House Journal 78th Day Sunday, May 17, 2026

The bill was repassed, as amended by Conference, and its title agreed to.

Niska moved that the House recess subject to the call of the Chair. The motion prevailed.

RECESS

RECONVENED

The House reconvened and was called to order by the Speaker.

CALENDAR FOR THE DAY

H. F. No. 719 was reported to the House.

Franson moved to amend H. F. No. 719, the first engrossment, as follows:

Delete everything after the enacting clause and insert:

"ARTICLE 1

APPROPRIATIONS

Section 1. CAPITAL IMPROVEMENT APPROPRIATIONS.

(a) The sums shown in the column under "Appropriations" are appropriated from the bond proceeds fund, or another named fund, to the state agencies or officials indicated, to be spent for public purposes. Appropriations of bond proceeds must be spent as authorized by the Minnesota Constitution, article XI, section 5, clause (a), to acquire and better public land and buildings and other public improvements of a capital nature, or as authorized by the Minnesota Constitution, article XI, section 5, clauses (b) to (j), or article XIV. Unless otherwise specified, money appropriated in this act:

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(1) may be used to pay state agency staff costs that are attributed directly to the capital program or project in accordance with accounting policies adopted by the commissioner of management and budget;

(2) is available until the project is completed or abandoned subject to Minnesota Statutes, section 16A.642;

(3) for activities under Minnesota Statutes, sections 16B.307, 84.946, and 135A.046, should not be used for projects that can be financed within a reasonable time frame under Minnesota Statutes, section 16B.322 or 16C.144; and

(4) is available for a grant to a political subdivision after the commissioner of management and budget determines that an amount sufficient to complete the project as described in this act has been committed to the project, as required by Minnesota Statutes, section 16A.502.

(b) Unless otherwise specified, appropriations in this article from the general fund or from the trunk highway fund are made in fiscal year 2027 and are onetime appropriations.

APPROPRIATIONS

Sec. 2. UNIVERSITY OF MINNESOTA

Subdivision 1. Total Appropriation

$75,000,000

To the Board of Regents of the University of Minnesota for the purposes specified in this section.

Subd. 2. Asset Preservation

40,000,000

To be spent in accordance with Minnesota Statutes, section 135A.046.

Subd. 3. MacGrath Campus Center Phase 1

35,000,000

To predesign, design, renovate, construct, furnish, and equip Phase 1 of a new campus center on the St. Paul campus. This appropriation includes money for site preparation, hazardous materials abatement, and the relocation or expansion of related utility infrastructure.

Sec. 3. MINNESOTA STATE COLLEGES AND UNIVERSITIES

Subdivision 1. Total Appropriation

$69,812,000

To the Board of Trustees of the State Colleges and Universities.

Subd. 2. Asset Preservation

64,612,000

To be spent in accordance with Minnesota Statutes, section 135A.046.

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Subd. 3. Alexandria Technical and Community College

4,000,000

To construct, furnish, and equip Phase 2 of capital improvements at Alexandria Technical and Community College. This appropriation includes money for capital improvements to a vacated transportation building, including major projects to repair or replace the HVAC system, building envelope, and other improvements for programming and student center space. This appropriation is in addition to the appropriation in Laws 2025, First Special Session chapter 15, article 1, section 3, subdivision 3.

Subd. 4. Southwest Minnesota State University

1,200,000

To design, construct, furnish, and equip the renovation of the Physical Education gymnasium.

Sec. 4. EDUCATION

Subdivision 1. Total Appropriation

$8,500,000

To the commissioner of education for the purposes specified in this section.

Subd. 2. Library Construction Grants

2,000,000

To the commissioner of education for Mary C. Murphy library construction grants under Minnesota Statutes, section 134.45.

Subd. 3. East Grand Forks; Education Learning Center

6,500,000

For a grant to Area Special Education Cooperative No. 997, to predesign, design, construct, renovate, furnish, and equip an education learning center in the city of East Grand Forks to house a regional educational program for students with autism, cognitive disabilities, emotional and behavioral disorders, and other students with specific educational needs, including space to house a Level IV setting regional special education program, subject to Minnesota Statutes, section 16A.695.

Sec. 5. MINNESOTA STATE ACADEMIES

$1,700,000

To the commissioner of administration for capital asset preservation improvements and betterments on both campuses of the Minnesota State Academies, to be spent in accordance with Minnesota Statutes, section 16B.307.

Sec. 6. PERPICH CENTER FOR ARTS EDUCATION

$1,300,000

To the commissioner of administration for capital asset preservation improvements and betterments at the Perpich Center for Arts Education, to be spent in accordance with Minnesota Statutes, section 16B.307.

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Sec. 7. NATURAL RESOURCES

Subdivision 1. Total Appropriation

$79,426,000

(a) To the commissioner of natural resources for the purposes specified in this section.

(b) The appropriations in this section are subject to the requirements of the natural resources capital improvement program under Minnesota Statutes, section 86A.12, unless this section or the statutes referred to in this section provide more specific standards, criteria, or priorities for projects than Minnesota Statutes, section 86A.12.

Subd. 2. Natural Resources Asset Preservation

30,000,000

For the preservation and replacement of state-owned facilities and recreational assets operated by the commissioner of natural resources to be spent in accordance with Minnesota Statutes, section 84.946.

Subd. 3. Betterment of Buildings

3,000,000

For acquisition, predesign, design, and construction to replace existing facilities that no longer meet the business needs of the department or to acquire or construct new facilities. This appropriation is for renovations at and expansion of the fish hatchery in the city of St. Paul. Amounts remaining after completion of the fish hatchery renovation and expansion may be applied to other projects to better state buildings.

Subd. 4. Betterment of Public Lands

1,400,000

For the betterment of public lands and other improvements of a capital nature. The commissioner shall determine project priorities as appropriate under Minnesota Statutes, section 86A.12. Any reforestation shall be conducted in accordance with Minnesota Statutes, section 89.002, subdivision 2.

Subd. 5. Aviation Infrastructure

2,000,000

For predesign, design, construction, and equipping new public safety infrastructure upgrades at the Brainerd Regional Airport to support the agency's emergency response for wildfires, search and rescue operations, and other agency needs.

Subd. 6. Accessibility

1,000,000

For the design and construction of accessibility improvements at state parks, recreation areas, and wildlife management areas.

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Subd. 7. Flood Hazard Mitigation

19,840,000

(a) For the state share of flood hazard mitigation grants for publicly owned capital improvements to prevent or alleviate flood damage under Minnesota Statutes, section 103F.161.

(b) Project priorities shall be determined by the commissioner as appropriate, based on need and consideration of available leveraging of federal, state, and local funds.

(c) Notwithstanding paragraph (b), $10,000,000 of this appropriation is for a grant to the Moorhead-Clay County Joint Powers Authority to design, construct, and equip flood mitigation infrastructure in the city of Moorhead. Any money not needed to complete flood mitigation infrastructure projects in the city of Moorhead may be expended on flood mitigation infrastructure projects in Clay County or the Buffalo Red River Watershed District required for the Fargo-Moorhead Area Diversion Project.

(d) Notwithstanding paragraph (b), $840,000 of this appropriation is for a grant to the Rice Creek Watershed District for predesign and design of flood hazard mitigation projects in the marked Interstate Highway 35W corridor, including constructing water storage and treatment basins and augmenting water conveyance systems, to alleviate flooding in the cities of New Brighton, St. Anthony Village, and Roseville.

(e) To the extent practicable and consistent with the project, recipients of appropriations for flood control projects in this subdivision shall create wetlands that are eligible for wetland replacement credit to replace wetlands drained or filled as the result of repair, reconstruction, replacement, or rehabilitation of an existing public road under Minnesota Statutes, section 103G.222, subdivision 1, paragraphs (l) and (m).

(f) To the extent that the cost of a municipal project exceeds two percent of the median household income in the municipality multiplied by the number of households in the municipality, this appropriation is also for the local share of the project.

Subd. 8. State Trail Renovation

2,000,000

To renovate paved and unpaved state trails established in Minnesota Statutes, section 85.015, according to the commissioner's priorities and as provided in Minnesota Statutes, section 84.946.

Subd. 9. Reforestation

3,500,000

For reforestation and stand improvement on state forest lands to meet the reforestation requirements of Minnesota Statutes, section 89.002, subdivision 2, including purchasing native seeds and native seedlings, planting, seeding, site preparation, and protection on state lands administered by the commissioner.

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Subd. 10. Anoka; Rum River Dam

4,696,000

(a) For a grant to the city of Anoka to design, engineer, and construct operational and safety improvements to the Rum River Dam in the city of Anoka.

(b) Any unspent amount of this appropriation remaining after completion of the project in paragraph (a) is available to design, engineer, and construct improvements to facilitate hydroelectric power generation and, if feasible, fish passage and river recreation; and modification of the existing spillway into a navigational lock.

Subd. 11. Cuyuna Lakes State Trail Segment

2,000,000

To design and construct a multiuse paved trail segment of the Cuyuna Lakes State Trail under Minnesota Statutes, section 85.015, subdivision 24, from the existing trail at the Northern Pacific Center to 28th Street Southeast, in the city of Brainerd.

Subd. 12. Champlin; Mississippi River Crossings

350,000

For a grant to the city of Champlin to construct a jetty and bank stabilization improvements upstream of the Mississippi Crossings public dock system in the city of Champlin.

Subd. 13. Fillmore County; Forestville Bridge

2,000,000

For a grant to Fillmore County to design, engineer, and construct the rehabilitation of the historic Forestville Bridge.

Subd. 14. Root River State Trail

2,000,000

For engineering and construction of the Root River State Trail under Minnesota Statutes, section 85.015, from the city of Preston to the city of Carimona.

Subd. 15. Three Rivers Park District; Coon Rapids Dam

5,640,000

(a) For one or more grants to the Three Rivers Park District to design, engineer, and construct improvements and betterments of a capital nature to the Coon Rapids Dam located on the Mississippi River.

(b) $1,800,000 of this appropriation is to replace and install hydraulic cylinders.

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(d) Any unspent amount of an appropriation in this subdivision is available for other improvements that improve the structural integrity, safety, and operational capabilities of the Coon Rapids Dam.

Subd. 16. Unspent Appropriations

The unspent portion of an appropriation for a state project in this section that is complete, upon written notice to the commissioner of management and budget, is available for asset preservation under Minnesota Statutes, section 84.946. Minnesota Statutes, section 16A.642, applies from the date of the original appropriation to the unspent amount transferred.

Sec. 8. POLLUTION CONTROL AGENCY

Subdivision 1. Total Appropriation

$12,014,000

To the Pollution Control Agency for the purposes specified in this section.

Subd. 2. Statewide Drinking Water Contamination Mitigation Program

1,500,000

For projects or grants under Minnesota Statutes, section 115B.245.

Subd. 3. Solid Waste Capital Assistance Grant Program

10,514,000

For grants under the capital assistance program under Minnesota Statutes, section 115A.54. The agency must prioritize the three highest ranked projects for this program on the capital budget request list for the Pollution Control Agency, published January 2026 in the State of Minnesota Final Capital Budget Requests.

Sec. 9. BOARD OF WATER AND SOIL RESOURCES

Subdivision 1. Total Appropriation

$6,500,000

To the Board of Water and Soil Resources for the purposes specified in this section.

Subd. 2. Local Government Roads Wetland Replacement Program

4,500,000

To acquire land or permanent easements and to restore, create, enhance, and preserve wetlands to replace those wetlands drained or filled as a result of the repair, reconstruction, replacement, or rehabilitation of existing public roads as required by Minnesota Statutes, section 103G.222, subdivision 1, paragraphs (l) and (m). Notwithstanding Minnesota Statutes, section 103G.222, subdivision 3, the board may implement the wetland replacement program statewide. The purchase price paid for acquisition of land

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or perpetual easement must be a fair market value as determined by the board. The board may enter into agreements with the federal government, other state agencies, political subdivisions, nonprofit organizations, fee title owners, or other qualified private entities to acquire wetland replacement credits in accordance with Minnesota Rules, chapter 8420. Up to five percent of this appropriation may be used for restoration and enhancement.

Subd. 3. Reinvest in Minnesota (RIM) Reserve Program

2,000,000

To acquire conservation easements from landowners to preserve, restore, create, and enhance wetlands and associated uplands of prairie and grasslands, and to restore and enhance rivers and streams, riparian lands, and uplands of prairie and grasslands, in order to protect soil and water quality, support fish and wildlife habitat, reduce flood damage, and provide other public benefits. The provisions of Minnesota Statutes, section 103F.515, apply to this program. The board shall give priority to leveraging federal money by enrolling targeted new lands or enrolling environmentally sensitive lands that have expiring federal conservation agreements. The board is authorized to enter into new agreements and amend past agreements with landowners as required by Minnesota Statutes, section 103F.515, subdivision 5, to allow for restoration. Up to five percent of this appropriation may be used for restoration and enhancement.

Sec. 10. AGRICULTURE

$1,380,000

To the commissioner of administration for capital asset preservation improvements and betterments at the potato inspection facility located in East Grand Forks, to be spent in accordance with Minnesota Statutes, section 16B.307.

Sec. 11. MINNESOTA ZOOLOGICAL GARDEN

$9,000,000

To the Minnesota Zoological Board for capital asset preservation improvements and betterments to infrastructure and exhibits at the Minnesota Zoo, to be spent in accordance with Minnesota Statutes, section 16B.307. Notwithstanding the specified uses of money under Minnesota Statutes, section 16B.307, this appropriation may be used to replace buildings that are in poor condition, outdated, and no longer support the work of the Minnesota Zoological Garden; to construct and renovate trails and roads on the Minnesota Zoological Garden site; and to renovate animal exhibits to meet modern animal welfare standards, address animal and staff safety issues, and improve the viewing experience for guests.

Sec. 12. ADMINISTRATION

Subdivision 1. Total Appropriation

$10,800,000

To the commissioner of administration for the purposes specified in this section.

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Subd. 2. Capital Asset Preservation and Replacement Account

10,000,000

To be spent in accordance with Minnesota Statutes, section 16A.632.

Subd. 3. Capitol Area Trees

800,000

To plant trees within the Capitol Area, as defined in Minnesota Statutes, section 15B.02, as part of implementation of the Capitol Mall Design Framework under Laws 2023, chapter 62, article 1, section 11, subdivision 2, as amended by Laws 2025, chapter 39, article 1, section 39.

Sec. 13. AMATEUR SPORTS COMMISSION

Subdivision 1. Total Appropriation

$5,250,000

To the Minnesota Amateur Sports Commission for the purposes specified in this section.

Subd. 2. Asset Preservation

4,500,000

For asset preservation improvements and betterments of a capital nature at the National Sports Center in Blaine, to be spent in accordance with Minnesota Statutes, section 16B.307.

Subd. 3. Mighty Ducks

750,000

For grants to local units of government under Minnesota Statutes, section 240A.09. This appropriation must not be used to acquire ice resurfacing or edging equipment.

Sec. 14. MILITARY AFFAIRS

Subdivision 1. Total Appropriation

$5,800,000

To the adjutant general for the purposes specified in this section.

Subd. 2. Duluth Hangar

3,500,000

To predesign and design the construction of a new hangar to hold aircraft at the Duluth International Airport in support of the 148th Fighter Wing of the Minnesota Air National Guard to replace existing hangars.

Subd. 3. Asset Preservation

2,300,000

For asset preservation improvements and betterments at readiness centers statewide, to be spent in accordance with Minnesota Statutes, section 16B.307.

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Sec. 15. PUBLIC SAFETY

Subdivision 1. Total Appropriation

$19,000,000

To the commissioner of public safety for the purposes specified in this section.

Subd. 2. Eden Prairie; Public Safety Garage and Storage Facility

2,000,000

For a grant to the city of Eden Prairie to design, construct, furnish, and equip a garage and storage facility to house regional fire, police, and other public safety equipment and vehicles to serve the city and surrounding communities.

Subd. 3. Golden Valley; Fire Station

2,000,000

For a grant to the city of Golden Valley to construct, equip, and furnish a new fire station with space to provide regional response, training opportunities, and other associated site improvements. This appropriation is for Phase II of the project and is in addition to the appropriation under Laws 2023, chapter 71, article 1, section 9, subdivision 9.

Subd. 4. Hilltop; Emergency Shelter

2,500,000

For a grant to the city of Hilltop for site preparation and to construct, furnish, and equip a new tornado and emergency shelter.

Subd. 5. Lake of the Woods County; Law Enforcement and Government Facilities

6,000,000

For a grant to Lake of the Woods County to design, engineer, construct, furnish, and equip new law enforcement and government facilities to improve public safety, accessibility, delivery of public services, and energy efficiency. Improvements and betterments of a capital nature funded by this appropriation are exempt from the requirements under Minnesota Statutes, section 16B.325.

Subd. 6. Mendota Heights; Public Safety and City Hall Facility

4,000,000

For a grant to the city of Mendota Heights to predesign and design a facility in the city of Mendota Heights to serve as a city hall and public safety facility for the city's police department.

Subd. 7. Minnetonka; Fire Station

2,500,000

For a grant to the city of Minnetonka to demolish and reconstruct, furnish, and equip Fire Station #2 located in the city's northeast quadrant. This appropriation includes money for improvements necessary to equip the new station for 24-hour operation, including space for housing, and for updated decontamination, gear storage, and training space.

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Sec. 16. TRANSPORTATION

Subdivision 1. Total Appropriation

$176,316,000

To the commissioner of transportation for the purposes specified in this section.

Subd. 2. Local Road Improvement Program

50,000,000

(a) From the bond proceeds account in the state transportation fund as provided in Minnesota Statutes, section 174.50, for eligible improvements on trunk highway corridor projects under Minnesota Statutes, section 174.52, subdivision 2; for construction and reconstruction of local roads with statewide or regional significance under Minnesota Statutes, section 174.52, subdivision 4; or for grants to counties to assist in paying the costs of rural road safety capital improvement projects on county state-aid highways under Minnesota Statutes, section 174.52, subdivision 4a.

(b) $3,000,000 of this appropriation is for grants to townships for capital improvements to township roads.

Subd. 3. Local Bridge Replacement Program

25,000,000

From the bond proceeds account in the state transportation fund to match federal money and to replace or rehabilitate local deficient bridges as provided in Minnesota Statutes, section 174.50.

Subd. 4. Highway Rail Grade Crossings

1,000,000

To design, construct, and equip the replacement of active highway rail grade warning devices that have reached the end of their useful life or new highway rail grade warning devices.

Subd. 5. Safe Routes to School

1,000,000

For grants under Minnesota Statutes, section 174.40.

Subd. 6. Anoka County; TH 65 Interchange

4,300,000

For a grant to Anoka County for preliminary engineering, environmental documentation, final design, right-of-way acquisition, and construction of intersection improvements along marked Trunk Highway 65 at Anoka County State-Aid Highway 116, also known as Bunker Lake Boulevard Northeast, and associated frontage roads and backage roads within the trunk highway system. This appropriation is for the portion of the project that is eligible to be funded with the proceeds of general obligation bonds.

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Subd. 7. Benton County; CSAH 1 Improvements

3,000,000

For a grant to Benton County to design, engineer, construct, and reconstruct improvements and betterments of a capital nature along Benton County State-Aid Highway 1 (Mayhew Lake Road) between 14th Avenue and 35th Street in the city of Sauk Rapids. This appropriation includes money for construction and reconstruction of six roundabouts and construct and reconstruction of Benton County State-Aid Highway 1.

Subd. 8. Columbus; Hornsby Street NE

250,000

From the bond proceeds account in the state transportation fund, for a grant to the city of Columbus for predesign of improvements to Hornsby Street Northeast from marked Trunk Highway 97 to Eureka Avenue.

Subd. 9. Cook County; Gunflint Trail Improvements

1,000,000

For a grant to Cook County to design improvements along the northwesternmost ten miles of the Gunflint Trail National Scenic Byway, terminating at Trails End Campground. This appropriation includes money for design of: (1) repaving approximately ten miles of failing roadway beginning 46 miles north of Grand Marais on the Gunflint Trail at the intersection with United States Forest Service Road 1347 and ending at the end of the Gunflint Trail at Trails End Campground; (2) replacement of deteriorated culverts throughout the corridor; (3) construction of up to four bridges; and (4) other related improvements necessary to preserve reliable access to the Boundary Waters Canoe Area Wilderness, Superior National Forest, and associated recreational areas.

Subd. 10. Dakota County; County Road 50

6,000,000

For one or more grants to Dakota County, the city of Lakeville, or both, to reconstruct Dakota County State-Aid Highway 50 from Kenrick Avenue to Klamath Trail as part of the Interstate Highway 35 interchange project to address corridor mobility and safety improvements. This appropriation may be used for preliminary and final design and to engineer, acquire right-of-way and temporary and permanent easements, inspect, construct, and reconstruct Dakota County State-Aid Highway 50 and other roads, including 175th Street and Kenrick Avenue, multipurpose pedestrian and bicycle facilities, public utility relocation, and stormwater management.

Subd. 11. Douglas County; I-94 Interchange

1,500,000

From the bond proceeds account in the state transportation fund, for a grant to Douglas County for preliminary engineering and final design of the local road portions of an interchange at marked

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Interstate Highway 94 and Douglas County State-Aid Highway 17. This appropriation also includes money for other infrastructure necessary to support completion of the project, including pedestrian safety, public utility, and stormwater management improvements.

Subd. 12. Faribault County; Welk Drive

500,000

For a grant to Faribault County to design and construct improvements to Faribault County State-Aid Highway 63/Welk Drive between Faribault County State-Aid Highway 16 and the city boundary to accommodate an expansion of an industrial park adjacent to the project area in the city of Blue Earth.

Subd. 13. Forest Lake; CSAH 32

2,755,000

For one or more grants to the city of Forest Lake, Washington County, or both, for preliminary design, final design, engineering, right-of-way acquisition, and construction of improvements to Washington County State-Aid Highway 32 (11th Avenue) in the city of Forest Lake to address safety, accessibility, and other traffic operation issues.

Subd. 14. Frazee; North River Drive

1,850,000

For a grant to the city of Frazee to design, engineer, and construct North River Drive and associated water and sewer infrastructure from Becker County State-Aid Highway 29 to marked Trunk Highway 87 to connect to Wannigan Regional Park.

Subd. 15. Freeport; I-94 Interchange

6,000,000

For a grant to the city of Freeport for reconstruction of the local road portions of the intersection of marked Interstate Highway 94 and 1st Avenue in the city of Freeport. This appropriation includes money for preliminary and final design, engineering, permitting, demolition of an existing bridge over marked Interstate Highway 94, or construction of a new interchange or other infrastructure necessary to support completion of the project, including pedestrian safety, public utilities, and stormwater management.

Subd. 16. Fridley; BNSF Northtown Yard

2,000,000

For a grant to the city of Fridley to predesign, design, and engineer the extension of 57th Avenue NE, including public utilities as necessary and a bridge and approach walls, across the BNSF Northtown Yard from Main Street NE (Anoka County State-Aid Highway 102) westward to East River Road (Anoka County State-Aid Highway 1) in Fridley.

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Subd. 17. Independence; U.S. Highway 12

4,000,000

For a grant to the city of Independence to predesign, design, and construct critical safety and mobility improvements along marked U.S. Highway 12 from County Line Road to County Road 90 in Hennepin County.

Subd. 18. Karlstad; Municipal Airport

6,500,000

For one or more grants to the city of Karlstad, Deerwood Township, or both, for engineering and construction of a primary airport runway and supporting facilities. This appropriation is for Phase 3 of the project and includes money for grading and drainage improvements; runway, taxiway, and parking apron paving; and the relocation of a township road. This appropriation is in addition to the Phase 1 appropriation in Laws 2021, First Special Session chapter 5, article 1, section 2, subdivision 2, and the Phase 2 appropriation in Laws 2023, chapter 71, article 1, section 10, subdivision 11.

Subd. 19. Lake Park; Local Roads

2,000,000

For a grant to the city of Lake Park to design, engineer, construct, reconstruct, and rehabilitate local roads within the boundaries of the city.

Subd. 20. Minneapolis; Pedestrian Access and Safety Improvements

115,000

For a grant to the city of Minneapolis for construction of ADA-accessible facilities in the public right-of-way.

Subd. 21. North Branch; I-35 Interchange

1,000,000

For a grant to the city of North Branch for predesign, design, and right-of-way acquisition to construct an interchange at Interstate Highway 35 and 400th Street in the city of North Branch.

Subd. 22. Oakdale; Pedestrian Bridge

3,750,000

For a grant to the city of Oakdale to design and construct a pedestrian bridge and associated improvements over marked Interstate Highway 694 at the intersection of 40th Street to provide a safe crossing for residents, connectivity with local and regional trails and parks, and access to places of work.

Subd. 23. Olmsted County; U.S. Highway 14 Intersection G.O. Improvements

5,600,000

From the bond proceeds account in the state transportation fund, for one or more grants to the city of Byron, Olmsted County, or both for the county and city share of general obligation bond eligible portions of a project to conduct environmental analysis,

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predesign, and final design of a project to replace at-grade intersections and traffic signals with grade separated interchanges along marked U.S. Highway 14, including but not limited to intersections with Olmsted County State-Aid Highway 3 and Olmsted County State-Aid Highway 5, in the city of Byron. Any amount remaining after substantial completion of environmental analysis, predesign, design, and engineering work may be applied to the city and county's share to acquire right-of-way for, and to construct, furnish, and equip these interchanges and associated infrastructure and road work to accommodate these interchanges.

Subd. 24. Olmsted County; U.S. Highway 14 Intersection T.H. F. Improvements

2,400,000

From the trunk highway fund for trunk highway fund eligible portions of a project to conduct environmental analysis, predesign, and final design of a project to replace at-grade intersections and traffic signals with grade-separated interchanges along marked U.S. Highway 14, including but not limited to intersections with Olmsted County State-Aid Highway 3 and Olmsted County State-Aid Highway 5, in the city of Byron. Any amount remaining after substantial completion of environmental analysis, predesign, design, and engineering work may be applied to the state's share to acquire right-of-way for, and to construct, furnish, and equip these interchanges and associated infrastructure and road work to accommodate these interchanges.

Subd. 25. Pope County; 210th Avenue

5,000,000

From the bond proceeds account in the state transportation fund, for one or more grants to the city of Glenwood, Glenwood Township, or Leven Township, or any combination of these entities for the acquisition of permanent easements and right-of-way and to predesign, design, construct, and reconstruct 210th Avenue in Pope County between marked Trunk Highway 28 and Pope County State-Aid Highway 28.

Subd. 26. Redwood Falls; Historic Swayback Bridge

1,300,000

For a grant to the city of Redwood Falls to design and construct restoration of the historic WPA 1938 Swayback Bridge, Number 89859.

Subd. 27. Richfield; Nicollet Avenue Reconstruction

2,000,000

For one or more grants to the city of Richfield, Hennepin County, or both to design and construct portions of approximately 1.4 miles of roadway and public utility infrastructure, including replacement of water main, sanitary sewer main, and storm sewer main on Nicollet Avenue (Hennepin County State-Aid Highway 52) from 77th Street to 66th Street (Hennepin County State-Aid Highway 53)

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and other streets to support reconstruction of Nicollet Avenue in the city of Richfield. This appropriation includes money for predesign necessary to complete the project and for the acquisition of real property or right-of-way or easement acquisition within the corridor. This appropriation is for the city's local cost-share and is to be used in cooperation with Hennepin County for the Nicollet Avenue (Hennepin County State-Aid Highway 52) reconstruction project.

Subd. 28. Savage; Highway 13 Local Road Improvements

3,000,000

For property and easement acquisition, final design, and construction of intersection improvements along marked Trunk Highway 13 at Quentin Avenue, Lynn Avenue, Chowen Avenue, and Washburn Avenue and the associated frontage roads, backage roads, connecting local streets, and utility infrastructure improvements, if necessary or required for construction.

Subd. 29. Scott County; I-35 Interchange

1,200,000

From the trunk highway fund for predesign, design, environmental review, engineering, and right-of-way acquisition for reconstruction of the interchange at marked Interstate Highway 35 and Scott County State-Aid Highway 2.

Subd. 30. Slayton; 34th Street

2,000,000

For a grant to the city of Slayton to predesign, design, engineer, construct, and equip the reconstruction of 34th Street in the city of Slayton, from Juniper Avenue to 160th Avenue.

Subd. 31. St. Louis Park; Local Street Improvements

5,100,000

For a grant to the city of St. Louis Park to acquire property or interests in property, predesign, design, construct, furnish, and equip improvements to Meadowbrook Road from Excelsior Boulevard to Oxford Street, Oxford Street from Meadowbrook Road to Edgewood Avenue, Edgewood Avenue from Oxford Street to Cambridge Street, Cambridge Street from Edgewood Avenue to Alabama Avenue, and Louisiana Avenue from north of the intersection of Oxford Street to south of the intersection. This appropriation includes money for area bikeway and sidewalk construction; bridge repair and modifications; replacement or repair of water, sewer, and storm sewer facilities; regional water quality and flood storage infrastructure construction; and other improvements or upgrades related to street reconstruction work, including streetlights, signals, striping, and signs; replacement or repair of pavement, curb, and gutter; and roundabout construction.

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Subd. 32. Stearns County; 322nd Street

3,000,000

For a grant to Stearns County for design, engineering, environmental analysis of, land acquisition for, and reconstruction of 322nd Street from Stearns County State-Aid Highway 4 to Stearns County State-Aid Highway 133 in and adjacent to the city of St. Cloud.

Subd. 33. Stewartville; 15th Avenue NE Improvements

3,096,000

For a grant to the city of Stewartville for construction of a section of 15th Avenue Northeast within the High Forest Township limits, that is adjacent to and borders the city of Stewartville. This appropriation may be used to improve and pave the roadway and to address drainage issues at the intersection with 6th Street Northeast, including replacing culverts and storm sewers.

Subd. 34. Stillwater; Washington Avenue

4,300,000

For a grant to the city of Stillwater to design, engineer, and construct a new intersection of Washington Avenue and North Frontage Road and associated roadway and safety upgrades and improvements in the city of Stillwater.

Subd. 35. Waconia; TH 5 Reconstruction

4,700,000

For a grant to the city of Waconia to design, engineer, construct, and reconstruct local road improvements related to the reconstruction of marked Trunk Highway 5 from the intersection with marked Trunk Highway 284 and South Olive Street to the intersection with Carver County State-Aid Highway 59, known as Main Street, in Waconia. For the purposes of this subdivision, "local road improvements" includes but is not limited to frontage roads, backage roads, connecting local streets, trails, and utility infrastructure that are eligible for the use of proceeds of general obligation bonds.

Subd. 36. Washington County; County Road 19A Realignment

9,600,000

For a grant to Washington County for environmental review, right-of-way acquisition, and final design for the realignment of County Road 19A and 100th Street South in the city of Cottage Grove.

Subd. 37. Washington County; CSAH 18 and CSAH 19 Intersection

500,000

For a grant to Washington County to construct improvements for safety and reducing congestion at the intersection of Washington County State-Aid Highway 18 (Bailey Road) and County State-Aid Highway 19 (Woodbury Drive) in the city of Woodbury.

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Sec. 17. METROPOLITAN COUNCIL

Subdivision 1. Total Appropriation

$57,831,000

To the Metropolitan Council for the purposes specified in this section.

Subd. 2. Metropolitan Cities Inflow and Infiltration Grants

15,000,000

For inflow and infiltration grants under Minnesota Statutes, section 473.5491.

Subd. 3. Metropolitan Regional Parks and Trails

10,000,000

For the cost of improvements and betterments of a capital nature and acquisition by the council and metropolitan parks implementing agencies as defined in Minnesota Statutes, section 473.351, of regional recreational open-space lands in accordance with the council's policy plan as provided in Minnesota Statutes, section 473.147. This appropriation must not be used to purchase easements.

Subd. 4. Community Tree-Planting Grants

5,000,000

For community tree-planting grants under Minnesota Statutes, section 473.355.

Subd. 5. Champlin; Elm Creek Greenway

500,000

For a grant to the city of Champlin for property and easement acquisition and predesign for a new segment of the Elm Creek Greenway Trail Corridor in the city of Champlin to connect Mississippi Crossings to the Elm Creek Park Reserve.

Subd. 6. Minneapolis Park and Recreation Board; North Commons Park

6,000,000

For a grant to the Minneapolis Park and Recreation Board to design, construct, and equip improvements to North Commons Park in the city of Minneapolis to implement elements of the North Commons Improvement Project, including the renovation of the community building with indoor sports, gathering, and arts spaces, sports fields, and renovation and relocation of the water park. This appropriation is in addition to the appropriation in Laws 2020, Fifth Special Session chapter 3, article 3, section 3.

Subd. 7. Minneapolis Park and Recreation Board; Cedar Riverside Recreation Center

1,500,000

For a grant to the Minneapolis Park and Recreation Board to predesign, design, and construct the new Cedar Riverside Recreation Center to serve the largest immigrant population center in the state.

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Subd. 8. Minneapolis Park and Recreation Board; Loring Park

1,800,000

For a grant to the Minneapolis Park and Recreation Board to predesign, design, construct, furnish, and equip improvements of a capital nature to renovate the Berger Fountain and Plaza in Loring Park.

Subd. 9. Ramsey County; Boulevard Trail

4,750,000

For a grant to Ramsey County to design and construct an approximately 2.25-mile multiuse trail and other site improvements along the southern edge of Vadnais Lake, enhancing safety, providing scenic access to natural areas, and providing regional connectivity and recreational opportunities for pedestrians and cyclists.

Subd. 10. St. Paul; Como Zoo

9,350,000

For a grant to the city of St. Paul to design, construct, furnish, and equip new habitats for a big cats and African animal exhibit at the Como Zoo in the city of St. Paul. In addition to exhibit space, the habitats shall include space for training, enrichment, off-exhibit animal housing, and veterinary care.

Subd. 11. Washington County; Brown's Creek State Trail Connection

2,931,000

For a grant to Washington County to construct a trail connection from Washington County State-Aid Highway 5 to the Brown's Creek State Trail, established under Minnesota Statutes, section 85.015, subdivision 14, and to construct and improve an overlook and viewing area of the historic Point Douglas-St. Louis River Road Bridge.

Subd. 12. Washington County; Hardwood Creek Regional Trail Extension

1,000,000

For a grant to Washington County for acquisition, design, and construction of the Hardwood Creek Regional Trail extension within the city of Hugo.

Sec. 18. HUMAN SERVICES

Subdivision 1. Total Appropriation

$11,131,000

To the commissioner of human services for the purposes specified in this section.

Subd. 2. Emergency Shelter Facilities

10,000,000

For emergency shelter facility grants under article 2.

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Subd. 3. St. David's

1,131,000

For a grant to Hennepin County to design and construct the expansion and renovation of the St. David's facility located at 1130 Nicollet Mall in the city of Minneapolis, subject to Minnesota Statutes, section 16A.695. The facility must be used to promote the public welfare by providing early childhood education, children's mental health and pediatric therapy services, and support services that stabilize families, build skills, increase independence, and improve the educational and health outcomes of Minnesotans.

Sec. 19. DIRECT CARE AND TREATMENT

$23,000,000

To the commissioner of administration for asset preservation improvements and betterments of a capital nature, to be spent in accordance with Minnesota Statutes, section 16B.307, at facilities operated by Direct Care and Treatment.

Sec. 20. CHILDREN, YOUTH, AND FAMILIES

$2,000,000

To the commissioner of children, youth, and families for grants under Minnesota Statutes, section 142A.46, to predesign, design, construct, renovate, furnish, and equip early childhood learning facilities.

Sec. 21. VETERANS AFFAIRS

Subdivision 1. Total Appropriation

$77,372,000

To the commissioner of administration for the purposes specified in this section.

Subd. 2. Asset Preservation

15,000,000

For asset preservation improvements and betterments of a capital nature at the veterans homes in Minneapolis, Hastings, Fergus Falls, Montevideo, Bemidji, Preston, Silver Bay, and Luverne, and the state veterans cemeteries at Little Falls, Preston, and Duluth, to be spent in accordance with Minnesota Statutes, section 16B.307.

Subd. 3. Minneapolis Veterans Home

17,200,000

To design, construct, furnish, and equip the renovation of the Minneapolis Veterans home Building 16. This appropriation may also be used to design and complete hazardous materials abatement.

Subd. 4. Hastings Veterans Home

45,172,000

To design, construct, furnish, and equip the renovation of administrative and residential buildings and infrastructure at the

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Minnesota Veterans Home, Hastings campus. This appropriation includes money to design and complete demolition of all or portions of buildings and other structures deemed unnecessary or undesirable for the development of the project, site preparation, and asbestos removal and hazardous materials abatement.

Sec. 22. CORRECTIONS

Subdivision 1. Total Appropriation

$52,142,000

To the commissioner of administration for the purposes specified in this section.

Subd. 2. Asset Preservation

39,208,000

For asset preservation improvement and betterments of a capital nature at the Minnesota correctional facilities statewide to be spent in accordance with Minnesota Statutes, section 16B.307. The report required under Minnesota Statutes, section 16B.307, subdivision 2, shall include a list of all projects that have been paid for with this appropriation.

Subd. 3. Facility Consolidation

350,000

For predesign of consolidation and expansion of correctional facilities statewide.

Subd. 4. Minnesota Correctional Facility - Faribault

10,712,000

To construct, renovate, furnish, and equip an expansion of vocational programming space in the Dakota Building at the Faribault Correctional Facility campus. This appropriation includes money for demolition.

Subd. 5. Clay County; Juvenile Detention Facility

1,872,000

For a grant to Clay County to design, construct, furnish, and equip Phase 1 of a nonsecure juvenile detention facility in the city of Moorhead.

Subd. 6. Unspent Appropriations

The unspent portion of an appropriation for a Department of Corrections project in this section that is complete, upon written notice to the commissioner of management and budget, is available for asset preservation under Minnesota Statutes, section 16B.307. Minnesota Statutes, section 16A.642, applies from the date of the original appropriation to the unspent amount transferred.

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Sec. 23. EMPLOYMENT AND ECONOMIC DEVELOPMENT

Subdivision 1. Total Appropriation

$135,479,000

To the commissioner of employment and economic development for the purposes specified in this section.

Subd. 2. Greater Minnesota Business Development Public Infrastructure

2,000,000

For grants under Minnesota Statutes, section 116J.431.

Subd. 3. Innovative Business Development Public Infrastructure

2,000,000

For grants under Minnesota Statutes, section 116J.435.

Subd. 4. Transportation Economic Development Infrastructure

2,000,000

For grants under Minnesota Statutes, section 116J.436.

Subd. 5. Austin Port Authority; Hormel Institute Bioimaging Center

4,000,000

For a grant to the Austin Port Authority to design, construct, furnish, and equip the renovation of space at the Hormel Institute facility in the city of Austin, a learning laboratory for workforce development, kindergarten through grade 12 engagement, and professional training in STEM and bioimaging education.

Subd. 6. Breckenridge; Community Center

3,000,000

For a grant to the city of Breckenridge to design, construct, furnish, and equip a community center.

Subd. 7. Brooklyn Center; Opportunity Site Public Infrastructure

3,000,000

For a grant to the city of Brooklyn Center for predesign, design, site preparation, construction, and equipping of public infrastructure to serve the Opportunity Site. This appropriation includes money for utility improvements, stormwater ponding, road construction, public parking, and other improvements necessary to facilitate travel to and use of the Opportunity Site by the public.

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Subd. 8. Brooklyn Park; Northwest Metro Regional Athletic Facility

7,500,000

For a grant to the city of Brooklyn Park to construct, furnish, and equip an addition to the Brooklyn Park community activity center to create a Northwest Metro Regional Athletic Facility, including multicourt gymnasium space.

Subd. 9. Chanhassen; Community Center

2,500,000

For a grant to the city of Chanhassen to design, furnish, and equip a regional recreation, community, and event center, to include two sheets of indoor ice, a walking track, indoor turf, indoor playground, gathering space, meeting rooms, and other amenities. This appropriation includes money for the acquisition of real property or interests in real property.

Subd. 10. Columbia Heights; Public Works Facility

2,478,000

For a grant to the city of Columbia Heights to predesign and design a public works facility, an expanded public recycling area, a new access road, and other related infrastructure and facility improvements. This appropriation includes money for the acquisition of real property and demolition associated with the project.

Subd. 11. DECC; Accessibility Improvements

4,900,000

For a grant to the Duluth Entertainment and Convention Center Authority to predesign, design, construct, renovate, furnish, and equip improvements and betterments of a capital nature at the Duluth Entertainment and Convention Center facility. This appropriation includes money for elevator and escalator improvements, energy efficiency upgrades, heating system upgrades, Americans with Disabilities Act (ADA) compliance improvements, and seat replacement.

Subd. 12. Hennepin County; Avivo Rehabilitation Services Facility

5,000,000

For a grant to Hennepin County for design; site preparation, including demolition and environmental remediation; and renovation of Avivo facilities located at 1900 Chicago Avenue and 1908 Chicago Avenue in the city of Minneapolis to support ongoing operations.

Subd. 13. Housing and Redevelopment Authority of Duluth; Mission Engagement Center

8,850,000

For a grant to the Housing and Redevelopment Authority of Duluth to predesign, design, construct, furnish, and equip a community engagement center in the city to serve people experiencing homelessness.

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Subd. 14. Mahnomen Health Center Joint Powers Board; Skilled Nursing Facility

10,000,000

For a grant to the Mahnomen Health Center Joint Powers Board to design, construct, furnish, and equip a skilled nursing facility in the city of Mahnomen.

Subd. 15. Martin County; Veterans Office

300,000

For a grant to Martin County to design the renovation of an existing county-owned building in the city of Fairmont to provide new office space for the county's University of Minnesota Extension/4-H and Veterans Services offices.

Subd. 16. Northfield; Community Resource Center

3,000,000

For a grant to the city of Northfield to predesign, design, construct, furnish, and equip improvements to the Northfield Community Resource Center. This appropriation includes money for expansion of the facility, updates for safety and security, replacement of HVAC and other improvements to mechanical systems, and renovation of existing space within the facility.

Subd. 17. Olmsted County; History Center Museum

2,322,000

For a grant to Olmsted County to design, construct, furnish, and equip the expansion and renovation of the History Center of Olmsted County Museum facility.

Subd. 18. Osseo; Central Avenue Streetscape

586,000

For a grant to the city of Osseo to complete renovation and construction of sidewalks and streetscape improvements on Central Avenue in downtown Osseo.

Subd. 19. Osseo; City Hall

214,000

For a grant to the city of Osseo for construction of capital improvements to the city's City Hall building, including replacement of the roof and renovations to accessibility features.

Subd. 20. Osseo; Public Works Facility

800,000

For a grant to the city of Osseo to construct and equip capital improvements at the Osseo Public Works Building, including acquiring and installing a security system, improving security fencing, interior office space rehabilitation, and constructing and equipping an addition to the current building for cold storage.

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Subd. 21. Plymouth; City Center

5,000,000

For a grant to the city of Plymouth to design, construct, renovate, and equip public infrastructure for stormwater ponding in the area bounded by Vicksburg Lane and Trunk Highway 55 in the city of Plymouth, known as the Plymouth City Center.

Subd. 22. Ranier; Public Works Building

554,000

For a grant to the city of Ranier to predesign, design, construct, furnish, and equip a new public works maintenance building.

Subd. 23. Robbinsdale; Public Works Facility

3,325,000

For a grant to the city of Robbinsdale to design a new public works facility.

Subd. 24. Shakopee; Innovation Hub

4,000,000

For a grant to the city of Shakopee to design, construct, furnish, and equip the workforce training and postsecondary education spaces of the Innovation Hub in the city of Shakopee.

Subd. 25. South St. Paul; Aquatic Facility

4,150,000

(a) For a grant to the city of South St. Paul to design, construct, and equip a new swimming pool and aquatics center.

(b) The grant under this section is exempt from the requirements under Minnesota Statutes, section 16B.325.

(c) The following must be incorporated into the swimming pool and aquatics center funded under this section: (1) high-efficiency and low-impact lighting; (2) native and pollinator-supporting landscaping; (3) WaterSense certified low-flow sink and toilet plumbing features; (4) daylighting in occupied spaces; (5) shade features; (6) amenities and accessibility features to enhance visitor travel to the facility by active transportation, as defined under Minnesota Statutes, section 174.38, subdivision 1; (7) low-VOC materials to enhance indoor air quality; and (8) photovoltaic-ready infrastructure.

Subd. 26. St. Cloud; 5th Avenue Downtown Connection Project

3,400,000

For a grant to the city of St. Cloud to acquire right-of-way and design, engineer, construct, furnish, and equip public infrastructure improvements for the 5th Avenue South Campus and Downtown Connection project.

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Subd. 27. St. Cloud; Mississippi Riverwalk Connection

3,000,000

For a grant to the city of St. Cloud to design, engineer, construct, and equip the St. Cloud Mississippi Riverwalk Connection Project, including grading, trail and pathway construction, pedestrian crossings if necessary, lighting, landscaping, riverbank stabilization, shoreline restoration, utility work, and related public infrastructure improvements.

Subd. 28. St. Paul; Roy Wilkins Auditorium

40,000,000

For a grant to the city of St. Paul to predesign, design, construct, furnish, and equip renovations to the Roy Wilkins Auditorium.

Subd. 29. St. Paul; CHS Field

1,000,000

For a grant to the city of St. Paul to predesign improvements at CHS Field. This appropriation includes money for predesign of upgrades and improvements to the facility's infrastructure to meet Major League Baseball ballpark requirements, including construction of a new locker room, enhanced visitor amenities, and for environmental remediation of contaminated soil.

Subd. 30. St. Paul; Latino Museum

3,600,000

For a grant to the city of St. Paul to acquire property for, and to design, construct, furnish, and equip, the Minnesota Latino Museum at 85 West Water Street on Harriet Island.

Subd. 31. West St. Paul; 150 Thompson Park

1,000,000

For a grant to the city of West St. Paul to design improvements at 150 Thompson Park. This appropriation includes money for design of a plaza, urban beach, playground, dry creek, and trails.

Subd. 32. Woodbury; La Lake Park

2,000,000

For a grant to the city of Woodbury to design, construct, and equip facilities and infrastructure for La Lake Park. This appropriation includes money for an open-air shelter with restrooms, picnic areas, trails and a trailhead, and for other site improvements and amenities. This appropriation also includes money for stormwater management infrastructure and natural resource site improvements to protect water quality and enhance ecosystem health.

Sec. 24. PUBLIC FACILITIES AUTHORITY

Subdivision 1. Total Appropriation

$409,012,000

To the Public Facilities Authority for the purposes specified in this section.

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Subd. 2. State Match for Federal Grants to State Revolving Loan Programs

19,000,000

To match federal capitalization grants for the clean water revolving fund under Minnesota Statutes, section 446A.07, and the drinking water revolving fund under Minnesota Statutes, section 446A.081. This appropriation must be used for qualified capital projects.

Subd. 3. Water Infrastructure Funding Program

56,000,000

(a) For grants to eligible municipalities under the water infrastructure funding program under Minnesota Statutes, section 446A.072.

(b) $26,000,000 of this appropriation is for wastewater projects listed on the Pollution Control Agency's project priority list in the fundable range under the clean water revolving fund program.

(c) $30,000,000 of this appropriation is for drinking water projects listed on the commissioner of health's project priority list in the fundable range under the drinking water revolving fund program.

(d) After all eligible projects under paragraph (b) or (c) have been funded in a fiscal year, the Public Facilities Authority may transfer any remaining, uncommitted money to eligible projects under a program defined in paragraph (b) or (c) based on that program's project priority list.

Subd. 4. Point Source Implementation Grants Program

30,000,000

For grants to eligible municipalities under the point source implementation grants program under Minnesota Statutes, section 446A.073. This appropriation must be used for qualified capital projects.

Subd. 5. Lead Service Line Replacement

15,000,000

For grants to eligible entities under the Lead Service Line Replacement program under Minnesota Statutes, section 446A.077.

Subd. 6. Emerging Contaminants Grant Program

17,000,000

For grants to eligible municipalities under the Emerging Contaminants Grant Program under Minnesota Statutes, section 446A.082.

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Subd. 7. Albertville, Hanover, St. Michael; Regional Water System

5,000,000

For a grant to the joint powers water board, a regional water supply system serving the communities of Albertville, Hanover, and St. Michael, to design, construct, and equip improvements necessary to expand treatment capacity and address manganese and radium water quality issues.

Subd. 8. Alexandria Lake Area Sanitary District; Reclamation Facility

5,000,000

For a grant to the Alexandria Lake Area Sanitary District (ALASD) to construct and equip Phase Two improvements and upgrades to the district's regional water reclamation facility.

Subd. 9. Apple Valley; Water Treatment Plant Improvements

3,000,000

For a grant to the city of Apple Valley to predesign and design the renovation and expansion of the existing water treatment plant in the city to address perfluoroalkyl and polyfluoroalkyl substances (PFAS) in the city's drinking water supply.

Subd. 10. Big Lake; Wastewater Treatment Facility

3,500,000

For a grant to the city of Big Lake to design and engineer improvements and renovations to the city's wastewater treatment facility.

Subd. 11. Bloomington; North Central Sanitary Sewer Project

4,000,000

For a grant to the city of Bloomington to design, construct, and equip sanitary sewer improvements to facilitate increased sanitary sewer capacity needs in north central Bloomington, including the Penn American District.

