and the lawyer’s client to lobbying-reporting obligations. Stakeholders are actively engaged in efforts to clarify the law through administrative or other action.

The month of September was a bad month for the City of Minneapolis’ 2040 Comprehensive Plan (2040 Comp Plan). On September 5, 2023, Minnesota’s Fourth Judicial District (Hennepin County) released a decision temporarily enjoining the City “from any ongoing implementation of the residential development portions of the City’s 2040 comprehensive plan.” The district court ordered the City to “immediately cease all present action in furtherance of the 2040 Plan” pending completion of environmental review. The Court further ordered that, if the City does not complete an environmental impact statement or an alternative urban areawide review by November 4, 2023, the City must restore the status quo “between the parties [the City and the nonprofits that sued the City over the 2040 Plan] as it existed on December 4, 2018 by reinstating for its prospective enforcement both the residential development portions of the City’s Comprehensive 2030 Plan, and the pre-December 4, 2018 land use ordinances” regarding those same residential development areas. Based on the district court’s rationale for its order, the “residential development portions” of the 2040 Comp Plan appear to refer to zoning districts that, prior to the 2040 Plan, were designated to allow only single-family residential use. The 2040 Comp Plan lifted the single-family residential limitation for these zoning districts. That said, the district court’s order uses broad language, applying to “the residential development portions of the City’s 2040 comprehensive plan.” This language could be read more broadly to include all residential zoning districts in Minneapolis. The City filed a notice of appeal of the court’s order on September 15, 2023, and moved the district court to stay the injunction pending the City’s appeal. The district court heard arguments for the motion for the stay on September 19, 2023. The district court has not yet ruled on the motion. Notably, in the September 5 order, the district court, in the City’s words, “forecasted its intent to deny the City’s motion for a stay, having explicitly ordered that the amended injunction is ‘not stayed and shall be effective immediately.’” Therefore, a stay from the district court appears unlikely. Although, the City can appeal any denial of the stay motion to the Court of Appeals. In a declaration submitted to the district court in support of the stay motion, the Director of Community Planning and Economic Development stated that the City has “been inundated with questions and concerns from residents and developers of both market-rate and affordable housing regarding the uncertainty caused by the amended injunction ordered by the Court. The Director stated that “[i]mplementation of the amended injunction . . . will require, at a minimum, . . . [r]eviewing plans and ordinances to identify and re-introduce those ordinances implemented during the timeframe of the 2040 Plan and discern which provisions are simultaneously supported by the 2030 Plan from those 2030 Plan provisions that the City is being ordered to resume under the Amended Order.” She further noted, “There are currently 73 units of market rate and 55 units of affordable rental and ownership housing in the development pipeline that will not be approved under the amended injunction” She continued that there are “another 498 units of market rate and 69 units of affordable housing which have received land use approvals but will likely not be able to receive building permits before the November 4, 2023, deadline in the Amended Order.” Generally speaking, while there is little clarity as to how the City will comply with the district court’s order, there are a few things that can be expected. First, the City most likely will not issue new building permits or land-use approvals (e.g., conditional use permits and variances) for non-single-family, residential structures on land that, under the 2030 Plan, was only to be used for single-family, residential purposes, even if the 2040 Plan would allow that development. Second, the City may be forced to amend the City’s zoning code to undo previous amendments made to formerly single-family, residential districts if the previous amendments had permitted more intense development. There is an open question as to what happens to a developer that has been granted a building permit or land-use approval for non-single-family, residential structures on land that historically could only be used for single-family, residential purposes and may be in the midst of construction or already has already completed construction. And, of course, the district court or, more likely, the Court of Appeals could stay the order pending the City’s appeal. If the stay is granted, the City would not have to comply with the district court’s order during the pendency of the appeal. The only certainty is that uncertainty regarding the 2040 Comp Plan will continue for many months, if not years.