Good morning.  Get ready to say it with us: “We needed the rain.”

The X.AI challenge to Minnesota’s anti-nudification law is becoming a political flashpoint. Lawmakers and statewide elected leaders were quick to note the lawsuit by Elon Musk’s company. They invoked the tech billionaire and took aim at him for attempting to bring down the policy intended to prevent the spread of AI-generated child sexual abuse material. Rep. Jess Hanson, DFL-Burnsville, said yesterday that, “when the richest man in the world hangs out with the Epstein class, and that's who's ruling around the world, especially in this country with little to no consequences we cannot act surprised when he's trying to protect the number one tool used to make child sexual abuse material.” Another swing district Democrat, Rep. Brad Tabke of Shakopee said in a news release: “Big Tech is suing Minnesota because they want a wild west where they’re allowed to do anything to make a profit — including generating child sexual assault material. It’s disgusting.” Lisa Demuth, a GOP contender for governor who voted for the law, told MPR News yesterday that she hadn’t looked at the court filing. “When we're looking at AI, we need to keep people safe. I voted for that bill specifically in the House, and that was passed and signed into law by the governor in an effort to keep people safe, and I think we really need to recognize that. Of course, there is First Amendment and things that we need to absolutely support and provide for. But there is also a safety element when it comes to adults, but especially children.”

St. Paul Mayor Kaohy Her says she’s cooperating with an investigation into her conduct amid a sexual harassment complaint. The allegation was lodged in April by police Chief Axel Henry and included a text message that he found to be sexually suggestive. The complaint alleges other subordinates were also mistreated. The St. Paul Pioneer Press got brief remarks from Her at a public appearance Wednesday. She told the newspaper she has turned over materials sought by an external investigator. “We’ve been compliant since April,” Her said. She added, “I look forward to the investigation closing so I can release all those for people to see.” She gave no indication she would recede from the job, including proposing a new budget. “It doesn’t change, the work always continues,” she said.

Last October, then-DFL state lawmaker Kaohly Her endorsed Angie Craig’s bid for U.S. Senate, but that endorsement vanished from Craig’s website overnight. As allegations of sexual harassment against Her, now the St. Paul mayor, began dominating local news Tuesday night, the endorsement that the Craig campaign had mentioned several times in recent months disappeared. Her’s backing was also a point of pride for Craig during a debate Monday at MPR News , where she was among a few local officials that the Senate candidate mentioned. Craig’s campaign did not respond to requests for comment on the change.

All three of the top GOP U.S. Senate candidates say they’d like to see the SAVE act passed, but they’re not in agreement on how far they’d go to pass it. The Star Tribune’s Walker Orenstein reports that only one candidate is aligned with President Trump on eliminating the filibuster in order to pass the SAVE act in the Senate: Royce White. The SAVE act would require documentation of citizenship to register to vote and a photo ID for people to vote. Michele Tafoya said she was not quite ready to "blow up the filibuster" in order to get it passed. The GOP-endorsed candidate Adam Schwarze is also wary of getting rid of the filibuster. But both Schwarze and Tafoya say they could be in favor of requiring a “talking filibuster” meaning opponents of the bill would physically have to hold the floor in order to block a bill. 

Restore Sanity, the new-on-the-scene group with a big governor’s race footprint, filed its latest campaign report this week showing just how active it is on behalf of Republican Lisa Demuth. The group’s report shows it has already put $2.7 million into advertising and other messaging on her behalf. We noted yesterday that it got a fresh $1 million donation this week. But the report also has a notable $500,000 donation in June from Running Aces, a north-suburban horse track that wants to expand its gambling options but needs state approval. A key Demuth adviser has been a key Running Aces consultant and registered North Metro Harness Initiative LLC lobbyist. MPR News host Clay Masters asked Demuth yesterday if she would favor gambling law changes sought by Running Aces. She said new gambling from sports betting to prediction markets brings bipartisan support and bipartisan opposition. “I'll have to continue to take a look at where any type of gambling, sports betting, anything is moving forward in the state.” Democratic groups have long drawn big donations from tribal communities, which have for years successfully kept gambling expansion bills outside of tribal casinos at bay.

Usually by now, Democratic aligned groups have been up with ads to take on the potential GOP rivals for governor. But it’s been mostly quiet on that front as the heated Senate primary takes center stage. The left-leaning groups have been stockpiling, however. The We All Do Better PAC (named for the rallying cry of the late Sen. Paul Wellstone) had $900,000 as of the start of June. The group has taken in $1 million since. But it’s other groups, the DFL feeder fund WIN Minnesota, and a North Carolina-based entity, the Strategic Victory Fund , that are plowing large amounts into that PAC. In 2022, the fund was involved in governor’s races in states where Democrats feared a loss could have presidential race implications. The thinking was that governors and statehouses were a last-level of protection if the Electoral College was again at risk of being put under the microscope. We haven’t seen We All Do Better deploy any money yet, but we’ll keep an eye out. The Alliance for a Better Minnesota, which has been the recipient of past We All Do Better money, was sitting on $740,000 as of July 20. 

Champlin grandma says, raise a glass to Minnesota seniors! Anita LeBrun never expected to be a national sensation, but her efforts at the state Capitol this year to remove liquor license requirements at nursing homes went viral. The 82-year-old grandmother of five testified before lawmakers about her love of happy hours and her desire to be able to bond with her friends and family over a glass of pinot grigio at official senior home events. Minnesota law allowed residents to drink privately, but required facilities to keep up a liquor license if they wanted to serve alcohol at events, which could cost retirement homes thousands of dollars annually. For LeBrun, changing the law is about letting seniors enjoy their golden years, but also about independence. LeBrun inspired fans around the country and bipartisan legislation that Gov. Tim Walz signed into law. Kyle Melnick at the Washington Post walks us through LeBrun’s full story.

The “Grandparents’ Happy Hour” law isn’t the only legislation going into effect Saturday. Cait explains some of the key laws that take effect Aug. 1, including a nudification technology ban (though that is facing a court challenge), a new grant program to solve nonfatal shootings across the state and a cryptocurrency ATM ban. Check out her full breakdown here.