Subd. 12. Burnsville; Water Treatment Plant

2,750,000

For a grant to the city of Burnsville to construct and equip upgrades and improvements necessary for renovation of the city's water treatment plant, including electrical component replacement, water line upgrades, and improvements to the surface water treatment process.

Subd. 13. Central Iron Range Sanitary Sewer District

1,400,000

For a grant to the Central Iron Range Sanitary Sewer District to predesign, design, construct, furnish, and equip improvements and betterments of a capital nature to the district's infrastructure,

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including Great Scott Township/Buhl/Kinney conveyance capacity expansion and upgrades, Buhl lift station upgrades, and security upgrades and conveyance system infrastructure expansion along the Trunk Highway 169 corridor between Great Scott Township and Chisholm, for residential, industrial, and commercial development.

Subd. 14. Chisago County; Shorewood Park; Sanitary Sewer District Extension

820,000

For a grant to Chisago County to predesign, design, and construct an extension of the Shorewood Park Sanitary Sewer District sewer system to 20 homes on Rush Lake.

Subd. 15. Cohasset; Public Infrastructure

3,000,000

For a grant to the city of Cohasset to design, construct, reconstruct, and equip the rehabilitation of the city's water tower; the extension of water, sanitary sewer, and storm sewer infrastructure citywide; and associated street reconstruction.

Subd. 16. Cold Spring; Wastewater Treatment Facility

5,500,000

For a grant to the city of Cold Spring to design and engineer improvements to the city's wastewater treatment facility.

Subd. 17. Cook; Public Infrastructure

1,500,000

For a grant to the city of Cook to predesign, design, engineer, and construct improvements to the city's inflow and infiltration collection system to extend utilities to the city's North Loop.

Subd. 18. Crystal; Douglas Drive Water Main

1,750,000

For a grant to the city of Crystal to predesign, design, and engineer the replacement of water main infrastructure, and associated street, sidewalk, and storm sewer improvements, along Hennepin County State-Aid Highway 102 (Douglas Drive) in the city of Crystal, from the intersection of Hennepin County State-Aid Highway 70 (Medicine Lake Road) and 29th Avenue North to Hennepin County State-Aid Highway 8 (West Broadway).

Subd. 19. Dayton; Water Tower

3,000,000

For a grant to the city of Dayton to acquire real property for, and to predesign, design, and construct a new water tower to provide adequate water storage and sufficient pressure for fire suppression for residents.

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Subd. 20. Duluth; Lakewood Water Treatment Plant

4,268,000

For a grant to the city of Duluth to design and construct improvements and betterments of a capital nature to the Lakewood water treatment plant. This appropriation includes money for the historic pumphouse roof and structural repairs, flocculation tank repairs, and clearwell and clarifier upgrades.

Subd. 21. Duluth North Shore Sanitary District

958,000

For a grant to the Duluth North Shore Sanitary District to design, engineer, and construct improvements to reduce inflow and infiltration within the district's sanitary collection system.

Subd. 22. Eagle Lake; Drinking Water Treatment Facility

6,000,000

For a grant to the city of Eagle Lake to construct and equip a water treatment facility to provide clean drinking water to residents and address water quality issues, including high levels of manganese.

Subd. 23. East Bethel; Elementary School Utility Connections

3,000,000

For a grant to the city of East Bethel to predesign, design, construct, and equip city water and sewer infrastructure to connect East Bethel Elementary School and Cedar Creek Elementary School to city water and sewer systems. This appropriation includes money for a new water tower and a new water treatment facility.

Subd. 24. Ely; Water Infrastructure

3,900,000

For a grant to the city of Ely to design, construct, and equip upgrades to and the replacement of water infrastructure. This appropriation includes money for the replacement of raw water intake and pump house infrastructure on Burntside Lake; the rehabilitation and replacement of water main infrastructure throughout the city; installation of new pumps, automated controls, and remote monitoring systems; replacement of associated deteriorated bridge crossings; and major projects at the Ely water treatment plant, including roof replacement, HVAC upgrades, and the installation of solar energy infrastructure.

Subd. 25. Eveleth; Wastewater Treatment Facility

2,500,000

For a grant to the city of Eveleth to construct and equip filtration improvements and the rehabilitation and replacement of aging and failing infrastructure at the Eveleth wastewater treatment facility to achieve compliance with regulations for phosphorus and mercury levels in the city's wastewater.

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Subd. 26. Excelsior; Public Infrastructure

5,613,000

For a grant to the city of Excelsior to acquire right-of-way, predesign, design, engineer, construct, and reconstruct public infrastructure. This appropriation includes money for improvements or upgrades to water main, storm sewer, and sanitary sewer systems; curb, gutter, and street improvements; and other publicly owned infrastructure consistent with the city's pavement management plan.

Subd. 27. Floodwood; Water and Sewer Infrastructure

1,500,000

For a grant to the city of Floodwood to design and construct capital improvements to the city's water and sewer infrastructure along County Road 832 (Floodwood Road). This appropriation includes money for replacement and expansion of water and sewer mains and associated street reconstruction to enhance business and residential development.

Subd. 28. Ghent; Water Infrastructure

3,000,000

For a grant to the city of Ghent for Phase 1 improvements to municipal water infrastructure.

Subd. 29. Grand Marais; Wastewater Treatment Plant

1,908,000

For a grant to the city of Grand Marais to design, construct, and equip improvements and betterments of a capital nature to the existing wastewater treatment facility in the city of Grand Marais to address risks posed from aging and failing infrastructure.

Subd. 30. Hastings; Water Treatment Plant

17,500,000

For a grant to the city of Hastings to predesign, design, construct, and equip the Eastern Water Treatment Plant and associated piping to remove perfluoroalkyl and polyfluoroalkyl substances from city drinking water.

Subd. 31. Holdingford; Lift Station

1,000,000

For a grant to the city of Holdingford to design, construct, and equip a new primary lift station.

Subd. 32. International Falls; Water Treatment Facility

4,800,000

For a grant to the city of International Falls to construct, renovate, furnish, and equip improvements and betterments of a capital nature at the existing water treatment facility in the city of International Falls, including an expansion of the facility, rehabilitation and replacement of aging and failing infrastructure, security upgrades, and other site improvements to support ongoing operations.

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Subd. 33. Jordan; Wastewater Infrastructure

5,375,000

For a grant to the city of Jordan to design, construct, and equip wastewater treatment improvements in the city of Jordan.

Subd. 34. Kandiyohi; Water Infrastructure

4,000,000

For a grant to the city of Kandiyohi to predesign, design, engineer, construct, and equip Phase 2 of water infrastructure improvements in the city of Kandiyohi.

Subd. 35. Keewatin; Public Infrastructure

5,500,000

For a grant to the city of Keewatin to design, construct, furnish, and equip the replacement and reconstruction of water mains, sanitary sewer lines, storm sewer systems, and streets.

Subd. 36. Lafayette; Water Treatment Plant

3,087,000

For a grant to the city of Lafayette to construct and equip a reverse osmosis system and associated improvements at the existing water treatment plant to address high levels of chloride in the city's wastewater and to prevent additional disinfection products violations in the city's drinking water.

Subd. 37. Lake Benton; Public Infrastructure

863,000

For a grant to the city of Lake Benton to design, engineer, construct, and reconstruct the replacement of sanitary sewer, water, and storm sewer infrastructure along the marked U.S. Highway 75 corridor in conjunction with the reconstruction of U.S. Highway 75.

Subd. 38. Lake Lillian; Public Infrastructure

3,500,000

For a grant to the city of Lake Lillian to design, construct, and equip the replacement of aging and failing municipal infrastructure. This appropriation includes money for improvements to and replacement of a water distribution system, sanitary sewer system, and storm sewer system infrastructure, and reconstruction of city streets. This appropriation is in addition to the appropriation in Laws 2023, chapter 72, article 2, section 10, subdivision 9.

Subd. 39. Laketown Township; Wastewater Infrastructure

6,400,000

For a grant to Laketown Township to design, construct, and equip replacement of sanitary sewer infrastructure, including septic tanks, sewer main, service lines from septic tanks to the main sewer line, and lift stations, necessary for replacement of the township's existing wastewater collection system. This

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appropriation includes money for demolition and removal of existing sanitary sewer infrastructure and for street restoration and other improvements necessary for completion of the project. This appropriation is for areas 6B, 6F, 6D-3, and 6D-4.

Subd. 40. Lonsdale; Water Tower and Water Main

4,851,000

For a grant to the city of Lonsdale to design, construct, furnish, and equip a new water tower and water main looping in the city of Lonsdale.

Subd. 41. Loretto; Water and Sewer Infrastructure

2,700,000

For a grant to the city of Loretto to design, engineer, and construct the replacement of water mains, water valves, sanitary sewer system, and stormwater system infrastructure in the city of Loretto, including associated street reconstruction.

Subd. 42. Minneapolis; Storm Sewer Project

8,000,000

For a grant to the city of Minneapolis to design and construct a new storm sewer under 13th Avenue Northeast from 2nd Street Northeast to a new outfall at the Mississippi River.

Subd. 43. Minneapolis; Water Main Project

12,360,000

For a grant to the city of Minneapolis to design and construct a structural liner along approximately 2.6 miles within the 36-inch water main running under 2nd Street North and Washington Avenue North.

Subd. 44. Minneapolis; Water Distribution Facility

4,000,000

For a grant to the city of Minneapolis for predesign, design, engineering, environmental analysis, and construction of a water distribution facility to be located in Hennepin County. This appropriation is in addition to the appropriation in Laws 2023, chapter 71, article 1, section 15, subdivision 11.

Subd. 45. Minnetonka Beach; Public Infrastructure

4,540,000

For a grant to the city of Minnetonka Beach to design, engineer, construct, and equip the replacement of aging and failing municipal infrastructure. This appropriation includes money for water system, sanitary system, and utility improvements.

Subd. 46. Minnetrista; Water Treatment Plant

3,000,000

For a grant to the city of Minnetrista to predesign, design, construct, furnish, and equip a new water treatment plant.

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Subd. 47. Moose Lake; Sewer Lining

1,575,000

For a grant to the city of Moose Lake to predesign, design, and construct the lining of a sewer main pipe in the city of Moose Lake.

Subd. 48. Mountain Lake; Public Infrastructure

2,000,000

For a grant to the city of Mountain Lake to design and construct public infrastructure, including streets, clean drinking water, and sanitary and stormwater sewer, to expand housing in the city.

Subd. 49. New Germany; Wastewater Treatment Expansion

4,000,000

For a grant to the city of New Germany to design, engineer, construct, and equip improvements and betterments of a capital nature necessary to expand the city's wastewater treatment facility capacity.

Subd. 50. New Ulm; Public Infrastructure

4,000,000

For a grant to the city of New Ulm to design, construct, and equip capital improvements necessary for completion of a gravity sewer flow system, replacement of water main, removal of a lift station, and replacement of impacted surface amenities.

Subd. 51. Newport; Public Infrastructure

4,000,000

For a grant to the city of Newport to acquire right-of-way for and to predesign, design, and construct the removal, replacement, and installation of water, sanitary sewer, and storm sewer system infrastructure and reconstruction of affected streets in the project area to address inflow and infiltration. For purposes of this section, "project area" means 3rd Avenue between 21st Street and 15th Street, 17th Street between 3rd Avenue and the Mississippi River, 12th Street between 7th Avenue and the Mississippi River, 3rd Avenue between 14th Street and 12th Street, 13th Street between 7th Avenue and 4th Avenue, and 5th Avenue between 14th Street and 12th Street in the city of Newport.

Subd. 52. North Zumbro Sanitary Sewer District; New Regional Wastewater Treatment Facility

12,000,000

For a grant to the joint powers sanitary district created pursuant to Minnesota Statutes, section 471.59, comprising the cities of Zumbrota, Goodhue, Pine Island, and Wanamingo, to design, engineer, permit, construct, and equip Phase 1 of a new state-of-the-art regional wastewater treatment facility and adjoining lift stations and forcemains to be located in Goodhue County and to serve as a regional wastewater facility prototype. This facility shall provide wastewater treatment service for the Elk Run

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settlement lands of the Prairie Island Indian Community, which shall connect to existing wastewater infrastructure in the city of Pine Island. This appropriation includes money for demolition of existing wastewater treatment structures and related infrastructure and for improvements and betterments of a capital nature, including the construction of infrastructure, necessary to connect the new facility to the communities in the sanitary district and for the facility to serve its intended purpose. Phase 1 consists of site work at the lift station sites and construction of a portion of forcemain piping. This appropriation is in addition to the appropriation in Laws 2023, chapter 72, article 2, section 10, subdivision 10.

Subd. 53. Oak Park Heights; Water Infrastructure

1,600,000

For a grant to the city of Oak Park Heights for design and engineering of improvements to the city's municipal water treatment infrastructure for the remediation and removal of perfluoroalkyl and polyfluoroalkyl substances from the city's drinking water supply.

Subd. 54. Proctor; Utility Extension

3,500,000

For a grant to the city of Proctor to predesign, design, and construct water, sewer, and electric utility extensions from Ugstad Road on the north side of marked Interstate Highway 35 to the south side and extending along the frontage road and utility replacements from Ugstad Road on the north side of marked Interstate Highway 35 to 2nd Street.

Subd. 55. Rice Lake; Sewer and Water Infrastructure

3,800,000

For one or more grants to the city of Rice Lake to design and construct the following capital projects to provide safe drinking water for residents, support development in the area, and prepare for anticipated road reconstruction: (1) an extension of water infrastructure along Martin Road, between Stavenger Road and Howard Gnesen Road; (2) an extension of sewer and water infrastructure along a new frontage road between Martin Road and West Calvary Road; and (3) an extension of sewer infrastructure near the intersection of Martin Road and Rice Lake Road.

Subd. 56. Rochester; Sanitary Sewer Expansion

13,224,000

For a grant to the city of Rochester to predesign, design, and construct Phase 1 of the expansion of sanitary sewer and water infrastructure to support development of additional housing for the region. This appropriation also includes money for the portion of Phase 2 from the Chicago and North Western Railroad to Marion Road Southeast and 19th Avenue Southeast.

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Subd. 57. Russell; Public Infrastructure

1,000,000

For a grant to the city of Russell to design, construct, and equip the replacement of aging and failing municipal infrastructure. This appropriation includes money for improvements to and replacement of a water distribution system, a sanitary sewer system, and storm sewer system infrastructure, and reconstruction of city streets.

Subd. 58. Silver Bay; Water Pressure Improvements

1,070,000

For a grant to the city of Silver Bay to predesign, design, construct, and equip the rehabilitation and replacement of pressure-reducing valve stations and associated water distribution system infrastructure to address water pressure, safety, and infrastructure issues that compromise ongoing operations.

Subd. 59. Silver Lake; Public Infrastructure

3,000,000

For a grant to the city of Silver Lake to predesign, design, engineer, construct, and equip stormwater, wastewater, and drinking water infrastructure. This appropriation includes money for improvements to or replacement of municipal: wastewater ponds, spray irrigation and sanitary sewer systems, and associated infrastructure; storm sewer systems and associated infrastructure to better drain areas of the community; and water main distribution systems and associated infrastructure to provide for improved water quality, water flow, fire protection, and water accountability.

Subd. 60. South Haven; Water and Sewer Infrastructure

3,500,000

For a grant to the city of South Haven to design, construct, and equip the municipal infrastructure. This appropriation includes money for improvements to and replacement of water distribution system, sanitary sewer system, storm sewer system infrastructure, water filters, and reconstruction of city streets.

Subd. 61. Spicer; Public Infrastructure

2,100,000

For a grant to the city of Spicer to design, construct, and equip publicly owned infrastructure, including a new lift station, and sewer, water, and roadway improvements, to serve the County Road 8 area located in the southeast portion of the city, to encourage economic growth and development.

Subd. 62. St. Francis; Water and Sewer Improvements

4,000,000

For a grant to the city of St. Francis to design and construct water and sewer improvements to publicly owned infrastructure along marked Trunk Highway 47, from Cree Street to 241st Avenue.

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Subd. 63. St. Paul Regional Water Services; Fridley Pump Station

1,500,000

For a grant to St. Paul Regional Water Services to design, construct, and equip the rehabilitation and replacement of aging and failing infrastructure at the Fridley pump station site. This appropriation includes major projects to repair or replace electrical, mechanical, and piping systems; replacement of standpipe and sluice gates; sump pump system improvements; and water pump and motor upgrades.

Subd. 64. St. Paul; West 7th Street Improvement Project

13,000,000

For a grant to the city of St. Paul for the Trunk Highway 5/West 7th Street Improvement Project to predesign, design, engineer, construct, and equip improvements to the publicly owned underground sanitary sewer infrastructure under West 7th Street. $6,500,000 is designated for the section of West 7th Street from Kellogg Boulevard to St. Clair Avenue and $6,500,000 is designated for the section of West 7th Street from St. Clair Avenue to Interstate Highway 35E.

Subd. 65. Taylors Falls; Sewer System Improvements

1,500,000

For a grant to the city of Taylors Falls to design, construct, and equip improvements to the city's sanitary sewer system.

Subd. 66. Thomson; Public Infrastructure

1,500,000

For a grant to the township of Thomson in Carlton County to design, construct, and equip the replacement of aging and failing municipal infrastructure. This appropriation includes money for improvements to and replacement of water distribution systems, sanitary sewer system infrastructure, and reconstruction of streets.

Subd. 67. Two Harbors; Public Infrastructure

2,000,000

For a grant to the city of Two Harbors to design, construct, and reconstruct publicly owned physical infrastructure as part of the Department of Transportation's Trunk Highway 61 reconstruction throughout the city of Two Harbors, including but not limited to sanitary and storm sewers, water supply systems, natural gas and electric utilities, new utility extensions along the Trunk Highway 61 corridor including sanitary and storm sewers, water supply systems, natural gas and electric utilities, street construction and reconstruction, wastewater treatment systems, stormwater management systems, street and trail lighting, curbs, gutters, sidewalks, trail crossings, and pedestrian ramps for Americans with Disabilities Act compliance.

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Subd. 68. Waseca; Sanitary Sewer Infrastructure

8,900,000

For a grant to the city of Waseca to design, engineer, and construct improvements to and replacement of sanitary sewer infrastructure to reduce inflow and infiltration into the system and increase sanitary sewer system conveyance capacity, including reconstruction of the Nelson Lift Station. This appropriation includes money for reconstruction of streets, roadways, sidewalks, and other infrastructure within the project areas.

Subd. 69. Waseca; Water Tower

1,000,000

For a grant to the city of Waseca to acquire land or permanent easements and to predesign, survey, and design a new water tower in the city of Waseca.

Subd. 70. West Central Regional Water System

5,000,000

For one or more grants to Norman County, Clay County, Polk County, all three counties, or any combination of two of the three counties, to acquire land or interests in land, and to design, engineer, and construct facilities and infrastructure for Phase 1 of the West Central Regional Water System project, including water transmission mains, and other infrastructure to be built and located in Norman County, Clay County, Polk County, all three counties, or any combination of two of the counties.

Subd. 71. West Union; Sewer Infrastructure

900,000

For a grant to the city of West Union to design, engineer, construct, and equip a new wastewater municipal infrastructure system. This appropriation includes money for new sanitary sewer system infrastructure and reconstruction of city streets.

Subd. 72. Winona; Wastewater Treatment Facility

6,500,000

For a grant to the city of Winona to predesign, design, construct, and equip improvements and upgrades to the existing municipal wastewater treatment facility.

Subd. 73. Wrenshall; Public Infrastructure

1,500,000

For a grant to the city of Wrenshall to design, engineer, construct, and equip the replacement of aging and failing municipal infrastructure. This appropriation includes money for phased improvements to and replacement of water distribution systems and storm sewer system infrastructure, and reconstruction of city streets.

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Sec. 25. MINNESOTA HOUSING FINANCE AGENCY

$17,500,000

(a) To the Minnesota Housing Finance Agency to finance the costs of rehabilitation to preserve public housing under Minnesota Statutes, section 462A.202, subdivision 3a. For purposes of this section, "public housing" means housing for low-income persons and households financed by the federal government and publicly owned. Priority may be given to proposals that maximize nonstate resources to finance the capital costs and requests that prioritize health, safety, and energy improvements. The priority in Minnesota Statutes, section 462A.202, subdivision 3a, for projects to increase the supply of affordable housing and the restrictions of Minnesota Statutes, section 462A.202, subdivision 7, do not apply to this appropriation.

(b) The agency must equally divide the total appropriation between the metropolitan area, as defined in Minnesota Statutes, section 473.121, subdivision 2, and greater Minnesota. The agency must distribute awards in greater Minnesota to projects with the greatest geographic distribution in Regions 1 to 10 under Minnesota Statutes, section 462.385.

Sec. 26. MINNESOTA HISTORICAL SOCIETY

Subdivision 1. Total Appropriation

$6,000,000

To the Minnesota Historical Society for the purposes specified in this section.

Subd. 2. Historic Sites Asset Preservation

5,000,000

For capital improvements and betterments at state historic sites, buildings, landscaping at historic buildings, exhibits, markers, and monuments, to be spent in accordance with Minnesota Statutes, section 16B.307. The society shall determine project priorities as appropriate based on need.

Subd. 3. County and Local Preservation Grants

1,000,000

For grants to county and local jurisdictions as matching money for historic preservation projects of a capital nature, as provided in Minnesota Statutes, section 138.0525.

Sec. 27. BOND SALE AUTHORIZATION.

(a) To provide the money appropriated in this act from the bond proceeds fund, and to provide for expenses authorized in Minnesota Statutes, section 16A.641, subdivision 8, paragraph (c), the commissioner of management and budget shall sell and issue bonds of the state in an amount up to $1,183,585,000 in the manner, upon the terms, and with the effect prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota Constitution, article XI, sections 4 to 7.

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(b) To provide the money appropriated in this act from the bond proceeds account in the state transportation fund, and to provide for expenses authorized in Minnesota Statutes, section 16A.641, subdivision 8, paragraph (c), the commissioner of management and budget shall sell and issue bonds of the state in an amount up to $87,350,000 in the manner, upon the terms, and with the effect prescribed by Minnesota Statutes, sections 16A.631 to 16A.675, and by the Minnesota Constitution, article XI, sections 4 to 7.

Sec. 28. CANCELLATIONS; BOND SALE AUTHORIZATION REDUCTIONS.

(a) $62,372,000 of the appropriation in Laws 2023, chapter 72, article 1, section 19, subdivision 3, is canceled. The bond sale authorization in Laws 2023, chapter 72, article 1, section 27, subdivision 1, as amended by Laws 2024, chapter 88, article 2, section 20, is reduced by the same amount.

(b) $465,000 of the appropriation in Laws 2017, First Special Session chapter 8, article 1, section 8, subdivision 2, is canceled. The bond sale authorization in Laws 2017, First Special Session chapter 8, article 1, section 25, subdivision 1, is reduced by the same amount.

(c) The appropriation of $4,000,000 in Laws 2020, Fifth Special Session chapter 3, article 1, section 21, subdivision 37, is canceled. The bond sale authorization in Laws 2020, Fifth Special Session chapter 3, article 1, section 26, subdivision 1, is reduced by the same amount.

(d) The appropriation of $2,500,000 in Laws 2023, chapter 72, article 1, section 18, subdivision 5, paragraph (c), is canceled. The bond sale authorization in Laws 2023, chapter 72, article 1, section 27, subdivision 1, as amended by Laws 2024, chapter 88, article 2, section 20, is reduced by the same amount.

(e) The appropriation of $1,600,000 in Laws 2023, chapter 72, article 1, section 23, subdivision 20, is canceled. The bond sale authorization in Laws 2023, chapter 72, article 1, section 27, subdivision 1, as amended by Laws 2024, chapter 88, article 2, section 20, is reduced by the same amount.

Sec. 29. BOND SALE SCHEDULE.

The commissioner of management and budget shall schedule the sale of state general obligation bonds so that, during the biennium ending June 30, 2027, no more than $1,184,495,000 will need to be transferred from the general fund to the state bond fund to pay principal and interest due and to become due on outstanding state general obligation bonds. During the biennium, before each sale of state general obligation bonds, the commissioner of management and budget shall calculate the amount of debt service payments needed on bonds previously issued and shall estimate the amount of debt service payments that will be needed on the bonds scheduled to be sold. The commissioner shall adjust the amount of bonds scheduled to be sold so as to remain within the limit set by this section. The amount needed to make the debt service payments is appropriated from the general fund as provided in Minnesota Statutes, section 16A.641.

Sec. 30. EFFECTIVE DATE.

This article is effective the day following final enactment.

ARTICLE 2

CAPITAL INVESTMENT POLICY

Section 1. Minnesota Statutes 2024, section 16A.86, subdivision 3a, is amended to read:

Subd. 3a. Information provided. All requests for state assistance under this section must include the following information:

(1) the name of the political subdivision that will own the capital project for which state assistance is being requested;

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(2) the public purpose of the project;

(3) the extent to which the political subdivision has or expects to provide local, private, user financing, or other nonstate funding for the project;

(4) a list of the bondable activities that the project encompasses; examples of bondable activities are public improvements of a capital nature for land acquisition, predesign, design, construction, and furnishing and equipping for occupancy;

(5) whether the project will require new or additional state operating subsidies;

(6) whether the governing body of the political subdivision requesting the project has passed a resolution in support of the project and has established priorities for all projects within its jurisdiction for which bonding appropriations are requested when submitting multiple requests;

(7) whether the political subdivision has a plan for maintenance and preservation of the project, including safety and security, maintenance and utility costs, availability of repair parts and materials, sustainability, and any other criteria the political subdivision deems relevant;

~~(7)~~ (8) if the project requires a predesign under section 16B.335, whether the predesign has been completed at the time the capital project request is submitted, and whether the political subdivision has submitted the project predesign to the commissioner of administration for review and approval; and

~~(8)~~ (9) if applicable, the information required under section 473.4485, subdivision 1a.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 2. Minnesota Statutes 2025 Supplement, section 134.45, subdivision 4, is amended to read:

Subd. 4. Match. A public library jurisdiction applying for a grant under this section must match the grant with ~~local~~ nonstate funds.

EFFECTIVE DATE. This section is effective for grants awarded after June 30, 2026.

Sec. 3. Minnesota Statutes 2024, section 446A.077, subdivision 3, is amended to read:

Subd. 3. Eligible recipients. (a) The following are eligible recipients of grants under this section:

(1) community public water suppliers of a community water system as defined in Code of Federal Regulations, title 40, section 141.2, as amended;

(2) municipalities;

(3) suppliers of other residential drinking water systems; and

(4) any applicant eligible for loans and grants under the federal Safe Drinking Water Act.

(b) All eligible recipients as part of the grant application process must apply to be listed on the Department of Health project priority list.

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(c) Notwithstanding paragraph (a), recipients of grants funded by state general obligation bond proceeds under this section must be political subdivisions of the state.

Sec. 4. Minnesota Statutes 2024, section 446A.077, subdivision 4, is amended to read:

Subd. 4. Eligible uses. (a) An eligible recipient may use a grant provided under this program for:

(1) removing and replacing lead drinking water service lines;

(2) repaying debt incurred for the purposes described in clauses (1), (3), and (4);

(3) providing information to residents on the benefits of removing lead service lines; or

(4) performing necessary construction activities required for and associated with removing and replacing lead service lines.

(b) Grant money used for removing and replacing lead drinking water service lines under paragraph (a), clause (1), must pay for 100 percent of the cost of replacing the privately owned portions of those lines.

(c) Grant money used for removing and replacing lead drinking water service lines under paragraph (a), clause (1), may pay for ~~not more than 50~~ up to 100 percent of the cost of replacing the publicly owned portions of those lines.

(d) Notwithstanding paragraph (a), eligible uses of grants funded by state general obligation bond proceeds under this section are limited to removing and replacing publicly owned portions of drinking water service lines and performing necessary construction activities required for and associated with removing and replacing publicly owned portions of lead service lines.

Sec. 5. Minnesota Statutes 2025 Supplement, section 446A.082, is amended to read:

446A.082 ~~EMERGING~~ DRINKING WATER CONTAMINANTS GRANTS.

Subdivision 1. Program established. When money is appropriated under this program, the authority shall award grants to a governmental unit for up to 50 percent of the cost of drinking water infrastructure projects to address a confirmed exceedance of maximum contaminant level as defined by the federal Safe Drinking Water Act or a health advisory level for a drinking water emerging contaminant as defined by the Environmental Protection Agency.

Subd. 2. Eligibility. An eligible project for this program must:

(1) be listed on the Drinking Water Revolving Fund Project Priority List under Minnesota Rules, part 4720.9015;

(2) receive priority points under Minnesota Rules, part 4720.9020, subpart 2, 4, or 4a; and

(3) be certified by the commissioner of health under Minnesota Rules, part 4720.9060.

Subd. 3. Application and reservation of funds. (a) Grant applications to the authority may be made at any time on forms prescribed by the authority, including a project schedule and cost estimate for the work necessary to comply with the purpose described in subdivision 2.

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(b) The commissioner of health shall review and certify to the authority those projects that have plans and specifications approved under Minnesota Rules, part 4720.9060. When a project is certified by the commissioner of health, the authority shall reserve grant funds for the project in the order listed on the commissioner of health's project priority list and in an amount based on the cost estimate in the commissioner of health's certification or the as-bid costs, whichever is less.

Subd. 4. Grant amount. The grant amount for an eligible project under this program shall be for an amount up to 50 percent of the eligible as-bid project cost up to $5,000,000, minus the amount of federal emerging contaminant funds the project receives under section 446A.081, subdivision 9, paragraph (b), clause (4), or other federal emerging contaminant funds.

Subd. 5. Grant approval. The authority shall award a grant for an eligible project only after:

(1) the applicant has submitted the as-bid project cost;

(2) the commissioner of health has certified the grant eligible portion of the project; and

(3) the authority has determined that the additional financing necessary to complete the project has been committed from other sources.

Subd. 6. Grant disbursement. Grant funds shall be disbursed by the authority as eligible project costs are incurred by the governmental unit and in accordance with a project financing agreement and applicable state laws and rules governing the disbursements.

Subd. 7. Recovering expenses. Money granted to a grantee under this program may be recovered in a civil action brought by the attorney general against any person who may be liable under section 115B.04 or any other law. To be eligible for recovery, the expenses must be reasonable and necessary expenses, including all response costs, and administrative and legal expenses. The authority, Department of Health, and Pollution Control Agency's certification of expenses shall be prima facie evidence that the expenses are reasonable and necessary. Any money recovered in a civil action for a project financed with bonds under this section shall be transferred to the commissioner of management and budget for deposit in the state bond proceeds fund and applied toward principal interest on outstanding bonds.

Sec. 6. Minnesota Statutes 2024, section 446A.086, subdivision 11, is amended to read:

Subd. 11. Amount of debt obligation authorized. The amount of debt outstanding under this section must not exceed ~~$1,000,000,000~~ $1,500,000,000.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 7. Minnesota Statutes 2024, section 457A.03, subdivision 3, is amended to read:

Subd. 3. State participation; limitations. The commissioner may not provide any assistance under this chapter for more than 80 percent of the ~~nonfederal share~~ total cost of any project. Assistance provided under this chapter may not be used to match any other state funds. The commissioner shall not assume continuing funding responsibility for any commercial navigation facility project.

Sec. 8. EMERGENCY SHELTER FACILITIES.

Subdivision 1. Definitions. (a) For the purposes of this section, the following terms have the meanings given.

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(b) "Commissioner" means the commissioner of human services.

(c) "Eligible applicant" means a statutory or home rule charter city, county, or housing and redevelopment authority established under Minnesota Statutes, section 469.003.

(d) "Emergency shelter facility" means a facility that provides a safe, sanitary, accessible, and suitable emergency shelter for individuals and families experiencing homelessness, regardless of whether the facility provides emergency shelter during the day, overnight, or both.

Subd. 2. Creation of account. An emergency shelter facility account is created in the bond proceeds fund. Money in the account is appropriated to the commissioner to make grants under this section. Money in the account is available until encumbered or spent subject to Minnesota Statutes, section 16A.642.

Subd. 3. Project criteria. The commissioner shall prioritize grants under this section for projects that improve or expand emergency shelter facility options by:

(1) adding additional emergency shelter facilities by renovating existing facilities not currently operating as emergency shelter facilities;

(2) adding additional emergency shelter facility beds by renovating existing emergency shelter facilities, including major projects that address an accumulation of deferred maintenance or repair or replacement of mechanical, electrical, and safety systems and components in danger of failure;

(3) adding additional emergency shelter facility beds through acquisition and construction of new emergency shelter facilities; and

(4) improving the safety, sanitation, accessibility, and habitability of existing emergency shelter facilities, including major projects that address an accumulation of deferred maintenance or repair or replacement of mechanical, electrical, and safety systems and components in danger of failure.

Subd. 4. Eligible uses of grant money. A grant under this section may be used to pay for 100 percent of total project capital expenditures or a specified project phase, up to $7,000,000 per project.

Subd. 5. State and local building codes met. All projects funded with a grant under this section must meet all applicable state and local building codes at the time of project completion.

Subd. 6. Lease or management agreements. An eligible applicant may enter into a lease or management agreement for operation of the emergency shelter facility, subject to Minnesota Statutes, section 16A.695.

Subd. 7. Competitive request for proposal process; priority. (a) The commissioner must use a competitive request for proposal process to identify potential projects and eligible applicants on a statewide basis. At least 40 percent of the appropriation for this purpose must be awarded to projects located in greater Minnesota. If the commissioner does not receive sufficient eligible funding requests from greater Minnesota to award at least 40 percent of the appropriation for this purpose to projects in greater Minnesota, the commissioner may award the remaining money to other eligible projects.

(b) The commissioner must prioritize project applications in the following order:

(1) projects that include a lease or management agreement for operation of the emergency shelter facility and the eligible applicant will provide at least ten percent of total project funding;

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(2) projects that include a lease or management agreement for operation of the emergency shelter and the eligible applicant will provide less than ten percent of total project funding; and

(3) all other projects for which the eligible applicant will provide at least ten percent of total project funding.

Sec. 9. CLOQUET FORESTRY CENTER; LAND TRANSFER.

(a) The commissioner of administration must convey for no consideration all state-owned land within boundaries of the Cloquet Forestry Center to the Board of Regents of the University of Minnesota.

(b) The conveyance must be in a form approved by the attorney general. The attorney general may make changes to the land description to correct errors and ensure accuracy.

(1) the Southeast Quarter of the Northwest Quarter of Section 30, Township 49 North, Range 17 West;

(2) the East Half of the Northeast Quarter of Section 36, Township 49 North, Range 18 West;

(3) the Northwest Quarter of the Southeast Quarter of Section 29, Township 49 North, Range 17 West;

(4) the Northwest Quarter of the Northwest Quarter of Section 29, Township 49 North, Range 17 West;

(5) the Northwest Quarter of the Southwest Quarter (or Lot 3) of Section 30, Township 49 North, Range 17 West;

(6) the Southwest Quarter of the Northwest Quarter (or Lot 2) of Section 31, Township 49 North, Range 17 West;

(7) the Southeast Quarter of the Northeast Quarter of Section 32, Township 49 North, Range 17 West; and

(8) the North Half of the Northeast Quarter of Section 32, Township 49 North, Range 17 West.

Sec. 10. CLOQUET FORESTRY CENTER DEFEASANCE OF GENERAL OBLIGATION BONDS; APPROPRIATION.

$1,300,000 in fiscal year 2027 is appropriated from the general fund to the commissioner of management and budget to prepay and defease any outstanding state general obligation bonds used for improvements and betterments at the University of Minnesota Cloquet Forestry Center, and other associated financing costs to facilitate the university's goal of returning this land to the Fond du Lac Band of Lake Superior Chippewa. This amount may be deposited, invested, and applied to accomplish the purposes of this section as provided in Minnesota Statutes, section 475.67, subdivisions 5 to 10 and 13. Upon the prepayment and defeasance of all associated debt on the real property and improvements, all conditions set forth in Minnesota Statutes, section 16A.695, subdivision 3, shall be deemed to have been satisfied and the real property and improvements shall no longer constitute state bond financed property under Minnesota Statutes, section 16A.695. This is a onetime appropriation.

Sec. 11. BCA MARYLAND BUILDING.

Notwithstanding any law, rule, or ordinance to the contrary, a building permit under the State Building Code is not required to construct a new perimeter eight-foot security fence and access controls at the BCA Maryland uilding site, as enacted in Laws 2023, chapter 72, article 1, section 15, subdivision 3.

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ARTICLE 3

APPROPRIATION MODIFICATIONS

Section 1. Laws 2020, Fifth Special Session chapter 3, article 1, section 16, subdivision 39, is amended to read:

Subd. 39. Red Wing; Rail Grade Separation

10,000,000

From the bond proceeds account in the state transportation fund as provided in Minnesota Statutes, section 174.50, for a grant to the city of Red Wing for right-of-way acquisition, environmental analysis, design, engineering, removal of an existing structure, and construction of a rail grade crossing separation at Sturgeon Lake Road. This appropriation is in addition to the appropriation for the same purpose in Laws 2017, First Special Session chapter 8, article 1, section 15, subdivision 4. Any unspent portion of the amount appropriated in this subdivision may be used for capital improvements to Sturgeon Lake Road in the area of the rail grade separation project. Notwithstanding Minnesota Statutes, section 16A.642, the bond sale authorization and appropriation of bond proceeds for this project are available until December 31, 2030.

Sec. 2. Laws 2020, Fifth Special Session chapter 3, article 1, section 17, subdivision 13, as amended by Laws 2023, chapter 72, article 3, section 23, and Laws 2025, First Special Session chapter 15, article 3, section 2, is amended to read:

Subd. 13. White Bear Lake Communities; Lake Links Trail

3,600,000

(a) For grants to complete design and construction of a multiuse paved trail and route for pedestrians, bicycles, and wheelchairs around White Bear Lake in Ramsey and Washington Counties, as follows:

(1) $2,600,000 of this appropriation is for one or more grants to the city of Dellwood in Washington County to design, engineer, construct, and equip trail improvements consistent with the completed preliminary engineering along or parallel with the shore of White Bear Lake between the Mahtomedi city limits and ~~the western line of Washington~~ ~~County~~ Meadow Lane in the city of Dellwood. This appropriation may also be used for the acquisition of permanent easements and right-of-way;

(2) $500,000 of this appropriation is for a grant to White Bear Township in Ramsey County to design, engineer, construct, and equip trail improvements along and parallel with the shore of White Bear Lake between the Washington County line and the city limits of the city of White Bear Lake, Ramsey County; and

(3) $500,000 of this appropriation is for a grant to the city of White Bear Lake in Ramsey County to design, engineer, construct, and equip trail improvements along or parallel with the shore of White Bear Lake between the eastern city limits of White Bear Lake and Pacific Avenue.

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(b) The city of Dellwood may complete the trail improvements funded under paragraph (a), clause (1), in the following segments and in any order, and may enter into separate grant agreements for each trail segment or any combination of segments:

(1) Echo Street to Dwinnell Avenue~~, along the railway bed~~;

(2) Yellow Birch Road to Echo Street~~, along Dellwood Avenue~~; and

(3) Meadow Lane to Yellow Birch Road~~, along Dellwood Avenue; and~~.

~~(4) from the intersection of Dellwood Road and Dellwood Avenue to the intersection of Meadow Lane and Dellwood Avenue, along Dellwood Avenue.~~

Amounts remaining after substantial completion of a trail segment or combination of segments under this paragraph may be applied to any other trail segment or combination of segments described in this paragraph.

(c) Notwithstanding Minnesota Statutes, section 16A.642, the bond sale authorization and appropriation of bond proceeds for this project is available until December 31, 2028.

Sec. 3. Laws 2023, chapter 72, article 1, section 16, subdivision 19, is amended to read:

Subd. 19. Washington County; Interchange at Trunk Highway 36 and Lake Elmo Avenue

10,000,000

From the bond proceeds account in the state transportation fund, as provided in Minnesota Statutes, section 174.50, for ~~a grant~~ one or more grants to Washington County, the city of Lake Elmo, or the city of Grant for property acquisition and to predesign, design, construct, furnish, and equip a new interchange at marked Trunk Highway 36 and County State-Aid Highway 17, known as Lake Elmo Avenue, in Washington County. This appropriation is for portions of the project that are eligible to be funded with general obligation bonds.

Sec. 4. Laws 2023, chapter 72, article 1, section 21, subdivision 9, is amended to read:

Subd. 9. Oak Park Heights; Redevelopment

2,190,000

For a grant to the city of Oak Park Heights to acquire property and to predesign and design public infrastructure for development of the Allen S. King power plant site in the city. Public infrastructure includes clean water systems, sanitary sewer systems, stormwater systems, roads, trails, and sidewalks. Notwithstanding Minnesota Statutes, section 16A.642, the bond sale authorization and appropriation of bond proceeds in this subdivision are available until December 31, 2029.

Sec. 5. EFFECTIVE DATE.

This article is effective the day following final enactment.

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ARTICLE 4

TEMPORARY REGISTRATION TAX REDUCTION

Section 1. TEMPORARY REGISTRATION TAX REDUCTION.

Subdivision 1. Applicability. This section applies to taxes payable under Minnesota Statutes, section 168.013, subdivision 1a, for a registration period starting on or after January 1, 2027, and on or before December 31, 2027.

Subd. 2. Registration tax reduction. For the period specified in subdivision 1 only, the commissioner of public safety must calculate the registration tax owed on a vehicle under Minnesota Statutes, section 168.013, subdivision 1a, using the following rates instead of the rates provided in that section:

(1) the rate for a vehicle under Minnesota Statutes, section 168.013, subdivision 1a, paragraph (a), clause (1), is 1.25 percent; and

(2) the rate for a vehicle under Minnesota Statutes, section 168.013, subdivision 1a, paragraph (a), clause (2), is 1.285 percent.

Subd. 3. Limitation. The amount paid or due on a vehicle using the rates provided in subdivision 2 must be disregarded for the purposes of Minnesota Statutes, section 168.013, subdivision 1a, paragraph (g).

Subd. 4. Implementation. The commissioner of public safety must include the following information on a vehicle's registration tax invoice:

(1) a brief statement informing the vehicle owner that, due to legislative action in 2026, the registration tax rate for the vehicle has been temporarily reduced; and

(2) the difference between the amount of registration tax that would have been due under Minnesota Statutes, section 168.013, subdivision 1a, and the amount of registration tax due under subdivision 2.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. TRANSFER.

$254,000,000 in fiscal year 2027 is transferred from the general fund to the highway user tax distribution fund. This is a onetime transfer.

EFFECTIVE DATE. This section is effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to state government; authorizing spending to acquire and better public land and buildings and for other improvements of a capital nature with certain conditions; establishing new programs and modifying existing programs; authorizing the conveyance of state bond-financed property; modifying and canceling prior appropriations; authorizing the sale and issuance of state bonds; appropriating money; providing for a temporary registration tax reduction; amending Minnesota Statutes 2024, sections 16A.86, subdivision 3a; 446A.077, subdivisions 3, 4; 446A.086, subdivision 11; 457A.03, subdivision 3; Minnesota Statutes 2025 Supplement, sections 134.45, subdivision 4; 446A.082; Laws 2020, Fifth Special Session chapter 3, article 1, sections 16, subdivision 39; 17, subdivision 13, as amended; Laws 2023, chapter 72, article 1, sections 16, subdivision 19; 21, subdivision 9."

The motion prevailed and the amendment was adopted.

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Franson moved to amend H. F. No. 719, the first engrossment, as amended, as follows:

Page 2, line 12, delete "MacGrath" and insert "Magrath"

Page 2, line 17, before "hazardous" insert "demolition of existing space,"

Page 9, line 4, delete "repairs to" and insert "reconstruction of"

Page 16, line 31, delete "within the trunk highway system"

Page 20, line 18, after the period, insert "This appropriation is only for the general obligation bond eligible portions of the project."

Page 21, line 16, after the period, insert "This appropriation is only for the general obligation bond eligible portions of the project."

Page 71, line 20, after "Grant" insert ", or any combination of these entities,"

The motion prevailed and the amendment was adopted.

Lee, F. moved to amend H. F. No. 719, the first engrossment, as amended, as follows:

Page 34, line 10, after the period, insert "This appropriation is in addition to the appropriation in Laws 2023, chapter 71, article 1, section 14, subdivision 10, as amended by Laws 2024, chapter 88, section 12, and is for the same purpose."

The motion prevailed and the amendment was adopted.

The Speaker called Olson to the Chair.

H. F. No. 719, as amended, was read for the third time.

LAY ON THE TABLE

Niska moved that H. F. No. 719, as amended, be laid on the table. The motion prevailed and H. F. No. 719, as amended, was laid on the table.

CALENDAR FOR THE DAY, Continued

H. F. No. 2484 was reported to the House.

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Lee, F. moved to amend H. F. No. 2484, the second engrossment, as follows:

Delete everything after the enacting clause and insert:

"ARTICLE 1

APPROPRIATIONS

Section 1. CAPITAL IMPROVEMENT APPROPRIATIONS.

(a) The sums shown in the column under "Appropriations" are appropriated from the general fund in fiscal year 2027 to the state agencies or officials indicated, to be spent for public purposes. These are onetime appropriations. Unless otherwise specified, money appropriated in this act is subject to paragraphs (b) to (e) of this section.

(b) For any project funded in whole or in part by this act, workers on the project must be paid at least the prevailing wage rate as defined in Minnesota Statutes, section 177.42, subdivision 6, and the project is subject to the requirements and enforcement provisions in Minnesota Statutes, sections 177.27, 177.30, 177.32, and 177.41 to 177.45. For the purposes of this paragraph, "project" means demolition, erection, construction, remodeling, or repairing of a public building, facility, or other public work financed in whole or part by state funds. Project also includes demolition, erection, construction, remodeling, or repairing of a building, facility, or public work when the acquisition of property, predesign, design, or demolition is financed in whole or in part by state funds.

(c) Money appropriated in this act: (1) is available for a grant after the commissioner of management and budget determines that an amount sufficient to complete the project as described in this act has been committed to the project, as required by Minnesota Statutes, section 16A.502; (2) may be used to pay state agency staff costs that are attributed directly to the capital program or project for capitalizable staff costs; and (3) is available until the project is completed or abandoned, subject to Minnesota Statutes, section 16A.642.

(d) The sustainable building guidelines under Minnesota Statutes, section 16B.325, are mandatory for all new buildings and major renovations owned or to be owned by the state, state agencies, Minnesota State Colleges and Universities, and the University of Minnesota that are funded with an appropriation in this act.

(e) Recipients of grants from money appropriated in this act must demonstrate to the commissioner of the agency making the grant that the recipient has the ability and a plan to fund the program intended for the facility. This paragraph does not apply to state agencies.

APPROPRIATIONS

Sec. 2. MINNESOTA STATE COLLEGES AND UNIVERSITIES

Subdivision 1. Total Appropriation

$4,500,000

To the Board of Trustees of the Minnesota State Colleges and Universities for the purposes specified in this section.

Subd. 2. Systemwide Demolition

3,000,000

For demolition and removal of obsolete and underutilized buildings and infrastructure and restoration of the vacant sites to reduce operations, maintenance, and capital renewal costs on Minnesota State Colleges and Universities campuses.

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Subd. 3. Winona State University

1,500,000

To establish physical space and programming on the Winona State University campus dedicated to a legislative engagement center.

Sec. 3. EDUCATION

$808,000

To the commissioner of education for a grant to the Lower Sioux Indian Community in Redwood County for predesign and design of a Dakota language immersion public charter school for birth through grade 4.

Sec. 4. NATURAL RESOURCES

$400,000

To the commissioner of natural resources for a grant to the Pickwick Mill Inc., for improvements and repairs to the historic Pickwick Mill Dam in Winona County.

Sec. 5. POLLUTION CONTROL AGENCY

Subdivision 1. Total Appropriation

$775,000

To the Pollution Control Agency for the purposes specified in this section.

Subd. 2. Statewide Drinking Water Contamination Mitigation

650,000

For projects or grants under Minnesota Statutes, section 115B.245.

Subd. 3. Infectious Waste Study

125,000

To conduct a study of unlawful shipment of infectious or pathological waste as provided in article 2.

Sec. 6. PUBLIC SAFETY

$400,000

To the commissioner of public safety for a grant to the city of Medford to acquire property for and to predesign and design a fire station.

Sec. 7. TRANSPORTATION

Subdivision 1. Total Appropriation

$4,550,000

To the commissioner of transportation for the purposes specified in this section.

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Subd. 2. 70th Street Interchange

400,000

For preliminary design and final design of an interchange at marked Trunk Highway 10/Trunk Highway 61 and Washington County State-Aid Highway 22 (70th Street) in the city of St. Paul Park.

Subd. 3. Hortman Memorial Highway Signage

750,000

To mark Trunk Highway 610 and erect appropriate signs in accordance with Minnesota Statutes, section 161.14, subdivision 112.

Subd. 4. Ramsey; North Metro Local Road Planning Activities

2,900,000

(a) For a grant to the city of Ramsey for the activities stated in paragraph (b) to prepare for a new river crossing and future improvements to road, transportation, and other infrastructure in the area bounded by and inclusive of marked Trunk Highway 101, U.S. Highway 10, U.S. Highway 169, marked Trunk Highway 610, and marked Interstate Highway 94.

