Commerce agreement adjusts key lead ban, creates HOA ombudsperson

Lawmakers finalized a commerce budget deal Thursday that would give a reprieve on lead in keys and create a new ombudsperson to facilitate disputes between residents and homeowner associations.

It would also boost staffing in the Department of Commerce’s securities unit, create a task force to study property insurance affordability and continue the reinsurance program that lowers premiums for residents who buy their health insurance on the individual marketplace.

The agreement was based on the regular session’s omnibus commerce policy and budget bills, HF2443/SF2216* and HF2403*/SF2477.

[MORE: View the commerce spreadsheet, agreement]

Rep. Tim O'Driscoll (R-Sartell), co-chair of the House Commerce Finance and Policy Committee, said the working group was able to work together on the agreement to make decisions based on facts and what’s important for Minnesotans.

“Did everybody get everything they wanted out of here? No, but is it a good product for Minnesota? I agree, I think it is,” O’Driscoll said.

Sen. Matt Klein (DFL-Mendota Heights), chair of the Senate Commerce and Consumer Protection Committee, said they were able to come to a commonsense agreement on consumer protections and keeping health care costs lowered for Minnesotans.

Klein noted that a proposed ban on flavored nitrous oxide, used by kids to get high, didn’t make it into the agreement because the language wasn’t specific enough and would have included cooking products that have legitimate uses. He plans to continue to work on it before the 2026 legislative session and hopes retailers will begin removing those products from stores without a legislative directive.

Policy changes

The agreement proposes several changes to the state’s lead and cadmium ban, which will prohibit cadmium paint and car keys containing lead or cadmium after July 1 this year. The agreement would exempt keys containing lead that are imported, manufactured, sold or distributed before July 1, 2028. Keys containing lead equal to or less than 1.5% by total weight that are imported, manufactured, sold or distributed after July 1, 2028 would also be exempt. Artist materials including paints, pastels, pigments, ceramic glazes, markers and encaustics, as well as ink pens and mechanical pencils, would be exempt from the ban.

The agreement would create a new ombudsperson position to facilitate disputes between unit owners and homeowner associations and assist unit owners, tenants and associations in understanding their rights. The new position would cost $347,000 a year beginning in fiscal year 2026.

And a task force would be created to provide recommendations to the Legislature on the affordability of property insurance for single-family homes, multifamily rental housing and common interest communities.

Other policy changes would:

• allow a safe deposit lease to renew automatically and allow a consumer to terminate a lease at any time;
• allow a financial institution to close a deposit account of a customer who has harassed that institution’s employees or customers;
• require places of entertainment with an occupancy of at least 100 to provide, at ticketed events, free water to attendees and allow attendees to bring in sealed bottled water or an empty water bottle to fill; and
• require an insurer to provide a copy of the current policy to the holder when requested once per policy period.

Funding changes

The commerce agreement would fund $79.34 million in spending for the Department of Commerce, a $4.78 million increase over the February base, in the 2026-27 biennium and $69.79 million in spending for the Office of Cannabis Management, a $6.65 million decrease over the February base.

For fiscal years 2028-29, the agreement would appropriate $79.99 million to the Department of Commerce, a $5.46 million increase over the February base, and $63.17 million to the Office of Cannabis Management, a $15.89 million decrease from the February base.

The agreement meets the global budget targets, which call for a $3 million decrease in fiscal years 2026-27 and a $12 million decrease in fiscal years 2028-29 for the Department of Commerce and Office of Cannabis Management.

The Office of Cannabis Management’s cuts are to funding for the CanRenew Grant, which provides money to organizations that work with communities where residents are eligible to be social equity applicants. The agreement would reduce the available grant funding by $7.49 million in fiscal years 2026-27 and $17.02 million in fiscal years 2028-29.

The Department of Commerce will receive an operating increase of $3 million and the Office of Cannabis Management will receive an operating increase of $842,000 in fiscal years 2026-27.

To fund the reinsurance program, $145 million would be transferred from the Health Care Access Fund to combine with $99.81 million in federal funding and existing funds in the Premium Security Account in fiscal years 2026-27. Federal funding of $99.81 million in fiscal year 2028 would be combined with an assessment estimated to total $266.83 million imposed on group health carriers in fiscal year 2029. The carriers would then be able to claim a tax credit for that assessment in fiscal year 2030.

The addition of four full-time equivalent staff for the securities unit would cost $543,000 each fiscal year beginning with fiscal year 2026. That cost is expected to be covered by an increase in licensing fees for investment advisors and brokers.