By – Jeff Tollefson, President & CEO of the Minnesota Technology Association

After a rocky start, the 2025 Minnesota legislative session is back to (mostly) business as usual with a lot of new policy and funding bills being introduced in both the House and Senate. As of yesterday, 1,861 bills have been introduced in the Senate and 1,493 in the House, a sizeable number but still below the record numbers we were seeing last year. The late start in the House may make it difficult to get a budget passed before the session closes on May 12th, and I’ve got my fingers duly crossed in hopes that legislative leaders will find a way to get this done and avoid a government shutdown.

The Minnesota Technology Association has been weighing in on a number of issues that impact MnTech member companies and our broader technology community. Here are a few of note:

    • Data Center Sales Tax Exemptions – MnTech submitted a letter of support for use in a Senate Tax Committee hearing this morning on SF769, which provides for sales tax exemptions on purchases of information technology equipment and computer software for use in qualified large-scale data centers. Data centers serve as the backbone of modern business operations, supporting cloud computing, artificial intelligence, and digital services. As Minnesota continues to position itself as a leader in the digital economy, fostering a competitive environment for large-scale data centers is critical to our state’s economic growth, innovation capacity, and business resilience. Sales tax exemptions for data center equipment play a key role in attracting and retaining these high-value investments and we support the extension of these exemptions.
    • AI and the Workforce – I testified in a Senate Labor Committee hearing against a proposal by a group called the North Star Policy Action that would broaden collective bargaining rights and empower labor groups and workers to influence AI adoption in their workplaces. Rather than focusing on restricting AI’s impact through mandates and barriers, we urged lawmakers to adopt a strategy that:
      • Encourages innovation by making our state a hub for responsible AI adoption and business expansion.
      • Invests in workforce adaptation by supporting retraining programs, industry partnerships, and incentives that help workers adapt and transition into new AI-enabled roles.
      • Is risk smart, not risk averse, addressing legitimate concerns such as algorithmic bias and data privacy with targeted, thoughtful policies rather than broad, reactionary restrictions.

We urged the committee to take a measured approach that resists over-regulating AI’s evolution and encourages AI innovation while ensuring Minnesotans are prepared for the rapidly changing future of work.

    • Restrictive Employment Covenants – We’ve met with a few legislative leaders to gauge their interest in further modifying a labor bill passed last year that restricts the ability of a staffing or consulting firm from potentially charging a conversion fee if a customer hires away one of its employees while on contract with that customer. While able to negotiate a narrow carve-out last year for firms providing software development and related services, we are hoping to expand and clarify the exemption this session.
    • Social Media Algorithms – Last year, we spent a lot of time pushing back against proposed bills (particularly the Age Appropriate Design Code Act) that were well intended in their efforts to protect children against harmful online content, but too broad in scope and would have impacted a lot of MnTech member companies whose online content could be “reasonably assumed” would be accessed by kids under the age of 18 (e.g. Target, Best Buy, Polaris, etc.). Fortunately, none of those expansive pieces of legislation passed. We’ve been monitoring similar activity this year and the one bill introduced (HF48/SF1528) is much better written and appropriately focused. It prohibits a social media platform with more than 1,000,000 account holders globally from using a social media algorithm to target user-generated content at an account holder who is under the age of 18 and located in Minnesota and we see no reason why MnTech should oppose its adoption.

We are awaiting two bills to be “jacketed” and ready for legislative review in the coming weeks for funding in support of MnTech’s SciTech Internship Program and for additional funding for computer science education. While I will cover the details of both funding requests in my next legislative update, we’re requesting $2 million for continuation of the successful SciTech program that has placed more than 3,300 college students into STEM internships at small companies across Minnesota over the past 12 years, as well as $4.6 million for expanded access to computer science education in Minnesota schools.

Again, more information will be provided in a subsequent post as these two bills hopefully get introduced next week. Until then, please do not hesitate to reach out to me with any policy issues or concerns at jeff@mntech.org.