(b) This appropriation includes money for the following activities:

(1) planning and evaluation, environmental analysis, and design necessary for the river crossing and future road, transportation, and other infrastructure improvements in the project area;

(2) completion of Tier I and environmental impact statements required for the project area; and

(3) assessment of the impact of improvements to highways and roads in the project area on other local infrastructure systems, including but not limited to water, wastewater, and stormwater systems.

Subd. 5. Radar Infrastructure Grants

500,000

For radar infrastructure grants as provided in article 2.

Sec. 8. HUMAN SERVICES

$550,000

To the commissioner of human services for administration of emergency shelter facility grants.

Sec. 9. HEALTH

Subdivision 1. Total Appropriation

$2,300,000

To the commissioner of health for the purposes specified in this section.

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Subd. 2. Drinking Water Planning Grants

1,800,000

For drinking water regionalization planning and assistance grants as provided in article 2.

Subd. 3. West Central Dental Resources

500,000

For a grant to West Central Dental Resources, Inc., to furnish and equip a critical access dental clinic in the city of Alexandria.

Sec. 10. VETERANS AFFAIRS

$350,000

To the commissioner of veterans affairs for a grant to Stillwater Veterans Memorial to expand a veterans' memorial in Stillwater Veterans Memorial Park in the city of Stillwater.

Sec. 11. CORRECTIONS

$2,302,000

For asset preservation improvement and betterments of a capital nature at Minnesota correctional facilities statewide to be spent in accordance with Minnesota Statutes, section 16B.307. Notwithstanding the specified uses of money under Minnesota Statutes, section 16B.307, the commissioner may use the general fund appropriation for capital expenditures allowed under Minnesota Statutes, section 16B.307, that do not constitute betterments and capital improvements within the meaning of the Minnesota Constitution, article XI, section 5, clause (a). The report required under Minnesota Statutes, section 16B.307, subdivision 2, shall include a list of all projects that have been paid for with this appropriation.

Sec. 12. EMPLOYMENT AND ECONOMIC DEVELOPMENT

Subdivision 1. Total Appropriation

$18,630,000

To the commissioner of employment and economic development for the purposes specified in this section.

Subd. 2. Anoka; Haven for Heroes

500,000

For a grant to the city of Anoka to renovate and repair Cottage 3 and the auditorium on the Haven for Heroes campus. This appropriation includes money for improvements of a capital nature, including major projects to preserve or replace mechanical, electrical, plumbing, and security systems; safety and energy efficiency upgrades; roof repairs; and site renovations to support ongoing operations.

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Subd. 3. South St. Paul; Public Works Facility

2,250,000

For a grant to the city of South St. Paul for environmental remediation activities and geotechnical soil corrections at the new Public Works Central Maintenance Facility site at 675 Verderosa Avenue in the city of South St. Paul.

Subd. 4. City of Ottertail; Veterans Memorial

100,000

For a grant to the city of Ottertail to design, construct, and equip site improvements and infrastructure for a veterans memorial in the city of Ottertail.

Subd. 5. St. Paul; Arena at the RiverCentre Complex

10,000,000

For a grant to the city of St. Paul for predesign and design of updates and improvements to the arena at the RiverCentre complex.

Subd. 6. Capitol Area Economic Development Grant Program

630,000

For a grant to the St. Paul Port Authority for the Capitol Area economic development grant program, established in Laws 2025, First Special Session chapter 14, section 3, subdivision 3.

Subd. 7. St. Paul Port Authority; The Heights Redevelopment Site

1,000,000

For a grant to the St. Paul Port Authority for the contribution of improved land to housing developers at the former Hillcrest Golf Course, now known as The Heights redevelopment site in the city of St. Paul, for the purpose of developing affordable rental and ownership housing units.

Subd. 8. Gammelgarden Museum

200,000

For a grant to the Gammelgarden Museum of Scandia in the city of Scandia to preserve and restore historically significant buildings on the grounds of the museum.

Subd. 9. Bridge for Youth

1,000,000

For a grant to The Bridge for Youth for predesign, design, and land acquisition for a new multiuse facility in Hennepin County. The new facility shall include youth program and recreational space, administrative and program office space, and up to 40 new units of transitional and affordable housing and emergency shelter space for unaccompanied homeless youth and young families experiencing homelessness.

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Subd. 10. Center for Communication and Development

1,000,000

For a grant to the Center for Communication and Development to construct, furnish, and equip a new Center for Communication and Development facility in the city of Minneapolis. This appropriation is in addition to the appropriation in Laws 2025, First Special Session chapter 14, section 5.

Subd. 11. Neighborhood HealthSource

1,300,000

For a grant to Neighborhood HealthSource to predesign, design, construct, furnish, and equip a new clinic in North Minneapolis to relocate the clinic currently located on Fremont Avenue in the city of Minneapolis. The new clinic must be designed with affordable housing located above the clinic that will be owned and managed by a different organization.

Subd. 12. New Pathways

250,000

For a grant to New Pathways, Inc., to design, construct, furnish, and equip a regional shelter facility to provide comprehensive support services for families with children experiencing homelessness in the city of Cambridge and the surrounding area.

Subd. 13. Organization of Liberians in Minnesota

400,000

For a grant to the Organization of Liberians in Minnesota (OLM) for the renovation, construction, furnishing, and equipping of the organization's current community center in Brooklyn Park to provide culturally appropriate programs and services to meet the diverse needs of community members in the northwest suburbs.

Sec. 13. PUBLIC FACILITIES AUTHORITY

Subdivision 1. Total Appropriation

$10,600,000

To the Public Facilities Authority for the purposes specified in this section.

Subd. 2. Apple Valley; Water Treatment Plant Improvements

6,100,000

Subd. 3. North St. Paul; Water Tower

4,500,000

For a grant to the city of North St. Paul to design, construct, and equip a new water tower.

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Sec. 14. MINNESOTA HISTORICAL SOCIETY

$300,000

To the Minnesota Historical Society for a grant to Dakota County to design and construct wayfinding and interpretive signage for the Heroes and Heritage Interpretive Trail Loop in Dakota County.

ARTICLE 2

MISCELLANEOUS

Section 1. Minnesota Statutes 2024, section 161.14, is amended by adding a subdivision to read:

Subd. 112. Hortman Memorial Highway. Marked Trunk Highway 610 is designated as "Hortman Memorial Highway." Subject to section 161.139, the commissioner must adopt a suitable design to mark this highway and erect appropriate signs.

Sec. 2. Minnesota Statutes 2024, section 474A.02, subdivision 1a, is amended to read:

Subd. 1a. Aggregate bond limitation. "Aggregate bond limitation" means ~~up to 55 percent of the reasonably expected aggregate basis of a residential rental project and the land on which the project is or will be located.~~ the greater of:

(1) 30 percent of the reasonably expected aggregate basis of a residential rental project and the land on which the project is or will be located; or

(2) the maximum supportable permanent amortizing debt, subject to a maximum of 40 percent of the reasonably expected aggregate basis of a residential rental project and the land on which the project is or will be located.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 3. DRINKING WATER REGIONALIZATION PLANNING AND ASSISTANCE GRANTS.

Subdivision 1. Eligible recipients. Grants under this section must be made available to counties, municipalities, and townships that seek to undertake the process outlined in chapter 116A to establish or expand regional drinking water systems.

Subd. 2. Eligible expenses. Grant funds must be used for planning activities, including feasibility studies, engineering analyses, legal and financial assessments, community engagement efforts, preliminary and final design work, and activities necessary for drinking water system establishment or expansion under chapter 116A to support regional drinking water infrastructure development.

Subd. 3. Grant administration. By November 1, 2026, the commissioner of health must develop an application process and selection criteria that prioritizes projects addressing aging infrastructure, water quality, affordability, or economic development.

Subd. 4. Grant maximum and match requirement. Grants awarded under this section must not exceed $300,000 per grant recipient per year. Grant recipients must provide matching funds equaling at least 25 percent of the total grant amount. For any one regional drinking water system or district, the commissioner may not award grants in a fiscal year that, in the aggregate across all grant recipients involved with that drinking water system or district, exceed 60 percent of the funds available for that fiscal year.

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Subd. 5. Reporting. The commissioner of health must submit a report to the chairs and ranking minority members of the legislative committees with jurisdiction over water infrastructure by January 15, 2028, summarizing the grants awarded, the progress of funded projects, and recommendations for future funding to support drinking water regionalization efforts.

Sec. 4. STUDY OF UNLAWFUL SHIPMENT OF INFECTIOUS OR PATHOLOGICAL WASTE.

By January 15, 2027, the commissioner of the Pollution Control Agency must submit a study to the chairs and ranking minority members of the senate and house of representatives committees and divisions with primary jurisdiction over environment and health and human services on the unlawful transportation of infectious or pathological waste to solid waste management facilities. The study must include:

(1) an assessment of the extent and frequency of unlawful transfer of infectious or pathological waste to solid waste management facilities and an assessment of the costs associated with those unlawful transfers;

(2) a survey of a representative sample of known generators of infectious waste regarding current practices for ensuring infectious and pathological waste is segregated from other waste material as required by Minnesota Statutes, section 116.78; and

(3) recommendations for legislative or policy changes that could be adopted to reduce the frequency and cost of unlawful transfers of infectious or pathological waste, including an estimate of the costs to state agencies. In formulating these recommendations, the commissioner must consider whether the following measures might contribute to a reduction in unlawful transfers of infectious or pathological waste to solid waste management facilities:

(i) imposing fines on generators of infectious or pathological waste who arrange for its transportation to solid waste management facilities that have not been approved by the agency to accept infectious or pathological waste; and

(ii) undertaking unannounced inspections of infectious or pathological waste generators.

Sec. 5. APPLICABILITY OF INCREASED FUNDING FOR WATER INFRASTRUCTURE GRANTS.

The maximum grant amount for water infrastructure grants under Minnesota Statutes, section 446A.072, subdivision 5a, as set forth in Laws 2025, First Special Session chapter 15, article 2, section 5, is available to drinking water projects that received points for consolidation on the Drinking Water Revolving Fund Project Priority List subject to a grant agreement under Minnesota Statutes, section 446A.072, subdivision 5a, as of September 1, 2024, or thereafter.

Sec. 6. RADAR INFRASTRUCTURE GRANTS.

Subdivision 1. Purpose. The commissioner of transportation, in consultation with the commissioner of public safety, shall make grants to political subdivisions of the state, including airport authorities and airport commissions, for the acquisition, design, construction, and installation of mobile radar infrastructure and equipment to enhance airspace and marine surveillance. Projects supported by this appropriation shall provide statewide surveillance of low altitude airspace and navigable waterways, detect and track intruding aircraft and vessels, assist with drone traffic management and emergency response, and enhance collision and obstruction avoidance for publicly owned airports and public waters.

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Subd. 2. Grants. (a) Grants under this section may be used for the following projects:

(1) procurement and installation of radar sensors capable of detecting and tracking small, low radar cross section targets to track aircraft, unmanned aerial vehicles, and vessels across Minnesota's airspace and waterways;

(2) construction of radar towers; acquisition or leasing of temporary or mobile towers, shelters, and power infrastructure; installation of communications networks such as fiber optic lines or secure wireless links to allow real time remote display, alerting, and control;

(3) integration with existing surveillance and air traffic systems, including automatic identification system (AIS) and automatic dependent surveillance-broadcast (ADS-B) data, and installation of ancillary equipment, including cameras, forward looking infrared devices, and other sensors for consolidated situational awareness; and

(4) site acquisition and improvement for radar installations, including grading, foundations, and access roads.

(b) Money from a grant may also be used for training and technical support necessary to commission and operate the capital project.

Sec. 7. MELISSA HORTMAN MEMORIAL.

(a) $800,000 of the appropriation to implement the updated Capitol Mall Design Framework under Laws 2023, chapter 62, article 1, section 11, subdivision 2, as amended by Laws 2025, chapter 39, article 1, section 39, is to design, procure, and install a tribute recognizing Melissa Hortman. The tribute shall be incorporated into the design of a memorial garden on the State Office Building site by the Department of Administration. Minnesota Rules, part 2400.2703, shall not apply to the activities funded under this section.

(b) Notwithstanding any law or rule to the contrary, the Capitol Area Architectural and Planning Board must select the artist to create the tribute via a competitive process and obtain the approval of the immediate family of Melissa Hortman throughout the selection and design approval process. The tribute design shall include the likeness of Melissa Hortman and deceased family members of Melissa Hortman.

Sec. 8. TRANSFER.

Notwithstanding Minnesota Statutes, section 116L.20, subdivision 2, paragraph (a), $3,800,000 in fiscal year 2026 is transferred from the workforce development fund to the general fund. This is a onetime transfer.

Sec. 9. APPROPRIATION; ZOOLOGICAL BOARD.

$3,800,000 in fiscal year 2026 is appropriated to the Minnesota Zoological Board to address an operational deficiency. This is a onetime appropriation.

Sec. 10. APPROPRIATIONS; STATE AIRPORTS.

Subdivision 1. Mankato Regional Airport. $1,265,000 in fiscal year 2027 is appropriated from the state airports fund to the commissioner of transportation for a grant to the city of Mankato to design, construct, furnish, and equip an air traffic control tower facility at the Mankato Regional Airport. This is a onetime appropriation and is available until June 30, 2028.

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Subd. 2. Duluth International Airport. (a) $2,000,000 in fiscal year 2027 is appropriated from the state airports fund to the commissioner of transportation for a grant to the Duluth Airport Authority to design, construct, furnish, and equip a new air traffic control tower and base building to include office spaces, office support spaces, equipment rooms, work spaces, and logistic support spaces at the Duluth International Airport. This project includes site and associated site support area preparation, including demolition of obsolete buildings, construction and installation of utilities and a stormwater retention system, and existing fuel tank replacement. A portion of this appropriation must be used as a match to federal funding for the project.

(b) Notwithstanding Minnesota Statutes, section 16B.98, subdivision 14, the commissioner must not use any amount of this appropriation for administrative costs. This appropriation is in addition to the appropriation under Laws 2025, First Special Session chapter 8, article 1, section 2, subdivision 2, paragraph (a), clause (1). This appropriation is available until June 30, 2028.

EFFECTIVE DATE. This section is effective July 1, 2026.

Sec. 11. CANCELLATIONS.

(a) The appropriation of $4,500,000 in Laws 2023, chapter 71, article 1, section 14, subdivision 30, is canceled.

(b) The appropriation of $7,000,000 in Laws 2023, chapter 71, article 1, section 11, subdivision 2, is canceled.

(c) $5,700,000 of the appropriation in Laws 2021, First Special Session chapter 14, article 11, section 42, as amended by Laws 2023, chapter 73, section 2, is canceled.

(d) $565,000 of the appropriation in Laws 2021, First Special Session chapter 14, article 11, section 41, is canceled.

Sec. 12. CORRIDORS OF COMMERCE; EXTENSION.

(a) For purposes of this section, "relevant appropriations" means the appropriations and bond sale authorizations in:

(1) Laws 2021, First Special Session chapter 5, article 2, section 2, subdivision 1; and

(2) Laws 2023, chapter 68, article 2, section 2, subdivision 1.

(b) Notwithstanding any law to the contrary, those portions of the relevant appropriations and bond sale authorizations that the commissioner of transportation has awarded under the corridors of commerce program to a project that provides for reconstruction of marked Trunk Highway 13 in the cities of Savage and Burnsville are available until June 30, 2029.

Sec. 13. EFFECTIVE DATE.

This article is effective the day following final enactment.

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ARTICLE 3

APPROPRIATION MODIFICATIONS

Section 1. Laws 2023, chapter 37, article 1, section 2, subdivision 15, is amended to read:

Subd. 15. Capacity-Building Grants

3,145,000

(a) This appropriation is for capacity-building grants under Minnesota Statutes, section 462A.21, subdivision 3b. Of this amount, up to $170,000 in fiscal year 2024 is for Open Access Connections. The appropriation for Open Access Connections is onetime.

(b) $445,000 in fiscal year 2024 is for a grant to ~~the Community Stabilization Project~~ Merrick Community Services to: (1) deliver services and curriculum to renters and property owners in order to preserve deeply affordable rental units in underrepresented communities; (2) help create entry-level employment opportunities for renters; and (3) construct a secure space for documents and identification for those experiencing homelessness. This is a onetime appropriation.

Sec. 2. Laws 2023, chapter 71, article 1, section 10, subdivision 9, is amended to read:

Subd. 9. Hennepin County; Railroad Crossing

450,000

For one or more grants to Hennepin County, the city of Medina, the city of Independence, or a combination thereof, to design, engineer, and construct railroad crossing safety improvements at Town Line Road in the city of Medina and the city of Independence. Notwithstanding Minnesota Statutes, section 16A.642, this appropriation is available until December 31, 2029.

Sec. 3. Laws 2023, chapter 71, article 1, section 10, subdivision 10, is amended to read:

Subd. 10. Hutchinson; Civil Air Patrol

3,700,000

For a grant to the city of Hutchinson to predesign, design, construct, equip, and furnish a hangar and statewide training center for the Civil Air Patrol.

Sec. 4. Laws 2023, chapter 71, article 1, section 11, subdivision 7, as amended by Laws 2025, First Special Session chapter 15, article 3, section 5, is amended to read:

Subd. 7. Dellwood; Lake Links Trail

2,000,000

(a) For one or more grants to the city of Dellwood in Washington County to design, engineer, construct, and equip trail improvements consistent with the completed preliminary

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engineering along or parallel with the shore of White Bear Lake between the Mahtomedi city limits and ~~the western border of Washington County~~ Meadow Lane in the city of Dellwood. This appropriation may also be used for the acquisition of permanent easements and right-of-way. This appropriation is in addition to the appropriation in Laws 2020, Fifth Special Session chapter 3, article 1, section 17, subdivision 13, as amended by Laws 2023, chapter 72, article 3, section 23, and Laws 2025, First Special Session chapter 15, article 3, section 2, and is for the same purposes. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2028.

(b) The city of Dellwood may complete the trail improvements funded under paragraph (a) in the following segments and in any order, and may enter into separate grant agreements for each trail segment or any combination of segments:

(1) Echo Street to Dwinnell Avenue;

(2) Yellow Birch Road to Echo Street; and

(3) Meadow Lane to Yellow Birch Road.

Sec. 5. Laws 2023, chapter 71, article 1, section 11, subdivision 9, is amended to read:

Subd. 9. Dakota County; Thompson Park

2,000,000

For a grant to Dakota County for design of Thompson County Park Master Plan improvements, which may include a land bridge over Highway 52, a pollinator promenade, a sensory garden, restoration of historical stream corridor, farmstead interpretation, Dakota Lodge renovations, a sound wall, a greenway rest area with picnic shelter, and a sledding hill and construction of Dakota Lodge improvements, park entry wayfinding and safety improvements, and an accessible trail loop with inclusive nature play stations.

Sec. 6. Laws 2023, chapter 71, article 1, section 11, subdivision 15, as amended by Laws 2024, chapter 88, article 1, section 8, is amended to read:

Subd. 15. Ramsey County; Rice Street Revitalization

1,000,000

For one or more grants to Ramsey County, the city of Maplewood, the city of St. Paul, or the city of Roseville for the Rice Street revitalization project, to improve safety for users in the corridor with a focus on pedestrians and bicyclists. This appropriation includes money for predesign, design, environmental analysis, and

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right-of-way acquisition of Rice Street (County State-Aid Highway 49) and on approach streets to support reconstruction of Rice Street from Wheelock Parkway in St. Paul to County Road B in Roseville and Maplewood. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2029.

Sec. 7. Laws 2023, chapter 71, article 1, section 14, subdivision 25, is amended to read:

Subd. 25. Mendota Heights; Pilot Knob

1,850,000

For a grant to the city of Mendota Heights for development of Oheyawahe (Pilot Knob), a culturally, historically, and environmentally important site and Dakota sacred site located at 2100 Pilot Knob Road in Mendota Heights, overlooking the confluence of the Mississippi and Minnesota Rivers, which is included on the National Register of Historic Places. This appropriation includes money to design and construct: multipurpose gathering spaces, interpretation structures, trail connections and walkways, parking, and other visitor amenities and infrastructure; grading, landscaping, and other site and natural resource improvements including the planting and restoration of native vegetation; and other betterments necessary to provide safe and improved visitor access and preserve the site as a public natural area. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2029.

Sec. 8. Laws 2023, chapter 71, article 1, section 14, subdivision 35, is amended to read:

Subd. 35. St. Paul; Inclusive Playground

2,500,000

For a grant to the city of St. Paul to construct, furnish, and equip an inclusive and accessible playground in the city of St. Paul. "Inclusive and accessible playground" as used in this subdivision means a playground, planned and designed in partnership with community stakeholders, designed to be safe and accessible to all children, including those with intellectual, developmental, or physical disabilities. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2029.

Sec. 9. Laws 2023, chapter 71, article 1, section 14, subdivision 43, is amended to read:

Subd. 43. Accessible Space

1,150,000

For ~~a grant to Accessible Space, Inc.,~~ grants for capital improvements of to low-income accessible housing units located at 814 Iglehart Avenue, 825 Selby Avenue, and 135 to 154 Western Avenue South in the city of St. Paul; 1370 Curve Crest Boulevard in the city of Stillwater; and 1074 Roselawn Avenue West in the

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city of Roseville. Of this appropriation, $183,000 is for a grant to ASI Homes, Inc., to construct capital improvements of low-income accessible housing units located at 814 Iglehart Avenue and 825 Selby Avenue in the city of St. Paul; $250,000 is for a grant to ASI Stillwater, Inc., to construct capital improvements of low-income accessible housing units located at 1370 Curve Crest Boulevard in the city of Stillwater; $417,000 is for a grant to ASI Roseville, Inc., to construct capital improvements of low-income accessible housing units located at 1074 Roselawn Avenue West in the city of Roseville; and $300,000 is for a grant to Twin Ports Accessibility Project, Inc., to construct capital improvements of low-income accessible housing units located at 135 to 154 Western Avenue South in the city of St. Paul.

Sec. 10. Laws 2023, chapter 71, article 1, section 14, subdivision 46, is amended to read:

Subd. 46. Agate Housing and Services

5,000,000

(a) For a grant to Agate Housing and Services to design, construct, equip, and furnish a shelter facility in the city of Minneapolis for those experiencing homelessness.

(b) Any money remaining after the project in paragraph (a) is completed may be used to predesign, design, furnish, equip, renovate, and construct a second shelter facility to be located in the city of Minneapolis.

Sec. 11. Laws 2023, chapter 71, article 1, section 14, subdivision 47, is amended to read:

Subd. 47. Ain Dah Yung Center

2,200,000

For a grant to the Ain Dah Yung (Our Home) Center to predesign, design, construct, furnish, and equip the renovation of the emergency shelter ~~and youth lodge~~ in the city of St. Paul. The renovations include tuckpointing, electric upgrades, ADA access, emergency fire escape, and bathroom renovation for the emergency shelter. ~~This appropriation also includes money for roof replacement, electric upgrades, and ADA access for the youth lodge.~~

Sec. 12. Laws 2023, chapter 71, article 1, section 14, subdivision 50, is amended to read:

Subd. 50. Appetite For Change

1,500,000

For a grant to Appetite for Change to acquire property, predesign, and design a facility that will provide access to food, workforce development, urban agriculture, and health and wellness services in the city of Minneapolis. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2029.

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Sec. 13. Laws 2023, chapter 71, article 1, section 14, subdivision 54, is amended to read:

Subd. 54. CornerHouse

2,750,000

For a grant to CornerHouse to acquire property for a new facility in Hennepin County. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2029.

Sec. 14. Laws 2023, chapter 71, article 1, section 14, subdivision 56, is amended to read:

Subd. 56. Division of Indian Work

500,000

For a grant to the Division of Indian Work (DIW) to ~~predesign the renovation of~~ demolish property it currently owns, which formerly served as a transitional housing facility for teen mothers, ~~and the renovation and~~ to renovate and make capital repairs of to the DIW's existing facility at 1001 East Lake Street in the city of Minneapolis, and to predesign an expansion of the facility at 1001 East Lake Street, to better carry out its mission of providing support and strength to urban American Indian people through a full spectrum of culturally based programming.

Sec. 15. Laws 2023, chapter 71, article 1, section 14, subdivision 66, as amended by Laws 2024, chapter 88, article 1, section 22, is amended to read:

Subd. 66. Irreducible Grace Foundation

1,500,000

For a grant to the Irreducible Grace Foundation to acquire and to design, construct, furnish, and equip the renovation of existing multiunit residential housing in the Rondo or Frogtown neighborhood in the city of St. Paul to be owned and managed by the Irreducible Grace Foundation to provide approximately 12 to 14 units of housing for youth and young adults facing homelessness. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2029.

Sec. 16. Laws 2023, chapter 71, article 1, section 14, subdivision 75, is amended to read:

Subd. 75. MNI Sota Fund

1,000,000

For a grant to MNI Sota Fund to acquire real property for and to design a new facility in the city of Minneapolis. MNI Sota Fund will create an Indigenous asset building center equipped with classrooms, office space, and a small business incubator to support aspiring American Indian entrepreneurs and homeowners. Notwithstanding Minnesota Statutes, section 16A.642, the appropriation for this project is available until December 31, 2029.

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Sec. 17. Laws 2023, chapter 71, article 1, section 14, subdivision 91, is amended to read:

Subd. 91. Sanneh Foundation

1,820,000

For a grant to the Sanneh Foundation to acquire property for ~~and to predesign and design~~ an Innovation Center in the city of St. Paul for community gathering, training, and for supportive housing to host teacher pathway candidates and future educators, nonprofit service providers, AmeriCorps members, workforce and human development participants and programs, and other community employees serving the public.

Sec. 18. Laws 2023, chapter 71, article 1, section 15, subdivision 9, is amended to read:

Subd. 9. Lincoln-Pipestone Rural Water System

11,500,000

(a) For one or more grants to the Lincoln-Pipestone Rural Water System for the purposes described in this subdivision.

(1) $4,000,000 of this appropriation is to design, construct, and equip ~~a biological filtration~~ water source improvements and water treatment ~~system~~ improvements for the reduction of nitrate ~~removal~~ and other contaminants.

(2) $2,500,000 of this appropriation is to design and construct improvements and betterments of a capital nature to water treatment facilities in Fortier Township, including contact basin and water storage improvements.

(3) $5,000,000 of this appropriation is to acquire property and to design and construct water storage and distribution infrastructure, including booster stations and new water connecting pipelines.

(b) Notwithstanding Minnesota Statutes, section 16A.642, this appropriation is available until December 31, 2028.

Sec. 19. Laws 2023, chapter 72, article 2, section 3, subdivision 14, is amended to read:

Subd. 14. Sauk River Watershed District; ~~Gravity Outlet Conveyance System~~

1,400,000

For a grant to the Sauk River Watershed District to design, construct, and equip ~~a gravity~~ an outlet conveyance system, including an upstream control structure at the outlet location, to direct water from Long Lake in Birchdale Township in Todd County to ~~Sauk Lake~~ an appropriate downstream outlet in Todd County to mitigate issues caused by high water levels in Long Lake.

Sec. 20. Laws 2023, chapter 72, article 2, section 9, subdivision 5, is amended to read:

Subd. 5. Forest Lake; Veterans Memorial

250,000

For a grant to the city of Forest Lake ~~Veterans Memorial Committee~~ to construct a memorial to veterans of the United States armed forces at Lakeside Memorial Park.

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Sec. 21. Laws 2023, chapter 72, article 2, section 9, subdivision 12, is amended to read:

Subd. 12. Winona; Mississippi ~~River~~ Riverfront Trail

5,000,000

For a grant to the city of Winona for final design, engineering, and construction of a ~~bridge and bridge approaches connecting to Chestnut Street at one end and Carimona Street at the other end as part of the multipurpose nonmotorized Riverfront Trail from Levee Park to Lions Park~~ trail segment to connect portions of the Mississippi Riverfront Trail between Levee Park and Lions Park. Any unspent portion of this appropriation remaining after completion of the project listed in this subdivision, after written notice to the commissioner of management and budget, is available for final design, engineering, and construction to extend the Mississippi Riverfront Trail in the city of Winona.

Sec. 22. Laws 2023, chapter 72, article 2, section 10, subdivision 10, is amended to read:

Subd. 10. North Zumbro Sanitary District; Wastewater Treatment Facility

10,000,000

For a grant to the joint powers sanitary district created pursuant to Minnesota Statutes, section 471.59, comprising the cities of Zumbrota, Goodhue, Pine Island, and Wanamingo, to acquire property for and to ~~predesign~~ design and engineer a new state‑of‑the-art regional wastewater treatment facility to be located in Goodhue County and to serve as a regional wastewater facility prototype. This facility shall provide wastewater treatment service for the Elk Run settlement lands of the Prairie Island Indian Community, which shall connect to existing wastewater infrastructure in the city of Pine Island. This appropriation includes money for improvements and betterments of a capital nature, including the demolition of the existing wastewater treatment structures and related infrastructure, and construction of infrastructure necessary to connect the new facility to the communities in the sanitary district and for the facility to serve its intended purpose.

Sec. 23. Laws 2023, chapter 72, article 2, section 11, is amended to read:

Sec. 11. MINNESOTA HISTORICAL SOCIETY

$2,100,000

To the Minnesota Historical Society for a grant to Dodge County to predesign, design, and construct the stabilization of the Wasioja Historic District seminary ruins; and to predesign, design, and construct a walkway to the middle of the ruins to preserve and enhance access to the ruins~~; and to construct a fence surrounding the ruins~~.

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Sec. 24. Laws 2024, chapter 125, article 8, section 6, is amended to read:

Sec. 6. ~~DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT~~ METROPOLITAN COUNCIL

$-0-

$5,000,000

Cedar Riverside Recreation Center. $5,000,000 in fiscal year 2025 is for a ~~payment~~ grant to the Minneapolis Park and Recreation Board for the design, development, and construction of the new Cedar Riverside Recreation Center to serve the largest immigrant population center in the state. This is a onetime appropriation available until June 30, 2028.

Sec. 25. EFFECTIVE DATE.

This article is effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to capital investment; authorizing spending to acquire and better land and buildings and for other improvements of a capital nature with certain conditions; establishing new programs and modifying existing programs; requiring a report; modifying and canceling prior appropriations; appropriating money; amending Minnesota Statutes 2024, sections 161.14, by adding a subdivision; 474A.02, subdivision 1a; Laws 2023, chapter 37, article 1, section 2, subdivision 15; Laws 2023, chapter 71, article 1, sections 10, subdivisions 9, 10; 11, subdivisions 7, as amended, 9, 15, as amended; 14, subdivisions 25, 35, 43, 46, 47, 50, 54, 56, 66, as amended, 75, 91; 15, subdivision 9; Laws 2023, chapter 72, article 2, sections 3, subdivision 14; 9, subdivisions 5, 12; 10, subdivision 10; 11; Laws 2024, chapter 125, article 8, section 6."

The motion prevailed and the amendment was adopted.

Scott moved to amend H. F. No. 2484, the second engrossment, as amended, as follows:

Page 27, after line 9, insert:

"Sec. 25. REPEALER.

Laws 2025, First Special Session chapter 8, article 1, section 19, is repealed.

EFFECTIVE DATE. This section is effective the day following final enactment."

Renumber the sections in sequence and correct the internal references

Amend the title accordingly

A roll call was requested and properly seconded.

The question was taken on the Scott amendment and the roll was called. There were 66 yeas and 67 nays as follows:

Those who voted in the affirmative were:

The motion did not prevail and the amendment was not adopted.

Lee, F. moved to amend H. F. No. 2484, the second engrossment, as amended, as follows:

Page 3, line 16, after the period, insert "This appropriation is not an appropriation for a capital improvement project within the meaning of Minnesota Statutes, section 16A.642, notwithstanding the requirements in section 1, paragraphs (b) to (e). This appropriation is available until June 30, 2031."

Page 4, line 4, after the period, insert "This appropriation is not an appropriation for a capital improvement project within the meaning of Minnesota Statutes, section 16A.642, notwithstanding the requirements in section 1, paragraphs (b) to (e). This appropriation is available until June 30, 2031."

Page 5, line 3, after the period, insert "This appropriation is not an appropriation for a capital improvement project within the meaning of Minnesota Statutes, section 16A.642, notwithstanding the requirements in section 1, paragraphs (b) to (e). This appropriation is available until June 30, 2031."

Page 5, line 10, after the period, insert "This appropriation is not an appropriation for a capital improvement project within the meaning of Minnesota Statutes, section 16A.642, notwithstanding the requirements in section 1, paragraphs (b) to (e). This appropriation is available until June 30, 2031."

Page 5, delete section 10

Page 7, line 12, after the period, insert "This appropriation is added to and is for the same purpose as the appropriation in Laws 2025, First special session chapter 14, section 3, subdivision 3."

Page 7, line 15, delete everything after "the" and insert "city of St. Paul for the design and construction of a city park at the former Hillcrest Golf Course, now known as The Heights."

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Page 7, delete lines 16 to 21

Page 9, after line 5, insert:

"Subd. 14. Stillwater Veterans Memorial

350,000

For a grant to Stillwater Veterans Memorial to expand a veterans' memorial in Stillwater Veterans Memorial Park in the city of Stillwater."

Renumber the sections in sequence and adjust amounts accordingly

The motion prevailed and the amendment was adopted.

H. F. No. 2484, as amended, was read for the third time.

LAY ON THE TABLE

Niska moved that H. F. No. 2484, as amended, be laid on the table. The motion prevailed and H. F. No. 2484, as amended, was laid on the table.

The following Conference Committee Report was received:

CONFERENCE COMMITTEE REPORT ON H. F. No. 2438

A bill for an act relating to transportation; establishing a budget for transportation; appropriating money for transportation purposes, including Department of Transportation, Department of Public Safety, and Metropolitan Council activities; modifying prior appropriations; transferring money; modifying various policy and finance provisions; modifying and providing for allocation of certain fees; directing certain rulemaking; requiring studies; modifying and requiring certain legislative reporting; amending Minnesota Statutes 2024, sections 4.076, subdivisions 4, 5; 161.115, subdivision 177; 161.178, subdivisions 1, 2a, 8, by adding a subdivision; 162.16; 168.002, subdivision 6; 168.013, subdivision 1m; 168.091; 168.1287, subdivisions 1, 5; 168.27, subdivisions 8, 11, 16, 22; 168.33, by adding a subdivision; 168A.11, subdivision 1; 168E.01, by adding subdivisions; 168E.05, subdivision 1; 169.011, subdivision 36; 169.06, subdivision 5; 169.09, subdivision 8; 169.14, subdivision 1a; 169.686, subdivision 1; 169.865, subdivisions 1a, 3; 169A.55, subdivision 5; 171.01, by adding a subdivision; 171.05, subdivision 1; 171.06, by adding a subdivision; 171.0605, subdivision 2, by adding a subdivision; 171.061, by adding a subdivision; 171.13, subdivisions 7, 8; 171.17, subdivision 1; 171.2405, subdivision 1; 171.301, subdivision 1; 171.306, subdivisions 1, 4; 174.02, by adding a subdivision; 174.03, subdivision 12, by adding a subdivision; 174.07, subdivision 3; 174.38, subdivision 4; 174.49, by adding a subdivision; 174.56; 174.634, subdivision 2; 289A.51, subdivisions 1, 3, 4; 297A.993, subdivision 2a; 299A.01, by adding a subdivision; 360.511, by adding subdivisions; 360.55, subdivisions 4, 4a, 8, by adding a subdivision; 398A.04, by adding a subdivision; 473.13, by adding a subdivision; 473.39, subdivision 6, by adding subdivisions; 473.408, by adding a subdivision; 473.4465, subdivision 4, by adding a subdivision; Laws 2021, First Special Session chapter 5, article 1, section 2, subdivision 2, as amended; Laws 2021, First Special Session chapter 14, article 11, section 45; Laws 2023, chapter 60, article 10, section 9; Laws 2023, chapter 68, article 1, section 2, subdivisions 2, 3; article 4, section 109; Laws 2024, chapter 127, article 1, section 2, subdivision 3; proposing coding for new law in Minnesota Statutes, chapters 137; 168; 168A; 174.

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May 17, 2026

The Honorable Lisa M. Demuth

Speaker of the House of Representatives

The Honorable Bobby Joe Champion

President of the Senate

We, the undersigned conferees for H. F. No. 2438 report that we have agreed upon the items in dispute and recommend as follows:

That the Senate recede from its amendments and that H. F. No. 2438 be further amended as follows:

Delete everything after the enacting clause and insert:

"ARTICLE 1

FEDERAL CONFORMITY

Section 1. Minnesota Statutes 2024, section 289A.02, subdivision 7, is amended to read:

Subd. 7. Internal Revenue Code. Unless specifically defined otherwise, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through May 1, ~~2023~~ 2026.

EFFECTIVE DATE. This section is effective the day following final enactment, except the changes incorporated by federal changes are effective retroactively at the same time the changes were effective for federal purposes.

Sec. 2. Minnesota Statutes 2024, section 290.01, subdivision 19, as amended by Laws 2026, chapter 88, article 1, section 170, is amended to read:

Subd. 19. Net income. (a) For a trust or estate taxable under section 290.03, and a corporation taxable under section 290.02, the term "net income" means the federal taxable income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through the date named in this subdivision, incorporating the federal effective dates of changes to the Internal Revenue Code and any elections made by the taxpayer in accordance with the Internal Revenue Code in determining federal taxable income for federal income tax purposes, and with the modifications provided in sections 290.0131 to 290.0136 and 290.035.

(b) For an individual, the term "net income" means federal adjusted gross income with the modifications provided in sections 290.0131, 290.0132, ~~and~~ 290.0135 to 290.0137, and 290.035.

(c) In the case of a regulated investment company or a fund thereof, as defined in section 851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, except that:

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal Revenue Code does not apply;

(2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue Code must be applied by allowing a deduction for capital gain dividends and exempt-interest dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; and

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(3) the deduction for dividends paid must also be applied in the amount of any undistributed capital gains which the regulated investment company elects to have treated as provided in section 852(b)(3)(D) of the Internal Revenue Code.

(d) The net income of a real estate investment trust as defined and limited by section 856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust taxable income as defined in section 857(b)(2) of the Internal Revenue Code.

(e) The net income of a designated settlement fund as defined in section 468B(d) of the Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through May 1, ~~2023~~ 2026, applies for taxable years beginning after December 31, 1996.

(g) Except as otherwise provided, references to the Internal Revenue Code in this subdivision and sections 290.0131 to 290.0136 mean the code in effect for purposes of determining net income for the applicable year.

(h) In the case of a partnership electing to file a composite return under section 289A.08, subdivision 7, "net income" means the partner's share of federal adjusted gross income from the partnership modified by section 290.035 and the additions provided in section 290.0131, subdivisions 8 to 10, 16, 17, ~~and~~ 19, and 24 to 26, and the subtractions provided in: (1) section 290.0132, subdivisions 9, 27, 28, ~~and~~ 31, 40, and 41, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite tax computation to the extent the electing partner would have been allowed the subtraction.

(i) In the case of a qualifying entity electing to pay the pass-through entity tax under section 289A.08, subdivision 7a, "net income" means the qualifying owner's share of federal adjusted gross income from the qualifying entity modified by section 290.035 and the additions provided in section 290.0131, subdivisions 5, 8 to 10, 16, 17, ~~and~~ 19, and 24 to 26, and the subtractions provided in: (1) section 290.0132, subdivisions 3, 9, 27, 28, ~~and~~ 31, 40, and 41, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the pass-through entity tax computation to the extent the qualifying owners would have been allowed the subtraction. The income of both a resident and nonresident qualifying owner is allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20.

Sec. 3. Minnesota Statutes 2024, section 290.01, subdivision 31, is amended to read:

Subd. 31. Internal Revenue Code. Unless specifically defined otherwise, "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through May 1, ~~2023~~ 2026. Internal Revenue Code also includes any uncodified provision in federal law that relates to provisions of the Internal Revenue Code that are incorporated into Minnesota law.

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Sec. 4. Minnesota Statutes 2024, section 290.0122, subdivision 4, is amended to read:

Subd. 4. Charitable contributions. (a) A taxpayer is allowed a deduction for charitable contributions. The deduction equals the amount of the charitable contribution deduction allowable to the taxpayer under section 170 of the Internal Revenue Code, including the denial of the deduction under section 408(d)(8), except that ~~the provisions of section 170(b)(1)(G) apply regardless of~~, notwithstanding section 170(b)(1)(I) of the Internal Revenue Code, the deduction is limited to contributions in excess of one percent of the taxpayer's contribution base for the taxable year.

(b) For taxable years beginning after December 31, 2017, the determination of carryover amounts must be made by applying the rules under section 170 of the Internal Revenue Code based on the charitable contribution deductions claimed and allowable under this section.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 5. Minnesota Statutes 2024, section 290.0131, subdivision 15, is amended to read:

Subd. 15. 529 plan addition. The lesser of the following amounts is an addition:

(1) the total distributions for the taxable year from a qualified plan under section 529 of the Internal Revenue Code, owned by the taxpayer, that are expended for:

(i) qualified higher education expenses under section 529(c)(7) of the Internal Revenue Code (expenses for tuition for elementary or secondary public, private, or religious school); and

(ii) qualified postsecondary credentialing expenses, as defined in section 529(f) of the Internal Revenue Code; or

(2) the total amount required to be reported to the taxpayer by any trustee of a qualified tuition plan under section 529 of the Internal Revenue Code as earnings on Internal Revenue Service Form 1099Q for the taxable year.

EFFECTIVE DATE. This section is effective retroactively from the same time as the changes under section 70414 of Public Law 119-21 became effective.

Sec. 6. Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision to read:

Subd. 21. Disallowed educational assistance payments. (a) The amount of disallowed educational assistance payments is an addition.

(b) For the purposes of this subdivision, "disallowed educational assistance payments" means the following amounts that are excluded from gross income under section 127 of the Internal Revenue Code:

(1) payments of principal and interest described in section 127(c)(1)(B) of the Internal Revenue Code; plus

(2) the combined amount of educational assistance described in sections 127(c)(1)(A) and 127(c)(1)(C) of the Internal Revenue Code in excess of $5,250.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 7. Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision to read:

Subd. 22. Qualified transportation fringe. (a) The amount of qualified transportation fringe in excess of the prior law limit is an addition.

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(b) For the purposes of this subdivision:

(1) "prior law limit" means the limitation under section 132(f)(2) of the Internal Revenue Code, except adjusted for inflation by substituting "1998" for "1997" in section 132(f)(6) of the Internal Revenue Code; and

(2) "qualified transportation fringe" has the meaning given in section 132(f) of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 8. Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision to read:

Subd. 23. Services performed in the Sinai Peninsula and other areas. The amount excluded from gross income attributable to services performed in the areas listed in section 70118 of Public Law 119-21 is an addition.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 9. Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision to read:

Subd. 24. Opportunity zone capital gain income. (a) The amount of opportunity zone capital gain income is an addition.

(b) For the purposes of this subdivision, "opportunity zone capital gain income" equals the sum of:

(1) the amount of gains the taxpayer excluded from gross income or deferred in the taxable year under section 1400Z-2(a) of the Internal Revenue Code due to a deferral under section 1400Z-2(b)(1) of the Internal Revenue Code; and

(2) for a gain on an investment in the taxable year, the amount by which the taxpayer's basis in the investment was increased under section 1400Z-2(b)(2)(B) or 1400Z-2(c) of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2026.

Sec. 10. Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision to read:

Subd. 25. Interest on loans secured by rural or agricultural real property. The amount of interest excluded from gross income under section 139L of the Internal Revenue Code is an addition.

EFFECTIVE DATE. This section is effective retroactively from the same time as section 70435 of Public Law 119-21 became effective.

Sec. 11. Minnesota Statutes 2024, section 290.0131, is amended by adding a subdivision to read:

Subd. 26. Business meals provided on fishing boats or at fish processing facilities; expenses for bona fide transactions. The sum of the following amounts is an addition:

(1) the amount of business meal expenses in excess of the 50 percent limitation that are allowed as a deduction under section 274(n)(2)(C) of the Internal Revenue Code; plus

(2) the amount of expenses allowed as a deduction under section 274(e)(8) of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

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Sec. 12. Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision to read:

Subd. 40. Previously taxed capital gains in an opportunity zone. The amount of a gain that was deferred under section 1400Z-2 of the Internal Revenue Code that was previously recognized as an addition under section 290.0131, subdivision 24, and was recognized in the taxable year is a subtraction. The subtraction is not allowed for the increase in basis described in section 290.0131, subdivision 24, paragraph (b), clause (2).

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2026.

Sec. 13. Minnesota Statutes 2024, section 290.0132, is amended by adding a subdivision to read:

Subd. 41. Net CFC tested income. The amount calculated under section 290.034, paragraph (a), clause (2), is a subtraction. The subtraction must not exceed the amount of net CFC tested income calculated under section 290.034 for the taxable year.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 14. Minnesota Statutes 2024, section 290.0133, is amended by adding a subdivision to read:

Subd. 16. Research and experimental expenditures amortization. (a) Eighty percent of the amount of the deduction claimed for domestic research or experimental expenditures under section 174A(a) of the Internal Revenue Code is an addition.

(b) For a taxpayer making the election under Public Law 119-21, section 70302, subsection (f)(1), 80 percent of the amount of any deduction claimed retroactively for a taxable year is an addition.

(c) For a taxpayer making an election under Public Law 119-21, section 70302, subsection (f)(2)(A)(i) or (ii), the amount of the deduction claimed for unamortized amounts is an addition.

EFFECTIVE DATE. Paragraphs (a) and (c) are effective retroactively for taxable years beginning after December 31, 2024. Paragraph (b) is effective retroactively for taxable years beginning after December 31, 2021.

Sec. 15. Minnesota Statutes 2024, section 290.0133, is amended by adding a subdivision to read:

Subd. 17. Opportunity zone capital gain income. (a) The amount of opportunity zone capital gain income is an addition.

(b) For the purposes of this subdivision, "opportunity zone capital gain income" equals the sum of:

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2026.

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Sec. 16. Minnesota Statutes 2024, section 290.0133, is amended by adding a subdivision to read:

Subd. 18. Interest on loans secured by rural or agricultural real property. The amount of interest excluded from gross income under section 139L of the Internal Revenue Code is an addition.

EFFECTIVE DATE. This section is effective retroactively from the same time as section 70435 of Public Law 119-21 became effective.

Sec. 17. Minnesota Statutes 2024, section 290.0133, is amended by adding a subdivision to read:

Subd. 19. Business meals provided on fishing boats or at fish processing facilities; expenses for bona fide transactions. The sum of the following amounts is an addition:

(1) the amount of business meal expenses in excess of the 50 percent limitation that are allowed as a deduction under section 274(n)(2)(C) of the Internal Revenue Code; plus

(2) the amount of expenses allowed as a deduction under section 274(e)(8) of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 18. Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision to read:

Subd. 22. Research and experimental expenditures amortization. (a) In each of the four taxable years immediately following the taxable year in which an addition is required under section 290.0133, subdivision 16, paragraph (a) or (b), an amount equal to one-fourth of the amount of the addition is a subtraction.

(b) For the taxable year in which an addition is required under section 290.0133, subdivision 16, paragraph (c), and for each of the taxable years immediately following that taxable year, an amount equal to the amortized amount is a subtraction. For purposes of this paragraph, "amortized amount" means the amount of the deduction allowed for an expenditure in a taxable year under section 174A of the Internal Revenue Code if the taxpayer did not make the election under Public Law 119-21, section 70302, subsection (f)(2)(A)(i) or (ii).

EFFECTIVE DATE. Paragraph (a) is effective retroactively for taxable years beginning after December 31, 2022. Paragraph (b) is effective retroactively for taxable years beginning after December 31, 2024.

Sec. 19. Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision to read:

Subd. 23. Previously taxed capital gains in an opportunity zone. The amount of a gain that was deferred under section 1400Z-2 of the Internal Revenue Code that was previously recognized as an addition under section 290.0133, subdivision 17, and was recognized in the taxable year is a subtraction. The subtraction is not allowed for the increase in basis described in section 290.0133, subdivision 21, paragraph (b), clause (2).

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2026.

Sec. 20. Minnesota Statutes 2024, section 290.0134, is amended by adding a subdivision to read:

Subd. 24. Net CFC tested income. The amount calculated under section 290.034, paragraph (a), clause (2), is a subtraction. The subtraction must not exceed the amount of net CFC tested income calculated under section 290.034 for the taxable year.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

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Sec. 21. Minnesota Statutes 2024, section 290.033, is amended to read:

290.033 NET INVESTMENT INCOME TAX.

(a) For purposes of this section, "net investment income" has the meaning given in section 1411(c) of the Internal Revenue Code, ~~excluding~~ except:

(1) net investment income excludes the net gain attributable to the disposition of property classified as class 2a under section 273.13, subdivision 23; and

(2) net investment income is adjusted for capital gains in an opportunity zone, as provided in paragraph (e).

(b) In addition to the tax computed under section 290.06, subdivision 2c, a tax is imposed on the net investment income of individuals, estates, and trusts in excess of $1,000,000 at a rate of one percent.

(c) For an individual who is not a Minnesota resident for the entire taxable year, the tax under this subdivision must be calculated as if the individual is a Minnesota resident for the entire year, and that amount must be multiplied by a fraction in which:

(1) the numerator is net investment income allocable under section 290.17 to Minnesota; and

(2) the denominator is the total amount of net investment income for the taxable year.

(d) For an estate or trust, the tax on net investment income must be computed by multiplying the net investment income tax liability by a fraction, the numerator of which is the amount of the estate or trust's net investment income allocated to the state pursuant to the provisions of sections 290.17, 290.191, and 290.20, and the denominator of which is the taxpayer's total net investment income.

(e) For a taxpayer with an addition under section 290.0131, subdivision 24, net investment income is increased by the amount of the addition. For a taxpayer with a subtraction under section 290.0132, subdivision 40, net investment income is reduced by the amount of the subtraction.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2026.

Sec. 22. [290.034] NET CFC TESTED INCOME.

(a) The amount of net CFC tested income for Minnesota purposes is calculated as follows:

(1) any amounts included in federal taxable income pursuant to section 951A of the Internal Revenue Code as modified under section 290.035; minus

(2) the amount calculated under section 951A(b)(2)(A) of the Internal Revenue Code, as amended through May 1, 2023. The calculation excludes section 951A(b)(2)(B). Any internal references to the calculation refer to the Internal Revenue Code as amended through May 1, 2023.

(b) The result of the calculation under paragraph (a) must not be less than zero.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

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Sec. 23. [290.035] ADJUSTMENT FOR NET CFC TESTED INCOME AND SUBPART F INCOME.

For purposes of determining a United States shareholder's Net CFC tested income under section 951A of the Internal Revenue Code or subpart F income under section 951 of the Internal Revenue Code, the provisions of Public Law 119-21 relating to the permanent extension of the look-thru rule under section 70351 do not apply.

Sec. 24. Minnesota Statutes 2025 Supplement, section 290.06, subdivision 2c, is amended to read:

Subd. 2c. Schedules of rates for individuals, estates, and trusts. (a) The income taxes imposed by this chapter upon married individuals filing joint returns and surviving spouses as defined in section 2(a) of the Internal Revenue Code must be computed by applying to their taxable net income the following schedule of rates:

(1) On the first $38,770, 5.35 percent;

(2) On all over $38,770, but not over $154,020, 6.8 percent;

(3) On all over $154,020, but not over $269,010, 7.85 percent;

(4) On all over $269,010, 9.85 percent.

Married individuals filing separate returns, estates, and trusts must compute their income tax by applying the above rates to their taxable income, except that the income brackets will be one-half of the above amounts after the adjustment required in subdivision 2d.

(b) The income taxes imposed by this chapter upon unmarried individuals must be computed by applying to taxable net income the following schedule of rates:

(1) On the first $26,520, 5.35 percent;

(2) On all over $26,520, but not over $87,110, 6.8 percent;

(3) On all over $87,110, but not over $161,720, 7.85 percent;

(4) On all over $161,720, 9.85 percent.

(c) The income taxes imposed by this chapter upon unmarried individuals qualifying as a head of household as defined in section 2(b) of the Internal Revenue Code must be computed by applying to taxable net income the following schedule of rates:

(1) On the first $32,650, 5.35 percent;

(2) On all over $32,650, but not over $131,190, 6.8 percent;

(3) On all over $131,190, but not over $214,980, 7.85 percent;

(4) On all over $214,980, 9.85 percent.

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(d) In lieu of a tax computed according to the rates set forth in this subdivision, the tax of any individual taxpayer whose taxable net income for the taxable year is less than an amount determined by the commissioner must be computed in accordance with tables prepared and issued by the commissioner of revenue based on income brackets of not more than $100. The amount of tax for each bracket shall be computed at the rates set forth in this subdivision, provided that the commissioner may disregard a fractional part of a dollar unless it amounts to 50 cents or more, in which case it may be increased to $1.

(e) An individual who is not a Minnesota resident for the entire year must compute the individual's Minnesota income tax as provided in this subdivision. After the application of the nonrefundable credits provided in this chapter, the tax liability must then be multiplied by a fraction in which:

(1) the numerator is the individual's Minnesota source federal adjusted gross income as defined in section 62 of the Internal Revenue Code and increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19, and 20 to 26, and 290.0137, paragraph (a); and reduced by

(ii) the Minnesota assignable portion of the subtraction for United States government interest under section 290.0132, subdivision 2, the subtractions under sections 290.0132, subdivisions 9, 14, 15, 18, 27, 31, ~~and~~ 32, 40, and 41, and 290.0137, paragraph (c), after applying the allocation and assignability provisions of section 290.081, clause (a), or 290.17; and

(2) the denominator is the individual's federal adjusted gross income as defined in section 62 of the Internal Revenue Code, increased by:

(i) the additions required under sections 290.0131, subdivisions 2, 6, 8 to 10, 16, 17, 19, and 20 to 26, and 290.0137, paragraph (a); and reduced by

(ii) the subtractions under sections 290.0132, subdivisions 2, 9, 14, 15, 18, 27, 31, ~~and~~ 32, 40, and 41, and 290.0137, paragraph (c).

(f) If an individual who is not a Minnesota resident for the entire year is a qualifying owner of a qualifying entity that elects to pay tax as provided in section 289A.08, subdivision 7a, paragraph (b), the individual must compute the individual's Minnesota income tax as provided in paragraph (e), and also must include, to the extent attributed to the electing qualifying entity:

(1) in paragraph (e), clause (1), item (i), and paragraph (e), clause (2), item (i), the addition under section 290.0131, subdivision 5; and

(2) in paragraph (e), clause (1), item (ii), and paragraph (e), clause (2), item (ii), the subtraction under section 290.0132, subdivision 3.

Sec. 25. Minnesota Statutes 2024, section 290.06, subdivision 2h, is amended to read:

Subd. 2h. Section 529 plan recapture. (a) For the purposes of this subdivision:

(1) the definitions under section 290.0684 apply;

(2) "account owner" means an individual who owns one or more qualified accounts;

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(3) "credit ratio" means the ratio of (i) two times the total amount of credits that an account owner claimed under section 290.0684 for contributions to the account owner's qualified accounts to (ii) the total contributions in all taxable years to the account owner's qualified accounts;

(4) "qualified higher education expenses" has the meaning given in section 529(e)(3) of the Internal Revenue Code, except:

(i) section 529(c)(7) does not apply; and

(ii) qualified higher education expenses do not include qualified postsecondary credentialing expenses, as defined in section 529(f) of the Internal Revenue Code; and

(5) "subtraction ratio" means the ratio of (i) the total amount of subtractions that an account owner claimed under section 290.0132, subdivision 23, for contributions to the account owner's qualified accounts to (ii) the total contributions in all taxable years to the account owner's qualified accounts.

(b) If a distribution from a qualified account is used for a purpose other than to pay for qualified higher education expenses, the account owner must pay an additional tax equal to:

(1) 50 percent of the product of the credit ratio and the amount of the distribution; plus

(2) ten percent of the product of the subtraction ratio and the amount of the distribution.

(c) The additional tax under this subdivision does not apply to any portion of a distribution that is subject to the additional tax under section 529(c)(6) of the Internal Revenue Code.

EFFECTIVE DATE. This section is effective retroactively from the same time as the changes under section 70414 of Public Law 119-21 became effective.

Sec. 26. Minnesota Statutes 2024, section 290.067, is amended to read:

290.067 DEPENDENT CARE CREDIT.

Subdivision 1. Amount of credit. (a) A taxpayer may take as a credit against the tax due from the taxpayer ~~and a spouse, if any,~~ under this chapter an amount equal to the dependent care credit for which the taxpayer is eligible pursuant to the provisions of section 21 of the Internal Revenue Code except that in determining whether the child qualified as a dependent, income received as a Minnesota family investment program grant or allowance to or on behalf of the child must not be taken into account in determining whether the child received more than half of the child's support from the taxpayer the taxpayer's eligible dependent care expenses, as determined under subdivision 1a, multiplied by the taxpayer's credit percentage, as determined under subdivision 1b. The credit is reduced by five percent of adjusted gross income in excess of $65,610.

(b) If a child who has not attained the age of six years at the close of the taxable year is cared for at a licensed family day care home operated by the child's parent, the taxpayer is deemed to have paid employment-related expenses. If the child is 16 months old or younger at the close of the taxable year, the amount of expenses deemed to have been paid equals the maximum limit for one qualifying individual under section 21(c) and (d) of the Internal Revenue Code. If the child is older than 16 months of age but has not attained the age of six years at the close of the taxable year, the amount of expenses deemed to have been paid equals the amount the licensee would charge for the care of a child of the same age for the same number of hours of care.

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(c) If a taxpayer:

~~(1) has a child who has not attained the age of one year at the close of the taxable year; and~~

(2) does not participate in a dependent care assistance program as defined in section 129 of the Internal Revenue Code, in lieu of the actual employment related expenses paid for that child under paragraph (a) or the deemed amount under paragraph (b), the lesser of (i) the earned income of the taxpayer or (ii) the amount of the maximum limit for one qualifying individual under section 21(c) and (d) of the Internal Revenue Code will be deemed to be the employment related expense paid for that child. The earned income limitation of section 21(d) of the Internal Revenue Code shall not apply to this deemed amount. These deemed amounts apply regardless of whether any employment-related expenses have been paid.

~~(d) If the taxpayer is not required and does not file a federal individual income tax return for the tax year, no credit is allowed for any amount paid to any person unless:~~

~~(1) the name, address, and taxpayer identification number of the person are included on the return claiming the credit; or~~

(2) if the person is an organization described in section 501(c)(3) of the Internal Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code, the name and address of the person are included on the return claiming the credit.

In the case of a failure to provide the information required under the preceding sentence, the preceding sentence does not apply if it is shown that the taxpayer exercised due diligence in attempting to provide the information required.

~~(e)~~ (b) In the case of a nonresident or part-year resident, the credit determined under this section ~~21 of the Internal Revenue Code~~ must be allocated ~~based on the ratio by which the earned income of the claimant and the claimant's spouse from Minnesota sources bears to the total earned income of the claimant and the claimant's spouse~~ using the percentage calculated under section 290.06, subdivision 2c, paragraph (e).

~~(f) For residents of Minnesota, the subtractions for military pay under section 290.0132, subdivisions 11 and 12, are not considered "earned income not subject to tax under this chapter."~~

~~(g) For residents of Minnesota, the exclusion of combat pay under section 112 of the Internal Revenue Code is not considered "earned income not subject to tax under this chapter."~~

(h) For taxpayers with federal adjusted gross income in excess of $52,230, the credit is equal to the lesser of the credit otherwise calculated under this subdivision, or the amount equal to $600 minus five percent of federal adjusted gross income in excess of $52,230 for taxpayers with one qualifying individual, or $1,200 minus five percent of federal adjusted gross income in excess of $52,230 for taxpayers with two or more qualifying individuals, but in no case is the credit less than zero.

(1) "employment-related expenses" has the meaning given in section 21(b)(2) of the Internal Revenue Code; and

(2) "qualifying individual" has the meaning given in section 21(b)(1) of the Internal Revenue Code, except that in determining whether the child qualified as a dependent income received as a Minnesota family investment program grant or allowance to or on behalf of the child must not be taken into account in determining whether the child received more than half of the child's support from the taxpayer.

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Subd. 1a. Eligible dependent care expenses. (a) A taxpayer's eligible dependent care expenses equals the amount of employment-related expenses incurred during the taxable year, subject to the limitation in paragraph (b).

(b) A taxpayer's eligible dependent care expenses are limited to:

(1) $3,000 if there was one qualifying individual with respect to the taxpayer; or

(2) $6,000 if there were two or more qualifying individuals with respect to the taxpayer.

(c) The limits under paragraph (b), clauses (1) and (2), are reduced by the amount of dependent care assistance excluded from gross income under section 129 of the Internal Revenue Code for the taxable year.

(d) For the purposes of determining employment-related expenses, the provisions of section 21(d) of the Internal Revenue Code apply.

Subd. 1b. Credit percentage. (a) The credit percentage equals 35 percent, subject to the reductions in paragraph (b).

(b) A taxpayer's credit percentage is reduced by one percentage point for each $2,000, or fraction thereof, by which the taxpayer's adjusted gross income exceeds $15,000, until the credit percentage equals 20 percent.

Subd. 2b. Inflation adjustment. The commissioner shall annually adjust the ~~dollar amount of the income threshold at which the maximum credit begins to be reduced under~~ adjusted gross income amount in subdivision 1, paragraph (a), as provided in section 270C.22. The statutory year is taxable year ~~2019~~ 2026.

Subd. 2c. Deemed expenses. (a) If a child who has not attained the age of six years at the close of the taxable year is cared for at a licensed family day care home operated by the child's parent, the taxpayer is deemed to have paid employment-related expenses. The amount of expenses deemed to have been paid equals the amount the licensee would charge for the care of a child of the same age for the same number of hours of care up to the maximum eligible expenses allowed, as determined under subdivisions 1a and 1b.

(b) If a taxpayer, regardless of filing status:

(1) has a qualifying individual who has not attained the age of one year at the close of the taxable year; and

(2) used the deemed amount under paragraph (a) in lieu of the actual employment-related expenses paid for that child, the amount of deemed employment-related expenses equals the lesser of:

(i) the earned income of the taxpayer; or

(ii) the amount of the maximum limit for one qualified individual under subdivision 1a.

The earned income limitation of section 21(d) of the Internal Revenue Code does not apply to this deemed amount. These deemed amounts apply regardless of whether any employment-related expenses have been paid.

Subd. 3. Credit to be refundable; appropriation. If the amount of credit which a claimant would be eligible to receive pursuant to this subdivision exceeds the claimant's tax liability under this chapter, the excess amount of the credit shall be refunded to the claimant by the commissioner of revenue. The amount needed to pay the refunds required by this section is appropriated to the commissioner from the general fund.

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Subd. 4. Right to file claim. The right to file a claim under this section shall be personal to the claimant and shall not survive death, but such right may be exercised on behalf of a claimant by the claimant's legal guardian or attorney-in-fact. When a claimant dies after having filed a timely claim the amount thereof shall be disbursed to another member of the household as determined by the commissioner of revenue. If the claimant was the only member of a household, the claim may be paid to the claimant's personal representative, but if neither is appointed and qualified within two years of the filing of the claim, the amount of the claim shall escheat to the state.

Subd. 7. Special rules. For purposes of this section, the special rules of section 21(e) of the Internal Revenue Code apply.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 27. Minnesota Statutes 2025 Supplement, section 290.091, subdivision 2, is amended to read:

Subd. 2. Definitions. For purposes of the tax imposed by this section, the following terms have the meanings given.

(a) "Alternative minimum taxable income" means the sum of the following for the taxable year:

(1) the taxpayer's federal alternative minimum taxable income as defined in section 55(b)(1)(D) of the Internal Revenue Code;

(2) the taxpayer's itemized deductions allowed in computing federal alternative minimum taxable income, but excluding:

(i) the charitable contribution deduction under section 170 of the Internal Revenue Code;

(ii) the medical expense deduction;

(iii) the casualty, theft, and disaster loss deduction; and

(iv) the impairment-related work expenses of a person with a disability;

(3) for depletion allowances computed under section 613A(c) of the Internal Revenue Code, with respect to each property (as defined in section 614 of the Internal Revenue Code), to the extent not included in federal alternative minimum taxable income, the excess of the deduction for depletion allowable under section 611 of the Internal Revenue Code for the taxable year over the adjusted basis of the property at the end of the taxable year (determined without regard to the depletion deduction for the taxable year);

(4) to the extent not included in federal alternative minimum taxable income, the amount of the tax preference for intangible drilling cost under section 57(a)(2) of the Internal Revenue Code determined without regard to subparagraph (E);

(5) to the extent not included in federal alternative minimum taxable income, the amount of interest income as provided by section 290.0131, subdivision 2;

(6) the amount of ~~addition~~ additions required by section 290.0131, subdivisions 9, 10, ~~and~~ 16, and 21 to 26;

(7) the deduction allowed under section 199A of the Internal Revenue Code, to the extent not included in the addition required under clause (6); and

(8) to the extent not included in federal alternative minimum taxable income, the amount of foreign-derived intangible income deducted under section 250 of the Internal Revenue Code;

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less the sum of the amounts determined under the following:

(i) interest income as defined in section 290.0132, subdivision 2;

(ii) an overpayment of state income tax as provided by section 290.0132, subdivision 3, to the extent included in federal alternative minimum taxable income;

(iii) the amount of investment interest paid or accrued within the taxable year on indebtedness to the extent that the amount does not exceed net investment income, as defined in section 163(d)(4) of the Internal Revenue Code. Interest does not include amounts deducted in computing federal adjusted gross income;

(iv) amounts subtracted from federal taxable or adjusted gross income as provided by section 290.0132, subdivisions 7, 9 to 15, 17, 21, 24, 26 to 29, 31, and 34 to 39 41;

(v) the amount of the net operating loss allowed under section 290.095, subdivision 11, paragraph (c); and

(vi) the amount allowable as a Minnesota itemized deduction under section 290.0122, subdivision 7.

In the case of an estate or trust, alternative minimum taxable income must be computed as provided in section 59(c) of the Internal Revenue Code, except alternative minimum taxable income must be increased by the addition in section 290.0131, subdivision 16.

(b) "Investment interest" means investment interest as defined in section 163(d)(3) of the Internal Revenue Code.

(d) "Regular tax" means the tax that would be imposed under this chapter (without regard to this section, section 290.033, and section 290.032), reduced by the sum of the nonrefundable credits allowed under this chapter.

(e) "Tentative minimum tax" equals 6.75 percent of alternative minimum taxable income after subtracting the exemption amount determined under subdivision 3.

Sec. 28. Minnesota Statutes 2024, section 290.21, subdivision 9, is amended to read:

Subd. 9. Controlled foreign corporations. The net income of a corporation that is included pursuant to section 951 of the Internal Revenue Code as modified under section 290.035 is dividend income.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 29. Minnesota Statutes 2024, section 290.21, subdivision 10, is amended to read:

Subd. 10. ~~Global intangible low-taxed~~ Net CFC tested income. ~~Any amounts included in taxable income pursuant to section 951A of the Internal Revenue Code, are~~ The amount of net CFC tested income calculated under section 290.034 is dividend income.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

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Sec. 30. Minnesota Statutes 2024, section 290A.03, subdivision 15, is amended to read:

Subd. 15. Internal Revenue Code. "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended through May 1, ~~2023~~ 2026.

Sec. 31. Minnesota Statutes 2024, section 291.005, subdivision 1, is amended to read:

Subdivision 1. Scope. Unless the context otherwise clearly requires, the following terms used in this chapter shall have the following meanings:

(1) "Commissioner" means the commissioner of revenue or any person to whom the commissioner has delegated functions under this chapter.

(2) "Federal gross estate" means the gross estate of a decedent as required to be valued and otherwise determined for federal estate tax purposes under the Internal Revenue Code, increased by the value of any property in which the decedent had a qualifying income interest for life and for which an election was made under section 291.03, subdivision 1d, for Minnesota estate tax purposes, but was not made for federal estate tax purposes.

(3) "Internal Revenue Code" means the United States Internal Revenue Code of 1986, as amended through May 1, ~~2023~~ 2026.

(4) "Minnesota gross estate" means the federal gross estate of a decedent after (a) excluding therefrom any property included in the estate which has its situs outside Minnesota, and (b) including any property omitted from the federal gross estate which is includable in the estate, has its situs in Minnesota, and was not disclosed to federal taxing authorities.

(5) "Nonresident decedent" means an individual whose domicile at the time of death was not in Minnesota.

(6) "Personal representative" means the executor, administrator or other person appointed by the court to administer and dispose of the property of the decedent. If there is no executor, administrator or other person appointed, qualified, and acting within this state, then any person in actual or constructive possession of any property having a situs in this state which is included in the federal gross estate of the decedent shall be deemed to be a personal representative to the extent of the property and the Minnesota estate tax due with respect to the property.

(7) "Resident decedent" means an individual whose domicile at the time of death was in Minnesota. The provisions of section 290.01, subdivision 7, paragraphs (c) and (d), apply to determinations of domicile under this chapter.

(8) "Situs of property" means, with respect to:

(i) real property, the state or country in which it is located;

(ii) tangible personal property, the state or country in which it was normally kept or located at the time of the decedent's death or for a gift of tangible personal property within three years of death, the state or country in which it was normally kept or located when the gift was executed;

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(iii) a qualified work of art, as defined in section 2503(g)(2) of the Internal Revenue Code, owned by a nonresident decedent and that is normally kept or located in this state because it is on loan to an organization, qualifying as exempt from taxation under section 501(c)(3) of the Internal Revenue Code, that is located in Minnesota, the situs of the art is deemed to be outside of Minnesota, notwithstanding the provisions of item (ii); and

(iv) intangible personal property, the state or country in which the decedent was domiciled at death or for a gift of intangible personal property within three years of death, the state or country in which the decedent was domiciled when the gift was executed.

For a nonresident decedent with an ownership interest in a pass-through entity with assets that include real or tangible personal property, situs of the real or tangible personal property, including qualified works of art, is determined as if the pass-through entity does not exist and the real or tangible personal property is personally owned by the decedent. If the pass-through entity is owned by a person or persons in addition to the decedent, ownership of the property is attributed to the decedent in proportion to the decedent's capital ownership share of the pass-through entity.

(9) "Pass-through entity" includes the following:

(i) an entity electing S corporation status under section 1362 of the Internal Revenue Code;

(ii) an entity taxed as a partnership under subchapter K of the Internal Revenue Code;

(iii) a single-member limited liability company or similar entity, regardless of whether it is taxed as an association or is disregarded for federal income tax purposes under Code of Federal Regulations, title 26, section 301.7701-3; or

(iv) a trust to the extent the property is includable in the decedent's federal gross estate; but excludes

(v) an entity whose ownership interest securities are traded on an exchange regulated by the Securities and Exchange Commission as a national securities exchange under section 6 of the Securities Exchange Act, United States Code, title 15, section 78f.

ARTICLE 2

INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1. Minnesota Statutes 2024, section 41A.30, subdivision 1, is amended to read:

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Aircraft" has the meaning given in section 296A.01, subdivision 3.

(d) "Commissioner" means the commissioner of agriculture.

(e) "Jet fuel" has the meaning given in section 296A.01, subdivision 8.

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(f) "Qualifying taxpayer" means a taxpayer, as defined in section 290.01, subdivision 6, that is engaged in the business of:

(1) producing sustainable aviation fuel; or

(2) blending sustainable aviation fuel with aviation gasoline or jet fuel.

(g) "Sustainable aviation fuel" means liquid fuel that:

(1) is derived from:

(i) biomass, as defined in section 41A.15, subdivision 2e, that is produced in the United States, provided that any agricultural feedstocks are from planted crops and crop residue harvested from agricultural land cleared or cultivated any time prior to December 19, 2007, that is either actively managed or fallow;

(ii) gaseous carbon oxides; or

(iii) hydrogen that has a carbon intensity not greater than four kilograms of carbon dioxide equivalent per kilogram of hydrogen produced;

(2) is not derived from palm fatty acid distillates; and

(3) achieves at least a 50 percent life cycle greenhouse gas emissions reduction in comparison with petroleum‑based aviation gasoline, aviation turbine fuel, and jet fuel as determined by a test that shows:

(i) that the fuel production pathway achieves at least a 50 percent life cycle greenhouse gas emissions reduction in comparison with petroleum-based aviation gasoline, aviation turbine fuel, and jet fuel utilizing the most recent version of Argonne National Laboratory's Greenhouse Gases, Regulated Emissions, and Energy Use in Technologies (GREET) model that accounts for reduced emissions throughout the fuel production process; or

(ii) that the fuel production pathway achieves at least a 50 percent reduction of the aggregate attributional core life cycle emissions and the positive induced land use change values under the life cycle methodology for sustainable aviation fuels adopted by the International Civil Aviation Organization with the agreement of the United States.

EFFECTIVE DATE. This section is effective retroactively for taxable years beginning after December 31, 2024, for sustainable aviation fuel sold after June 30, 2025.

Sec. 2. Minnesota Statutes 2024, section 41A.30, subdivision 2, is amended to read:

Subd. 2. Tax credit establishment. (a) A qualifying taxpayer may claim a tax credit against the tax due under chapter 290 equal to $1.50 for each gallon of sustainable aviation fuel that is:

(1) produced in Minnesota or blended with aviation or gasoline or jet fuel in Minnesota, provided that carbon oxides sequestered as part of the production process are not used as a tertiary injectant in a qualified enhanced oil recovery project; and

(2) sold in Minnesota to a purchaser who certifies that the sustainable aviation fuel is for use as fuel in an aircraft departing from an airport in Minnesota.

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(b) The credit may be claimed only after approval and certification by the commissioner and is limited to the amount stated on the credit certificate issued under subdivision 3. A qualifying taxpayer must apply to the commissioner for certification and allocation of a credit in a form and manner prescribed by the commissioner.

(c) A qualifying taxpayer may claim a credit for blending or producing sustainable aviation fuel, but not both. If sustainable aviation fuel is blended with aviation gasoline or jet fuel, the credit is allowed only for the portion of sustainable aviation fuel that is included in the blended fuel.

(d) If the amount of credit that the taxpayer is eligible to receive under this section exceeds the liability for tax under chapter 290, the commissioner of revenue must refund the excess to the taxpayer.

(e) Subject to the commissioner's certification, a qualifying taxpayer may claim a supplemental tax credit against the tax due under chapter 290 equal to the rate of $0.02 per gallon for each additional whole percentage carbon intensity reduction beyond 50 percent, but capped at $2.00 per gallon.

EFFECTIVE DATE. This section is effective retroactively for taxable years beginning after December 31, 2024, for sustainable aviation fuel sold after June 30, 2025.

Sec. 3. Minnesota Statutes 2025 Supplement, section 41A.30, subdivision 5, is amended to read:

Subd. 5. Allocation limits. (a) Subject to additional rollover allocation as provided in paragraph (b), for tax credits allowed under subdivision 2, the commissioner must not issue credit certificates for more than ~~$11,600,000~~ $36,900,000 in total, allocated as follows:

(1) $7,400,000 for fiscal year 2025; ~~and~~

(2) $2,100,000 for ~~each of~~ fiscal ~~years~~ year 2026 ~~and 2027~~;

(3) $7,400,000 for fiscal year 2027;

(4) $5,300,000 for fiscal year 2028; and

(5) $2,100,000 for each fiscal year from 2029 through 2035.

(b) Any portion of a fiscal year's credits that is not allocated by the commissioner does not cancel and may be carried forward to subsequent fiscal years until ~~all credits have been allocated~~ the entire allocation has been made, except that the commissioner must not issue any credit certificates for fiscal years beginning after June 30, ~~2030~~ 2035, and any unallocated amounts cancel on that date.

EFFECTIVE DATE. This section is effective retroactively for taxable years beginning after December 31, 2025.

Sec. 4. Minnesota Statutes 2024, section 41A.30, subdivision 7, is amended to read:

Subd. 7. Expiration. This section expires for taxable years beginning after December 31, ~~2030~~ 2035.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 5. Minnesota Statutes 2025 Supplement, section 41B.0391, subdivision 2, is amended to read:

Subd. 2. Tax credit for owners of agricultural assets. (a) An owner of agricultural assets may take a credit against the tax due under chapter 290 for the sale or rental of agricultural assets to a beginning farmer in the amount allocated by the authority under subdivision 4, or, for taxable years beginning after December 31, 2025, and before January 1, 2027, subdivision 4a. An owner of agricultural assets is eligible for allocation of a credit equal to:

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(1) eight percent of the lesser of the sale price or the fair market value of the agricultural asset, up to a maximum of $50,000;

(2) ten percent of the gross rental income in each of the first, second, and third years of a rental agreement, up to a maximum of $7,000 per year; or

(3) 15 percent of the cash equivalent of the gross rental income in each of the first, second, and third years of a share rent agreement, up to a maximum of $10,000 per year.

(b) A qualifying rental agreement includes cash rent of agricultural assets or a share rent agreement. The agricultural asset must be rented at prevailing community rates as determined by the authority.

(c) The credit may be claimed only after approval and certification by the authority, and is limited to the amount stated on the certificate issued under subdivision 4. An owner of agricultural assets must apply to the authority for certification and allocation of a credit, in a form and manner prescribed by the authority.

(d) An owner of agricultural assets or beginning farmer may terminate a rental agreement, including a share rent agreement, for reasonable cause upon approval of the authority. If a rental agreement is terminated without the fault of the owner of agricultural assets, the tax credits shall not be retroactively disallowed. In determining reasonable cause, the authority must look at which party was at fault in the termination of the agreement. If the authority determines the owner of agricultural assets did not have reasonable cause, the owner of agricultural assets must repay all credits received as a result of the rental agreement to the commissioner of revenue. The repayment is additional income tax for the taxable year in which the authority makes its decision or when a final adjudication under subdivision 5, paragraph (a), is made, whichever is later.

(e) The credit is limited to the liability for tax as computed under chapter 290 for the taxable year. If the amount of the credit determined under this section for any taxable year exceeds this limitation, the excess is a beginning farmer incentive credit carryover according to section 290.06, subdivision 37.

(f) For purposes of the credit for the sale of agricultural land only, the family member definitional exclusions in subdivision 1, paragraph (c), clauses (4) and (5), do not apply. For a sale to a family member to qualify for the credit, the sales price of the agricultural land must equal or exceed the assessed value of the land as of the date of the sale. For purposes of this paragraph, "sale to a family member" means a sale to a beginning farmer in which the beginning farmer or the beginning farmer's spouse is a family member of:

(1) the owner of the agricultural land; or

(2) a partner, member, shareholder, or trustee of the owner of the agricultural land.

(g) For a sale to a limited land access farmer, the credit rate under paragraph (a), clause (1), is 12 percent rather than eight percent.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 6. Minnesota Statutes 2025 Supplement, section 41B.0391, subdivision 4, is amended to read:

Subd. 4. Authority duties. (a) The authority shall:

(1) approve and certify or recertify beginning farmers as eligible for the program under this section;

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(2) approve and certify or recertify owners of agricultural assets as eligible for the tax credit under subdivision 2 subject to the allocation limits in paragraph (c) , provided that the allocation limits in paragraph (c) do not apply for credits allocated in taxable years beginning after December 31, 2025, and before January 1, 2027;

(3) provide necessary and reasonable assistance and support to beginning farmers for qualification and participation in financial management programs approved by the authority;

(4) refer beginning farmers to agencies and organizations that may provide additional pertinent information and assistance; and

(5) notwithstanding section 41B.211, the Rural Finance Authority must share information with the commissioner of revenue to the extent necessary to administer provisions under this subdivision and section 290.06, subdivisions 37 and 38. The Rural Finance Authority must annually notify the commissioner of revenue of approval and certification or recertification of beginning farmers and owners of agricultural assets under this section. For credits under subdivision 2, the notification must include the amount of credit approved by the authority and stated on the credit certificate.

(b) The certification of a beginning farmer or an owner of agricultural assets under this section is valid for the year of the certification and the two following years, after which time the beginning farmer or owner of agricultural assets must apply to the authority for recertification.

(c) For credits for owners of agricultural assets allowed under subdivision 2, the authority must not allocate more than $6,500,000 for taxable years beginning after December 31, 2022, and before January 1, 2024, and $4,000,000 for taxable years beginning after December 31, 2023. The authority must allocate credits on a first-come, first‑served basis beginning on January 1 of each year, except that recertifications for the second and third years of credits under subdivision 2, paragraph (a), clauses (1) and (2), have first priority. Any amount authorized but not allocated for taxable years ending before January 1, 2023, is canceled and is not allocated for future taxable years. For taxable years beginning after December 31, 2022, any amount authorized but not allocated in any taxable year does not cancel and is added to the allocation for the next taxable year. For each taxable year, 50 percent of newly allocated credits must be allocated to limited land access farmers. Any portion of a taxable year's newly allocated credits that is reserved for limited land access farmers that is not allocated by September 30 of the taxable year is available for allocation to other credit allocations beginning on October 1.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 7. Minnesota Statutes 2024, section 41B.0391, is amended by adding a subdivision to read:

Subd. 4a. Temporary removal of allocation limitation. For taxable years beginning after December 31, 2025, and before January 1, 2027, the allocation limitations in subdivision 4, paragraph (c), do not apply. This subdivision expires January 1, 2027.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 8. Minnesota Statutes 2025 Supplement, section 41B.0391, subdivision 6a, is amended to read:

Subd. 6a. Report to legislature. (a) No later than February 1 each year the Rural Finance Authority, in consultation with the commissioner of revenue, must provide a report to the chairs and ranking minority members of the legislative committees having jurisdiction over agriculture, economic development, rural development, and taxes, in compliance with sections 3.195 and 3.197, on the beginning farmer tax credits under this section.

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(b) The report must include background information on beginning farmers in Minnesota and any other information the commissioner and authority find relevant to evaluating the effect of the credits on increasing opportunities for and the number of beginning farmers.

(1) the number and amount of credits issued under each clause;

(2) the geographic distribution of credits issued under each clause;

(3) the type of agricultural assets for which credits were issued under clause (1);

(4) the number and geographic distribution of beginning farmers whose purchase or rental of assets resulted in credits for the seller or owner of the asset;

(5) the number and amount of credits disallowed under subdivision 2, paragraph (d);

(6) data on the number of beginning farmers by geographic region, including:

(i) the number of beginning farmers by race and ethnicity, as those terms are applied in the 2020 United States Census; and

(ii) to the extent available, the number of beginning farmers who are limited land access farmers; and

(7) the number and amount of credit applications that exceeded the allocation available under subdivision 4 in each year.

(d) For credits issued under subdivision 3, the report must include:

(1) the number and amount of credits issued;

(2) the geographic distribution of credits;

(3) a listing and description of each approved financial management program for which credits were issued; and

(4) a description of the approval procedure for financial management programs not on the list maintained by the authority, as provided in subdivision 3, paragraph (a).

EFFECTIVE DATE. This section is effective for reports due for credits issued for taxable years beginning after December 31, 2025.

Sec. 9. Minnesota Statutes 2024, section 289A.08, subdivision 7a, is amended to read:

Subd. 7a. Pass-through entity tax. (a) For the purposes of this subdivision, the following terms have the meanings given:

(1) "income" has the meaning given in section 290.01, subdivision 19, paragraph (i). The income of a resident qualifying owner of a qualifying entity that is a partnership or limited liability company taxed as a partnership under the Internal Revenue Code is not subject to allocation outside this state as provided for resident individuals under section 290.17, subdivision 1, paragraph (a). The income of a nonresident qualifying owner of a qualifying entity and the income of a resident qualifying owner of a qualifying entity that is an S corporation, including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the Internal Revenue Code, are allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20;

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(2) "qualifying entity" means a partnership, limited liability company taxed as a partnership or S corporation, or S corporation including a qualified subchapter S subsidiary organized under section 1361(b)(3)(B) of the Internal Revenue Code that has at least one qualifying owner. Qualifying entity does not include a publicly traded partnership, as defined in section 7704 of the Internal Revenue Code; and

(3) "qualifying owner" means:

(i) a resident or nonresident individual or estate that is a partner, member, or shareholder of a qualifying entity;

(ii) a resident or nonresident trust that is a shareholder of a qualifying entity that is an S corporation; or

(iii) a disregarded entity that has a qualifying owner as its single owner.

(b) For taxable years beginning after December 31, 2020, a qualifying entity may elect to file a return and pay the pass-through entity tax imposed under paragraph (c). The election:

(1) must be made on or before the due date or extended due date of the qualifying entity's pass-through entity tax return;

(2) must exclude partners, members, shareholders, or owners who are not qualifying owners;

(3) may only be made by qualifying owners who collectively hold more than 50 percent of the ownership interests in the qualifying entity held by qualifying owners;

(4) is binding on all qualifying owners who have an ownership interest in the qualifying entity; and

(5) once made is irrevocable for the taxable year.

(c) Subject to the election in paragraph (b), a pass-through entity tax is imposed on a qualifying entity in an amount equal to the sum of the tax liability of each qualifying owner.

(d) The amount of a qualifying owner's tax liability under paragraph (c) is the amount of the qualifying owner's income multiplied by the highest tax rate for individuals under section 290.06, subdivision 2c. The computation of a qualifying owner's net investment income tax liability must be computed under section 290.033. When making this determination:

(1) nonbusiness deductions, standard deductions, or personal exemptions are not allowed; and

(2) a credit or deduction is allowed only to the extent allowed to the qualifying owner.

(e) The amount of each credit and deduction used to determine a qualifying owner's tax liability under paragraph (d) must also be used to determine that qualifying owner's income tax liability under chapter 290.

(f) This subdivision does not negate the requirement that a qualifying owner pay estimated tax if the qualifying owner's tax liability would exceed the requirements set forth in section 289A.25. The qualifying owner's liability to pay estimated tax on the qualifying owner's tax liability as determined under paragraph (d) is, however, satisfied when the qualifying entity pays estimated tax in the manner prescribed in section 289A.25 for composite estimated tax.

(g) A qualifying owner's adjusted basis in the interest in the qualifying entity, and the treatment of distributions, is determined as if the election to pay the pass-through entity tax under paragraph (b) is not made.

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(h) To the extent not inconsistent with this subdivision, for purposes of this chapter, a pass-through entity tax return must be treated as a composite return and a qualifying entity filing a pass-through entity tax return must be treated as a partnership filing a composite return.

(i) The provisions of subdivision 17 apply to the election to pay the pass-through entity tax under this subdivision.

(j) If a nonresident qualifying owner of a qualifying entity making the election to file and pay the tax under this subdivision has no other Minnesota source income, filing of the pass-through entity tax return is a return for purposes of subdivision 1, provided that the nonresident qualifying owner must not have any Minnesota source income other than the income from the qualifying entity, other electing qualifying entities, and other partnerships electing to file a composite return under subdivision 7. If it is determined that the nonresident qualifying owner has other Minnesota source income, the inclusion of the income and tax liability for that owner under this provision will not constitute a return to satisfy the requirements of subdivision 1. The tax paid for the qualifying owner as part of the pass-through entity tax return is allowed as a payment of the tax by the qualifying owner on the date on which the pass-through entity tax return payment was made.

(k) Once a credit is claimed by a qualifying owner under section 290.06, subdivision 40, a qualifying entity cannot receive a refund for tax paid under this subdivision for any amounts claimed under that section by the qualifying owners. Once a credit is claimed under section 290.06, subdivision 40, any refund must be claimed in conjunction with a return filed by the qualifying owner.

(l) This subdivision expires ~~at the same time and on the same terms as section 164(b)(6)(B) of the Internal Revenue Code~~ for taxable years beginning after December 31, 2027, except that the expiration of this subdivision does not affect the commissioner's authority to audit or power of examination and assessments for credits claimed under this section.

EFFECTIVE DATE. This section is effective retroactively from January 1, 2026.

Sec. 10. [289A.081] DIRECT FREE FILING OF INDIVIDUAL RETURNS.

(a) The commissioner must establish an electronic filing system through which taxpayers may directly file an electronic individual income tax return free of charge. The commissioner may contract with a software vendor to develop the filing system required under this section, but the vendor must not offer paid tax preparation services for Minnesota individual income taxpayers for tax years that the system is active, and the filing system must be made available on the Department of Revenue website. The commissioner must not limit access to the system based on a taxpayer's income.

(b) To the extent feasible, the commissioner must coordinate the state filing system under this section with any federal filing systems established for free filing of federal tax returns.

(c) The commissioner must make the system required under this section available for taxable years beginning after December 31, 2026. At a minimum, the system must allow taxpayers to claim:

(1) the marriage penalty credit under section 290.0675;

(2) the education credit under section 290.0674;

(3) the child and working family credits under sections 290.0661 and 290.0671;

(4) the dependent care credit under section 290.067;

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(5) the student loan credit under section 290.0682; and

(6) the renter's credit under section 290.0693.

(d) The commissioner may establish an electronic filing system through which individual taxpayers may file a federal income tax return for free.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 11. Minnesota Statutes 2024, section 290.01, subdivision 19, as amended by Laws 2026, chapter 88, article 1, section 170, is amended to read:

(b) For an individual, the term "net income" means federal adjusted gross income with the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal Revenue Code does not apply;

(e) The net income of a designated settlement fund as defined in section 468B(d) of the Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal Revenue Code.

(f) The Internal Revenue Code of 1986, as amended through May 1, 2023, applies for taxable years beginning after December 31, 1996.

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290.0132, subdivisions 9, 27, 28, and 31, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite tax computation to the extent the electing partner would have been allowed the subtraction.

(i) In the case of a qualifying entity electing to pay the pass-through entity tax under section 289A.08, subdivision 7a, "net income" means the qualifying owner's share of federal adjusted gross income from the qualifying entity modified by the additions provided in section 290.0131, subdivisions 5, 8 to 10, 16, 17, and 19, and the subtractions provided in: (1) section 290.0132, subdivisions 3, 9, 27, 28, and 31, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the pass-through entity tax computation to the extent the qualifying owners would have been allowed the subtraction. ~~The income of both a resident and nonresident qualifying owner is allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20.~~

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 12. Minnesota Statutes 2025 Supplement, section 290.06, subdivision 23a, is amended to read:

Subd. 23a. Pass-through entity tax paid to another state. (a) A credit is allowed against the tax imposed on a qualifying entity under section 289A.08, subdivision 7a, for pass-through entity tax paid to another state. The credit under this subdivision is allowed as a credit for taxes paid to another state under subdivision 22, paragraph (a), and may only be claimed by a qualifying owner. The credit allowed under this subdivision must be claimed in a manner prescribed by the commissioner.

(b) This subdivision expires ~~at the same time and on the same terms as section 164(b)(6)(B) of the Internal Revenue Code~~ for taxable years beginning after December 31, 2027, except that the expiration of this subdivision does not affect the commissioner's authority to audit or power of examination and assessments for credits claimed under this section.

(1) "income" has the meaning provided in section 290.01, subdivision 19, paragraph (i);

(2) "pass-through entity tax" means an entity-level tax imposed on the income of a partnership, limited liability corporation, or S corporation;

(3) "qualifying entity" has the meaning provided in section 289A.08, subdivision 7a, paragraph (a); and

(4) "qualifying owner" has the meaning provided in section 289A.08, subdivision 7a, paragraph (b).

EFFECTIVE DATE. This section is effective retroactively from January 1, 2026.

Sec. 13. Minnesota Statutes 2024, section 290.06, subdivision 40, is amended to read:

Subd. 40. Pass-through entity tax credit. (a) A qualifying owner of a qualifying entity that elects to pay the pass-through entity tax under section 289A.08, subdivision 7a, may claim a credit against the tax due under this chapter equal to the amount of the owner's tax liability as calculated under section 289A.08, subdivision 7a, paragraph (d). The commissioner may disallow a credit if the tax liability of the qualifying entity has not been paid.

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(b) If the amount of the credit the taxpayer may claim under this subdivision exceeds the taxpayer's tax liability under this chapter, the commissioner of revenue shall refund the excess to the taxpayer. The amount necessary to pay the claim for the refund provided in this subdivision is appropriated from the general fund to the commissioner of revenue.

(c) For purposes of this subdivision, "qualifying entity," "qualifying owner," and "tax liability" have the meanings given in section 289A.08, subdivision 7a, paragraphs (a) and (d).

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 14. Laws 2023, chapter 64, article 15, section 24, is amended to read:

Sec. 24. TAX FILING MODERNIZATION.

Subdivision 1. Account established; appropriation. A tax filing modernization account is established in the special revenue fund. All funds in the tax filing modernization account are appropriated to the commissioner of revenue for the purposes specified in subdivision 3.

Subd. 2. Transfer. $5,000,000 in fiscal year 2024 is transferred to the tax filing modernization account from the general fund. This is a onetime transfer.

Subd. 3. Eligible uses. ~~(a)~~ The commissioner of revenue may use funds in the tax filing modernization account to ~~modernize the state process for filing individual income tax returns, including:~~

~~(1) updating and reviewing changes to individual income tax forms resulting from this act;~~

~~(2) coordinating the process for filing state individual income tax returns with free filing options for the federal income tax; and~~

~~(3) development and implementation of~~ develop and implement state free filing options for the individual income tax as provided in Minnesota Statutes, section 289A.081.

(b) Beginning July 1, 2026, the commissioner of revenue may use any unspent funds in the tax filing modernization account to make taxpayer assistance grants to eligible organizations qualifying under section 7526A(e)(2)(B) of the Internal Revenue Code.

Subd. 4. Unspent funds. Any unspent funds in the tax filing modernization account cancel to the general fund on June 30, ~~2027~~ 2029.

Subd. 5. Sunset. This section expires and the account is abolished on July 1, 2029.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 15. INCOME TAX SUBTRACTION; NURSING FACILITY WORKFORCE WAGE SUPPLEMENT PROGRAM.

(a) For purposes of this section:

(1) "subtraction" has the meaning given in Minnesota Statutes, section 290.0132, subdivision 1, and the rules in that subdivision apply to this section; and

(2) the definitions in Minnesota Statutes, section 290.01.

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(b) The amount of supplemental wage payments provided under Minnesota Statutes, section 256R.60, is a subtraction.

(c) Payments under this section are excluded from income, as defined in Minnesota Statutes, section 290A.03, subdivision 3.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025, and before January 1, 2027, only if S. F. 4476 is finally enacted at the 2026 regular legislative session.

Sec. 16. PASS-THROUGH ENTITY TAX; 2026 ESTIMATED PAYMENTS.

For estimated payments due from pass-through entities under Minnesota Statutes, section 289A.08, subdivision 7a, paragraph (f), for taxable years beginning after December 31, 2025, and before January 1, 2027, no addition to tax is imposed under Minnesota Statutes, section 289A.25, subdivision 2, if the first estimated payment is paid in full with the second estimated payment, as required under Minnesota Statutes, section 289A.25, subdivision 3.

EFFECTIVE DATE. This section is effective retroactively for taxable years beginning after December 31, 2025, and before January 1, 2027.

Sec. 17. REVIVAL AND REENACTMENT.

Minnesota Statutes, sections 289A.08, subdivision 7a, and 290.06, subdivision 23a, are revived and reenacted retroactively from January 1, 2026.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 18. APPROPRIATION; DIRECT FREE FILING SYSTEM.

$2,300,000 in fiscal year 2027 is appropriated from the general fund to the commissioner of revenue for the direct free filing system required under Minnesota Statutes, section 289A.081. The base for this appropriation is $3,500,000 in fiscal year 2028 and $3,500,000 in fiscal year 2029.

ARTICLE 3

SALES AND USE TAXES

Section 1. Minnesota Statutes 2024, section 297A.68, is amended by adding a subdivision to read:

Subd. 9a. Championship golf tournaments admission and related events. (a) The granting of the privilege of admission to a world championship golf tournament sponsored by the Professional Golfers' Association of America and to related events sponsored by the Professional Golfers' Association of America is exempt.

(b) This subdivision expires July 1, 2030.

EFFECTIVE DATE. This section is effective for sales and purchases made after June 30, 2026.

Sec. 2. Minnesota Statutes 2024, section 428B.02, subdivision 4, is amended to read:

Subd. 4. Service charges; relationship to services. (a) A municipality may impose a service charge on a business pursuant to this chapter for the purpose of providing activities and improvements that will provide benefits to a business that is located within the tourism improvement district and subject to the tourism improvement district service charge. Each business paying a service charge within a district must benefit directly or indirectly from

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improvements provided by a tourism improvement association, provided, however, the business need not benefit equally. Service charges must be based on a percent of gross business revenue, a fixed dollar amount per transaction, or any other reasonable method based upon benefit and approved by the municipality. A business may, but is not required to, collect the service charge imposed by this section from the purchaser. If separately stated on the invoice, bill of sale, or similar document given to the purchaser, the service charge is excluded from the sales price for purposes of the tax imposed under chapter 297A.

(b) Service charges may be used to cover the costs of collections, as well as other administrative costs associated with operating, forming, or maintaining the district.

EFFECTIVE DATE. This section is effective retroactively for sales and purchases made after June 30, 2025.

ARTICLE 4

PROPERTY TAX AIDS AND CREDITS

Section 1. Minnesota Statutes 2025 Supplement, section 126C.13, subdivision 4, is amended to read:

Subd. 4. General education aid. ~~For fiscal year 2015 and later,~~ A district's general education aid equals:

(1) general education revenue, excluding operating capital revenue, equity revenue, local optional revenue, and transition revenue; plus

(2) operating capital aid under section 126C.10, subdivision 13b; plus

(3) equity aid under section 126C.10, subdivision 30; plus

(4) transition aid under section 126C.10, subdivision 33; plus

(5) shared time aid under section 126C.01, subdivision 7; plus

(6) referendum aid under section 126C.17, subdivisions 7 ~~and~~, 7a, and 7c; plus

(7) online learning aid under section 124D.096; plus

(8) local optional aid according to section 126C.10, subdivision 2e, paragraph (f).

EFFECTIVE DATE. This section is effective for revenue in fiscal year 2028 and later.

Sec. 2. Minnesota Statutes 2024, section 126C.17, is amended by adding a subdivision to read:

Subd. 7c. Seasonal tax base replacement aid. (a) For purposes of this subdivision, "eligible school district" means a school district for which the seasonal tax base adjustment factor under paragraph (c) is at least equal to 0.15. A school district determined eligible under this paragraph for aid in fiscal year 2028 or any later fiscal year remains an eligible school district for aid in any subsequent fiscal year.

(b) An eligible school district's seasonal tax base replacement aid equals the product of (1) the seasonal tax base adjustment factor, and (2) the district's referendum equalization levy calculated under subdivision 6, after any adjustment under subdivisions 7a and 7b.

(c) A district's seasonal tax base adjustment factor equals the lesser of 0.50 or the ratio of (1) the seasonal market value for the district, to (2) the sum of the referendum market value and the seasonal market value for the district. For the purposes of this paragraph, "seasonal market value" means the market value of all taxable property classified as class 4c(12) under section 273.13.

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(d) The amount calculated under paragraph (b) must be used to reduce the district's referendum levy determined after the adjustments under subdivisions 7a and 7b.

EFFECTIVE DATE. This section is effective for taxes payable in 2027 and later.

Sec. 3. Minnesota Statutes 2024, section 272.02, subdivision 101, is amended to read:

Subd. 101. Certain property owned by an Indian tribe. (a) Property is exempt that:

(1) is located in a city of the first class with a population less than 100,000 as of the 2010 federal census;

(2) was on January 1, 2016, and is for the current assessment, owned by a federally recognized Indian tribe, or its instrumentality, that is located within the state of Minnesota; and

(3) is used exclusively as a medical clinic or for a parking lot used exclusively to serve the medical clinic.

(b) Property that qualifies for the exemption under this subdivision is limited to no more than ~~two contiguous~~ five parcels and structures that do not exceed, in the aggregate, 30,000 square feet. Property acquired for single‑family housing, market-rate apartments, agriculture, or forestry does not qualify for this exemption. The exemption created by this subdivision expires with taxes payable in ~~2028~~ 2038.

EFFECTIVE DATE. This section is effective beginning with assessment year 2027.

Sec. 4. Minnesota Statutes 2024, section 272.02, is amended by adding a subdivision to read:

Subd. 110. Certain property owned by an Indian Tribe. (a) Property is exempt that:

(1) is located in a city with a population greater than 12,400 but less than 12,800 according to the 2020 federal census;

(2) was on January 1, 2026, and is for the current assessment, owned by a federally recognized Indian Tribe, or its instrumentality, that is located within the state; and

(3) is used to store medical clinic equipment and materials.

(b) Property that qualifies for exemption under this subdivision is limited to one parcel. Any portion of the property used for housing, parking facilities, agriculture, or forestry does not qualify for this exemption.

EFFECTIVE DATE. This section is effective beginning with property taxes payable in 2027. For assessment year 2026 only, an exemption application under this section must be filed with the county assessor by July 1, 2026.

Sec. 5. Minnesota Statutes 2025 Supplement, section 273.13, subdivision 22, is amended to read:

Subd. 22. Class 1. (a) Except as provided in subdivision 23 and in paragraphs (b) and (c), real estate which is residential and used for homestead purposes is class 1a. In the case of a duplex or triplex in which one of the units is used for homestead purposes, the entire property is deemed to be used for homestead purposes. The market value of class 1a property must be determined based upon the value of the house, garage, and land.

The first $500,000 of market value of class 1a property has a net classification rate of one percent of its market value; and the market value of class 1a property that exceeds $500,000 has a classification rate of 1.25 percent of its market value.

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(b) Class 1b property includes homestead real estate or homestead manufactured homes used for the purposes of a homestead by:

(1) any person who is blind as defined in section 256D.35, or the person who is blind and the spouse of the person who is blind;

(2) any person who is permanently and totally disabled or by the person with a disability and the spouse of the person with a disability; or

(3) the surviving spouse of a veteran who was permanently and totally disabled homesteading a property classified under this paragraph for taxes payable in 2008.

Property is classified and assessed under clause (2) only if the government agency or income-providing source certifies, upon the request of the homestead occupant, that the homestead occupant satisfies the disability requirements of this paragraph, and that the property is not eligible for the valuation exclusion under subdivision 34.

Property is classified and assessed under paragraph (b) only if the commissioner of revenue or the county assessor certifies that the homestead occupant satisfies the requirements of this paragraph.

Permanently and totally disabled for the purpose of this subdivision means a condition which is permanent in nature and totally incapacitates the person from working at an occupation which brings the person an income. The first $50,000 market value of class 1b property has a net classification rate of 0.45 percent of its market value. The remaining market value of class 1b property is classified as class 1a property, class 2a property, or class 4d(2) property, whichever is appropriate.

(c) Class 1c property is commercial use real and personal property that abuts public water as defined in section 103G.005, subdivision 15, or abuts a state trail administered by the Department of Natural Resources, and is devoted to temporary and seasonal residential occupancy for recreational purposes but not devoted to commercial purposes for more than 250 days in the year preceding the year of assessment, and that includes a portion used as a homestead by the owner, which includes a dwelling occupied as a homestead by a shareholder of a corporation that owns the resort, a partner in a partnership that owns the resort, or a member of a limited liability company that owns the resort even if the title to the homestead is held by the corporation, partnership, or limited liability company. For purposes of this paragraph, property is devoted to a commercial purpose on a specific day if any portion of the property, excluding the portion used exclusively as a homestead, is used for residential occupancy and a fee is charged for residential occupancy. Class 1c property must contain three or more rental units. A "rental unit" is defined as a cabin, condominium, townhouse, sleeping room, or individual camping site equipped with water and electrical hookups for recreational vehicles. Class 1c property must provide recreational activities such as the rental of ice fishing houses, boats and motors, snowmobiles, downhill or cross-country ski equipment; provide marina services, launch services, or guide services; or sell bait and fishing tackle. Any unit in which the right to use the property is transferred to an individual or entity by deeded interest, or the sale of shares or stock, no longer qualifies for class 1c even though it may remain available for rent. A camping pad offered for rent by a property that otherwise qualifies for class 1c is also class 1c, regardless of the term of the rental agreement, as long as the use of the camping pad does not exceed 250 days. If the same owner owns two separate parcels that are located in the same township, and one of those properties is classified as a class 1c property and the other would be eligible to be classified as a class 1c property if it was used as the homestead of the owner, both properties will be assessed as a single class 1c property; for purposes of this sentence, properties are deemed to be owned by the same owner if each of them is owned by a limited liability company, and both limited liability companies have the same membership. The portion of the property used as a homestead is class 1a property under paragraph (a). The remainder of the property is classified as follows: the first ~~$600,000~~ $1,500,000 of market value is tier I, the next ~~$1,700,000~~ $3,000,000 of market value is tier II, and any remaining market value is tier III. The classification rates for class 1c are: tier I, 0.50 percent; tier II, 1.0 percent; and tier III, 1.25 percent. Owners of real and personal property devoted to

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temporary and seasonal residential occupancy for recreation purposes in which all or a portion of the property was devoted to commercial purposes for not more than 250 days in the year preceding the year of assessment desiring classification as class 1c, must submit a declaration to the assessor designating the cabins or units occupied for 250 days or less in the year preceding the year of assessment by January 15 of the assessment year. Those cabins or units and a proportionate share of the land on which they are located must be designated as class 1c as otherwise provided. The remainder of the cabins or units and a proportionate share of the land on which they are located must be designated as class 3a commercial. The owner of property desiring designation as class 1c property must provide guest registers or other records demonstrating that the units for which class 1c designation is sought were not occupied for more than 250 days in the year preceding the assessment if so requested. The portion of a property operated as a (1) restaurant, (2) bar, (3) gift shop, (4) conference center or meeting room, and (5) other nonresidential facility operated on a commercial basis not directly related to temporary and seasonal residential occupancy for recreation purposes does not qualify for class 1c.

(d) Class 1d property includes structures that meet all of the following criteria:

(1) the structure is located on property that is classified as agricultural property under section 273.13, subdivision 23;

(2) the structure is occupied exclusively by seasonal farm workers during the time when they work on that farm, and the occupants are not charged rent for the privilege of occupying the property, provided that use of the structure for storage of farm equipment and produce does not disqualify the property from classification under this paragraph;

(3) the structure meets all applicable health and safety requirements for the appropriate season; and

(4) the structure is not salable as residential property because it does not comply with local ordinances relating to location in relation to streets or roads.

The market value of class 1d property has the same classification rates as class 1a property under paragraph (a).

EFFECTIVE DATE. This section is effective beginning with assessment year 2026.

Sec. 6. Minnesota Statutes 2025 Supplement, section 412.341, subdivision 3, is amended to read:

Subd. 3. Change in membership; procedures. (a) The number of commission members may be increased or decreased by ordinance within the permitted number of commissioner members as provided in subdivision 1, paragraph (a). The ordinance ~~changing~~ modifying the number of commission members must include a provision for maintaining staggered terms for commission members, provided that if the number of members is reduced, the reduction must be effected in such a manner that all incumbent members are permitted to serve their full terms. An ordinance adopted under this subdivision must not be effective until at least 45 days after its adoption.

(b) An ordinance ~~reducing~~ modifying the size of the commission shall not take effect and the question of whether to ~~reduce~~ modify the size of the commission must be placed on the ballot at the next general or special election if: (1) within 45 days of the ordinance's adoption by the city council, a petition is filed with the city clerk requesting that a referendum be held on ~~reducing~~ modifying the size of the commission; and (2) the petition is signed by a number of eligible voters equal to at least 15 percent of the number of electors voting at the most recent general election. The ballot question shall be substantially stated as follows:

"Shall the size of the public utilities commission be reduced (increased) from ....... members to.......members?"

The question shall be followed by the words "Yes" and "No" with an appropriate oval or similar target shape before each in which a voter may record a choice. If a majority of the votes cast on the question are in favor of ~~reducing~~ modifying the size of the commission, the ordinance shall be considered approved and shall be effective immediately. If the majority of votes cast on the question are against ~~reducing~~ modifying the size of the commission, the ordinance shall not take effect.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 7. Minnesota Statutes 2024, section 469.0773, is amended to read:

469.0773 LAKE CITY.

Subdivision 1. Establishment. The city of Lake City may establish a port authority commission that has the same powers as a port authority established under section 469.049 or other law, except that the port authority shall have no power to issue debt or bonds of any kind or exercise powers of eminent domain. The port authority may request the city of Lake City to levy a tax for the benefit of the port authority. Notwithstanding section 469.053, subdivision 4, the city of Lake City may grant or deny the request to levy a tax. If the city establishes a port authority commission, the city shall exercise all the powers relating to the port authority granted to a city by sections 469.048 to 469.068 or other law. Notwithstanding any law to the contrary, the city may choose the name of the commission.

Subd. 2. Municipal housing and redevelopment authority. If the city of Lake City establishes a port authority commission under subdivision 1, the commission may exercise the same powers as a municipal housing and redevelopment authority established under sections 469.001 to 469.047 or other law, except that t he port authority shall have no power to levy taxes, issue debt or bonds of any kind, or exercise powers of eminent domain. The city shall then exercise all the powers relating to the municipal housing and redevelopment authority granted to a city by sections 469.001 to 469.047 or other law.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 8. Minnesota Statutes 2024, section 469.081, subdivision 3a, is amended to read:

Subd. 3a. Terms of members. Notwithstanding the enabling resolution or section 469.050, subdivision 4, the term length for an appointee to the Red Wing Port Authority for a term beginning on or after January 1, 2011, shall be ~~three~~ six years.

EFFECTIVE DATE. This section is effective the day after the governing body of the city of Red Wing and its chief clerical officer comply with Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 9. Minnesota Statutes 2024, section 477A.30, subdivision 8, is amended to read:

Subd. 8. Expiration. Distributions under this section expire after aids payable in ~~2028~~ 2032 have been distributed.

Sec. 10. CITY OF LAKE CITY; VALIDATION OF PRIOR ACT.

Notwithstanding the time limits in Minnesota Statutes, section 645.021, the city of Lake City may approve, by resolution, Laws 2021, chapter 19, section 1, and file its approval with the secretary of state by January 1, 2027. If approved under this paragraph, actions undertaken by the city in accordance with Laws 2021, chapter 19, section 1, and Minnesota Statutes, section 469.0773, are validated.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 11. ONETIME INCREASE IN HOMESTEAD CREDIT REFUND.

Subdivision 1. Homestead credit refund. For claims filed based on taxes payable in 2026, the commissioner shall increase by 14.88 percent the refund otherwise payable under Minnesota Statutes, section 290A.04, subdivision 2.

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Subd. 2. No notification of appeal rights. In adjusting homestead credit refunds under this section, the commissioner is not required to provide information concerning appeal rights that ordinarily must be provided whenever the commissioner adjusts refunds payable under Minnesota Statutes, chapter 290A. Taxpayers retain all rights to appeal adjustments under this section.

Subd. 3. Appropriation. The amount necessary to make the payments required under this section is appropriated from the general fund to the commissioner of revenue.

EFFECTIVE DATE. This section is effective only for refunds based on property taxes payable in 2026.

Sec. 12. ONETIME SCHOOL DISTRICT SEASONAL TAX BASE REPLACEMENT AID.

Subdivision 1. Aid amount. (a) For purposes of this subdivision, "eligible school district" means a school district for which the seasonal tax base adjustment factor under paragraph (c) is at least equal to 0.15.

(b) For fiscal year 2027 only, an eligible school district's seasonal tax base replacement aid equals the product of (1) the seasonal tax base adjustment factor, and (2) the district's referendum equalization levy calculated for fiscal year 2027 under Minnesota Statutes, section 126C.17, subdivision 6, after any adjustment under Minnesota Statutes, section 126C.17, subdivisions 7a and 7b.

Subd. 2. Entitlement limit. If the total initial aid entitlement calculated under subdivision 1 exceeds $2,542,000, the commissioner of education must prorate the aid entitlement for each district proportionately.

Subd. 3. Payment. This aid is 100 percent payable in fiscal year 2027.

Subd. 4. Appropriation. $2,542,000 is appropriated in fiscal year 2027 from the general fund to the commissioner of education for onetime school district seasonal tax base replacement aid under this section. This is a onetime appropriation.

Sec. 13. 2027 AID CALCULATION.

(a) Notwithstanding Minnesota Statutes, sections 477A.013 and 477A.014, for aids payable in 2027 only, the commissioner of revenue must calculate and certify aid under Minnesota Statutes, section 477A.013, subdivisions 8 and 9, as if Northern Township is eligible to receive the aid in calendar year 2027. If, by January 31, 2027, Northern Township has not incorporated as a city, the commissioner of revenue must within 30 days recalculate and recertify aid under Minnesota Statutes, section 477A.013, subdivisions 8 and 9, without including the township.

(b) The 2026 aid for the jurisdiction under paragraph (a) is assumed to be $109.35 multiplied by the jurisdiction's 2024 population when calculating aid under Minnesota Statutes, section 477A.013, subdivisions 8 and 9, for aids payable in 2027 only.

EFFECTIVE DATE. This section is effective for aids payable in 2027 only.

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ARTICLE 5

MINERALS TAXES

Section 1. Minnesota Statutes 2024, section 298.225, is amended to read:

298.225 APPROPRIATION.

Subdivision 1. Guaranteed distribution. (a) Except as provided under ~~paragraph~~ paragraphs (c) to (f) , the distribution of the taconite production tax as provided in section 298.28, subdivisions 3 to 5, 6, ~~paragraph~~ paragraphs (b) and (c) , 7, and 8, shall equal the lesser of the following amounts:

(1) the amount distributed pursuant to this section and section 298.28, with respect to 1983 production if the production for the year prior to the distribution year is no less than 42,000,000 taxable tons. If the production is less than 42,000,000 taxable tons, the amount of the distributions shall be reduced proportionately at the rate of two percent for each 1,000,000 tons, or part of 1,000,000 tons by which the production is less than 42,000,000 tons; or

(2)(i) for the distributions made pursuant to section 298.28, subdivisions 4, paragraphs (b) and (c), and 6, paragraph (c), 31.2 percent of the amount distributed pursuant to this section and section 298.28, with respect to 1983 production;

(ii) for the distributions made pursuant to section 298.28, subdivision 5, paragraphs (b) and (d), 75 percent of the amount distributed pursuant to this section and section 298.28, with respect to 1983 production provided that the aid guarantee for distributions under section 298.28, subdivision 5, paragraph (b), shall be reduced by five cents per taxable ton for production years 2014 and thereafter.

(b) The distribution of the taconite production tax as provided in section 298.28, subdivision 2, shall equal the following amount:

(1) if the production for the year prior to the distribution year is at least 42,000,000 taxable tons, the amount distributed pursuant to this section and section 298.28 with respect to 1999 production; or

(2) if the production for the year prior to the distribution year is less than 42,000,000 taxable tons, the amount distributed pursuant to this section and section 298.28 with respect to 1999 production, reduced proportionately at the rate of two percent for each 1,000,000 tons or part of 1,000,000 tons by which the production is less than 42,000,000 tons.

(c) The distribution of the taconite production tax under section 298.28, subdivision 3, paragraph (a), must equal the amount distributed under 298.28, with respect to 1983 production.

(d) For the two years after the year in which Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24, the distribution of the taconite production tax under section 298.28, subdivision 4, paragraph (b), clause (1), must equal the amount distributed under section 298.28, with respect to 2023 production.

(e) For the two years after the year in which Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24, the distributions of the taconite production tax under section 298.28, subdivision 4, paragraph (b), clause (2), items (i) to (v), must equal the amounts distributed under section 298.28, with respect to 2023 production, and the distributions of the taconite production tax to each school district under section 298.28, subdivision 4, paragraph (b), clause (2), item (vi), subitems (A) and (B), must equal $150,000.

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(f) For the two years after the year in which Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24, the distributions of the taconite production tax to each school district under section 298.28, subdivision 4, paragraph (d), clause (3), items (i) and (ii), must equal $100,000.

(g) For the two years after the year in which Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24, the distribution of the taconite production tax under section 298.28, subdivision 11, paragraph (d), must equal 75 percent of the amount that each school district received under Minnesota Statutes 1978, section 294.26, in calendar year 1977.

(h) For the two years after the year in which Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24, the distributions of the taconite production tax to each of the city of Orr and the city of Winton under section 298.282, subdivision 1, paragraph (a), must equal $25,000, and the distributions of the taconite production tax to each of the city of Cook and the city of Two Harbors under section 298.282, subdivision 1, paragraph (a), must equal $75,000.

Subd. 2. Funding guaranteed distribution level. (a) The money necessary for funding the difference between the initial distribution made pursuant to section 298.28 and the amount guaranteed in subdivision 1, paragraphs (a) to (c), is appropriated in equal proportions from the initial current year distributions to the taconite environmental protection fund and to the Douglas J. Johnson economic protection trust pursuant to section 298.28. If the initial distributions to the taconite environmental protection fund and the Douglas J. Johnson economic protection trust are insufficient to fund the difference, the commissioner of Iron Range resources and rehabilitation shall make the payments of any remaining difference from the corpus of the taconite environmental protection fund and the corpus of the Douglas J. Johnson economic protection trust fund in equal proportions as directed by the commissioner of revenue.

(b) The money necessary for funding the difference between the initial distribution made pursuant to section 298.28 and the amount guaranteed in subdivision 1, paragraphs (d) to (h), is appropriated from the initial current year distribution to the Douglas J. Johnson economic protection trust pursuant to section 298.28. If the initial distribution to the Douglas J. Johnson economic protection trust is insufficient to fund the difference, the commissioner of Iron Range resources and rehabilitation shall make the payments of any remaining difference from the corpus of the Douglas J. Johnson economic protection trust fund as directed by the commissioner of revenue.

(c) If a taconite producer ceases beneficiation operations permanently and is required by a special law to make bond payments for a school district, the Douglas J. Johnson economic protection trust fund shall assume the payments of the taconite producer if the producer ceases to make the needed payments. The commissioner of Iron Range resources and rehabilitation shall make these school bond payments from the corpus of the Douglas J. Johnson economic protection trust fund in the amounts certified by the commissioner of revenue.

Sec. 2. Minnesota Statutes 2024, section 298.227, is amended to read:

298.227 TACONITE ECONOMIC DEVELOPMENT FUND.

(a) Except as provided in paragraph (b), an amount equal to that distributed pursuant to each taconite producer's taxable production and qualifying sales under section 298.28, subdivision 9a, shall be held by the commissioner of Iron Range resources and rehabilitation in a separate taconite economic development fund for each taconite and direct reduced ore producer. Money from the fund for each producer shall be released by the commissioner after review by a joint committee consisting of an equal number of representatives of the salaried employees and the nonsalaried production and maintenance employees of that producer. The District 11 director of the United States Steelworkers of America, on advice of each local employee president, shall select the employee members. In nonorganized operations, the employee committee shall be elected by the nonsalaried production and maintenance employees. The review must be completed no later than six months after the producer presents a proposal for

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expenditure of the funds to the committee. The funds held pursuant to this section may be released only for workforce development, concurrent reclamation, plant and stationary mining equipment, facilities for the producer, or for research and development in Minnesota on new mining, taconite, iron, or steel production technology, but only if the producer provides a matching expenditure equal to the amount of the distribution to be used for the same purpose. If a proposed expenditure is not approved by the commissioner, after consultation with the advisory board, the funds must be deposited in the taconite environmental protection fund under sections 298.222 to 298.225. If a taconite production facility is sold after operations at the facility had ceased, any money remaining in the fund for the former producer may be released to the purchaser of the facility on the terms otherwise applicable to the former producer under this section. If a producer fails to provide matching funds for a proposed expenditure within six months after the commissioner approves release of the funds, the funds may be released by the commissioner for deposit in the taconite area environmental protection fund created in section 298.223. Any portion of the fund which is not released by the commissioner within one year of its deposit in the fund shall be distributed to the taconite environmental protection fund.

(b) Notwithstanding any provision to the contrary, a producer operating Mesabi Metallics or its successor may not receive a distribution under this section.

Sec. 3. Minnesota Statutes 2024, section 298.28, subdivision 2, is amended to read:

Subd. 2. City or town where quarried or produced. (a) 4.5 cents per gross ton of merchantable iron ore concentrate, hereinafter referred to as "taxable ton," produced by each producer except Mesabi Metallics or its successor, plus one cent per taxable ton produced in 2023 from the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor, plus the amount provided in paragraph (c), must be allocated to the city or town in the county in which the lands from which taconite was mined or quarried were located or within which the concentrate was produced. If the mining, quarrying, and concentration, or different steps in either thereof are carried on in more than one taxing district, the commissioner shall apportion equitably the proceeds of the part of the tax going to cities and towns among such subdivisions upon the basis of attributing 50 percent of the proceeds of the tax to the operation of mining or quarrying the taconite, and the remainder to the concentrating plant and to the processes of concentration, and with respect to each thereof giving due consideration to the relative extent of such operations performed in each such taxing district. The commissioner's order making such apportionment shall be subject to review by the Tax Court at the instance of any of the interested taxing districts, in the same manner as other orders of the commissioner.

(b)(1) Four cents per taxable ton produced by each producer except Mesabi Metallics or its successor, and one cent per taxable ton produced in 2023 from the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor shall be allocated to cities and ~~organized~~ townships affected by mining because their boundaries are within three miles of a taconite mine pit that:

(i) was actively mined by LTV Steel Mining Company in 1999; or

(ii) has been actively mined in at least one of the prior three years.

(2) If a city or town is located near more than one mine meeting the criteria under this paragraph, the city or town is eligible to receive aid calculated from only the mine producing the largest taxable tonnage. When more than one municipality qualifies for aid based on one company's production, the aid must be apportioned among the municipalities in proportion to their populations. The amounts distributed under this paragraph to each ~~municipality~~ city and organized township must be used for infrastructure improvement projects. The amounts distributed under this paragraph to counties on behalf of each unorganized township must be used by the county for infrastructure improvement projects within the unorganized township.

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(c) The amount that would have been computed for the current year under Minnesota Statutes 2008, section 126C.21, subdivision 4, for a school district shall be distributed to the cities and townships within the school district in the proportion that their taxable net tax capacity within the school district bears to the taxable net tax capacity of the school district for property taxes payable in the year prior to distribution.

Sec. 4. Minnesota Statutes 2024, section 298.28, subdivision 3, is amended to read:

Subd. 3. Cities; towns. (a) 12.5 cents per taxable ton, produced by each producer except Mesabi Metallics or its successor, plus two cents per taxable ton produced in 2023 from the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor, less any amount distributed under subdivision 8, and paragraph (b), must be allocated to the taconite municipal aid account to be distributed as provided in section 298.282. The amount allocated to the taconite municipal aid account must be annually increased in the same proportion as the increase in the implicit price deflator as provided in section 298.24, subdivision 1.

(b) An amount must be allocated to towns or cities that is annually certified by the county auditor of a county containing a taconite tax relief area as defined in section 273.134, paragraph (b) , within which there is (1) an organized township if, as of January 2, 1982, more than 75 percent of the assessed valuation of the township consists of iron ore or (2) a city if, as of January 2, 1980, more than 75 percent of the assessed valuation of the city consists of iron ore.

(c) The amount allocated under paragraph (b) will be the portion of a township's or city's certified levy equal to the proportion of (1) the difference between 50 percent of January 2, 1982, assessed value in the case of a township and 50 percent of the January 2, 1980, assessed value in the case of a city and its current assessed value to (2) the sum of its current assessed value plus the difference determined in (1), provided that the amount distributed shall not exceed $55 per capita in the case of a township or $75 per capita in the case of a city. For purposes of this limitation, population will be determined according to the 1980 decennial census conducted by the United States Bureau of the Census. If the current assessed value of the township exceeds 50 percent of the township's January 2, 1982, assessed value, or if the current assessed value of the city exceeds 50 percent of the city's January 2, 1980, assessed value, this paragraph shall not apply. For purposes of this paragraph, "assessed value," when used in reference to years other than 1980 or 1982, means the appropriate net tax capacities multiplied by 10.2.

(d) In addition to other distributions under this subdivision, three cents per taxable ton for distributions in 2009 must be allocated for distribution to towns that are entirely located within the taconite tax relief area defined in section 273.134, paragraph (b). For distribution in 2010 through 2014 and for distribution in 2018 and subsequent years, the three-cent amount must be annually increased in the same proportion as the increase in the implicit price deflator as provided in section 298.24, subdivision 1. The amount available under this paragraph will be distributed to eligible towns on a per capita basis, provided that no town may receive more than ~~$50,000~~ $70,000 in any year under this paragraph. Any amount of the distribution that exceeds the ~~$50,000~~ $70,000 limitation for a town under this paragraph must be redistributed on a per capita basis among the other eligible towns, to whose distributions do not exceed ~~$50,000~~ $70,000.

Sec. 5. Minnesota Statutes 2024, section 298.28, subdivision 4, is amended to read:

Subd. 4. School districts. (a) 32.15 cents per taxable ton produced by each producer except Mesabi Metallics or its successor, plus 32.72 cents per taxable ton produced by Mesabi Metallics or its successor, plus $300,000 from the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor, plus the increase provided in paragraph (b), clause (3) , plus the increase provided in paragraph (d), less the amount that would have been computed under Minnesota Statutes 2008, section 126C.21, subdivision 4, for the current year for that district, must be allocated to qualifying school districts to be distributed, based upon the certification of the commissioner of revenue, under paragraphs (b), (c), (d), and (f).

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(b) ~~(i)~~ (1) 3.43 cents per taxable ton must be distributed to the school districts in which the lands from which taconite was mined or quarried were located or within which the concentrate was produced.

The distribution must be based on the apportionment formula prescribed in subdivision 2.

~~(ii)~~ (2) Four cents per taxable ton ~~from each taconite facility~~ produced by each producer except Mesabi Metallics or its successor, plus eight cents per taxable ton produced by Mesabi Metallics or its successor, plus $300,000 from the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor must be distributed to each affected school district for deposit in a fund dedicated to building maintenance and repairs, as follows:

~~(1)~~ (i) proceeds from Keewatin Taconite or its successor are distributed to Independent School Districts Nos. 316, Coleraine, and 319, Nashwauk-Keewatin, or their successor districts;

~~(2)~~ (ii) proceeds from the Hibbing Taconite Company or its successor are distributed to Independent School Districts Nos. 695, Chisholm, and 701, Hibbing, or their successor districts;

~~(3)~~ (iii) proceeds from the Mittal Steel Company and Minntac or their successors are distributed to Independent School Districts Nos. 712, Mountain Iron-Buhl, ~~706, Virginia,~~ 2711, Mesabi East, and ~~2154, Eveleth-Gilbert~~ 2909, Rock Ridge, or their successor districts;

~~(4)~~ (iv) proceeds from the Northshore Mining Company or its successor are distributed to Independent School Districts Nos. 2142, St. Louis County, and 381, Lake Superior, or their successor districts; ~~and~~

~~(5)~~ (v) proceeds from United Taconite or its successor are distributed to Independent School Districts Nos. 2142, St. Louis County, and ~~2154, Eveleth-Gilbert~~ 2909, Rock Ridge, or their successor districts.; and

(vi) proceeds from Mesabi Metallics or its successor are distributed as follows:

(A) $150,000 to Independent School District No. 318, Grand Rapids, or its successor district;

(B) $150,000 to Independent School District No. 696, Ely, or its successor district; and

(C) eight cents per taxable ton to Independent School Districts Nos. 316, Greenway, and 319, Nashwauk‑Keewatin, or their successor districts.

Revenues that are required to be distributed to more than one district shall be apportioned according to the number of pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous year.

(3) Each school district that received a distribution under clause (2) in distribution year 2024 shall receive, from the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor, an additional four cents per taxable ton produced in 2023 by the producer from which the school district received a distribution under clause (2) in distribution year 2024.

(c) ~~(i)~~ (1) 24.72 cents per taxable ton, less any amount distributed under paragraph (e), shall be distributed to a group of school districts comprised of those school districts which qualify as a tax relief area under section 273.134, paragraph (b) , or in which there is a qualifying municipality as defined by section 273.134, paragraph (a) , in direct proportion to school district indexes as follows: for each school district, its pupil units determined under section 126C.05 for the prior school year shall be multiplied by the ratio of the average adjusted net tax capacity per pupil unit for school districts receiving aid under this clause as calculated pursuant to chapters 122A, 126C, and 127A for the school year ending prior to distribution to the adjusted net tax capacity per pupil unit of the district. Each district shall receive that portion of the distribution which its index bears to the sum of the indices for all school districts that receive the distributions.

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(ii) (2) Notwithstanding clause ~~(i)~~ (1) , each school district that receives a distribution under sections 298.018; 298.24; and 298.25 to 298.28, exclusive of any amount received under this clause; 298.34 to 298.39; 298.391 to 298.396; 298.405; or any law imposing a tax on severed mineral values after reduction for any portion distributed to cities and towns under section 126C.48, subdivision 8, paragraph (5), that is less than the amount of its levy reduction under section 126C.48, subdivision 8, for the second year prior to the year of the distribution shall receive a distribution equal to the difference; the amount necessary to make this payment shall be derived from proportionate reductions in the initial distribution to other school districts under clause ~~(i)~~ (1). If there are insufficient tax proceeds to make the distribution provided under this paragraph in any year, money must be transferred from the taconite property tax relief account in subdivision 6, to the extent of the shortfall in the distribution.

(d)(1) Any school district described in paragraph (c) where a levy increase pursuant to section 126C.17, subdivision 9, was authorized by referendum for taxes payable in 2001, shall receive a distribution of 21.3 cents per taxable ton. Each district shall receive $175 times the pupil units identified in section 126C.05, subdivision 1, enrolled in the second previous year or the 1983-1984 school year, whichever is greater, less the product of 1.8 percent times the district's taxable net tax capacity in 2011.

(2) Districts qualifying under paragraph (c) must receive additional taconite aid each year equal to 22.5 percent of the amount obtained by subtracting:

(i) 1.8 percent of the district's net tax capacity for 2011, from:

(ii) the district's weighted average daily membership for fiscal year 2012, multiplied by the sum of:

(A) $415, plus

(B) the district's referendum revenue allowance for fiscal year 2013.

(3) In addition to amounts under clauses (1) and (2), 4.57 cents per taxable ton produced in 2023 from the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor must be distributed as follows:

(i) $100,000 from the proceeds of Mesabi Metallics or its successor to Independent School District No. 695, Chisholm, or its successor district;

(ii) $100,000 from the proceeds of Mesabi Metallics or its successor to Independent School District No. 696, Ely, or its successor district; and

(iii) the remainder to school districts eligible for a distribution under paragraph (b), clause (1), based on the apportionment formula prescribed in subdivision 2.

If the total amount provided by paragraph (d) , clauses (1) and (2), is insufficient to make the payments herein required then the entitlement of $175 per pupil unit shall be reduced uniformly so as not to exceed the funds available. Any amounts received by a qualifying school district in any fiscal year pursuant to paragraph (d) shall not be applied to reduce general education aid which the district receives pursuant to section 126C.13 or the permissible levies of the district. Any amount remaining after the payments provided in this paragraph shall be paid to the commissioner of Iron Range resources and rehabilitation who shall deposit the same in the taconite environmental protection fund and the Douglas J. Johnson economic protection trust fund as provided in subdivision 11.

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Each district receiving money according to this paragraph shall reserve the lesser of the amount received under this paragraph or $25 times the number of pupil units served in the district. It may use the money for early childhood programs.

(e) There shall be distributed to any school district the amount which the school district was entitled to receive under section 298.32 in 1975.

(f) Four cents per taxable ton must be distributed to qualifying school districts according to the distribution specified in paragraph (b), clause ~~(ii)~~ (2) , and 11 cents per taxable ton must be distributed according to the distribution specified in paragraph (c). These amounts are not subject to section 126C.48, subdivision 8.

Sec. 6. Minnesota Statutes 2024, section 298.28, subdivision 7a, is amended to read:

Subd. 7a. Iron Range schools and community development account. (a) The following amounts must be allocated to the commissioner of Iron Range resources and rehabilitation to be deposited in the Iron Range schools and community development account that is hereby created:

(1)(i) for distributions in 2024 through 2032, 24 cents per taxable ton of the tax imposed under section 298.24, (ii) for distributions beginning in 2033, ten cents per taxable ton of the tax imposed under section 298.24;

(2) the amount as determined under section 298.17, paragraph (b), clause (3); ~~and~~

(3) for distributions in the year after the year in which Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24 through 2050, 20 cents per taxable ton produced by Mesabi Metallics or its successor, provided that the allocation under this clause must only be used for projects within Independent School District No. 316, Greenway, that are approved by referendum within five years of the date Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24, and that are approved by the commissioner of Iron Range resources and rehabilitation after review by the Iron Range Resources and Rehabilitation Advisory Board. If projects are not approved by referendum within five years of the date Mesabi Metallics or its successor begins producing tonnage subject to the taxes under section 298.24, or if the commissioner determines that the allocation exceeds the amount necessary for approved projects, the remainder of the allocation under this clause must be used as provided under paragraph (b); and

(4) any other amount as provided by law.

(b) Expenditures from this account, except as provided in paragraph (a), clause (3), may be approved as ongoing annual expenditures and shall be made only ~~to provide~~ for disbursements to assist school districts with the payment of bonds that were issued for qualified school projects, ~~or for any~~ other disbursements to school ~~disbursement as approved by the commissioner of Iron Range resources and rehabilitation after consultation with the Iron Range Resources and Rehabilitation Board~~ districts, or community development. For purposes of this section, "qualified school projects" means school projects within the taconite assistance area as defined in section 273.1341, that were (1) approved, by referendum, after April 3, 2006; and (2) approved by the commissioner of education pursuant to section 123B.71.

(c) Beginning in fiscal year 2019, the disbursement to school districts for payments for bonds issued under section 123A.482, subdivision 9, must be increased each year to offset any reduction in debt service equalization aid that the school district qualifies for in that year, under section 123B.53, subdivision 6, compared with the amount the school district qualified for in fiscal year 2018.

(d) No expenditure under this section shall be made unless approved by the commissioner of Iron Range resources and rehabilitation after consultation with the Iron Range Resources and Rehabilitation Advisory Board.

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Sec. 7. Minnesota Statutes 2024, section 298.28, subdivision 8, is amended to read:

Subd. 8. Range Association of Municipalities and Schools. 0.50 cent per taxable ton produced by each producer except Mesabi Metallics or its successor shall be paid to the Range Association of Municipalities and Schools, for the purpose of providing an areawide approach to problems which demand coordinated and cooperative actions and which are common to those areas of northeast Minnesota affected by operations involved in mining iron ore and taconite and producing concentrate therefrom, and for the purpose of promoting the general welfare and economic development of the cities, towns, and school districts within the Iron Range area of northeast Minnesota.

Sec. 8. Minnesota Statutes 2024, section 298.28, subdivision 9a, is amended to read:

Subd. 9a. Taconite economic development fund. (a) 25.1 cents per taxable ton ~~for distributions in 2002 and thereafter~~ produced by each producer except Mesabi Metallics or its successor must be paid to the taconite economic development fund. No distribution shall be made under this paragraph in ~~2004~~ 2027 or any subsequent year in which total industry production in the preceding year, excluding production by MagIron or its successor at Plant 4 in Arbo Township and production by Mesabi Metallics or its successor, falls below 30 million tons. Distribution shall only be made to a Minnesota taconite pellet producer's fund under section 298.227 if the producer timely pays its tax under section 298.24 by the dates provided under section 298.27, or pursuant to the due dates provided by an administrative agreement with the commissioner.

(b) An amount equal to 50 percent of the ~~tax~~ taxes collected under section 298.24 from each producer except Mesabi Metallics or its successor for concentrate sold in the form of pellet chips and fines not exceeding 5/16 inch in size and not including crushed pellets shall be paid to the taconite economic development fund. The amount paid shall not exceed $700,000 annually for all Minnesota taconite pellet producers. If the initial amount to be paid to the fund exceeds this amount, each Minnesota taconite pellet producer's payment shall be prorated so the total does not exceed $700,000.

Sec. 9. Minnesota Statutes 2024, section 298.28, subdivision 9b, is amended to read:

Subd. 9b. Taconite environmental fund. Five cents per taxable ton must be paid to the taconite environmental fund for use under section 298.2961, subdivision 4.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 10. Minnesota Statutes 2024, section 298.28, is amended by adding a subdivision to read:

Subd. 10a. Insufficient proceeds. If the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor are insufficient to fund the allocations designated from those proceeds under this section, the following allocations and distributions must be proportionally decreased such that the proceeds of the taxes collected under section 298.24 from Mesabi Metallics or its successor are sufficient to fund the allocations designated from those proceeds under this section:

(1) allocations under this section calculated based on taxable tonnage produced in 2023;

(2) distributions under subdivision 4, paragraph (b), clause (2), item (vi), subitems (A) and (B); and

(3) distributions under subdivision 4, paragraph (d), clause (3), items (i) and (ii).

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Sec. 11. Minnesota Statutes 2024, section 298.28, subdivision 11, is amended to read:

Subd. 11. Remainder. (a) The proceeds of the tax imposed by section 298.24 which remain after the distributions and payments in subdivisions 2 to ~~10a~~ 10, as certified by the commissioner of revenue, and paragraphs (b), (c), and (d) have been made, together with interest earned on all money distributed under this section prior to distribution, shall be divided between the taconite environmental protection fund created in section 298.223 and the Douglas J. Johnson economic protection trust fund created in section 298.292 as follows: Two-thirds to the taconite environmental protection fund and one-third to the Douglas J. Johnson economic protection trust fund. The proceeds shall be placed in the respective special accounts.

(b) There shall be distributed to each city, town, and county the amount that it received under Minnesota Statutes 1978, section 294.26, in calendar year 1977; provided, however, that (1) the amount distributed in 1981 to the unorganized territory number 2 of Lake County and the town of Beaver Bay based on the between-terminal trackage of Erie Mining Company will be distributed in 1982 and subsequent years to the unorganized territory number 2 of Lake County and the towns of Beaver Bay and Stony River based on the miles of track of Erie Mining Company in each taxing district; and (2) a city located within six miles of five other cities qualifying for a distribution under section 298.282 shall receive a distribution equal to $5,000 under this paragraph in calendar year 2020 and subsequent years. The distribution to all other cites and towns receiving a distribution under this paragraph shall be reduced by the ratio that $5,000 bears to the total aid distribution received by all cities and towns under this paragraph.

(c) There shall be distributed to the Iron Range resources and rehabilitation account the amounts it received in 1977 under Minnesota Statutes 1978, section 298.22. The amount distributed under this paragraph shall be expended within or for the benefit of the taconite assistance area defined in section 273.1341.

(d) There shall be distributed to each school district 62 75 percent of the amount that it received under Minnesota Statutes 1978, section 294.26, in calendar year 1977.

Sec. 12. Minnesota Statutes 2024, section 298.282, subdivision 1, is amended to read:

Subdivision 1. Distribution of taconite municipal aid account. (a) The amount deposited with the county as provided in section 298.28, subdivision 3, must be distributed as provided by this section among: (1) the municipalities located within a taconite assistance area under section 273.1341 that meet the criteria of section 273.1341, clause (1) or (2); (2) a township that contains a state park consisting primarily of an underground iron ore mine; (3) a city located within five miles of that state park; (4) the city of Cook in St. Louis County; (5) the city of Two Harbors in Lake County; (6) the city of Orr in St. Louis County; (7) the city of Winton in St. Louis County; and ~~(4)~~ (8) Breitung Township in St. Louis County, each being referred to in this section as a qualifying municipality. The ~~distribution to~~ distributions to each of the city of Orr, the city of Winton, and Breitung Township under this subdivision shall be $25,000 annually. The distributions to each of the city of Cook and the city of Two Harbors under this subdivision shall be $75,000 annually.

(b) The amount deposited in the state general fund as provided in section 298.018, subdivision 1, must be distributed in the same manner as provided under paragraph (a), except that subdivisions 3, 4, and 5 do not apply, and the distributions shall be made on the dates provided under section 298.018, subdivision 1a.

Sec. 13. EFFECTIVE DATE; REVISOR NOTIFICATION.

(a) Sections 1 to 8 and 10 to 12 are effective for distributions in the year after the year in which Mesabi Metallics or its successor begins producing tonnage subject to the taxes under Minnesota Statutes, section 298.24, and thereafter. The commissioner of revenue must certify to the commissioner of Iron Range resources and rehabilitation when production begins.

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(b) The commissioner of revenue must notify the revisor of statutes within 30 days of the certification under paragraph (a).

ARTICLE 6

TAX INCREMENT FINANCING

Section 1. Minnesota Statutes 2024, section 469.176, subdivision 2, is amended to read:

Subd. 2. Excess increments. (a) The authority ~~shall~~ must annually determine the amount of excess increments for a district, if any. This determination must be based on the tax increment financing plan in effect on December 31 of the year being reviewed and the increments ~~and other revenues~~ received as of December 31 of the year. ~~The authority must spend or return the excess increments under paragraph (c) within nine months after the end of the year.~~ If the authority determines there are excess increments for a district, within nine months after December 31, the authority must:

(1) return the excess increments to the county auditor; and

(2) absent an outstanding qualifying pay-as-you-go contract and note, as defined under section 469.1763, subdivision 4, paragraph (e), decertify the district.

(b) The requirement to decertify under paragraph (a) is deferred if:

(1) within nine months after December 31, a modification of the tax increment financing plan is approved under section 469.175, subdivision 4; and

(2) the modification increases the total costs authorized to be paid with increments from the district by an amount greater than the excess increment determined under paragraph (a).

(1) the authority determines an amount of excess increments exists;

(2) there are no further approved modifications to the tax increment financing plan that increase the total costs authorized to be paid with increments from the district by an amount greater than the excess increment; and

(3) the district has no outstanding qualifying pay-as-you-go contract and note.

~~(b)~~ (d) For purposes of this subdivision, "excess increments" equals the excess of:

(1) total increments collected from the district since its certification, reduced by any excess increments ~~paid~~ returned under paragraph ~~(c), clause (4),~~ (e) for a prior year, over

(2) the total costs authorized by the tax increment financing plan to be paid with increments from the district, ~~reduced, but not below zero, by the sum of:~~

~~(i) the amounts of those authorized costs that have been paid from sources other than tax increments from the district;~~

(ii) revenues, other than tax increments from the district, that are dedicated for or otherwise required to be used to pay those authorized costs and that the authority has received and that are not included in item (i);

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(iii) the amount of principal and interest obligations due on outstanding bonds after December 31 of the year and not prepaid under paragraph (c) in a prior year; and

~~(iv)~~ increased by the sum of the transfers of increments made under section 469.1763, subdivision 6, to reduce deficits in other districts made by December 31 of the year.

~~(c) The authority shall use excess increment only to do one or more of the following:~~

~~(1) prepay any outstanding bonds;~~

~~(2) discharge the pledge of tax increment for any outstanding bonds;~~

~~(3) pay into an escrow account dedicated to the payment of any outstanding bonds; or~~

~~(4) return the excess amount to~~ (e) The county auditor ~~who shall~~ must distribute the excess ~~amount~~ increments returned under paragraph (a) to the city or town, county, and school district in which the tax increment financing district is located in direct proportion to their respective local tax rates.

(d) For purposes of a district for which the request for certification was made prior to August 1, 1979, excess increments equal the amount of increments on hand on December 31, less the principal and interest obligations due on outstanding bonds or advances, qualifying under subdivision 1c, clauses (1), (2), (4), and (5), after December 31 of the year and not prepaid under paragraph (c).

~~(e)~~ (f) The county auditor must, prior to February 1 of each year, report to the commissioner of education the amount of any excess tax increment distributed to a school district for the preceding taxable year.

~~(f) For purposes of this subdivision, "outstanding bonds" means bonds which are secured by increments from the district.~~

(g) The state auditor may exempt an authority from reporting the amounts calculated under this subdivision for a calendar year, if the authority certifies to the auditor in its report that the total amount authorized by the tax increment plan to be paid with increments from the district exceeds the sum of the total increments collected for the district for all years by 20 percent.

EFFECTIVE DATE. This section applies to all districts and is effective for excess increment determinations for calendar year 2026 and thereafter.

Sec. 2. Laws 2021, First Special Session chapter 14, article 9, section 9, is amended to read:

Sec. 9. CITY OF MOUNTAIN LAKE; TIF DISTRICT NO. 1-8; FIVE-YEAR RULE EXTENSION.

(a) The requirement of Minnesota Statutes, section 469.1763, subdivision 3, that activities must be undertaken within a five-year period from the date of certification of a tax increment financing district, is extended by ~~a five‑year~~ an eight-year period to April 1, 2029, for Tax Increment Financing District No. 1-8, administered by the city of Mountain Lake or its economic development authority.

(b) The requirement of Minnesota Statutes, section 469.1763, subdivision 4, relating to the use of increment after the expiration of the five-year period under Minnesota Statutes, section 469.1763, subdivision 3, is extended to the ~~11th~~ 14th year for Tax Increment Financing District No. 1-8.

EFFECTIVE DATE. This section is effective the day after the governing body of the city of Mountain Lake and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3.

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Sec. 3. Laws 2021, First Special Session chapter 14, article 9, section 11, is amended to read:

Sec. 11. CITY OF WAYZATA; TIF DISTRICT NO. 6; EXPENDITURES ALLOWED.

(a) Notwithstanding Minnesota Statutes, ~~section~~ sections 469.176, subdivision 4l, and 469.1763, subdivision 2, the city of Wayzata may expend increments generated from Tax Increment Financing District No. 6 for the design and construction of the lakefront pedestrian walkway and community transient lake public access infrastructure related to the Panoway on Wayzata Bay project, and all such expenditures are deemed expended on activities within the district.

(b) Notwithstanding Minnesota Statutes, sections 469.176, subdivision 4l, and 469.1763, subdivision 2, the city of Wayzata may expend increments generated from Tax Increment Financing District No. 6 on the following projects:

(1) design and construction of the Eco Park, including shoreline restoration, marsh and water quality improvements, a pier extension of the lakeside boardwalk, and creation of eco-living classrooms;

(2) restoration of the Section Foreman House, including installation of a learning center and community space; and

(3) expansion and remodeling of the Depot Park, including accessibility improvements related to the Panoway on Wayzata Bay project.

(c) Notwithstanding Minnesota Statutes, section 469.1763, subdivisions 2, 3, and 4, expenditures on projects in paragraph (b) are deemed expended on activities within the district.

EFFECTIVE DATE. This section is effective the day after the governing body of the city of Wayzata and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 4. Laws 2025, First Special Session chapter 13, article 5, section 11, subdivision 3, is amended to read:

Subd. 3. Expiration. The authority to approve a tax increment financing plan to establish a tax increment financing district under this section expires December 31, ~~2026~~ 2028.

EFFECTIVE DATE. This section is effective the day after the governing body of the city of Eden Prairie and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3.

Sec. 5. CITY OF CHASKA; TAX INCREMENT FINANCING DISTRICT NO. 23.

Notwithstanding Minnesota Statutes, section 469.176, subdivision 1b, the Chaska Economic Development Authority may collect tax increment from Chaska Tax Increment Financing District No. 23 for up to 35 years after receipt of the first increment.

EFFECTIVE DATE. This section is effective upon compliance by the governing bodies of the city of Chaska, Carver County, and Independent School District No. 112 with the requirements of Minnesota Statutes, section 469.1782, subdivision 2.

Sec. 6. CITY OF COLUMBIA HEIGHTS; ALATUS TAX INCREMENT FINANCING DISTRICT; FIVE-YEAR RULE EXTENSION; SIX-YEAR RULE EXTENSION; DURATION EXTENSION.

(a) The five-year period under Minnesota Statutes, section 469.1763, subdivision 3, is extended to ten years and the period under Minnesota Statutes, section 469.1763, subdivision 4, relating to the use of increment after the expiration of the five-year period, is extended to 11 years for the Alatus Tax Increment Financing District in the city of Columbia Heights.

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(b) Notwithstanding Minnesota Statutes, section 469.176, subdivisions 1b and 1d, the city of Columbia Heights or its economic development authority may elect to extend the duration of the Alatus Tax Increment Financing District in the city of Columbia Heights by five years.

EFFECTIVE DATE. Paragraph (a) is effective the day after the governing body of the city of Columbia Heights and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3. Paragraph (b) is effective upon compliance by the governing bodies of the city of Columbia Heights, Anoka County, and Independent School District No. 13 with the requirements of Minnesota Statutes, section 469.1782, subdivision 2.

Sec. 7. CITY OF HOPKINS; TAX INCREMENT FINANCING DISTRICT 1-6 (325 BLAKE); FIVE‑YEAR RULE EXTENSION; SIX-YEAR RULE EXTENSION.

The five-year period under Minnesota Statutes, section 469.1763, subdivision 3, is extended to ten years and the period under Minnesota Statutes, section 469.1763, subdivision 4, relating to the use of increment after the expiration of the five-year period, is extended to 11 years for Tax Increment Financing District 1-6 (325 Blake) in the city of Hopkins.

EFFECTIVE DATE. This section is effective the day after the governing body of the city of Hopkins and its chief clerical officer comply with the requirements of Minnesota Statutes, section 645.021, subdivisions 2 and 3.

ARTICLE 7

PUBLIC FINANCE

Section 1. Minnesota Statutes 2024, section 297A.993, subdivision 4, is amended to read:

Subd. 4. Bonds. (a) A county may, by resolution, authorize, issue, and sell its bonds, notes, or other obligations for the purposes specified in subdivision 2. The county may also, by resolution, issue bonds to refund the bonds issued pursuant to this subdivision.

(b) The bonds may be limited obligations, payable solely from or secured by taxes levied under this section, and the county may also pledge its full faith, credit, and taxing power as additional security for the bonds. A regional railroad authority within the county may also pledge its taxing powers as additional security for the bonds.

(c) A county may issue and sell bonds in one or more series and without an election. The county may determine how the bonds shall be secured; how the bonds will bear interest, and the rate or rates, or variable rate; the rank or priority; how the bonds will be executed and be payable, and how they will mature; and how the bonds will be subject to any defaults, redemptions, repurchases, tender options, or other terms. The county may also determine how the bonds shall be sold.

(d) The county may enter into and perform all contracts deemed necessary or desirable by it to issue and secure the bonds, including an indenture of trust with a trustee located within or outside of the state.

(e) Before issuing bonds qualifying under this section, the county must publish a notice of its intention to issue the bonds and the date and time of a hearing to obtain public comment on the matter. The notice must be published in the official newspaper of the county or in a newspaper of general circulation in the county. The notice must be published at least 14 ten, but not more than 28, days before the date of the hearing.

(f) Any project financed with bonds issued under this section must be included in a capital improvement plan as defined in section 373.40, subdivision 3. For purposes of this paragraph, "project" means any project described in subdivision 2, notwithstanding section 373.40, subdivision 1, paragraph (b).

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(g) Except as otherwise provided in this subdivision, the bonds must be issued and sold in the manner provided under chapter 475.

Sec. 2. Minnesota Statutes 2024, section 469.060, subdivision 3, is amended to read:

Subd. 3. Detail; maturity. The port authority with the consent of its city's council shall set the date, denominations, place of payment, form, and details of the bonds. ~~The bonds must mature serially.~~ The first installment must be due in not more than three years and the last in not more than 30 years from the date of issuance.

ARTICLE 8

MISCELLANEOUS

Section 1. Minnesota Statutes 2024, section 270B.14, is amended by adding a subdivision to read:

Subd. 25. Exchange of criminal investigative data between Department of Revenue and Financial Crimes and Fraud Section. (a) For purposes of this subdivision, "FCFS" means the Financial Crimes and Fraud Section of the Bureau of Criminal Apprehension.

(b) The commissioner may disclose active criminal investigative data as classified under section 270B.03, subdivision 6, to the FCFS. The FCFS may disclose active criminal investigative data concerning tax administration to the commissioner as outlined in section 299C.061, subdivision 6. The commissioner may enter into an agreement with the FCFS outlining procedures to implement the exchange of information under this subdivision, but an agreement may provide for the disclosure of data only to the extent allowed under this subdivision. Disclosure is allowed only for the purpose of and to the extent necessary for tax administration and for the purpose of and to the extent necessary for the FCFS to carry out section 299C.061, subdivision 3.

(c) Data disclosed by the commissioner to the FCFS under this subdivision are classified under section 270B.03, subdivision 6. Data disclosed by the FCFS to the commissioner under section 299C.061, subdivision 6, are classified under section 13.82, subdivision 7.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2024, section 270B.15, is amended to read:

270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR AND STATE AUDITOR; INSPECTOR GENERAL.

Subdivision 1. Legislative auditor and state auditor. (a) Returns and return information must be disclosed to the legislative auditor to the extent necessary for the legislative auditor to carry out sections 3.97 to 3.979.

(b) The commissioner must disclose return information, including the report required under section 289A.12, subdivision 15, to the state auditor to the extent necessary to conduct audits of job opportunity building zones as required under section 469.3201.

Subd. 2. Inspector general. Returns and return information must be disclosed to the inspector general, as given meaning in section 15E.10, to the extent necessary for the inspector general to carry out chapter 15E. The inspector general may disseminate data of any classification to the commissioner for purposes of administering the provisions of section 290.036.

EFFECTIVE DATE. This section is effective January 1, 2027.

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Sec. 3. Minnesota Statutes 2024, section 270C.56, subdivision 1, is amended to read:

Subdivision 1. Liability imposed. A person who, either singly or jointly with others, has the control of, supervision of, or responsibility for filing returns or reports, paying taxes, or collecting or withholding and remitting taxes and who fails to do so, or a person who is liable under any other law, is liable for the payment of taxes arising under chapters 295, 296A, 297A, 297F, and 297G, or sections 290.036, 290.92, and 297E.02, and the applicable penalties and interest on those taxes.

EFFECTIVE DATE. This section is effective for convictions of fraud made after December 31, 2025.

Sec. 4. Minnesota Statutes 2024, section 289A.40, subdivision 1, is amended to read:

Subdivision 1. Time limit; generally. (a) Unless otherwise provided in this chapter, a claim for a refund of an overpayment of state tax must be filed within 3-1/2 years from the date prescribed for filing the return, plus any extension of time granted for filing the return, but only if filed within the extended time, or one year from the date of an order assessing tax under section 270C.33 or an order determining an appeal under section 270C.35, subdivision 8, or one year from the date of a return made by the commissioner under section 270C.33, subdivision 3, upon payment in full of the tax, penalties, and interest shown on the order or return made by the commissioner two years from the date the tax, penalties, or interest was paid, whichever period expires later. Claims for refund, except for taxes under chapter 297A, filed after the 3-1/2 year period but within the one-year period are limited to the amount of the tax, penalties, and interest on the order or return made by the commissioner and to issues determined by the order or return made by the commissioner.

In the case of assessments under section 289A.38, subdivision 5 or 6, claims for refund under chapter 297A filed after the 3-1/2 year period but within the one-year period are limited to the amount of the tax, penalties, and interest on the order or return made by the commissioner that are due for the period before the 3-1/2 year period.

(b) For purposes of this subdivision, the amount of a refund is limited as follows:

(1) if the claim was filed by the taxpayer during the 3-1/2 year period prescribed in paragraph (a), the refund must not exceed the tax, penalties, and interest paid within the period, immediately preceding the filing of the claim, equal to 3-1/2 years plus any extension of time granted for filing the return, but only if filed within the extended time;

(2) if the claim was not filed by the taxpayer within the 3-1/2 year period prescribed in paragraph (a), the refund must not exceed the tax, penalties, and interest paid during the two years immediately preceding the filing of the claim; and

(3) if no claim was filed by the taxpayer, the refund must not exceed the amount which would be allowable under clause (1) or (2), if the claim was filed on the date the refund is allowed.

(c) For purposes of this subdivision, the prepayment of tax made by withholding of tax at the source or payment of estimated tax before the due date is considered paid on the last day prescribed by law for the payment of the tax by the taxpayer. A return filed before the last day prescribed for filing the return is considered to be filed on the last day. If an extension for filing a return is granted, a return filed before the extended due date is considered to be filed on the extended due date.

EFFECTIVE DATE. This section is effective the day following final enactment and applies to claims for refund filed on or after that date.

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Sec. 5. Minnesota Statutes 2024, section 289A.60, subdivision 6, is amended to read:

Subd. 6. Penalty for failure to file, false or fraudulent return, evasion. (a) If a person, with intent to evade or defeat a tax or payment of tax, fails to file a return, files a false or fraudulent return, or attempts in any other manner to evade or defeat a tax or payment of tax, there is imposed on the person a penalty equal to 50 percent of the tax, less amounts paid by the person on the basis of the false or fraudulent return, if any, due for the period to which the return related.

(b) If a person files a false or fraudulent return that includes a claim for refund, there is imposed on the person a penalty equal to 50 percent of the portion of any refund claimed that is attributable to fraud. The penalty under this paragraph is in addition to any penalty imposed under paragraph (a) or (c).

(c) If a person receives money, whether reported or not reported on a return, that is due to fraud of a public program as defined in section 290.036, subdivision 1, there may be imposed on the person a penalty equal to 100 percent of the amounts received attributable to the fraud. The penalty under this paragraph is in addition to any penalty imposed under paragraph (a) or (b). This penalty must not be assessed on any amounts already assessed under section 290.036. Any amounts collected must be deposited to the tax relief account identified in section 290.036, subdivision 5. The penalty under this paragraph is an order of assessment by the commissioner that is appealable pursuant to chapters 270C and 271.

EFFECTIVE DATE. This section is effective for determinations of fraud made after December 31, 2025.

Sec. 6. [290.036] TAX ON AMOUNTS OBTAINED THROUGH FRAUD.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "First-tier rate" means the lowest rate cited in section 290.06, subdivision 2c, paragraphs (a) to (c).

(d) "Program fraud amount" means the amount of money acquired directly or indirectly by fraud of a public program that is certified to the commissioner under subdivision 4. Program fraud amount excludes refunds for overpayment of taxes.

Subd. 2. Tax imposed. (a) A tax equal to 100 percent of the program fraud amount is imposed on any person or organization convicted by a state or federal court of fraud.

(b) The tax under this section applies regardless of any amount of restitution, tax, or penalty imposed on or paid by a person or organization described in paragraph (a).

(c) If multiple persons or organizations are convicted of the same fraud, the liability shall be joint and several on the convicted persons or organizations.

(d) The assessment of this tax under paragraph (a) is considered a jeopardy assessment or jeopardy collection as provided in section 270C.36.

Subd. 3. Data sharing. As authorized by section 270B.14, subdivision 25, the commissioner may share with the Financial Crimes and Fraud Section of the Bureau of Criminal Apprehension active investigative data related to enforcement of this section.

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Subd. 4. Agency certification. (a) After a conviction of a person or organization of fraud of a public program, the agency primarily responsible for administering the public program must certify to the commissioner the name of the person or organization, the name of the public program involved, and the amount of money the court determines the person or organization was responsible for in the conviction, regardless of the restitution amount.

(b) The agency's certification must be in the form and manner prescribed by the commissioner.

(c) An agency's certification to the commissioner is prima facie correct and valid. The person or organization has the burden of establishing its incorrectness or invalidity in any related action or proceeding.

Subd. 5. Deposit of money. (a) A tax relief account is established in the special revenue fund. The commissioner must deposit the money collected from the tax imposed under this section to the tax relief account.

(b) The funds will remain in this account until the following:

(1) by December 15 of each year, the commissioner must determine the amount in the tax relief account and determine the amount of a reduction in the first-tier rate for the following taxable year. The determination is based using the most recent November forecast required under section 16A.103;

(2) when there is enough money accumulated in the tax relief account, the commissioner must reduce the first‑tier rate for the following taxable year. This reduction must be calculated to approximate the amount currently on deposit in the tax relief fund. The reduction must only be for that taxable year. The threshold for a reduction of the rate must not be below one-tenth of one percent; and

(3) if the rate is reduced for the following taxable year under clause (2), the amounts in the tax relief fund must be deposited in the general fund.

EFFECTIVE DATE. This section is effective for convictions of fraud made after December 31, 2025.

Sec. 7. Minnesota Statutes 2025 Supplement, section 299C.061, subdivision 6, is amended to read:

Subd. 6. Data sharing authorized. Notwithstanding chapter 13 or any other statute related to the classification of government data to the contrary, state agencies making a referral under subdivision 4 or 5 shall provide data related to the suspected fraudulent activity to the Section, including data classified as not public. The Section may share active criminal investigative data concerning insurance fraud with the Department of Commerce and active criminal investigative data concerning tax administration with the Department of Revenue. Data shared by the Section under this subdivision are classified under section 13.82, subdivision 7.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 8. Minnesota Statutes 2024, section 383A.80, subdivision 4, is amended to read:

Subd. 4. Expiration. The authority to impose the tax under this section expires January 1, ~~2028~~ 2036.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 9. Minnesota Statutes 2024, section 383B.80, subdivision 4, is amended to read:

Subd. 4. Expiration. The authority to impose the tax under this section expires January 1, ~~2028~~ 2036.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 10. Laws 2026, chapter 100, article 1, section 2, is amended to read:

Sec. 2. MINNESOTA HOUSING FINANCE AGENCY APPROPRIATIONS.

(a) Notwithstanding Minnesota Statutes, sections 462A.20, subdivision 3, and 462A.21, subdivision 10, $25,000,000 in fiscal year 2027 is appropriated from the aggregated earnings from investments of state appropriations made pursuant to Minnesota Statutes, section 462A.20, subdivision 3, in the housing development fund to the commissioner of the Minnesota Housing Finance Agency for the following purposes:

(1) $14,275,000 is for the workforce housing development program under Minnesota Statutes, section 462A.39;

(2) $4,000,000 is for the supportive housing program under Minnesota Statutes, section 462A.42, and must be used for the purposes provided in section 1, paragraph (b), except that, as provided in section 1, paragraph (d), if this amount is not needed for those purposes, it may be used for the purposes provided in Minnesota Statutes, section 462A.42;

(3) $4,000,000 is for the manufactured home park infrastructure grant and loan program under Minnesota Statutes, section 462A.2035, subdivision 1b;

(4) $2,000,000 is for the family homeless prevention and assistance program under Minnesota Statutes, section 462A.204~~, and may be used in the manner provided in section 3, subdivision 3~~. Notwithstanding the procurement provisions outlined in Minnesota Statutes, section 16C.06, subdivisions 1, 2, and 6, the agency may award grants to federally recognized Indian Tribes, to existing program grantees, and to former program grantees. The agency must consider community need, grantee capacity, and geographic distribution when awarding money. Notwithstanding Minnesota Statutes, section 16B.97, the agency must use all available methods and schedule of payments, including advanced payments, to effectuate legislative intent. Money must be spent by December 31, 2026. The agency may, at its discretion, redistribute unused or underutilized money among grantees to increase program efficiency and effectiveness;

(5) $425,000 is for the capacity-building grants program under Minnesota Statutes, section 462A.21, subdivision 3b, for a grant to a statewide tenant education and hotline service that provides free and confidential legal advice for all Minnesota renters. This amount may be awarded to existing grantees notwithstanding Minnesota Statutes, section 16C.06, subdivisions 1, 2, and 6;

(6) $150,000 is for the homeownership education, counseling, and training program under Minnesota Statutes, section 462A.209. This amount may be awarded to existing grantees notwithstanding Minnesota Statutes, section 16C.06, subdivisions 1, 2, and 6; and

(7) $150,000 is for the Minnesota Nice HomeShare pilot program established under paragraph (b).

(b) The commissioner of the Minnesota Housing Finance Agency must award a grant to St. Louis County for the county to establish and administer the Minnesota Nice HomeShare pilot program to assist seniors in the counties of Lake, St. Louis, and Washington to reduce living expenses by matching seniors who own homes with spare rooms to adults in need of affordable housing. For the purposes of this section, "senior" means a person 55 years of age or older. St. Louis County may partner with the Arrowhead Area Agency on Aging, the other named counties in this paragraph, or organizations that advocate for seniors, to promote the program. The program must:

(1) assist hosts and renters over the telephone, through a text chat function or by video;

(2) collect and process rental payments from renters and distribute payments to hosts in a timely manner;

(3) protect the private information and data of hosts and renters;

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(4) conduct background checks on hosts and renters, including contacting at least two references for each host and renter;

(5) acquire from renters employment verification or proof of school enrollment; and

(6) review and process all applications.

Sec. 11. NUCLEAR ENERGY STUDY; APPROPRIATION.

(a) $500,000 in fiscal year 2027 is appropriated from the general fund to the commissioner of commerce to contract with the Great Plains Institute to conduct a study to inform policymakers regarding the potential impact of new nuclear generation on the public interest of Minnesota, including affordability, reliability, environmental protection, and public health. This is a onetime appropriation.

(b) The commissioner of commerce must ensure balanced representation of perspectives in the study.

(1) changes in federal regulations governing the licensing of nuclear-powered facilities that may speed the review and approval process;

(2) technological advances made with respect to conventional nuclear-powered facilities that affect safety and cost;

(3) full lifecycle costs, including capital costs, financing costs, construction risk, cost overruns, decommissioning costs, waste management, and long-term liability exposure, compared to alternative baseload resource options. The analysis must include historical evidence from comparable projects in the United States and internationally;

(4) ratepayer impacts where new nuclear generation has been developed, including effects on electricity rates; cost and schedule overruns unrelated to unique events, including but not limited to the COVID pandemic; and the allocation of financial risk between ratepayers and developers;

(5) public subsidies, tax expenditures, and financial incentives that may be applied to new nuclear investments;

(6) the prospects for small modular reactors and factory-built portable modules with a capacity up to 300 megawatts, including:

(i) the types of technologies available;

(ii) current licensing status; and

(iii) estimated costs;

(7) siting issues, including:

(i) the degree to which the requirement for proximity to water resources sufficient for cooling purposes restricts possible locations of nuclear facilities, and what locations that meet that requirement are available in this state;

(ii) the potential for colocating nuclear facilities with businesses that demand very large amounts of electricity;

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(iii) the environmental impacts of nuclear facilities, including impacts on the health of nearby residents;

(iv) the prospects for acceptance of nuclear facilities by host communities, and best practices for engaging communities on this issue; and

(v) how interconnection and transmission issues affect potential plant locations;

(8) nuclear waste issues, including:

(i) the amount and toxicity of radioactive waste produced by both conventional nuclear technologies and small modular reactors;

(ii) the costs of on-site storage;

(iii) the prospects for developing permanent storage of radioactive waste at either a federally owned or privately owned repository to which Minnesota's waste could be transported; and

(iv) the feasibility and cost of reprocessing nuclear waste;

(9) the economic impacts of various nuclear technologies on a host community, including:

(i) increased employment levels during construction and operations;

(ii) increased local economic activity resulting from purchases made by the nuclear-powered facility and its employees; and

(iii) potential tax revenue to local communities and schools, and to the state;

(10) impacts of new nuclear-powered electric generating plants on public safety officials and emergency responders in host communities and adjacent areas with respect to emergency planning efforts;

(11) how new nuclear generation would impact Minnesota's statutory greenhouse gas reduction and carbon-free electricity goals;

(12) expected timelines from permitting through operation, including historical averages and delays for similar projects;

(13) current Minnesota statutes and administrative rules that would require modification in order to enable the construction and operation of nuclear reactors;

(14) the feasibility of replacing retiring generation assets in host communities with advanced nuclear reactors; and

(15) the workforce required, workforce available, and training capacity needed to construct and operate new nuclear reactors.

(d) The study must be conducted transparently, with all data, assumptions, and models made publicly available.

(e) No later than February 1, 2027, the commissioner of commerce must submit the study to the chairs and ranking minority members of the legislative committees with jurisdiction over energy policy and finance.

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Sec. 12. CANCELLATIONS.

$15,000,000 of the fiscal year 2024 Minnesota forward fund account appropriation in Laws 2023, chapter 53, article 21, section 7, paragraph (c), is canceled.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 13. TRANSFER.

$15,000,000 in fiscal year 2027 is transferred from the Minnesota forward fund account established in Minnesota Statutes, section 116J.8752, subdivision 3, to the general fund. This is a onetime transfer.

Sec. 14. TRANSFER.

$75,000,000 in fiscal year 2027 is transferred from the driver and vehicle services operating account under Minnesota Statutes, section 299A.705, subdivision 1, to the general fund. This is a onetime transfer.

Sec. 15. RETURN OF UNUSED TAX-FORFEITED SETTLEMENT APPROPRIATION; CANCELLATION.

Subdivision 1. Return of funds. Notwithstanding the cancellation deadline established in Laws 2024, chapter 113, section 1, subdivision 5, on June 29, 2026, the claims administrator appointed under Laws 2024, chapter 113, to settle litigation related to the state's retention of tax-forfeited lands, surplus proceeds from the sale of tax-forfeited lands, and mineral rights in those lands, must return to the commissioner of management and budget the lesser of $40,000,000 or the amount of the appropriation under Laws 2024, chapter 113, section 1, subdivision 5, that constitutes unspent funds in the net settlement fund, as provided in the settlement and final judgment filed on December 16, 2024.

Subd. 2. Cancellation. The commissioner of management and budget must cancel the amount received under subdivision 1 to the general fund within one day of the receipt of the funds.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 16. APPROPRIATION.

$38,000,000 is appropriated in fiscal year 2026 from the general fund to the commissioner of the Minnesota Housing Finance Agency for the family homeless prevention and assistance program under Minnesota Statutes, section 462A.204. This is a onetime appropriation and is made available for the purposes of the housing development fund. Notwithstanding the procurement provisions outlined in Minnesota Statutes, section 16C.06, subdivisions 1, 2, and 6, the agency may award grants to federally recognized Indian Tribes, existing program grantees, and former program grantees. The agency must consider community need, grantee capacity, and geographic distribution when awarding money. Notwithstanding Minnesota Statutes, section 16B.97, the agency must use all available methods and schedule of payments, including advanced payments, to effectuate legislative intent. Money must be spent by December 31, 2026. The agency may, at its discretion, redistribute unused or underutilized money among grantees to increase program efficiency and effectiveness.

EFFECTIVE DATE. This section is effective the day following final enactment and prevails over any contrary enactment made during the 2026 regular legislative session, regardless of order of enactment.

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Sec. 17. REPEALER.

Laws 2026, chapter 100, article 1, section 3, is repealed.

ARTICLE 9

DEPARTMENT OF REVENUE; INDIVIDUAL INCOME AND CORPORATE FRANCHISE TAXES

Section 1. Minnesota Statutes 2024, section 289A.08, subdivision 7, is amended to read:

Subd. 7. Composite income tax returns for nonresident partners, shareholders, and beneficiaries. (a) The commissioner may allow a partnership with nonresident partners to file a composite return and to pay the tax on behalf of nonresident partners who have no other Minnesota source income. This composite return must include the names, addresses, Social Security numbers, income allocation, and tax liability for the nonresident partners electing to be covered by the composite return.

(b) The computation of a partner's tax liability must be determined by multiplying the income allocated to that partner by the highest rate used to determine the tax liability for individuals under section 290.06, subdivision 2c. Nonbusiness deductions, standard deductions, or personal exemptions are not allowed. The computation of a partner's net investment income tax liability must be computed under section 290.033.

(c) The partnership must submit a request to use this composite return filing method for nonresident partners. The requesting partnership must file a composite return in the form prescribed by the commissioner of revenue. The filing of a composite return is considered a request to use the composite return filing method.

(d) The electing partner must not have any Minnesota source income other than the income from the partnership, other electing partnerships, and other qualifying entities electing to file and pay the pass-through entity tax under subdivision 7a. If it is determined that the electing partner has other Minnesota source income, the inclusion of the income and tax liability for that partner under this provision will not constitute a return to satisfy the requirements of subdivision 1. The tax paid for the individual as part of the composite return is allowed as a payment of the tax by the individual on the date on which the composite return payment was made. If the electing nonresident partner has no other Minnesota source income, filing of the composite return is a return for purposes of subdivision 1.

(e) This subdivision does not negate the requirement that an individual pay estimated tax if the individual's liability would exceed the requirements set forth in section 289A.25. The individual's liability to pay estimated tax is, however, satisfied when the partnership pays composite estimated tax in the manner prescribed in section 289A.25.

(f) If an electing partner's share of the partnership's gross income from Minnesota sources is less than the filing requirements for a nonresident under this subdivision, the tax liability is zero. However, a statement showing the partner's share of gross income must be included as part of the composite return.

(g) The election provided in this subdivision is only available to a partner who has no other Minnesota source income and who is either (1) a full-year nonresident individual or (2) a trust or estate that does not claim a deduction under either section 651 or 661 of the Internal Revenue Code.

(h) The composite return election provided in this subdivision is available to a nonresident partner who incurs an accelerated gain on installment sales under section 290.0137, paragraph (a). A nonresident partner who elects to defer the gain on installment sales under section 290.0137, paragraph (b), cannot utilize the composite return

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election for the partnership until the recognition of the deferred gain is completed. A nonresident who makes the election in section 290.0137, paragraph (b), must report the deferred gain on the nonresident's individual income tax return in the manner prescribed by the commissioner.

~~(h)~~ (i) A corporation defined in section 290.9725 and its nonresident shareholders may make an election under this ~~paragraph~~ subdivision. The provisions covering the partnership apply to the corporation and the provisions applying to the partner apply to the shareholder.

~~(i)~~ (j) Estates and trusts distributing current income only and the nonresident individual beneficiaries of the estates or trusts may make an election under this ~~paragraph~~ subdivision. The provisions covering the partnership apply to the estate or trust. The provisions applying to the partner apply to the beneficiary.

~~(j)~~ (k) For the purposes of this subdivision, "income" has the meaning given in section 290.01, subdivision 19, paragraph (h).

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 2. Minnesota Statutes 2024, section 290.01, subdivision 19, as amended by Laws 2026, chapter 88, article 1, section 170, is amended to read:

(b) For an individual, the term "net income" means federal adjusted gross income with the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137.

(1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal Revenue Code does not apply;

(e) The net income of a designated settlement fund as defined in section 468B(d) of the Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal Revenue Code.

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(f) The Internal Revenue Code of 1986, as amended through May 1, 2023, applies for taxable years beginning after December 31, 1996.

(1) the additions provided in ~~section~~ sections 290.0131, subdivisions 8 to 10, 16, 17, and 19, and 290.0137, paragraph (a); and

(2) the subtractions provided in: ~~(1)~~ (i) section 290.0132, subdivisions 9, 27, 28, and 31, to the extent the amount is assignable or allocable to Minnesota under section 290.17; ~~and (2)~~ (ii) section 290.0132, subdivision 14; and (iii) section 290.0137, paragraph (c).

The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the composite tax computation to the extent the electing partner would have been allowed the subtraction.

(i) In the case of a qualifying entity electing to pay the pass-through entity tax under section 289A.08, subdivision 7a, "net income" means the qualifying owner's share of federal adjusted gross income from the qualifying entity modified by the additions provided in section 290.0131, subdivisions 5, 8 to 10, 16, 17, and 19, and the subtractions provided in: (1) section 290.0132, subdivisions 3, 9, 27, 28, and 31, to the extent the amount is assignable or allocable to Minnesota under section 290.17; and (2) section 290.0132, subdivision 14. The subtraction allowed under section 290.0132, subdivision 9, is only allowed on the pass-through entity tax computation to the extent the qualifying owners would have been allowed the subtraction. The income of both a resident and nonresident qualifying owner is allocated and assigned to this state as provided for nonresident partners and shareholders under sections 290.17, 290.191, and 290.20.

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

Sec. 3. Minnesota Statutes 2024, section 290.0137, is amended to read:

290.0137 ACCELERATED RECOGNITION OF CERTAIN INSTALLMENT SALE GAINS.

(a) In the case of a nonresident individual or a person who becomes a nonresident individual during the tax year, taxable net income shall include the amount realized upon a sale of the assets of, or any interest in, an S corporation or partnership that operated in Minnesota during the year of sale, including any income or gain to be recognized in future years pursuant to an installment sale method of reporting under the Internal Revenue Code.

(1) For the purposes of this paragraph, an individual who becomes a nonresident of Minnesota in any year after an installment sale is required to recognize the full amount of any income or gain described in this paragraph on the individual's final Minnesota resident tax return to the extent that such income has not been recognized in a prior year.

(2) For the purposes of this section, "realized" has the meaning given in section 1001(b) of the Internal Revenue Code.

(3) For the purposes of this section, "installment sale" means any installment sale under section 453 of the Internal Revenue Code and any other sale that is reported utilizing a method of accounting authorized under subchapter E of the Internal Revenue Code that allows taxpayers to delay reporting or recognizing a realized gain until a future year.

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(b) Notwithstanding paragraph (a), nonresident taxpayers may elect to defer recognizing unrecognized installment sale gains by making an election under this paragraph. The election must be filed on a form to be determined or prescribed by the commissioner and must be filed by the due date of the individual income tax return, including any extension. Electing taxpayers must make an irrevocable agreement to:

(1) file Minnesota tax returns in all subsequent years when gains from the installment sales are recognized and reported to the Internal Revenue Service;

(2) allocate gains to the state of Minnesota as though the gains were realized in the year of sale under section 290.17, 290.191, or 290.20; and

(3) include all relevant federal tax documents reporting the installment sale with subsequent Minnesota tax returns.

(c) Income or gain recognized for Minnesota purposes pursuant to paragraph (a) must be excluded from taxable net income in any future year that ~~the taxpayer files a Minnesota tax return~~ a composite Minnesota tax return is filed to the extent that the income or gain has already been subject to tax pursuant to paragraph (a). If a composite Minnesota tax return is not filed, then any income or gain recognized for Minnesota purposes under paragraph (a) must be excluded from taxable net income in any future year in which the taxpayer files a Minnesota tax return to the extent that the income or gain has already been subject to tax pursuant to paragraph (a).

EFFECTIVE DATE. This section is effective for taxable years beginning after December 31, 2025.

ARTICLE 10

DEPARTMENT OF REVENUE; PROPERTY TAXES

Section 1. Minnesota Statutes 2024, section 273.032, is amended to read:

273.032 MARKET VALUE DEFINITION.

(a) Unless otherwise provided, for the purpose of determining any property tax levy limitation based on market value or any limit on net debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market value, any qualification to receive state aid based on market value, or any state aid amount based on market value, the terms "market value," "estimated market value," and "market valuation," whether equalized or unequalized, mean the estimated market value of taxable property within the local unit of government before any of the following or similar adjustments for:

(1) the market value exclusions under:

(i) section 273.11, subdivisions 14a and 14c (vacant platted land);

~~(ii) section 273.11, subdivisions 19 and 20 (certain improvements to business properties);~~

~~(iii)~~ (ii) section 273.11, subdivision 21 (homestead property damaged by mold);

~~(iv)~~ (iii) section 273.13, subdivision 34 (homestead of a veteran with a disability or family caregiver); or

~~(v)~~ (iv) section 273.13, subdivision 35 (homestead market value exclusion); or

(2) the deferment of value under:

(i) the Minnesota Agricultural Property Tax Law, section 273.111;

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(ii) the Aggregate Resource Preservation Law, section 273.1115;

(iii) the Minnesota Open Space Property Tax Law, section 273.112;

(iv) the rural preserves property tax program, section 273.114; or

(v) the Metropolitan Agricultural Preserves Act, section 473H.10; or

(3) the adjustments to tax capacity for:

(i) tax increment financing under sections 469.174 to 469.1794;

(ii) fiscal disparities under chapter 276A or 473F; or

(iii) powerline credit under section 273.425.

(b) Estimated market value under paragraph (a) also includes the market value of tax-exempt property if the applicable law specifically provides that the limitation, qualification, or aid calculation includes tax-exempt property.

(c) Unless otherwise provided, "market value," "estimated market value," and "market valuation" for purposes of property tax levy limitations and calculation of state aid, refer to the estimated market value for the previous assessment year and for purposes of limits on net debt, the issuance of bonds, certificates of indebtedness, or capital notes refer to the estimated market value as last finally equalized.

(d) For purposes of a provision of a home rule charter or of any special law that is not codified in the statutes and that imposes a levy limitation based on market value or any limit on debt, the issuance of bonds, certificates of indebtedness, or capital notes based on market value, the terms "market value," "taxable market value," and "market valuation," whether equalized or unequalized, mean "estimated market value" as defined in paragraph (a).

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2024, section 273.111, subdivision 9, is amended to read:

Subd. 9. Additional taxes. ~~(a) Except as provided in paragraph (b),~~ When real property which is being, or has been valued and assessed under this section no longer qualifies under subdivision 3, the portion no longer qualifying shall be subject to additional taxes, in the amount equal to the difference between the taxes determined in accordance with subdivision 4, and the amount determined under subdivision 5. Provided, however, that the amount determined under subdivision 5 shall not be greater than it would have been had the actual bona fide sale price of the real property at an arm's-length transaction been used in lieu of the market value determined under subdivision 5. Such additional taxes shall be extended against the property on the tax list for the current year, provided, however, that no interest or penalties shall be levied on such additional taxes if timely paid, and provided further, that such additional taxes shall only be levied with respect to the last three years that the said property has been valued and assessed under this section.

(b) Real property that has been valued and assessed under this section prior to May 29, 2008, and that ceases to qualify under this section after May 28, 2008, and is withdrawn from the program before August 16, 2010, is not subject to additional taxes under this subdivision or subdivision 3, paragraph (c). If additional taxes have been paid under this subdivision with respect to property described in this paragraph prior to April 3, 2009, the county must repay the property owner in the manner prescribed by the commissioner of revenue.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 3. REPEALER.

Minnesota Statutes 2024, sections 273.25; 273.65; 273.66; 273.67; 274.07; 428B.02, subdivision 7; and 477A.085, are repealed.

EFFECTIVE DATE. This section is effective the day following final enactment.

ARTICLE 11

DEPARTMENT OF REVENUE; MISCELLANEOUS

Section 1. Minnesota Statutes 2024, section 123B.53, subdivision 1, is amended to read:

Subdivision 1. Definitions. (a) For purposes of this section, the eligible debt service revenue of a district is defined as follows:

(1) the amount needed to produce between five and six percent in excess of the amount needed to meet when due the principal and interest payments on the obligations of the district for eligible projects according to subdivision 2, excluding the amounts listed in paragraph (b), minus

(2) the amount of debt service excess levy reduction for that school year calculated according to the procedure established by the commissioner.

(b) The obligations in this paragraph are excluded from eligible debt service revenue:

(1) obligations under section 123B.61;

(2) the part of debt service principal and interest paid from the taconite environmental protection fund or Douglas J. Johnson economic protection trust, excluding the portion of taconite payments from the Iron Range schools and community development account under section 298.28, subdivision 7a;

(3) obligations for long-term facilities maintenance under section 123B.595;

(4) obligations under section 123B.62; and

(5) obligations equalized under section 123B.535.

(c) For purposes of this section, if a preexisting school district reorganized under sections 123A.35 to 123A.43, 123A.46, and 123A.48 is solely responsible for retirement of the preexisting district's bonded indebtedness or capital loans, debt service equalization aid must be computed separately for each of the preexisting districts.

(d) For purposes of this section, the adjusted net tax capacity determined according to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property generally exempted from ad valorem taxes under section 272.02, subdivision 64.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2024, section 123B.535, subdivision 1, is amended to read:

Subdivision 1. Definitions. (a) For purposes of this section, the eligible natural disaster debt service revenue of a district is defined as the amount needed to produce between five and six percent in excess of the amount needed to meet when due the principal and interest payments on the obligations of the district that would otherwise qualify under section 123B.53 under the following conditions:

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(1) the district was impacted by a natural disaster event or area occurring January 1, 2005, or later, as declared by the President of the United States of America, which is eligible for Federal Emergency Management Agency payments;

(2) the natural disaster caused $500,000 or more in damages to school district buildings; and

(3) the repair and replacement costs are not covered by insurance payments or Federal Emergency Management Agency payments.

(b) For purposes of this section, the adjusted net tax capacity equalizing factor equals the quotient derived by dividing the total adjusted net tax capacity of all school districts in the state for the year before the year the levy is certified by the total number of adjusted pupil units in the state for the year prior to the year the levy is certified.

(c) For purposes of this section, the adjusted net tax capacity determined according to sections 127A.48 and 273.1325 shall be adjusted to include the tax capacity of property generally exempted from ad valorem taxes under section 272.02, subdivision 64.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 3. Minnesota Statutes 2025 Supplement, section 268.19, subdivision 1, is amended to read:

Subdivision 1. Use of data. (a) Except as provided by this section, data gathered from any person under the administration of the Minnesota Unemployment Insurance Law are private data on individuals or nonpublic data not on individuals as defined in section 13.02, subdivisions 9 and 12, and may not be disclosed except according to a district court order or section 13.05. A subpoena is not considered a district court order. These data may be disseminated to and used by the following agencies without the consent of the subject of the data:

(1) state and federal agencies specifically authorized access to the data by state or federal law;

(2) any agency of any other state or any federal agency charged with the administration of an unemployment insurance program;

(3) any agency responsible for the maintenance of a system of public employment offices for the purpose of assisting individuals in obtaining employment;

(4) the public authority responsible for child support in Minnesota or any other state in accordance with section 518A.83;

(5) human rights agencies within Minnesota that have enforcement powers;

(6) the Department of Revenue to the extent necessary for its duties under Minnesota laws;

(7) public and private agencies responsible for administering publicly financed assistance programs for the purpose of monitoring the eligibility of the program's recipients;

(8) the Department of Labor and Industry, the Department of Commerce, and the Bureau of Criminal Apprehension for uses consistent with the administration of their duties under Minnesota law;

(9) the Department of Human Services and the Office of Inspector General and its agents within the Department of Human Services, including county fraud investigators, for investigations related to recipient or provider fraud and employees of providers when the provider is suspected of committing public assistance fraud;

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(10) the Department of Human Services for the purpose of evaluating medical assistance services and supporting program improvement;

(11) local and state welfare agencies for monitoring the eligibility of the data subject for assistance programs, or for any employment or training program administered by those agencies, whether alone, in combination with another welfare agency, or in conjunction with the department or to monitor and evaluate the statewide Minnesota family investment program and other cash assistance programs, the Supplemental Nutrition Assistance Program, and the Supplemental Nutrition Assistance Program Employment and Training program by providing data on recipients and former recipients of Supplemental Nutrition Assistance Program (SNAP) benefits, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance under chapter 142E, or medical programs under chapter 256B or 256L or formerly codified under chapter 256D;

(12) local and state welfare agencies for the purpose of identifying employment, wages, and other information to assist in the collection of an overpayment debt in an assistance program;

(13) local, state, and federal law enforcement agencies for the purpose of ascertaining the last known address and employment location of an individual who is the subject of a criminal investigation;

(14) the United States Immigration and Customs Enforcement has access to data on specific individuals and specific employers provided the specific individual or specific employer is the subject of an investigation by that agency;

(15) the Department of Health for the purposes of epidemiologic investigations;

(16) the Department of Corrections for the purposes of case planning and internal research for preprobation, probation, and postprobation employment tracking of offenders sentenced to probation and preconfinement and postconfinement employment tracking of committed offenders;

~~(17) the state auditor to the extent necessary to conduct audits of job opportunity building zones as required under section 469.3201;~~

~~(18)~~ (17) the Office of Higher Education for purposes of supporting program improvement, system evaluation, and research initiatives including the Statewide Longitudinal Education Data System;

~~(19)~~ (18) the Family and Medical Benefits Division of the Department of Employment and Economic Development to be used as necessary to administer chapter 268B; and

~~(20)~~ (19) the executive director or interim executive director of the Minnesota Secure Choice Retirement Program established under chapter 187 for the purposes of assisting with communication with employers and to verify employer compliance with chapter 187.

(b) Data on individuals and employers that are collected, maintained, or used by the department in an investigation under section 268.182 are confidential as to data on individuals and protected nonpublic data not on individuals as defined in section 13.02, subdivisions 3 and 13, and must not be disclosed except under statute or district court order or to a party named in a criminal proceeding, administrative or judicial, for preparation of a defense.

(c) Data gathered by the department in the administration of the Minnesota unemployment insurance program must not be made the subject or the basis for any suit in any civil proceedings, administrative or judicial, unless the action is initiated by the department.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 4. Minnesota Statutes 2024, section 270B.14, subdivision 3, is amended to read:

Subd. 3. Administration of enterprise and job opportunity programs. The commissioner may disclose return information relating to the taxes imposed by chapters 290 and 297A to the Department of Employment and Economic Development or a municipality with a border city enterprise zone as defined under section 469.166, but only as necessary to administer the funding limitations under section 469.169, or to the Department of Employment and Economic Development and appropriate officials from the local government units in which a qualified business is located but only as necessary to enforce the job opportunity building zone benefits under section 469.315.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 5. Minnesota Statutes 2024, section 270B.15, is amended to read:

270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR ~~AND STATE AUDITOR~~.

~~(a)~~ Returns and return information must be disclosed to the legislative auditor to the extent necessary for the legislative auditor to carry out sections 3.97 to 3.979.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 6. Minnesota Statutes 2024, section 270C.055, is amended by adding a subdivision to read:

Subd. 4. Venue. Unless otherwise provided in chapter 289A, if two or more criminal offenses under the state revenue laws or chapter 349 are committed by the same person in more than one county, the accused may be prosecuted for all the offenses in any county in which one of the offenses was committed.

EFFECTIVE DATE. This section is effective for criminal offenses committed after July 31, 2026.

Sec. 7. Minnesota Statutes 2024, section 290.01, subdivision 29, is amended to read:

Subd. 29. Taxable income. The term "taxable income" means:

(1) for individuals, estates, and trusts, the same as taxable net income;

(2) for corporations, the taxable net income less

(i) the net operating loss deduction under section 290.095; and

(ii) the dividends received deduction under section 290.21, subdivision 4~~; and~~.

~~(iii) the exemption for operating in a job opportunity building zone under section 469.317.~~

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 8. Minnesota Statutes 2024, section 290.0921, subdivision 3, is amended to read:

Subd. 3. Alternative minimum taxable income. "Alternative minimum taxable income" is Minnesota net income as defined in section 290.01, subdivision 19, and includes the adjustments and tax preference items in sections 56, 57, 58, and 59(d), (e), (f), and (h) of the Internal Revenue Code. If a corporation files a separate company Minnesota tax return, the minimum tax must be computed on a separate company basis. If a corporation is part of a tax group filing a unitary return, the minimum tax must be computed on a unitary basis. The following adjustments must be made.

(1) The portion of the depreciation deduction allowed for federal income tax purposes under section 168(k) of the Internal Revenue Code that is required as an addition under section 290.0133, subdivision 11, is disallowed in determining alternative minimum taxable income.

(2) The subtraction for depreciation allowed under section 290.0134, subdivision 13, is allowed as a depreciation deduction in determining alternative minimum taxable income.

(3) The alternative tax net operating loss deduction under sections 56(a)(4) and 56(d) of the Internal Revenue Code does not apply.

(4) The special rule for certain dividends under section 56(g)(4)(C)(ii) of the Internal Revenue Code does not apply.

(5) The tax preference for depletion under section 57(a)(1) of the Internal Revenue Code does not apply.

(6) The tax preference for tax exempt interest under section 57(a)(5) of the Internal Revenue Code does not apply.

(7) The tax preference for charitable contributions of appreciated property under section 57(a)(6) of the Internal Revenue Code does not apply.

(8) For purposes of calculating the adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code, the term "alternative minimum taxable income" as it is used in section 56(g) of the Internal Revenue Code, means alternative minimum taxable income as defined in this subdivision, determined without regard to the adjustment for adjusted current earnings in section 56(g) of the Internal Revenue Code.

(9) For purposes of determining the amount of adjusted current earnings under section 56(g)(3) of the Internal Revenue Code, no adjustment shall be made under section 56(g)(4) of the Internal Revenue Code with respect to (i) the amount of foreign dividend gross-up subtracted as provided in section 290.0134, subdivision 2, or (ii) the amount of refunds of income, excise, or franchise taxes subtracted as provided in section 290.0134, subdivision 8.

~~(10) Alternative minimum taxable income excludes the income from operating in a job opportunity building zone as provided under section 469.317.~~

~~Items of tax preference must not be reduced below zero as a result of the modifications in this subdivision.~~

~~(11)~~ (10) The subtraction for disallowed section 280E expenses under section 290.0134, subdivision 19, is allowed as a deduction in determining alternative minimum taxable income.

Items of tax preference must not be reduced below zero as a result of the modifications in this subdivision.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 9. Minnesota Statutes 2024, section 290.0922, subdivision 2, is amended to read:

Subd. 2. Exemptions. The following entities are exempt from the tax imposed by this section:

(1) corporations exempt from tax under section 290.05;

(2) real estate investment trusts;

(3) regulated investment companies or a fund thereof;

(4) entities having a valid election in effect under section 860D(b) of the Internal Revenue Code;

(5) township mutual insurance companies; and

(6) cooperatives organized under chapter 308A, 308B, or 308C that provide housing exclusively to persons age 55 and over and are classified as homesteads under section 273.124, subdivision 3~~; and~~.

(7) a qualified business as defined under section 469.310, subdivision 11, if for the taxable year all of its property is located in a job opportunity building zone designated under section 469.314 and all of its payroll is a job opportunity building zone payroll under section 469.310.

Entities not specifically exempted by this subdivision are subject to tax under this section, notwithstanding section 290.05.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 10. Minnesota Statutes 2024, section 290.0922, subdivision 3, is amended to read:

Subd. 3. Definitions. (a) "Minnesota sales or receipts" means the total sales apportioned to Minnesota pursuant to section 290.191, subdivision 5, the total receipts attributed to Minnesota pursuant to section 290.191, subdivisions 6 to 8, and/or the total sales or receipts apportioned or attributed to Minnesota pursuant to any other apportionment formula applicable to the taxpayer.

(b) "Minnesota property" means total Minnesota tangible property as provided in section 290.191, subdivisions 9 to 11, and any other tangible property located in Minnesota~~, but does not include the property of a qualified business as defined under section 469.310, subdivision 11, that is located in a job opportunity building zone designated under section 469.314~~. Intangible property shall not be included in Minnesota property for purposes of this section. Taxpayers who do not utilize tangible property to apportion income shall nevertheless include Minnesota property for purposes of this section. On a return for a short taxable year, the amount of Minnesota property owned, as determined under section 290.191, shall be included in Minnesota property based on a fraction in which the numerator is the number of days in the short taxable year and the denominator is 365.

(c) "Minnesota payrolls" means total Minnesota payrolls as provided in section 290.191, subdivision 12, but does not include the job opportunity building zone payroll under section 469.310, subdivision 8, of a qualified business as defined under section 469.310, subdivision 11. Taxpayers who do not utilize payrolls to apportion income shall nevertheless include Minnesota payrolls for purposes of this section.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 11. Minnesota Statutes 2024, section 295.52, subdivision 5, is amended to read:

Subd. 5. Volunteer ambulance services. Volunteer ambulance services are not subject to the tax under this section. For purposes of this requirement, "volunteer ambulance service" means an ambulance service in which all of the individuals whose primary responsibility is direct patient care meet the definition of volunteer ambulance attendant under section 144E.001, subdivision 15. The ambulance service may employ administrative and support staff, and remain eligible for this exemption, if the primary responsibility of these staff is not direct patient care.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 12. Minnesota Statutes 2025 Supplement, section 297A.75, subdivision 1, is amended to read:

Subdivision 1. Tax collected. The tax on the gross receipts from the sale of the following exempt items must be imposed and collected as if the sale were taxable and the rate under section 297A.62, subdivision 1, applied. The exempt items include:

(1) building materials for an agricultural processing facility exempt under section 297A.71, subdivision 13;

(2) building materials for mineral production facilities exempt under section 297A.71, subdivision 14;

(3) building materials for correctional facilities under section 297A.71, subdivision 3;

(4) building materials used in a residence for veterans with a disability exempt under section 297A.71, subdivision 11;

(5) elevators and building materials exempt under section 297A.71, subdivision 12;

(6) materials and supplies for qualified low-income housing under section 297A.71, subdivision 23;

(7) materials, supplies, and equipment for municipal electric utility facilities under section 297A.71, subdivision 35;

~~(8) equipment and materials used for the generation, transmission, and distribution of electrical energy and an aerial camera package exempt under section 297A.68, subdivision 37;~~

~~(9)~~ (8) commuter rail vehicle and repair parts under section 297A.70, subdivision 3, paragraph (a), clause (10);

~~(10)~~ (9) materials, supplies, and equipment for construction or improvement of projects and facilities under section 297A.71, subdivision 40;

~~(11)~~ (10) enterprise information technology equipment and computer software for use in a qualified data center, qualified large-scale data center, or qualified refurbished data center exempt under section 297A.68, subdivision 42;

~~(12)~~ (11) materials, supplies, and equipment for qualifying capital projects under section 297A.71, subdivision 44, paragraphs (a) and (b);

~~(13)~~ (12) items purchased for use in providing critical access dental services exempt under section 297A.70, subdivision 7, paragraph (c);

~~(14)~~ (13) items and services purchased under a business subsidy agreement for use or consumption primarily in greater Minnesota exempt under section 297A.68, subdivision 44;

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(15) (14) building materials, equipment, and supplies for constructing or replacing real property exempt under section 297A.71, subdivisions ~~49;~~ 50, paragraph (b); , and 51;

~~(16)~~ (15) building materials, equipment, and supplies for qualifying capital projects under section 297A.71, subdivision 52;

~~(17)~~ (16) building materials, equipment, and supplies for constructing, remodeling, expanding, or improving a fire station, police station, or related facilities exempt under section 297A.71, subdivision 53; and

~~(18)~~ (17) building materials, equipment, and supplies for constructing, remodeling, or improving a sustainable aviation fuel facility exempt under section 297A.71, subdivision 54.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 13. Minnesota Statutes 2025 Supplement, section 297A.75, subdivision 2, is amended to read:

Subd. 2. Refund; eligible persons. Upon application on forms prescribed by the commissioner, a refund equal to the tax paid on the gross receipts of the exempt items must be paid to the applicant. Only the following persons may apply for the refund:

(1) for subdivision 1, clauses (1), (2), and ~~(13)~~ (12) , the applicant must be the purchaser;

(2) for subdivision 1, clause (3), the applicant must be the governmental subdivision;

(3) for subdivision 1, clause (4), the applicant must be the recipient of the benefits provided in United States Code, title 38, chapter 21;

(4) for subdivision 1, clause (5), the applicant must be the owner of the homestead property;

(5) for subdivision 1, clause (6), the owner of the qualified low-income housing project;

(6) for subdivision 1, clause (7), the applicant must be a municipal electric utility or a joint venture of municipal electric utilities;

(7) for subdivision 1, clauses ~~(8), (11), and (14)~~ (10) and (13) , the owner of the qualifying business;

(8) for subdivision 1, clauses ~~(9), (10), (12), (16), and (17)~~ (8), (9), (11), (15), and (16) , the applicant must be the governmental entity that owns or contracts for the project or facility;

(9) for subdivision 1, clause ~~(15)~~ (14) , the applicant must be the owner or developer of the building or project; and

(10) for subdivision 1, clause ~~(18)~~ (17) , the applicant must be the owner or developer of the sustainable aviation fuel facility.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 14. Minnesota Statutes 2025 Supplement, section 297A.75, subdivision 3, is amended to read:

Subd. 3. Application. (a) The application must include sufficient information to permit the commissioner to verify the tax paid. If the tax was paid by a contractor, subcontractor, or builder, under subdivision 1, clauses (3) to ~~(12)~~ (11) or ~~(14) to (18)~~ (13) to (17) , the contractor, subcontractor, or builder must furnish to the refund applicant a statement including the cost of the exempt items and the taxes paid on the items unless otherwise specifically provided by this subdivision. The provisions of sections 289A.40 and 289A.50 apply to refunds under this section.

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(b) An applicant may not file more than two applications per calendar year for refunds for taxes paid on capital equipment exempt under section 297A.68, subdivision 5.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 15. Minnesota Statutes 2025 Supplement, section 297A.94, is amended to read:

297A.94 DEPOSIT OF REVENUES.

(a) Except as provided in this section, the commissioner shall deposit the revenues, including interest and penalties, derived from the taxes imposed by this chapter in the state treasury and credit them to the general fund.

(b) The commissioner shall deposit taxes in the Minnesota agricultural and economic account in the special revenue fund if:

(1) the taxes are derived from sales and use of property and services purchased for the construction and operation of an agricultural resource project; and

(2) the purchase was made on or after the date on which a conditional commitment was made for a loan guaranty for the project under section 41A.04, subdivision 3.

The commissioner of management and budget shall certify to the commissioner the date on which the project received the conditional commitment. The amount deposited in the loan guaranty account must be reduced by any refunds and by the costs incurred by the Department of Revenue to administer and enforce the assessment and collection of the taxes.

(c) The commissioner shall deposit the revenues, including interest and penalties, derived from the taxes imposed on sales and purchases included in section 297A.61, subdivision 3, paragraph (g), clauses (1) and (4), in the state treasury, and credit them as follows:

(1) first to the general obligation special tax bond debt service account in each fiscal year the amount required by section 16A.661, subdivision 3, paragraph (b); and

(2) after the requirements of clause (1) have been met, the balance to the general fund.

(d) Beginning with sales taxes remitted after July 1, 2017, the commissioner shall deposit in the state treasury the revenues collected under section 297A.64, subdivision 1, including interest and penalties and minus refunds, and credit them to the highway user tax distribution fund.

(e) The commissioner shall deposit the revenues, including interest and penalties, collected under section 297A.64, subdivision 5, in the state treasury and credit them to the general fund. By July 15 of each year the commissioner shall transfer to the highway user tax distribution fund an amount equal to the excess fees collected under section 297A.64, subdivision 5, for the previous calendar year.

(f) Beginning with sales taxes remitted after July 1, 2017, in conjunction with the deposit of revenues under paragraph (d), the commissioner shall deposit into the state treasury and credit to the highway user tax distribution fund an amount equal to the estimated revenues derived from the tax rate imposed under section 297A.62, subdivision 1, on the lease or rental for not more than 28 days of rental motor vehicles subject to section 297A.64. The commissioner shall estimate the amount of sales tax revenue deposited under this paragraph based on the amount of revenue deposited under paragraph (d).

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(g) Each month the commissioner must deposit an amount equal to the estimated revenues derived from the taxes imposed under section 297A.62, subdivision 1, on the sale and purchase of motor vehicle repair and replacement parts in the state treasury and credit:

(1) a percentage to the highway user tax distribution fund as follows:

(i) 43.5 percent in each of fiscal years 2024 and 2025;

(ii) 43 percent in fiscal year 2026;

(iii) 41 percent in fiscal year 2027;

(iv) 36 percent in fiscal year 2028;

(v) 30 percent in fiscal year 2029;

(vi) 36 percent in each of fiscal years 2030 to 2034;

(vii) 38.5 percent in fiscal year 2035;

(viii) 41 percent in fiscal year 2036; and

(ix) 43.5 percent in fiscal year 2037 and thereafter;

(2) a percentage to the transportation advancement account under section 174.49 as follows:

(i) 3.5 percent in fiscal year 2024;

(ii) 4.5 percent in fiscal year 2025;

(iii) 5.5 percent in fiscal year 2026;

(iv) 7.5 percent in fiscal year 2027;

(v) 14.5 percent in fiscal year 2028;

(vi) 21.5 percent in fiscal year 2029;

(vii) 28.5 percent in fiscal year 2030;

(viii) 36.5 percent in fiscal year 2031;

(ix) 44.5 percent in fiscal year 2032; and

(x) 56.5 percent in fiscal year 2033 and thereafter; and

(3) the remainder in each fiscal year to the general fund.

After each February forecast, and prior to the following April 15, the commissioner shall estimate the monthly deposit amount for use in the following fiscal year based on the estimate of average revenue derived from the taxes imposed under section 297A.62, subdivision 1, on the sale and purchase of motor vehicle repair and replacement

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parts from the department's three most recent consumption tax models. If, after the commissioner estimates the monthly deposit amounts and prior to July 1, the rate of tax imposed under section 297A.62, subdivision 1, or the percentages specified under this paragraph are impacted by a law change, then the commissioner must update the estimated deposit amount by July 15. For purposes of this paragraph, "motor vehicle" has the meaning given in section 297B.01, subdivision 11, and "motor vehicle repair and replacement parts" includes (i) all parts, tires, accessories, and equipment incorporated into or affixed to the motor vehicle as part of the motor vehicle maintenance and repair, and (ii) paint, oil, and other fluids that remain on or in the motor vehicle as part of the motor vehicle maintenance or repair. For purposes of this paragraph, "tire" means any tire of the type used on highway vehicles, if wholly or partially made of rubber and if marked according to federal regulations for highway use.

(h) 81.56 percent of the revenues, including interest and penalties, transmitted to the commissioner under section 297A.65, must be deposited by the commissioner in the state treasury as follows:

(1) 47.5 percent of the receipts must be deposited in the heritage enhancement account in the game and fish fund, and may be spent only on activities that improve, enhance, or protect fish and wildlife resources, including conservation, restoration, and enhancement of land, water, and other natural resources of the state;

(2) 22.5 percent of the receipts must be deposited in the natural resources fund, and may be spent only for state parks and trails;

(3) 22.5 percent of the receipts must be deposited in the natural resources fund, and may be spent only on metropolitan park and trail grants;

(4) three percent of the receipts must be deposited in the natural resources fund, and may be spent only on local trail grants;

(5) two percent of the receipts must be deposited in the natural resources fund, and may be spent only for the Minnesota Zoological Garden, the Como Park Zoo and Conservatory, and the Duluth Zoo; and

(6) 2.5 percent of the receipts must be deposited in the pollinator account established in section 103B.101, subdivision 19.

(i) 1.5 percent of the revenues, including interest and penalties, transmitted to the commissioner under section 297A.65 must be deposited in a regional parks and trails account in the natural resources fund and may only be spent for parks and trails of regional significance outside of the seven-county metropolitan area under section 85.535, based on recommendations from the Greater Minnesota Regional Parks and Trails Commission under section 85.536.

(j) 1.5 percent of the revenues, including interest and penalties, transmitted to the commissioner under section 297A.65 must be deposited in an outdoor recreational opportunities for underserved communities account in the natural resources fund and may only be spent on projects and activities that connect diverse and underserved Minnesotans through expanding cultural environmental experiences, exploration of their environment, and outdoor recreational activities.

(k) The revenue dedicated under paragraph (h) may not be used as a substitute for traditional sources of funding for the purposes specified, but the dedicated revenue shall supplement traditional sources of funding for those purposes. Land acquired with money deposited in the game and fish fund under paragraph (h) must be open to public hunting and fishing during the open season, except that in aquatic management areas or on lands where angling easements have been acquired, fishing may be prohibited during certain times of the year and hunting may be prohibited. At least 87 percent of the money deposited in the game and fish fund for improvement, enhancement, or protection of fish and wildlife resources under paragraph (h) must be allocated for field operations.

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(l) The commissioner must deposit the revenues, including interest and penalties minus any refunds, derived from the sale of items regulated under section 624.20, subdivision 1, that may be sold to persons 18 years old or older and that are not prohibited from use by the general public under section 624.21, in the state treasury and credit:

(1) 25 percent to the volunteer fire assistance grant account established under section 88.068;

(2) 25 percent to the fire safety account established under section 297I.06, subdivision 3; and

(3) the remainder to the general fund.

For purposes of this paragraph, the percentage of total sales and use tax revenue derived from the sale of items regulated under section 624.20, subdivision 1, that are allowed to be sold to persons 18 years old or older and are not prohibited from use by the general public under section 624.21, is a set percentage of the total sales and use tax revenues collected in the state, with the percentage determined under Laws 2017, First Special Session chapter 1, article 3, section 39.

(m) The revenues deposited under paragraphs (a) to (l) do not include the revenues, including interest and penalties, generated by the sales tax imposed under section 297A.62, subdivision 1a, which must be deposited as provided under the Minnesota Constitution, article XI, section 15.

EFFECTIVE DATE. This section is effective retroactively from January 1, 2026.

Sec. 16. Minnesota Statutes 2024, section 297B.03, is amended to read:

297B.03 EXEMPTIONS.

There is specifically exempted from the provisions of this chapter and from computation of the amount of tax imposed by it the following:

(1) purchase or use, including use under a lease purchase agreement or installment sales contract made pursuant to section 465.71, of any motor vehicle by the United States and its agencies and instrumentalities and by any person described in and subject to the conditions provided in section 297A.67, subdivision 11;

(2) purchase or use of any motor vehicle by any person who was a resident of another state or country at the time of the purchase and who subsequently becomes a resident of Minnesota, provided the purchase occurred more than 60 days prior to the date such person began residing in the state of Minnesota and the motor vehicle was registered in the person's name in the other state or country;

(3) purchase or use of any motor vehicle by any person making a valid election to be taxed under the provisions of section 297A.90;

(4) purchase or use of any motor vehicle previously registered in the state of Minnesota when such transfer constitutes a transfer within the meaning of section 118, 331, 332, 336, 337, 338, 351, 355, 368, 721, 731, 1031, 1033, or 1563(a) of the Internal Revenue Code, as amended through December 16, 2016;

(5) purchase or use of any vehicle owned by a resident of another state and leased to a Minnesota-based private or for-hire carrier for regular use in the transportation of persons or property in interstate commerce provided the vehicle is titled in the state of the owner or secured party, and that state does not impose a sales tax or sales tax on motor vehicles used in interstate commerce;

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(6) purchase or use of a motor vehicle by a private nonprofit or public educational institution for use as an instructional aid in automotive training programs operated by the institution. "Automotive training programs" includes motor vehicle body and mechanical repair courses but does not include driver education programs;

(7) purchase of a motor vehicle by an ambulance service licensed under section 144E.10 when that vehicle is equipped and specifically intended for emergency response or for providing ambulance service;

(8) purchase of a motor vehicle by or for a public library, as defined in section 134.001, subdivision 2, as a bookmobile or library delivery vehicle;

(9) purchase of a ready-mixed concrete truck;

(10) purchase or use of a motor vehicle by a town for use exclusively for road maintenance, including snowplows and dump trucks, but not including automobiles, vans, or pickup trucks;

(11) purchase or use of a motor vehicle by a corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes, except a public school, university, or library, but only if the vehicle is:

(i) a truck, as defined in section 168.002, a bus, as defined in section 168.002, or a passenger automobile, as defined in section 168.002, if the automobile is designed and used for carrying more than nine persons including the driver; and

(ii) intended to be used primarily to transport tangible personal property or individuals, other than employees, to whom the organization provides service in performing its charitable, religious, or educational purpose;

(12) purchase of a motor vehicle for use by a transit provider exclusively to provide transit service is exempt if the transit provider is either (i) receiving financial assistance or reimbursement under section 174.24 or 473.384, or (ii) operating under section 174.29, 473.388, or 473.405;

(13) purchase or use of a motor vehicle by a qualified business, as defined in section 469.310, located in a job opportunity building zone, if the motor vehicle is principally garaged in the job opportunity building zone and is primarily used as part of or in direct support of the person's operations carried on in the job opportunity building zone. The exemption under this clause applies to sales, if the purchase was made and delivery received during the duration of the job opportunity building zone. The exemption under this clause also applies to any local sales and use tax;

~~(14)~~ (13) purchase of a leased vehicle by the lessee who was a participant in a lease-to-own program from a charitable organization that is:

(i) described in section 501(c)(3) of the Internal Revenue Code; and

(ii) licensed as a motor vehicle lessor under section 168.27, subdivision 4;

~~(15)~~ (14) purchase of a motor vehicle used exclusively as a mobile medical unit for the provision of medical or dental services by a federally qualified health center, as defined under title 19 of the Social Security Act, as amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990; and

~~(16)~~ (15) purchase of a motor vehicle by a veteran having a total service-connected disability, as defined in section 171.01, subdivision 51.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 17. Minnesota Statutes 2025 Supplement, section 299C.76, subdivision 1, is amended to read:

Subdivision 1. Definitions. (a) For the purposes of this section, the following definitions apply.

(b) "Federal tax information" means federal tax returns and return information or information derived or created from federal tax returns, in possession of or control by the requesting agency, that is covered by the safeguarding provisions of section 6103(p)(4) of the Internal Revenue Code.

(c) "IRS Publication 1075" means Internal Revenue Service Publication 1075 that provides guidance and requirements for the protection and confidentiality of federal tax information as required in section 6103(p)(4) of the Internal Revenue Code.

(d) "National criminal history record information" means the Federal Bureau of Investigation identification records as defined in Code of Federal Regulations, title 28, section 20.3(d).

(e) "Requesting agency" means the Department of Revenue; Department of Employment and Economic Development; Department of Human Services; Department of Children, Youth, and Families; board of directors of MNsure; Department of Information Technology Services; attorney general; Office of the Legislative Auditor; and counties.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 18. REPEALER.

Minnesota Statutes 2024, sections 272.02, subdivision 64; 272.029, subdivision 7; 289A.12, subdivision 15; 290.06, subdivision 29; 297A.68, subdivision 37; 469.310; 469.311; 469.312; 469.313; 469.314; 469.315; 469.316; 469.317; 469.318; 469.3181; 469.319; 469.3191; 469.3192; 469.3193; 469.320; and 469.3201, are repealed.

EFFECTIVE DATE. This section is effective the day following final enactment."

Delete the title and insert:

"A bill for an act relating to financing and operation of state and local government; modifying individual income taxes, corporate franchise taxes, property taxes and credits, local government aids, sales and use taxes, minerals taxes, tax increment financing provisions, public finance provisions, and other various taxes and tax-related provisions; providing for federal income tax conformity; modifying income tax credits; modifying provisions related to claims for income tax refunds; providing for a direct free filing system for individual income taxes; extending the pass-through entity tax; providing for seasonal tax base replacement aid; modifying property tax exemptions and classifications; providing a onetime increase in homestead credit refunds; modifying distributions of minerals tax proceeds and exemptions for contributions to certain funds; exempting certain sales and purchases; providing for return of funds, cancellations, and transfers; making minor policy and technical changes; requiring reports; appropriating money; amending Minnesota Statutes 2024, sections 41A.30, subdivisions 1, 2, 7; 41B.0391, by adding a subdivision; 123B.53, subdivision 1; 123B.535, subdivision 1; 126C.17, by adding a subdivision; 270B.14, subdivision 3, by adding a subdivision; 270B.15; 270C.055, by adding a subdivision; 270C.56, subdivision 1; 272.02, subdivision 101, by adding a subdivision; 273.032; 273.111, subdivision 9; 289A.02, subdivision 7; 289A.08, subdivisions 7, 7a; 289A.40, subdivision 1; 289A.60, subdivision 6; 290.01, subdivisions 19, as amended, 29, 31; 290.0122, subdivision 4; 290.0131, subdivision 15, by adding subdivisions; 290.0132, by adding subdivisions; 290.0133, by adding subdivisions; 290.0134, by adding subdivisions; 290.0137; 290.033; 290.06, subdivisions 2h, 40; 290.067; 290.0921, subdivision 3; 290.0922, subdivisions 2, 3; 290.21, subdivisions 9, 10; 290A.03, subdivision 15; 291.005, subdivision 1; 295.52, subdivision 5; 297A.68, by adding a subdivision; 297A.993, subdivision 4; 297B.03; 298.225; 298.227; 298.28, subdivisions 2, 3, 4, 7a, 8, 9a, 9b, 11, by adding a

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subdivision; 298.282, subdivision 1; 383A.80, subdivision 4; 383B.80, subdivision 4; 428B.02, subdivision 4; 469.060, subdivision 3; 469.0773; 469.081, subdivision 3a; 469.176, subdivision 2; 477A.30, subdivision 8; Minnesota Statutes 2025 Supplement, sections 41A.30, subdivision 5; 41B.0391, subdivisions 2, 4, 6a; 126C.13, subdivision 4; 268.19, subdivision 1; 273.13, subdivision 22; 290.06, subdivisions 2c, 23a; 290.091, subdivision 2; 297A.75, subdivisions 1, 2, 3; 297A.94; 299C.061, subdivision 6; 299C.76, subdivision 1; 412.341, subdivision 3; Laws 2021, First Special Session chapter 14, article 9, sections 9; 11; Laws 2023, chapter 64, article 15, section 24; Laws 2025, First Special Session chapter 13, article 5, section 11, subdivision 3; Laws 2026, chapter 100, article 1, section 2; proposing coding for new law in Minnesota Statutes, chapters 289A; 290; repealing Minnesota Statutes 2024, sections 272.02, subdivision 64; 272.029, subdivision 7; 273.25; 273.65; 273.66; 273.67; 274.07; 289A.12, subdivision 15; 290.06, subdivision 29; 297A.68, subdivision 37; 428B.02, subdivision 7; 469.310; 469.311; 469.312; 469.313; 469.314; 469.315; 469.316; 469.317; 469.318; 469.3181; 469.319; 469.3191; 469.3192; 469.3193; 469.320; 469.3201; 477A.085; Laws 2026, chapter 100, article 1, section 3."

We request the adoption of this report and repassage of the bill.

House Conferees: Greg Davids, Jim Joy, Aisha Gomez and Esther Agbaje.

Senate Conferees: Ann Rest, D. Scott Dibble, Amanda Hemmingsen-Jaeger and Grant Hauschild.

Davids moved that the report of the Conference Committee on H. F. No. 2438 be adopted and that the bill be repassed as amended by the Conference Committee. The motion prevailed.

H. F. No. 2438, as amended by Conference, was read for the third time.

LAY ON THE TABLE

Niska moved that H. F. No. 2438, as amended by Conference, be laid on the table. The motion prevailed and H. F. No. 2438, as amended by Conference, was laid on the table.

There being no objection, the order of business reverted to Messages from the Senate.

MESSAGES FROM THE SENATE

The following message was received from the Senate:

Madam Speaker:

I hereby announce that the Senate has concurred in and adopted the report of the Conference Committee on:

S. F. No. 4612.

The Senate has repassed said bill in accordance with the recommendation and report of the Conference Committee. Said Senate File is herewith transmitted to the House.

Thomas S. Bottern, Secretary of the Senate

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CONFERENCE COMMITTEE REPORT ON S. F. No. 4612

A bill for an act relating to state government; modifying provisions relating to the Departments of Health, Human Services, and Children, Youth, and Families; making changes for federal compliance; establishing work or community engagement requirements; providing for pharmacy dispensing reimbursements; modifying reimbursement rates for mental health services; modifying mental health provider credentialing requirements; modifying the county share for Supplemental Nutrition Assistance Program costs; modernizing child care and family child care licensing; modifying the Minnesota African American Family Preservation and Child Welfare Disproportionality Act; establishing a committee, legislative commission, and advisory task force; establishing a hospital stabilization program; transferring regulatory oversight of health maintenance organizations to the commissioner of commerce; requiring coverage of infertility treatment; regulating gas resource development; providing for health care worker retention and protection; requiring reports; authorizing rulemaking; requiring transfer; appropriating money; amending Minnesota Statutes 2024, sections 16A.103, by adding a subdivision; 60A.50, subdivision 3; 60A.951, subdivision 3; 60A.985, subdivision 8; 60A.9853, subdivision 1; 60A.9854; 60B.03, subdivision 2; 60G.01, subdivisions 2, 4; 62A.02, subdivision 8; 62A.021, subdivision 1; 62A.61; 62A.65, subdivisions 7, 8; 62D.08, subdivisions 1, 2, 3, 7; 62D.12, subdivision 1; 62D.124, subdivision 5; 62D.221, subdivisions 1, 2; 62E.11, subdivisions 9, 13; 62J.60, subdivision 5; 62L.02, subdivision 8; 62L.08, subdivision 11; 62L.09, subdivision 3; 62L.10, subdivision 4; 62L.11, subdivision 2; 62M.11; 62Q.01, subdivision 2; 62Q.096; 62Q.106; 62Q.188, subdivision 2; 62Q.37, subdivision 2; 62Q.47; 62Q.51, subdivision 3; 62Q.556, subdivisions 3, 4; 62Q.679; 62Q.69, subdivisions 2, 3; 62Q.71; 62Q.73, subdivisions 3, 10; 62Q.81, subdivision 7; 62U.04, subdivision 13, by adding a subdivision; 103I.001; 103I.005, subdivisions 9, 21, by adding subdivisions; 103I.601, subdivision 1, by adding subdivisions; 142D.21, subdivision 3; 142F.05, by adding subdivisions; 144.1222, subdivision 4, by adding a subdivision; 144.1501, subdivision 2; 144.1503, subdivision 7; 144.1505, subdivisions 1, 2, 3; 144.1507, subdivisions 1, 2, 4, by adding a subdivision; 144.1911, subdivisions 1, 5, 6; 144.555, by adding subdivisions; 145A.14, subdivision 2a; 151.741, subdivision 4; 245.462, by adding a subdivision; 245.4711, subdivision 5; 245.4881, subdivision 5; 245A.211, subdivision 1; 256.01, by adding a subdivision; 256.017, subdivision 2; 256B.01; 256B.04, subdivision 27; 256B.056, subdivisions 1, 2a, 7, 7a; 256B.0561, subdivision 2; 256B.06, subdivision 4; 256B.0625, by adding a subdivision; 256B.076, subdivision 1, by adding subdivisions; 256B.094, subdivisions 2, 3, 6; 256B.75; 260.63, subdivision 10; 260.64, subdivision 2; 260.67, subdivision 2; 260.68, subdivision 2; 260.69, subdivision 1; 260.693, subdivision 2; 260C.451, by adding a subdivision; 295.52, subdivision 8; Minnesota Statutes 2025 Supplement, sections 62D.21; 62D.211; 142A.03, subdivision 2; 144.125, subdivision 1; 151.741, subdivision 5; 245A.07, subdivision 3; 245C.02, subdivision 15a; 245C.05, subdivision 5; 256.043, subdivision 3; 256.9657, subdivision 2b; 256.969, subdivision 2f; 256B.0625, subdivisions 8, 20; 256B.0924, subdivision 6; 256B.1973, subdivision 9; 256B.69, subdivision 6d; 256B.761, by adding a subdivision; 260.691, subdivision 1; 260.692, subdivisions 1, 2, 3; Laws 2024, chapter 117, sections 21; 22; Laws 2024, chapter 127, article 67, section 7; proposing coding for new law in Minnesota Statutes, chapters 62D; 62Q; 103I; 142D; 144; 245A; 256; 256B; 260; proposing coding for new law as Minnesota Statutes, chapters 142H; 142I; repealing Minnesota Statutes 2024, sections 142B.01, subdivisions 11, 12, 13, 25, 26, 27; 142B.41, subdivisions 4, 6, 7, 8, 10, 11, 12, 13; 142B.54, subdivisions 1, 2, 3; 142B.62; 142B.65, subdivisions 1, 2, 3, 4, 5, 6, 7, 10; 142B.66, subdivisions 1, 2, 4, 5; 142B.70, subdivisions 1, 2, 3, 4, 5, 6, 9, 10, 11, 12; 142B.71; 142B.72; 142B.74; 142B.75; 142B.76; 142B.77; 151.741, subdivisions 2, 3, 6; 256B.0625, subdivision 38; 256B.198; 260.63, subdivision 9; Minnesota Statutes 2025 Supplement, sections 142B.41, subdivision 9; 142B.65, subdivisions 8, 9; 142B.66, subdivision 3; 142B.70, subdivisions 7, 8; 256B.69, subdivision 6i; Minnesota Rules, parts 9502.0300; 9502.0315; 9502.0325; 9502.0335; 9502.0341; 9502.0345; 9502.0355; 9502.0365; 9502.0367; 9502.0375; 9502.0395; 9502.0405; 9502.0415; 9502.0425; 9502.0435, subparts 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16; 9502.0445; 9503.0005; 9503.0010; 9503.0015; 9503.0030; 9503.0031; 9503.0032; 9503.0033; 9503.0034; 9503.0040; 9503.0045; 9503.0050; 9503.0055; 9503.0060; 9503.0065; 9503.0070; 9503.0075; 9503.0080; 9503.0085; 9503.0090; 9503.0095; 9503.0100; 9503.0105; 9503.0110; 9503.0115; 9503.0120; 9503.0125; 9503.0130; 9503.0140; 9503.0145; 9503.0150; 9503.0155; 9503.0170.

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May 17, 2026

The Honorable Bobby Joe Champion

President of the Senate

The Honorable Lisa M. Demuth

Speaker of the House of Representatives

We, the undersigned conferees for S. F. No. 4612 report that we have agreed upon the items in dispute and recommend as follows:

That the House recede from its amendments and that S. F. No. 4612 be further amended as follows:

Delete everything after the enacting clause and insert:

"ARTICLE 1

DEPARTMENT OF HEALTH

Section 1. Minnesota Statutes 2025 Supplement, section 3.732, subdivision 1, is amended to read:

Subdivision 1. Definitions. As used in this section and section 3.736 the terms defined in this section have the meanings given them.

(1) "State" includes each of the departments, boards, agencies, commissions, courts, and officers in the executive, legislative, and judicial branches of the state of Minnesota and includes but is not limited to the Housing Finance Agency, the Minnesota Office of Higher Education, the Health and Education Facilities Authority, ~~the Health Technology Advisory Committee,~~ the Armory Building Commission, the Zoological Board, the Department of Iron Range Resources and Rehabilitation, the Minnesota Historical Society, the State Agricultural Society, the University of Minnesota, the Minnesota State Colleges and Universities, state hospitals, and state penal institutions. It does not include a city, town, county, school district, or other local governmental body corporate and politic.

(2) "Employee of the state" means all present or former officers, members, directors, or employees of the state, members of the Minnesota National Guard, members of a bomb disposal unit approved by the commissioner of public safety and employed by a municipality defined in section 466.01 when engaged in the disposal or neutralization of bombs or other similar hazardous explosives, as defined in section 299C.063, outside the jurisdiction of the municipality but within the state, or persons acting on behalf of the state in an official capacity, temporarily or permanently, with or without compensation. It does not include either an independent contractor except, for purposes of this section and section 3.736 only, a guardian ad litem acting under court appointment, or members of the Minnesota National Guard while engaged in training or duty under United States Code, title 10, or title 32, section 316, 502, 503, 504, or 505, as amended through December 31, 1983. Notwithstanding sections 43A.02 and 611.263, for purposes of this section and section 3.736 only, "employee of the state" includes a district public defender or assistant district public defender in the Second or Fourth Judicial District~~, a member of the Health Technology Advisory Committee,~~ and any officer, agent, or employee of the state of Wisconsin performing work for the state of Minnesota pursuant to a joint state initiative.

(3) "Scope of office or employment" means that the employee was acting on behalf of the state in the performance of duties or tasks lawfully assigned by competent authority.

(4) "Judicial branch" has the meaning given in section 43A.02, subdivision 25.

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Sec. 2. Minnesota Statutes 2024, section 62J.17, subdivision 6a, is amended to read:

Subd. 6a. Prospective review and approval. (a) No health care provider subject to prospective review under this subdivision shall make a major spending commitment unless:

(1) the provider has filed an application with the commissioner to proceed with the major spending commitment and has provided all supporting documentation and evidence requested by the commissioner; and

(2) the commissioner determines, based upon this documentation and evidence, that the major spending commitment is appropriate under the criteria provided in subdivision 5a in light of the alternatives available to the provider.

(b) A provider subject to prospective review and approval shall submit an application to the commissioner before proceeding with any major spending commitment. The provider may submit information, with supporting documentation, regarding why the major spending commitment should be excepted from prospective review under subdivision 7.

(c) The commissioner shall determine, based upon the information submitted, whether the major spending commitment is appropriate under the criteria provided in subdivision 5a, or whether it should be excepted from prospective review under subdivision 7. In making this determination, the commissioner may also consider relevant information from other sources. At the request of the commissioner, the health technology advisory committee shall convene an expert review panel made up of persons with knowledge and expertise regarding medical equipment, specialized services, health care expenditures, and capital expenditures to review applications and make recommendations to the commissioner. The commissioner shall make a decision on the application within 60 days after an application is received.

(d) The commissioner of health has the authority to issue fines, seek injunctions, and pursue other remedies as provided by law.

Sec. 3. Minnesota Statutes 2024, section 62J.2930, subdivision 1, is amended to read:

Subdivision 1. Establishment. The commissioner of health shall establish an information clearinghouse within the Department of Health to facilitate the ability of consumers, employers, providers, health plan companies, and others to obtain information on health reform activities in Minnesota. The commissioner shall make available through the clearinghouse updates on federal and state health reform activities, including information developed or collected by the Department of Health on cost containment or other research initiatives, the development of voluntary purchasing pools, action plans submitted by health plan companies, reports or recommendations of ~~the Health Technology Advisory Committee and other~~ entities on technology assessments, and reports or recommendations from other formal committees applicable to health reform activities. The clearinghouse shall also refer requestors to sources of further information or assistance. The clearinghouse is subject to chapter 13.

Sec. 4. Minnesota Statutes 2024, section 62K.02, subdivision 2, is amended to read:

Subd. 2. Scope. (a) This chapter applies only to health plans offered in the individual market or the small group market, including stand-alone dental plans sold on MNsure.

(b) This chapter applies to health carriers with respect to individual health plans and small group health plans, unless otherwise specified.

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(c) If a health carrier issues or renews individual or small group health plans in other states, this chapter applies only to health plans issued or renewed in this state to a Minnesota resident, or to cover a resident of the state, or issued or renewed to a small employer that is actively engaged in business in this state, unless otherwise specified.

(d) This chapter does not apply to short-term coverage as defined in section 62A.65, subdivision 7, or grandfathered plan coverage as defined in section 62A.011, subdivision 1b.

Sec. 5. Minnesota Statutes 2024, section 62K.03, subdivision 6, is amended to read:

Subd. 6. Health plan. "Health plan" means a health plan as defined in section 62A.011, subdivision 3, and includes stand-alone dental plans sold on MNsure.

Sec. 6. Minnesota Statutes 2024, section 62K.075, is amended to read:

62K.075 PROVIDER NETWORK NOTIFICATIONS.

(a) A health carrier must provide on the carrier's website the provider network for each product offered by the carrier, and must update the carrier's website at least once a month with any changes to the carrier's provider network, including provider changes from in-network status to out-of-network status. A health carrier must also provide on the carrier's website, for each product offered by the carrier, a list of the current waivers of the requirements in section 62K.10, subdivision 2 ~~or 3~~, in a format that is easily accessed and searchable by enrollees and prospective enrollees.

(b) Upon notification from an enrollee, a health carrier must reprocess any claim for services provided by a provider whose status has changed from in-network to out-of-network as an in-network claim if the service was provided after the network change went into effect but before the change was posted as required under paragraph (a) unless the health carrier notified the enrollee of the network change prior to the service being provided. This paragraph does not apply if the health carrier is able to verify that the health carrier's website displayed the correct provider network status on the health carrier's website at the time the service was provided.

Sec. 7. Minnesota Statutes 2025 Supplement, section 62K.10, subdivision 2, is amended to read:

Subd. 2. Time and distance standards. Health carriers must meet the time and distance standards under Code of Federal Regulations, title 45, section 155.1050, for all covered health services, including dental, retail pharmacy, and specialty services.

Sec. 8. Minnesota Statutes 2024, section 62K.105, is amended to read:

62K.105 NETWORK ADEQUACY COMPLAINTS.

The commissioner of health shall establish a clear, easily accessible process for accepting complaints from enrollees regarding health carrier compliance with section 62K.10, subdivision 2~~, 3,~~ or 4. Using this process, an enrollee may file a complaint with the commissioner that a health carrier is not in compliance with the requirements of section 62K.10, subdivision 2~~, 3,~~ or 4. The commissioner of health shall investigate all complaints received under this section.

Sec. 9. Minnesota Statutes 2024, section 62K.14, is amended to read:

62K.14 LIMITED-SCOPE PEDIATRIC DENTAL PLANS.

(a) Limited-scope pediatric dental plans must be offered to the extent permitted under the Affordable Care Act: (1) on a guaranteed issue and guaranteed renewable basis; (2) with premiums rated on allowable rating factors used for health plans; and (3) without any exclusions or limitations based on preexisting conditions.

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(b) Notwithstanding paragraph (a), a health carrier may discontinue a limited scope pediatric dental plan at the end of a plan year if the health carrier provides written notice to enrollees before coverage is to be discontinued that the particular plan is being discontinued and the health carrier offers enrollees other dental plan options that are the same or substantially similar to the dental plan being discontinued in terms of premiums, benefits, cost-sharing requirements, and network adequacy. The written notice to enrollees must be provided at least 105 days before the end of the plan year.

~~(c) Limited-scope pediatric dental plans must ensure primary care dental services are available within 60 miles or 60 minutes' travel time.~~

~~(d)~~ (c) If a stand-alone dental plan as defined under the Affordable Care Act or a limited-scope pediatric dental plan is offered, either separately or in conjunction with a health plan offered to individuals or small employers, the health plan shall not be considered in noncompliance with the requirements of the essential benefit package in the Affordable Care Act because the health plan does not offer coverage of pediatric dental benefits if these benefits are covered through the stand-alone or limited-scope pediatric dental plan, to the extent permitted under the Affordable Care Act.

~~(e)~~ (d) Health carriers offering limited-scope pediatric dental plans must comply with this section and sections 62K.07, 62K.08, 62K.10, 62K.13, and 62K.15.

~~(f)~~ (e) The commissioner of commerce shall enforce paragraphs (a) and (b). Any limited-scope pediatric dental plan that is to be offered to replace a discontinued dental plan under paragraph (b) must be approved by the commissioner of commerce in terms of cost and benefit similarity, and the commissioner of health in terms of network adequacy similarity. ~~The commissioner of health shall enforce paragraph (c).~~

Sec. 10. Minnesota Statutes 2024, section 62U.04, subdivision 4, is amended to read:

Subd. 4. Encounter data. (a) All health plan companies, dental organizations, and third-party administrators shall submit encounter data on a monthly basis to a private entity designated by the commissioner of health. The data shall be submitted in a form and manner specified by the commissioner subject to the following requirements:

(1) the data must be de-identified data as described under the Code of Federal Regulations, title 45, section 164.514;

(2) the data for each encounter must include an identifier for the patient's health care home if the patient has selected a health care home, data on contractual value-based payments, and data deemed necessary by the commissioner to uniquely identify claims in the individual health insurance market;

(3) the data must include enrollee race and ethnicity, to the extent available, for claims incurred on or after January 1, 2023; ~~and~~

(4) except for the data described in clauses (2) and (3), the data must not include information that is not included in a health care claim, dental care claim, or equivalent encounter information transaction that is required under section 62J.536.; and

(5) the data must include at least the following data fields for any fully denied claims:

(i) an indicator of which claim lines were denied;

(ii) the reason for denial of each denied claim line;

(iii) the claim line status in terms of adjudication; and

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(iv) a claim identifier to link the original claim to subsequent action on the claim.

(b) The commissioner or the commissioner's designee shall only use the data submitted under paragraph (a) to carry out the commissioner's responsibilities in this section, including supplying the data to providers so they can verify their results of the peer grouping process consistent with the recommendations developed pursuant to subdivision 3c, paragraph (d), and adopted by the commissioner and, if necessary, submit comments to the commissioner or initiate an appeal.

(c) Data on providers collected under this subdivision are private data on individuals or nonpublic data, as defined in section 13.02. Notwithstanding the data classifications in this paragraph, data on providers collected under this subdivision may be released or published as authorized in subdivision 11. The commissioner or the commissioner's designee shall establish procedures and safeguards to protect the integrity and confidentiality of any data that it maintains.

(d) The commissioner or the commissioner's designee shall not publish analyses or reports that identify, or could potentially identify, individual patients.

(e) The commissioner shall compile summary information on the data submitted under this subdivision. The commissioner shall work with its vendors to assess the data submitted in terms of compliance with the data submission requirements and the completeness of the data submitted by comparing the data with summary information compiled by the commissioner and with established and emerging data quality standards to ensure data quality.

Sec. 11. Minnesota Statutes 2024, section 62U.04, subdivision 13, is amended to read:

Subd. 13. Expanded access to and use of the all-payer claims data. (a) The commissioner or the commissioner's designee shall make the data submitted under subdivisions 4, 5, 5a, and 5b, including data classified as private or nonpublic, available to individuals and organizations engaged in research on, or efforts to effect transformation in, health care outcomes, access, quality, disparities, or spending, provided the use of the data serves a public benefit. Data made available under this subdivision may not be used to:

(1) create an unfair market advantage for any participant in the health care market in Minnesota, including health plan companies, payers, and providers;

(2) reidentify or attempt to reidentify an individual in the data; or

(3) publicly report contract details between a health plan company and provider and derived from the data.

(b) To implement paragraph (a), the commissioner shall:

(1) establish detailed requirements for data access; a process for data users to apply to access and use the data; legally enforceable data use agreements to which data users must consent; a clear and robust oversight process for data access and use, including a data management plan, that ensures compliance with state and federal data privacy laws; agreements for state agencies and the University of Minnesota to ensure proper and efficient use and security of data; and technical assistance for users of the data and for stakeholders;

(2) ~~develop a~~ assess fees according to the fee schedule in subdivision 14 to support the cost of expanded access to and use of the data, provided the fees charged under the schedule do not create a barrier to access or use for those most affected by disparities; ~~and~~

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(3) create a research advisory group to advise the commissioner on applications for data use under this subdivision, including an examination of the rigor of the research approach, the technical capabilities of the proposed user, and the ability of the proposed user to successfully safeguard the data.; and

(4) annually publish on the Department of Health website a list of projects authorized under this subdivision.

Sec. 12. Minnesota Statutes 2024, section 62U.04, is amended by adding a subdivision to read:

Subd. 14. Fees for expanded access to and use of the all-payer claims database. (a) For purposes of this section:

(1) "custom data set or analysis" means a de-identified data set or report for which a standard data set or limited use data sets are not appropriate, that only provides the minimum necessary data, and that is de-identified using the expert determination method as defined in Code of Federal Regulations, title 45, section 164.514(b)(1);

(2) "data file" means a data file derived from medical claims, pharmacy claims, dental claims, eligibility information, membership information, or provider information for a single year;

(3) "limited use data set" means a data set that meets the requirements in Code of Federal Regulations, title 45, section 164.514(e)(2), and may include protected health information from which certain direct identifiers of individuals have been removed under the principle of minimum information necessary; and

(4) "standard data set" means a static data release designed by the commissioner to serve a wide range of projects in which nearly all de-identified data elements are disclosed in one release after applying the safe harbor de‑identification method defined in Code of Federal Regulations, title 45, section 164.514(b)(2), and from which protected health information and any combination of data elements that directly identify any person are excluded.

(b) The commissioner must assess fees on an individual or organization that receives data under subdivision 13 for the cost of accessing or receiving the data. Costs under this paragraph may include but are not limited to the cost of producing and releasing data to the individual or organization under subdivision 13 and managing infrastructure and operations. The commissioner must assess fees according to the following schedule based on the type of data requested and number of years for which access is requested:

(1) the fee for a standard data set is $3,500 per data file per year;

(2) the fee for a limited use data set is $7,000 per data file per year; and

(3) the fee for a custom data set or analysis is $89 per hour of staff time expended, with fees not to exceed $5,785.

(c) An individual or organization that receives approval to access or receive data under subdivision 13 must pay all the required fees in full before accessing or receiving the requested data.

(d) The commissioner may grant a partial or full waiver of the fees in paragraph (b) if the individual or organization requesting the data meets at least one of the following criteria:

(1) the fees represent a financial hardship to the individual or organization;

(2) the organization is a self-insured data submitter under this section;

(3) the individual or organization is affiliated with an academic institution;

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(4) the individual or organization requests a high volume of data files; or

(5) the request is from a Tribal health director for, or the governing body of, one of the 11 federally recognized Tribes in Minnesota.

In determining whether to grant a waiver under this paragraph, the commissioner may consult the research advisory group established under subdivision 13.

(e) Fees paid by an individual or organization approved to access or receive data under subdivision 13 are nonrefundable. Fees collected under this subdivision must be deposited into an account in the state government special revenue fund. Money in that account does not cancel.

(f) The commissioner must publish the fee schedule in paragraph (b) on the Department of Health website.

Sec. 13. Minnesota Statutes 2024, section 144.059, subdivision 8, is amended to read:

Subd. 8. Duties. (a) The council shall consult with and advise the commissioner on matters related to the establishment, maintenance, operation, and outcomes evaluation of palliative care initiatives in the state.

(b) By February 15 of each odd-numbered year, the council shall submit to the chairs and ranking minority members of the committees of the senate and the house of representatives with primary jurisdiction over health care a report containing:

(1) the advisory council's assessment of the availability of palliative care in the state;

(2) the advisory council's analysis of barriers to greater access to palliative care; and

(3) recommendations for legislative action, with draft legislation to implement the recommendations.

Sec. 14. Minnesota Statutes 2024, section 144.1222, is amended by adding a subdivision to read:

Subd. 2e. Private residential pool used for certified swimming classes. Notwithstanding Minnesota Rules, part 4717.0250, subpart 7, a private residential pool may be used as part of a business if the private residential pool is used by a paying guest of the homeowner and the guest is participating in a certified swimming class conducted by the homeowner, provided that:

(1) the homeowner is a certified swimming instructor and is conducting a certified swimming class on a one‑on‑one basis;

(2) not more than four individuals are in the pool at the same time during the class;

(3) prior to each new paying guest beginning participation in a certified swimming class:

(i) the guest, or the guest's parent or legal guardian if the guest is a minor, provides written consent to use of the pool. The written consent must include a statement that the guest, or the guest's parent or legal guardian if the guest is a minor, has received and read materials provided by the Department of Health with information on the risk of disease transmission and other risks associated with pools; and a statement that the Department of Health does not monitor or inspect the homeowner's pool to ensure compliance with the requirements in this section or Minnesota Rules, chapter 4717; and

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(ii) the homeowner tests the pool's water for the concentration of chlorine or bromine, pH, and alkalinity, and the water in the pool meets the requirements for disinfection residual, pH, and alkalinity in Minnesota Rules, part 4717.1750, subparts 3 to 6; and

(4) the following notice is conspicuously posted at the pool and, prior to each new paying guest beginning participation in a certified swimming class, is provided to the guest or to the guest's parent or legal guardian if the guest is a minor:

"NOTICE

This pool is exempt from state and local anti-entrapment and sanitary requirements that prevent waterborne diseases and chemical burns and is not subject to inspection.

USE AT YOUR OWN RISK"

Sec. 15. Minnesota Statutes 2024, section 144.1222, subdivision 4, is amended to read:

Subd. 4. Definitions. (a) For purposes of this section, the following terms have the meanings given them.

(b) "ASME/ANSI standard" means a safety standard accredited by the American National Standards Institute and published by the American Society of Mechanical Engineers.

(c) "ASTM standard" means a safety standard issued by ASTM International, formerly known as the American Society for Testing and Materials.

(d) "Public pool" means any pool other than a private residential pool, that is: (1) open to the public generally, whether for a fee or free of charge; (2) open exclusively to members of an organization and their guests; (3) open to residents of a multiunit apartment building, apartment complex, residential real estate development, or other multifamily residential area; (4) open to patrons of a hotel or lodging or other public accommodation facility; or (5) operated by a person in a park, school, licensed child care facility, group home, motel, camp, resort, club, condominium, manufactured home park, or political subdivision with the exception of swimming pools at family day care homes licensed under section 142B.41, subdivision 9, paragraph (a).

(e) "Unblockable suction outlet or drain" means a drain of any size and shape that a human body cannot sufficiently block to create a suction entrapment hazard and meets ASME/ANSI standards.

(f) "Certified swimming class" means an infant swimming resource (ISR) class; an American Red Cross swimming class, swimming lesson, or learn-to-swim class; or any other swimming class certified by a nationally accredited organization that operates in all 50 states.

(g) "Certified swimming instructor" means a certified ISR instructor; a certified American Red Cross swimming instructor or swim coach; or any other swimming instructor certified by a nationally accredited organization that operates in all 50 states.

Sec. 16. Minnesota Statutes 2025 Supplement, section 144.125, subdivision 1, is amended to read:

Subdivision 1. Duty to perform testing. (a) It is the duty of (1) the administrative officer or other person in charge of each institution caring for infants 28 days or less of age, (2) the person required in pursuance of the provisions of section 144.215, to register the birth of a child, or (3) the nurse midwife or midwife in attendance at the birth, to arrange to have administered to every infant or child in its care tests for heritable and congenital disorders according to subdivision 2 and rules prescribed by the state commissioner of health.

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(b) Testing, recording of test results, reporting of test results, and follow-up of infants with heritable congenital disorders, including hearing loss detected through the early hearing detection and intervention program in section 144.966, shall be performed at the times and in the manner prescribed by the commissioner of health.

(c) The fee to support the newborn screening program, including tests administered under this section and section 144.966, shall be $184.35 per specimen. This fee amount shall be deposited in the state treasury and credited to the state government special revenue fund. If the individual described in paragraph (a) submits to an insurer a claim for reimbursement for a newborn screening program fee but does not receive reimbursement from the insurer, the individual may request a special fee exemption form from the newborn screening program and may apply for an exemption from the fee. To qualify for the exemption, the individual must provide documentation to the newborn screening program that the insurer did not reimburse the individual for the fee.

(d) The fee to offset the cost of the support services provided under section 144.966, subdivision 3a, shall be $15 per specimen. This fee shall be deposited in the state treasury and credited to the general fund.

Sec. 17. Minnesota Statutes 2024, section 144.1501, subdivision 2, is amended to read:

Subd. 2. Availability. (a) The commissioner of health shall use money appropriated for health professional education loan forgiveness in this section:

(1) for medical residents, physicians, mental health professionals, and alcohol and drug counselors agreeing to practice in designated rural areas or underserved urban communities or specializing in the area of pediatric psychiatry;

(2) for midlevel practitioners agreeing to practice in designated rural areas or to teach at least 12 credit hours, or 720 hours per year in the nursing field in a postsecondary program at the undergraduate level or the equivalent at the graduate level;

(3) for nurses who agree to practice in a Minnesota nursing home; in an intermediate care facility for persons with developmental disability; in a hospital if the hospital owns and operates a Minnesota nursing home and a minimum of 50 percent of the hours worked by the nurse is in the nursing home; in an assisted living facility as defined in section 144G.08, subdivision 7; or for a home care provider as defined in section 144A.43, subdivision 4; or agree to teach at least 12 credit hours, or 720 hours per year in the nursing field in a postsecondary program at the undergraduate level or the equivalent at the graduate level;

(4) for other health care technicians agreeing to teach at least 12 credit hours, or 720 hours per year in their designated field in a postsecondary program at the undergraduate level or the equivalent at the graduate level. The commissioner, in consultation with the Healthcare Education-Industry Partnership, shall determine the health care fields where the need is the greatest, including, but not limited to, respiratory therapy, clinical laboratory technology, radiologic technology, and surgical technology;

(5) for pharmacists, advanced dental therapists, dental therapists, and public health nurses who agree to practice in designated rural areas;

(6) for dentists agreeing to deliver at least 25 percent of the dentist's yearly patient encounters to state public program enrollees or patients receiving sliding fee schedule discounts through a formal sliding fee schedule meeting the standards established by the United States Department of Health and Human Services under Code of Federal Regulations, title 42, section 51c.303; and

(7) for nurses employed as a hospital nurse by a nonprofit hospital and providing direct care to patients at the nonprofit hospital.

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(b) Appropriations made for health professional education loan forgiveness in this section do not cancel and are available until expended~~, except that at the end of each biennium, any remaining balance in the account that is not committed by contract and not needed to fulfill existing commitments shall cancel to the fund~~.

Sec. 18. Minnesota Statutes 2024, section 144.1503, subdivision 7, is amended to read:

Subd. 7. Selection process. The commissioner shall determine a maximum award for grants and loan forgiveness, and shall make selections based on the information provided in the grant application, including the demonstrated need for an applicant provider to enhance the education of its workforce, the proposed employee scholarship or loan forgiveness selection process, the applicant's proposed budget, and other criteria as determined by the commissioner. Notwithstanding any law or rule to the contrary, amounts appropriated for purposes of this section do not cancel and are available until expended~~, except that at the end of each biennium, any remaining amount that is not committed by contract and not needed to fulfill existing commitments shall cancel to the general fund~~.

Sec. 19. Minnesota Statutes 2024, section 144.1505, subdivision 1, is amended to read:

Subdivision 1. Definitions. For purposes of this section, the following definitions apply:

(1) "eligible advanced practice registered nurse program" means a program that is located in Minnesota and is currently accredited as a master's, doctoral, or postgraduate level advanced practice registered nurse program by the Commission on Collegiate Nursing Education or by the Accreditation Commission for Education in Nursing, or is presents a credible plan as a candidate for accreditation;

(2) "eligible dental therapy program" means a dental therapy education program or advanced dental therapy education program ~~that is~~ located in Minnesota ~~and is either~~ that:

(i) is approved by the Board of Dentistry; or

(ii) is currently accredited by the Commission on Dental Accreditation; or

(iii) presents a credible plan as a candidate for accreditation;

(3) "eligible mental health professional program" means a program that is located in Minnesota and is ~~listed~~ currently accredited as a mental health professional program by the appropriate accrediting body for clinical social work, psychology, marriage and family therapy, or licensed professional clinical counseling, or is presents a credible plan as a candidate for accreditation;

(4) "eligible pharmacy program" means a program that is located in Minnesota and is currently accredited as a doctor of pharmacy program by the Accreditation Council on Pharmacy Education or presents a credible plan as a candidate for accreditation;

(5) "eligible physician assistant program" means a program that is located in Minnesota and is currently accredited as a physician assistant program by the Accreditation Review Commission on Education for the Physician Assistant, or is presents a credible plan as a candidate for accreditation;

(6) "mental health professional" means an individual providing clinical services in the treatment of mental illness who meets one of the qualifications under section 245.462, subdivision 18;

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(7) "eligible physician training program" means a medical school training program or a physician residency training program located in Minnesota ~~and~~ that is currently accredited by the accrediting body or has presented a credible plan as a candidate for accreditation;

(8) "eligible dental program" means a dental education program or a dental residency training program located in Minnesota and that is currently accredited by the accrediting body or has presented a credible plan as a candidate for accreditation; ~~and~~

(9) "project" means a project to ~~establish or expand~~ (i) plan or implement a new eligible clinical training ~~for physician assistants, advanced practice registered nurses, pharmacists, dental therapists, advanced dental therapists, or mental health professionals in Minnesota.~~ program or increase the base number of trainees in an existing eligible clinical training program, or (ii) add or expand rural rotations or clinical training experiences in an existing eligible clinical training program;

(10) "rural community" means a Tribal Nation, statutory city, home rule charter city, or township in Minnesota that is outside the seven-county metropolitan area as defined in section 473.121, subdivision 2; and

(11) "underserved community" means a Minnesota area or population included in the list of designated primary medical care health professional shortage areas, medically underserved areas, or medically underserved populations maintained and updated by the United States Department of Health and Human Services.

Sec. 20. Minnesota Statutes 2024, section 144.1505, subdivision 2, is amended to read:

Subd. 2. Programs. (a) For advanced practice provider clinical training expansion grants, the commissioner of health shall award ~~health professional training site~~ grants to eligible physician assistant, advanced practice registered nurse, pharmacy, dental therapy, and mental health professional programs to plan and implement ~~expanded~~ a new eligible clinical training program or increase the base number of trainees in an existing eligible clinical training program. Clinical training must take place in communities outside the seven-county metropolitan area as defined in section 473.121, subdivision 2, or in underserved communities. A planning grant shall not exceed $75,000, and a three-year training grant shall not exceed $300,000 per project. The commissioner may provide a ~~one-year,~~ no-cost extension for grants.

(b) For health professional rural ~~and underserved~~ clinical rotations grants, the commissioner of health shall award ~~health professional training site~~ grants to existing eligible physician, physician assistant, advanced practice registered nurse, pharmacy, dentistry, dental therapy, and mental health professional training programs to ~~augment existing clinical~~ ~~training programs to~~ add, expand, or enhance rural ~~and underserved~~ rotations or clinical training experiences, such as credential or certificate rural tracks or other specialized training. Rotations and clinical training experiences must take place in rural communities, excluding the cities of Duluth, Moorhead, Rochester, and St. Cloud. For physician and dentist training, the expanded training must include rotations in primary care settings such as community clinics, hospitals, health maintenance organizations, or practices in rural communities.

(1) ~~establishing or expanding rotations~~ planning and implementing a new clinical training program or increasing the base number of trainees in an existing clinical training program as described in paragraph (a);

(2) recruitment, training, and retention of students ~~and~~, faculty, and preceptors;

(3) connecting students with appropriate clinical training sites, internships, practicums, or externship ~~activities~~ opportunities;

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(4) travel and lodging for students;

(5) faculty, student, and preceptor salaries, incentives, or other financial support;

(6) development and implementation of health equity and cultural ~~competency~~ responsiveness training;

(7) evaluations of the clinical training program to inform program improvements;

(8) training site improvements, fees, equipment, and supplies required to establish, maintain, or expand a training program; ~~and~~

(9) supporting clinical education in which trainees are part of a primary care team model.; and

(10) onboarding expenses for trainees to meet clinical training site requirements.

(d) Health professional rural clinical rotation grant funds may be used for:

(1) adding, expanding, or enhancing rural rotations and clinical training experiences in an existing clinical training program as described in paragraph (b);

(2) recruitment, training, and retention of students, faculty, and preceptors;

(3) connecting students with appropriate clinical training sites, internships, practicums, or externship opportunities;

(4) travel and lodging for students;

(5) faculty, student, and preceptor salaries, stipends, or other financial support;

(6) development and implementation of health equity and cultural responsiveness training;

(7) evaluations of the rural rotation or clinical training experience to inform program improvements;

(8) training site improvements, fees, equipment, and supplies required to establish or expand rural rotations or clinical training experiences;

(9) supporting clinical education in which trainees are part of a primary care team model; and

(10) onboarding expenses for trainees to meet clinical training site requirements.

Sec. 21. Minnesota Statutes 2024, section 144.1505, subdivision 3, is amended to read:

Subd. 3. Applications. (a) Eligible physician assistant, advanced practice registered nurse, pharmacy, dental therapy, dental, physician, and mental health professional programs seeking a grant shall apply to the commissioner. Applications for advanced practice provider clinical training expansion grants must include a description of the number of additional students who will be trained using grant funds; and attestation that funding will be used to support an increase in the number of clinical training slots;.

(b) All applications must include a description of the problem that the proposed project will address; a description of the project, including all costs associated with the project,; sources of funds for the project,; detailed uses of all funds for the project, and the results expected; and a plan to maintain or operate ~~any component included~~

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in the project after the grant period, including a description of potential barriers to sustainability. ~~The applicant~~ Applicants must describe achievable objectives, a timetable, and roles and capabilities of responsible individuals in the organization.

~~Applicants applying under subdivision 2, paragraph (b),~~ (c) Applications for rural clinical rotation grants must include a description of the new, expanded, or enhanced rural rotations or clinical training experiences; attestation that funding will be used to support improved rural clinical training experiences; and information about length of training and training site settings, geographic location of rural sites, and rural populations expected to be served.

Sec. 22. Minnesota Statutes 2024, section 144.1507, subdivision 1, is amended to read:

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Eligible program" means a program that meets the following criteria:

(1) is located in Minnesota;

(2) trains medical residents in the specialties of family medicine, general internal medicine, general pediatrics, psychiatry, geriatrics, or general surgery in rural residency training programs or in community-based ambulatory care centers that primarily serve the underserved, or trains postdoctoral psychology residents; and

(3) is accredited by the Accreditation Council for Graduate Medical Education or the American Psychological Association or presents a credible plan to obtain accreditation.

(c) "Rural community" means a Tribal Nation, statutory city, home rule charter city, or township in Minnesota that is outside the seven-county metropolitan area as defined in section 473.121, subdivision 2, excluding the cities of Duluth, Mankato, Moorhead, Rochester, and St. Cloud.

~~(c)~~ (d) "Rural residency training program" means a rural medical residency program or a rural psychology residency program that provides ~~an initial year of~~ training in an accredited residency program in Minnesota. ~~The subsequent years of the residency program are~~ At least two-thirds of the residency training must be based in rural communities, utilizing local clinics and community hospitals, with specialty rotations in nearby regional medical centers. When specialty rotations cannot take place within rural communities, training may occur in nonrural sites provided that at least one-half of all training occurs in rural communities. For residency training programs in general surgery, pediatrics, and psychiatry, at least one-half of the residency training must be based in communities outside the seven-county metropolitan area, with rotations in rural communities.

~~(d)~~ (e) "Community-based ambulatory care centers" means federally qualified health centers, community mental health centers, rural health clinics, health centers operated by the Indian Health Service, an Indian Tribe or Tribal organization, or an urban American Indian organization or an entity receiving funds under Title X of the Public Health Service Act.

~~(e)~~ (f) "Eligible project" means a project to establish and maintain a rural residency training program.

Sec. 23. Minnesota Statutes 2024, section 144.1507, subdivision 2, is amended to read:

Subd. 2. Rural residency training program. (a) The commissioner of health shall award rural residency training program grants to eligible programs to plan, implement, and sustain rural residency training programs. A rural medical residency training program grant shall not exceed $250,000 per year for up to three years for planning and development, and $225,000 per resident per year for each year thereafter to sustain the program. A rural

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psychology residency training program grant shall not exceed $150,000 per year for up to three years for planning and development and $150,000 per resident per year for each year thereafter to sustain the program. Medical and psychology residency programs that meet eligibility guidelines and continue to demonstrate financial need shall be granted sustaining funds, renewable every five years.

(b) Funds may be spent to cover the costs of:

(1) planning related to establishing accredited rural residency training programs;

(2) obtaining accreditation by the Accreditation Council for Graduate Medical Education, the American Psychological Association, or another national body that accredits rural residency training programs;

(3) establishing new rural residency training programs;

(4) recruitment, training, and retention of new residents and faculty related to the new rural residency training program;

(5) travel and lodging for new residents;

(6) faculty, new resident, and preceptor salaries related to new rural residency training programs;

(7) training site improvements, fees, equipment, and supplies required for new rural residency training programs; and

(8) supporting clinical education in which trainees are part of a primary care team model.

Sec. 24. Minnesota Statutes 2024, section 144.1507, subdivision 4, is amended to read:

Subd. 4. Consideration of grant applications. The commissioner shall review each application to determine if the residency program application is complete, if the proposed rural residency program and residency slots are eligible for a grant, and if the program is eligible for federal graduate medical education funding, and when the funding is available. If eligible programs are not eligible for federal graduate medical education funding, the commissioner may award continuation funding to the eligible program beyond the initial grant period without requiring a competitive application. The commissioner shall award grants to support training programs in family medicine, general internal medicine, general pediatrics, psychiatry, geriatrics, general surgery, psychology, and other primary care focus areas.

Sec. 25. Minnesota Statutes 2024, section 144.1507, is amended by adding a subdivision to read:

Subd. 6. Clinical training program coordination. The commissioner may award grants to the University of Minnesota to provide technical assistance to residency training programs for coordinated development of rural clinical training programs statewide.

Sec. 26. Minnesota Statutes 2024, section 144.1911, subdivision 1, is amended to read:

Subdivision 1. Establishment. The international medical graduates assistance program is established to address barriers to practice and facilitate pathways to assist immigrant international medical graduates to integrate into the Minnesota health care delivery system, with the goal of increasing access to primary care in rural and underserved areas of the state. Notwithstanding any law to the contrary, appropriations made to the program do not cancel and are available until expended.

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Sec. 27. Minnesota Statutes 2024, section 144.1911, subdivision 5, is amended to read:

Subd. 5. Clinical preparation. ~~(a)~~ The commissioner shall award grants to support clinical preparation for Minnesota international medical graduates needing additional clinical preparation or experience to qualify for residency. The grant program shall include:

(1) proposed training curricula;

(2) associated policies and procedures for clinical training sites, which must be part of existing clinical medical education programs in Minnesota; and

(3) monthly stipends for international medical graduate participants. Priority shall be given to primary care sites in rural or underserved areas of the state~~, and~~. International medical graduate participants who receive funding through the international medical graduate primary care residency grant program must commit to serving at least five years in a rural or underserved community of the state.

(b) The policies and procedures for the clinical preparation grants must be developed by December 31, 2015, including an implementation schedule that begins awarding grants to clinical preparation programs beginning in June of 2016.

Sec. 28. Minnesota Statutes 2024, section 144.1911, subdivision 6, is amended to read:

Subd. 6. International medical graduate primary care residency grant program and revolving account. (a) The commissioner shall award grants to support primary care residency positions designated for Minnesota immigrant physicians who are willing to serve in rural or underserved areas of the state. No grant shall exceed $150,000 per residency position per year. Eligible primary care residency grant recipients include accredited family medicine, general surgery, internal medicine, obstetrics and gynecology, psychiatry, and pediatric residency programs. Eligible primary care residency programs shall apply to the commissioner. Applications must include the number of anticipated residents to be funded using grant funds and a budget. ~~Notwithstanding any law to the contrary, funds awarded to grantees in a grant agreement do not lapse until the grant agreement expires.~~ Before any funds are distributed, a grant recipient shall provide the commissioner with the following:

(1) a copy of the signed contract between the primary care residency program and the participating international medical graduate;

(2) certification that the participating international medical graduate has lived in Minnesota for at least two years and is certified by the Educational Commission on Foreign Medical Graduates. Residency programs may also require that participating international medical graduates hold a Minnesota certificate of clinical readiness for residency, once the certificates become available; and

(3) verification that the participating international medical graduate has executed a participant agreement pursuant to paragraph (b).

(b) Upon acceptance by a participating residency program, international medical graduates shall enter into an agreement with the commissioner to provide primary care for at least five years in a rural or underserved area of Minnesota after graduating from the residency program and make payments to the revolving international medical graduate residency account for five years beginning in their second year of postresidency employment. Participants shall pay $15,000 or ten percent of their annual compensation each year, whichever is less.

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(c) A revolving international medical graduate residency account is established as an account in the special revenue fund in the state treasury. The commissioner of management and budget shall credit to the account appropriations, payments, and transfers to the account. Earnings, such as interest, dividends, and any other earnings arising from fund assets, must be credited to the account. Funds in the account are appropriated annually to the commissioner to award grants and administer the grant program established in paragraph (a). Notwithstanding any law to the contrary, any funds deposited in the account do not expire. The commissioner may accept contributions to the account from private sector entities subject to the following provisions:

(1) the contributing entity may not specify the recipient or recipients of any grant issued under this subdivision;

(2) the commissioner shall make public the identity of any private contributor to the account, as well as the amount of the contribution provided; and

(3) a contributing entity may not specify that the recipient or recipients of any funds use specific products or services, nor may the contributing entity imply that a contribution is an endorsement of any specific product or service.

Sec. 29. Minnesota Statutes 2024, section 144.293, subdivision 7, is amended to read:

Subd. 7. Exception to consent. Subdivision 2 does not apply to the release of health records to the commissioner of health ~~or the Health Data Institute under chapter 62J~~, provided that the commissioner encrypts the patient identifier upon receipt of the data.

Sec. 30. Minnesota Statutes 2024, section 144.551, subdivision 1, as amended by Laws 2026, chapter 91, section 1, is amended to read:

Subdivision 1. Restricted construction or modification. (a) The following construction or modification may not be commenced:

(1) any erection, building, alteration, reconstruction, modernization, improvement, extension, lease, or other acquisition by or on behalf of a hospital that increases the bed capacity of a hospital, relocates hospital beds from one physical facility, complex, or site to another, or otherwise results in an increase or redistribution of hospital beds within the state; and

(2) the establishment of a new hospital.

(b) This section does not apply to:

(1) construction or relocation within a county by a hospital, clinic, or other health care facility that is a national referral center engaged in substantial programs of patient care, medical research, and medical education meeting state and national needs that receives more than 40 percent of its patients from outside the state of Minnesota;

(2) a project for construction or modification for which a health care facility held an approved certificate of need on May 1, 1984, regardless of the date of expiration of the certificate;

(3) a project for which a certificate of need was denied before July 1, 1990, if a timely appeal results in an order reversing the denial;

(4) a project exempted from certificate of need requirements by Laws 1981, chapter 200, section 2;

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(5) a project involving consolidation of pediatric specialty hospital services within the Minneapolis-St. Paul metropolitan area that would not result in a net increase in the number of pediatric specialty hospital beds among the hospitals being consolidated;

(6) a project involving the temporary relocation of pediatric-orthopedic hospital beds to an existing licensed hospital that will allow for the reconstruction of a new philanthropic, pediatric-orthopedic hospital on an existing site and that will not result in a net increase in the number of hospital beds. Upon completion of the reconstruction, the licenses of both hospitals must be reinstated at the capacity that existed on each site before the relocation;

(7) the relocation or redistribution of hospital beds within a hospital building or identifiable complex of buildings provided the relocation or redistribution does not result in: (i) an increase in the overall bed capacity at that site; (ii) relocation of hospital beds from one physical site or complex to another; or (iii) redistribution of hospital beds within the state or a region of the state;

(8) relocation or redistribution of hospital beds within a hospital corporate system that involves the transfer of beds from a closed facility site or complex to an existing site or complex provided that: (i) no more than 50 percent of the capacity of the closed facility is transferred; (ii) the capacity of the site or complex to which the beds are transferred does not increase by more than 50 percent; (iii) the beds are not transferred outside of a federal health systems agency boundary in place on July 1, 1983; (iv) the relocation or redistribution does not involve the construction of a new hospital building; and (v) the transferred beds are used first to replace within the hospital corporate system the total number of beds previously used in the closed facility site or complex for mental health services and substance use disorder services. Only after the hospital corporate system has fulfilled the requirements of this item may the remainder of the available capacity of the closed facility site or complex be transferred for any other purpose;

(9) a construction project involving up to 35 new beds in a psychiatric hospital in Rice County that primarily serves adolescents and that receives more than 70 percent of its patients from outside the state of Minnesota;

(10) a project to replace a hospital or hospitals with a combined licensed capacity of 130 beds or less if: (i) the new hospital site is located within five miles of the current site; and (ii) the total licensed capacity of the replacement hospital, either at the time of construction of the initial building or as the result of future expansion, will not exceed 100 licensed hospital beds, or the combined licensed capacity of the hospitals, whichever is less;

(11) the relocation of licensed hospital beds from an existing state facility operated by the Direct Care and Treatment executive board to a new or existing facility, building, or complex operated by the Direct Care and Treatment executive board; from one regional treatment center site to another; or from one building or site to a new or existing building or site on the same campus;

(12) the construction or relocation of hospital beds operated by a hospital having a statutory obligation to provide hospital and medical services for the indigent that does not result in a net increase in the number of hospital beds, notwithstanding section 144.552, 27 beds, of which 12 serve mental health needs, may be transferred from Hennepin County Medical Center to Regions Hospital under this clause;

(13) a construction project involving the addition of up to 31 new beds in an existing nonfederal hospital in Beltrami County;

(14) a construction project involving the addition of up to eight new beds in an existing nonfederal hospital in Otter Tail County with 100 licensed acute care beds;

(15) a construction project involving the addition of 20 new hospital beds in an existing hospital in Carver County serving the southwest suburban metropolitan area;

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(16) a project for the construction or relocation of up to 20 hospital beds for the operation of up to two psychiatric facilities or units for children provided that the operation of the facilities or units have received the approval of the commissioner of human services;

(17) a project involving the addition of 14 new hospital beds to be used for rehabilitation services in an existing hospital in Itasca County;

(18) a project to add 20 licensed beds in existing space at a hospital in Hennepin County that closed 20 rehabilitation beds in 2002, provided that the beds are used only for rehabilitation in the hospital's current rehabilitation building. If the beds are used for another purpose or moved to another location, the hospital's licensed capacity is reduced by 20 beds;

(19) a critical access hospital established under section 144.1483, clause (9), and section 1820 of the federal Social Security Act, United States Code, title 42, section 1395i-4, that delicensed beds since enactment of the Balanced Budget Act of 1997, Public Law 105-33, to the extent that the critical access hospital does not seek to exceed the maximum number of beds permitted such hospital under federal law;

(20) notwithstanding section 144.552, a project for the construction of a new hospital in the city of Maple Grove with a licensed capacity of up to 300 beds provided that:

(i) the project, including each hospital or health system that will own or control the entity that will hold the new hospital license, is approved by a resolution of the Maple Grove City Council as of March 1, 2006;

(ii) the entity that will hold the new hospital license will be owned or controlled by one or more not-for-profit hospitals or health systems that have previously submitted a plan or plans for a project in Maple Grove as required under section 144.552, and the plan or plans have been found to be in the public interest by the commissioner of health as of April 1, 2005;

(iii) the new hospital's initial inpatient services must include, but are not limited to, medical and surgical services, obstetrical and gynecological services, intensive care services, orthopedic services, pediatric services, noninvasive cardiac diagnostics, behavioral health services, and emergency room services;

(iv) the new hospital:

(A) will have the ability to provide and staff sufficient new beds to meet the growing needs of the Maple Grove service area and the surrounding communities currently being served by the hospital or health system that will own or control the entity that will hold the new hospital license;

(B) will provide uncompensated care;

(D) will be a site for workforce development for a broad spectrum of health-care-related occupations and have a commitment to providing clinical training programs for physicians and other health care providers;

(E) will demonstrate a commitment to quality care and patient safety;

(F) will have an electronic medical records system, including physician order entry;

(G) will provide a broad range of senior services; and

(H) will provide emergency medical services that will coordinate care with regional providers of trauma services and licensed emergency ambulance services in order to enhance the continuity of care for emergency medical patients; and

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(I) will be completed by December 31, 2009, unless delayed by circumstances beyond the control of the entity holding the new hospital license; and

(v) as of 30 days following submission of a written plan, the commissioner of health has not determined that the hospitals or health systems that will own or control the entity that will hold the new hospital license are unable to meet the criteria of this clause;

(21) a project approved under section 144.553;

(22) a project for the construction of a hospital with up to 25 beds in Cass County within a 20-mile radius of the state Ah-Gwah-Ching facility, provided the hospital's license holder is approved by the Cass County Board;

(23) a project for an acute care hospital in Fergus Falls that will increase the bed capacity from 108 to 110 beds by increasing the rehabilitation bed capacity from 14 to 16 and closing a separately licensed 13-bed skilled nursing facility;

(24) notwithstanding section 144.552, a project for the construction and expansion of a specialty psychiatric hospital in Hennepin County for up to 50 beds, exclusively for patients who are under 21 years of age on the date of admission. The commissioner conducted a public interest review of the mental health needs of Minnesota and the Twin Cities metropolitan area in 2008. No further public interest review shall be conducted for the construction or expansion project under this clause;

(25) a project for a 16-bed psychiatric hospital in the city of Thief River Falls, if the commissioner finds the project is in the public interest after the public interest review conducted under section 144.552 is complete;

(26)(i) a project for a 20-bed psychiatric hospital, within an existing facility in the city of Maple Grove, exclusively for patients who are under 21 years of age on the date of admission, if the commissioner finds the project is in the public interest after the public interest review conducted under section 144.552 is complete;

(ii) this project shall serve patients in the continuing care benefit program under section 256.9693. The project may also serve patients not in the continuing care benefit program; and

(iii) if the project ceases to participate in the continuing care benefit program, the commissioner must complete a subsequent public interest review under section 144.552. If the project is found not to be in the public interest, the license must be terminated six months from the date of that finding. If the commissioner of human services terminates the contract without cause or reduces per diem payment rates for patients under the continuing care benefit program below the rates in effect for services provided on December 31, 2015, the project may cease to participate in the continuing care benefit program and continue to operate without a subsequent public interest review;

(27) a project involving the addition of 21 new beds in an existing psychiatric hospital in Hennepin County that is exclusively for patients who are under 21 years of age on the date of admission;

(28) a project to add 55 licensed beds in an existing safety net, level I trauma center hospital in Ramsey County as regulated under section 383A.91, subdivision 5, of which 15 beds are to be used for inpatient mental health and 40 are to be used for other services. In addition, five unlicensed observation mental health beds shall be added;

(29) upon submission of a plan to the commissioner for public interest review under section 144.552 and the addition of the 15 inpatient mental health beds specified in clause (28), to its bed capacity, a project to add 45 licensed beds in an existing safety net, level I trauma center hospital in Ramsey County as regulated under section

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383A.91, subdivision 5. Five of the 45 additional beds authorized under this clause must be designated for use for inpatient mental health and must be added to the hospital's bed capacity before the remaining 40 beds are added. Notwithstanding section 144.552, the hospital may add licensed beds under this clause prior to completion of the public interest review, provided the hospital submits its plan by the 2021 deadline and adheres to the timelines for the public interest review described in section 144.552;

(30) upon submission of a plan to the commissioner for public interest review under section 144.552, a project to add up to 30 licensed beds in an existing psychiatric hospital in Hennepin County that exclusively provides care to patients who are under 21 years of age on the date of admission. Notwithstanding section 144.552, the psychiatric hospital may add licensed beds under this clause prior to completion of the public interest review, provided the hospital submits its plan by the 2021 deadline and adheres to the timelines for the public interest review described in section 144.552;

(31) any project to add licensed beds in a hospital located in Cook County or Mahnomen County that: (i) is designated as a critical access hospital under section 144.1483, clause (9), and United States Code, title 42, section 1395i-4; (ii) has a licensed bed capacity of fewer than 25 beds; and (iii) has an attached nursing home, so long as the total number of licensed beds in the hospital after the bed addition does not exceed 25 beds. Notwithstanding section 144.552, a public interest review is not required for a project authorized under this clause;

(32) upon submission of a plan to the commissioner for public interest review under section 144.552, a project to add 22 licensed beds at a Minnesota freestanding children's hospital in St. Paul that is part of an independent pediatric health system with freestanding inpatient hospitals located in Minneapolis and St. Paul. The beds shall be utilized for pediatric inpatient behavioral health services. Notwithstanding section 144.552, the hospital may add licensed beds under this clause prior to completion of the public interest review, provided the hospital submits its plan by the 2022 deadline and adheres to the timelines for the public interest review described in section 144.552;

(33) a project for a 144-bed psychiatric hospital on the site of the former Bethesda hospital in the city of Saint Paul, Ramsey County, if the commissioner finds the project is in the public interest after the public interest review conducted under section 144.552 is complete. Following the completion of the construction project, the commissioner of health shall monitor the hospital, including by assessing the hospital's case mix and payer mix, patient transfers, and patient diversions. The hospital must have an intake and assessment area. The hospital must accommodate patients with acute mental health needs, whether they walk up to the facility, are delivered by ambulances or law enforcement, or are transferred from other facilities. The hospital must comply with subdivision 1a, paragraph (b). The hospital must annually submit de-identified data to the department in the format and manner defined by the commissioner;

(34) a project involving the relocation of up to 26 licensed long-term acute care hospital beds from an existing long-term care hospital located in Hennepin County with a licensed capacity prior to the relocation of 92 beds to dedicated space on the campus of an existing safety net, level I trauma center hospital in Ramsey County as regulated under section 383A.91, subdivision 5, provided both the commissioner finds the project is in the public interest after the public interest review conducted under section 144.552 is complete and the relocated beds continue to be used as long-term acute care hospital beds after the relocation; or

(35) a project to add 85 licensed beds in an existing safety net, level I trauma center hospital in Ramsey County as regulated under section 383A.91, subdivision 5.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 31. Minnesota Statutes 2024, section 145.56, subdivision 5, is amended to read:

Subd. 5. Periodic evaluations; biennial reports. To the extent funds are appropriated for the purposes of this subdivision, the commissioner shall conduct periodic evaluations of the impact of and outcomes from implementation of the state's suicide prevention plan and each of the activities specified in this section. ~~By July 1, 2002, and~~ On July 1 of each even-numbered year ~~thereafter~~, the commissioner shall report the results of these evaluations to the chairs of the policy and finance committees in the house of representatives and senate with jurisdiction over health and human services issues.

Sec. 32. Minnesota Statutes 2024, section 145.561, subdivision 2, is amended to read:

Subd. 2. 988 Lifeline. (a) The commissioner shall administer the designation of and oversight for a 988 Lifeline center or a network of 988 Lifeline centers to answer contacts from individuals accessing the Suicide and Crisis Lifeline from any jurisdiction within the state 24 hours per day, seven days per week.

(b) The designated 988 Lifeline Center must:

(1) have an active agreement with the 988 Suicide and Crisis Lifeline program for participation in the network and the department;

(2) meet the 988 Lifeline program requirements and best practice guidelines for operational and clinical standards;

(3) provide data and reports, and participate in evaluations and related quality improvement activities as required by the 988 Lifeline program and the department;

(4) identify or adapt technology that is demonstrated to be interoperable across mobile crisis and public safety answering points used in the state for the purpose of crisis care coordination;

(5) facilitate crisis and outgoing services, including mobile crisis teams in accordance with guidelines established by the 988 Lifeline program and the department;

(6) actively collaborate and coordinate service linkages with mental health and substance use disorder treatment providers, local community mental health centers including certified community behavioral health clinics and community behavioral health centers, mobile crisis teams, and community based and hospital emergency departments;

(7) offer follow-up services to individuals accessing the 988 Lifeline Center that are consistent with guidance established by the 988 Lifeline program and the department; and

(8) meet the requirements set by the 988 Lifeline program and the department for serving at-risk and specialized populations.

(c) The commissioner shall adopt rules to allow appropriate information sharing and communication between and across crisis and emergency response systems.

(d) The commissioner, having primary oversight of suicide prevention, shall work with the 988 Lifeline program, veterans crisis line, and other SAMHSA-approved networks for the purpose of ensuring consistency of public messaging about 988 services.

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(e) The commissioner shall work with representatives from 988 Lifeline Centers and public safety answering points, other public safety agencies, and the commissioner of public safety to facilitate the development of protocols and procedures for interactions between 988 and 911 services across Minnesota. Protocols and procedures shall be developed following available national standards and guidelines.

(f) The commissioner shall provide ~~an annual~~ a biennial public report on 988 Lifeline usage by July 1 of each even-numbered year, including data on answer rates, abandoned calls, and referrals to 911 emergency response. The biennial report may be included as a section within the state suicide prevention report required under section 145.56.

Sec. 33. Minnesota Statutes 2024, section 145.882, is amended by adding a subdivision to read:

Subd. 9. Contracting and procurement. The commissioner is exempt from the contract term limits in chapter 16C for issuance of benefits under the Special Supplemental Nutrition Program for Women, Infants and Children (WIC) through an electronic benefit transfer (EBT) system and related services and contracts. The contracts may have an initial term of up to five years, with extensions not to exceed a ten-year total contract duration.

Sec. 34. Minnesota Statutes 2024, section 145.882, is amended by adding a subdivision to read:

Subd. 10. Management information systems; contracting and procurement. WIC is exempt from the contract term limits in chapter 16C for the management information systems used for issuance of supplemental nutrition benefits and the WIC EBT systems used for processing the redemptions of supplemental nutrition benefits. These contracts may have an initial term of up to five years, with extensions not to exceed a ten-year total contract duration.

Sec. 35. Minnesota Statutes 2024, section 145A.04, subdivision 15, is amended to read:

Subd. 15. State and local advisory committees. (a) A state community health services advisory committee is established to advise, consult with, and make recommendations to the commissioner on the development, maintenance, funding, and evaluation of local and Tribal public health services. Each community health board may appoint a member to serve on the committee. Each of Minnesota's federally recognized Tribal Nations may appoint a member to serve on the committee. The committee must meet at least quarterly, and special meetings may be called by the committee chair or a majority of the members. A Tribal Nation may elect to participate at any time. Members or their alternates may be reimbursed for travel and other necessary expenses while engaged in their official duties.

(b) Notwithstanding section 15.059, the State Community Health Services Advisory Committee does not expire.

(c) The city boards or county boards that have established or are members of a community health board may appoint a community health advisory committee to advise, consult with, and make recommendations to the community health board on the duties under subdivision 1a.

Sec. 36. Minnesota Statutes 2024, section 145A.14, subdivision 2a, is amended to read:

Subd. 2a. Tribal governments. (a) Of the funding available for local public health grants, $1,500,000 per year is available to Tribal governments for:

(1) maternal and child health activities ~~under section 145.882, subdivision 7~~;

(2) activities to reduce health disparities ~~under section~~ ~~145.928, subdivision 10~~; ~~and~~

(3) emergency preparedness; and

(4) additional public health activities identified by each Tribal government.

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(b) The commissioner, in consultation with Tribal governments, shall establish a formula for distributing the funds and developing the outcomes to be measured.

Sec. 37. Minnesota Statutes 2024, section 148.517, subdivision 1, is amended to read:

Subdivision 1. Applicability. An applicant who applies for licensure as a speech-language pathologist or audiologist by reciprocity must meet the requirements of subdivisions 2 and 3. An applicant who applies for licensure as an audiologist by reciprocity must pass the practical exam required under section 148.515, subdivision 6.

Sec. 38. Minnesota Statutes 2024, section 148.517, subdivision 2, is amended to read:

Subd. 2. Current credentials required. An applicant applying for licensure by reciprocity must provide evidence to the commissioner that the applicant holds a current and unrestricted credential for the practice of speech‑language pathology or audiology in another jurisdiction that has requirements equivalent to or higher than those in effect for determining whether an applicant in this state is qualified to be licensed as a speech-language pathologist or audiologist. An applicant who provides sufficient evidence need not meet the requirements of section 148.515, except for section 148.515, subdivision 6, for applicants for licensure as an audiologist, provided that the applicant otherwise meets all other requirements of section 148.514.

Sec. 39. Minnesota Statutes 2024, section 148.5191, subdivision 4, is amended to read:

Subd. 4. Renewal deadline. Each license, including a temporary license provided under section 148.5161, must state an expiration date. An application for licensure renewal must be received by the Department of Health ~~or postmarked~~ at least 30 days before the expiration date. ~~If the postmark is illegible, the application shall be considered timely if received at least 21 days before the expiration date.~~

When the commissioner establishes the renewal schedule for an applicant, licensee, or temporary licensee, if the period before the expiration date is less than two years, the fee shall be prorated.

Sec. 40. Minnesota Statutes 2024, section 149A.91, subdivision 3, is amended to read:

Subd. 3. Embalming or refrigeration required. (a) A dead human body must be embalmed by a licensed mortician or registered intern or practicum student or clinical student, refrigerated, or packed in dry ice in the following circumstances:

(1) if the body will be transported by public transportation, pursuant to section 149A.93, subdivision 7;

(2) if final disposition will not be accomplished within 72 hours after death or release of the body by a competent authority with jurisdiction over the body or the body will be lawfully stored for final disposition in the future, except as provided in section 149A.94, subdivision 1;

(3) if the body will be publicly viewed subject to paragraph (b); or

(4) if so ordered by the commissioner of health for the control of infectious disease and the protection of the public health.

(b) For purposes of this subdivision, "publicly viewed" means reviewal of a dead human body by anyone other than those mentioned in section 149A.80, subdivision 2, and their minor children. Dry ice may only be used when the dead human body is publicly viewed within private property.

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(c) A body may not be kept in refrigeration for a period that exceeds ~~six~~ 14 calendar days, or packed in dry ice for a period that exceeds four calendar days, from the time and release of the body from the place of death or from the time of release from the coroner or medical examiner.

Sec. 41. Minnesota Statutes 2024, section 149A.94, subdivision 1, is amended to read:

Subdivision 1. Generally. Every dead human body lying within the state, except unclaimed bodies delivered for dissection by the medical examiner, those delivered for anatomical study pursuant to section 149A.81, subdivision 2, or lawfully carried through the state for the purpose of disposition elsewhere; and the remains of any dead human body after dissection or anatomical study, shall be decently buried or entombed in a public or private cemetery, alkaline hydrolyzed, cremated, or~~, effective July 1, 2025,~~ naturally reduced within ~~a reasonable time~~ 14 calendar days after death or release of the body by a competent authority with jurisdiction over the body. Where final disposition of a body will not be accomplished, or~~, effective July 1, 2025,~~ when natural organic reduction will not be initiated, within 72 hours following death or release of the body by a competent authority with jurisdiction over the body, the body must be properly embalmed, refrigerated, or packed with dry ice. A body may not be kept in refrigeration for a period exceeding ~~six~~ 14 calendar days, or packed in dry ice for a period that exceeds four calendar days, from the time of death or release of the body from the coroner or medical examiner.

Sec. 42. Minnesota Statutes 2024, section 149A.955, subdivision 14, is amended to read:

Subd. 14. Bodies awaiting natural organic reduction. A dead human body must be placed in the natural organic reduction vessel to initiate the natural reduction process within ~~24 hours~~ 14 calendar days after the natural organic reduction facility accepts legal and physical custody of the body. A natural organic reduction facility must keep the body in refrigeration while awaiting natural reduction. If a natural organic reduction facility does not initiate natural reduction within 14 calendar days after accepting legal and physical custody of the body, the facility must arrange final disposition of the body by burial or cremation. The person or persons with the right to control and duty of disposition of the body must determine whether the body is buried or cremated, and the body must be buried or cremated within five calendar days after the end of the 14-day period.

Sec. 43. REVISOR INSTRUCTION.

The revisor of statutes shall renumber Minnesota Statutes, section 62Q.075, as Minnesota Statutes, section 62D.081. The revisor shall also make necessary cross-reference changes consistent with the renumbering.

Sec. 44. REPEALER.

Minnesota Statutes 2024, sections 13D.08, subdivision 4; 62J.06; 62J.156; 62J.2930, subdivision 4; 62J.57; and 144.9821, are repealed.

ARTICLE 2

GAS RESOURCE DEVELOPMENT

Section 1. Minnesota Statutes 2024, section 93.514, is amended to read:

93.514 GAS AND OIL PRODUCTION RULEMAKING.

(a) The following agencies may adopt rules governing gas and oil exploration or production, as applicable:

(1) the commissioner of the Pollution Control Agency may adopt or amend rules regulating air emissions; water discharges, including stormwater management; and storage tanks as they pertain to gas and oil production;

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(2) the commissioner of health may adopt or amend rules on groundwater and surface water protection, exploratory boring construction, drilling registration and licensure, and inspections as they pertain to the exploration and appraisal of gas and oil resources;

~~(3)~~ (2) the Environmental Quality Board may adopt or amend rules to establish mandatory categories for environmental review as they pertain to gas and oil production;

~~(4)~~ (3) the commissioner of natural resources must adopt or amend rules pertaining to ~~the conversion of an exploratory boring to a production well,~~ pooling, spacing, unitization, ~~well abandonment,~~ siting, financial assurance, and reclamation for the production of gas and oil; and

~~(5)~~ (4) the commissioner of labor and industry may adopt or amend rules to protect workers from exposure and other potential hazards from gas and oil production.

(b) An agency adopting rules under this section must use the expedited procedure in section 14.389. Rules adopted or amended under this authority are exempt from the 18-month time limit under section 14.125. The agency must publish notice of intent to adopt expedited rules within 24 months of May 22, 2024.

(c) For purposes of this section, "gas" includes both hydrocarbon and nonhydrocarbon gases. "Production" includes extraction and beneficiation of gas or oil from consolidated or unconsolidated formations in the state.

(d) Any grant of rulemaking authority in this section is in addition to existing rulemaking authority and does not replace, impair, or interfere with any existing rulemaking authority.

(e) An entity adopting rules under this section is subject to the Tribal consultation requirements under section 10.65.

Sec. 2. Minnesota Statutes 2024, section 103I.001, is amended to read:

103I.001 LEGISLATIVE INTENT.

This chapter is intended to protect the health and general welfare by providing a means for the ~~development and~~ protection of the natural resource of groundwater in an orderly, healthful, and reasonable manner.

Sec. 3. Minnesota Statutes 2024, section 103I.005, subdivision 9, is amended to read:

Subd. 9. Exploratory boring. "Exploratory boring" means a surface drilling done to explore or prospect for ~~oil, natural~~ gas, apatite, diamonds, graphite, gemstones, kaolin clay, and metallic minerals, including iron, copper, zinc, lead, gold, silver, titanium, vanadium, nickel, cadmium, molybdenum, chromium, manganese, cobalt, zirconium, beryllium, thorium, uranium, aluminum, platinum, palladium, radium, tantalum, tin, and niobium~~, and a drilling or boring for petroleum~~.

Sec. 4. Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision to read:

Subd. 10a. Gas. "Gas" includes both hydrocarbon and nonhydrocarbon gases.

Sec. 5. Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision to read:

Subd. 10b. Gas well. "Gas well" means an excavation that is constructed to locate, extract, or produce gas.

Sec. 6. Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision to read:

Subd. 10c. Gas well contractor. "Gas well contractor" means a person with a gas well contractor's license issued by the commissioner.

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Sec. 7. Minnesota Statutes 2024, section 103I.005, is amended by adding a subdivision to read:

Subd. 11a. Hydraulic fracturing treatment. "Hydraulic fracturing treatment" means all stages of the treatment of a gas well by the application of fluid under pressure that is expressly intended to initiate or propagate fractures in a target geologic formation to enhance production of oil and gas.

Sec. 8. Minnesota Statutes 2024, section 103I.005, subdivision 21, is amended to read:

Subd. 21. Well. "Well" means an excavation that is drilled, cored, bored, washed, driven, dug, jetted, or otherwise constructed if the excavation is intended for the location, diversion, artificial recharge, monitoring, testing, remediation, or acquisition of groundwater. Well includes environmental wells, drive point wells, and dewatering wells. "Well" does not include:

(1) an excavation by backhoe, or otherwise for temporary dewatering of groundwater for nonpotable use during construction, if the depth of the excavation is 25 feet or less;

(2) an excavation made to obtain or prospect for oil, ~~natural~~ gas, minerals, or products of mining or quarrying;

(3) an excavation to insert media to repressure oil or ~~natural~~ gas bearing formations or to store petroleum, ~~natural~~ gas, or other products;

(4) an excavation for nonpotable use for wildfire suppression activities; or

(5) borings; or

(6) gas and oil wells.

Sec. 9. Minnesota Statutes 2024, section 103I.601, subdivision 1, is amended to read:

Subdivision 1. Definitions. (a) For the purposes of this section, the following words have the meanings given them.

(b) "Data" includes samples and factual noninterpreted data obtained from exploratory borings and samples including analytical results.

(d) "Samples" means at least a one-quarter portion of all samples from exploratory borings that are customarily collected by the explorer. When the exploratory borings are being done to explore or prospect for kaolin clay, "samples" means a representative sample of at least two cubic inches of material per foot from exploratory borings of the material that is customarily collected by the explorer.

(e) "Encounter gas" means a sustained presence of gas in an exploratory boring for at least 24 hours and in which gas has not dissipated prior to sealing.

Sec. 10. Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision to read:

Subd. 10. Exploratory borings encountering gas. (a) Requirements in this subdivision apply only for exploratory borings encountering gas.

(b) An explorer must notify the commissioners of health and natural resources:

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(1) within 24 hours of drilling an exploratory boring encountering gas; and

(2) prior to beginning a permanent sealing of an exploratory boring encountering gas.

(c) An explorer must submit a permanent sealing notification and fee of $125 to the commissioner prior to permanently sealing an exploratory boring encountering gas.

(d) An explorer must begin permanently sealing an exploratory boring encountering gas within ten days of encountering gas.

(e) An exploratory boring encountering gas is exempt from paragraph (d) if the boring is constructed to prevent movement of gas and water within and from one geological formation to another. The boring must be permanently sealed according to rules adopted by the commissioner.

(f) An exploratory boring encountering gas must be permanently sealed from the bottom of the boring to within two feet of the established ground surface.

(g) A permanent sealing report as required by subdivision 9 must also contain information indicating gas was encountered during construction and at what depth it was encountered.

(h) A person must not use an exploratory boring to extract gas for production.

Sec. 11. Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision to read:

Subd. 11. Conversion of a gas well prohibited. A person must not convert a gas well to any other type of well or boring.

Sec. 12. Minnesota Statutes 2024, section 103I.601, is amended by adding a subdivision to read:

Subd. 12. Conversion of a well or boring to a gas well. A person must not convert a well or boring to a gas well, except that an exploratory boring may be converted to a gas well if the exploratory boring was constructed:

(1) with innermost casing meeting API Specification 5CT;

(2) before July 1, 2025; and

(3) in compliance with provisions of this chapter.

Sec. 13. [103I.706] GAS WELLS.

Subdivision 1. Rulemaking authority. The commissioner of health must adopt rules for gas wells including requirements for exploratory borings for gas, and drilling, construction, sealing, use, reporting, and rig registration; and for licensing and certifying persons constructing, repairing, and sealing gas wells. These rules must include a prohibition against hydraulic fracturing treatment and a prohibition against the injection or disposal of surface water, groundwater, or any other liquid, gas, or chemical except for approved drilling fluids. In adopting rules under this section, the commissioner must use the expedited procedure in section 14.389. These rules must distinguish between types of gas based on the risks they pose to groundwater quality, health, and safety, and must specify the requirements that apply when an exploratory boring or gas well encounters a gas different from that for which exploration, prospecting, location, extraction, or production was proposed. Rules adopted or amended under this authority are exempt from the 18-month time limit under section 14.125. The commissioner must publish notice of intent to adopt expedited rules within 24 months after May 22, 2026. In adopting rules under this subdivision, the commissioner is subject to the Tribal consultation requirements under section 10.65.

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Subd. 2. Fees. (a) License, certification, and registration renewals are not prorated and expire on December 31 of each year.

(b) An applicant must meet the gas well contractor license requirements and fee requirements to construct, repair, or seal a gas well. The fee for a gas well contractor license is $300. The annual renewal fee for a gas well contractor license is $300.

(c) A gas well contractor must designate a certified representative. The certified representative must meet the application and fee requirements. The application fee for a certified representative is $100. The annual renewal fee for a certified representative is $100.

(d) A gas well contractor must meet the registration and fee requirements for rigs used to construct, repair, service, or seal a gas well. The fee to register gas well rigs is $125. The annual renewal fee for gas well rig registration is $125.

(e) If a gas well contractor or certified representative under paragraphs (b) and (c) fails to submit all information required for renewal or submits the application and information after the required renewal date:

(1) the gas well contractor or certified representative must include a late fee of $75; and

(2) the gas well contractor or certified representative may not conduct activities authorized by the gas well contractor's license or certified representative's certification until the renewal application, renewal application fee, and all other information required is submitted.

(f) A gas well contractor must submit a notification for construction of a proposed gas well on a form prescribed by the commissioner, with a fee of $10,000.

(g) A gas well contractor must submit a notification for sealing a gas well on a form prescribed by the commissioner, with a fee of $7,500.

Subd. 3. Rig registration. (a) Rigs used to drill, maintain, repair, or seal a gas well, including drilling rigs and workover rigs, must be registered with the commissioner.

(b) A person must file an application to register a rig on a form provided by the commissioner with the fee under subdivision 2, paragraph (d), with the commissioner.

(d) A person must file an application with the fee under subdivision 2, paragraph (d), to renew the registration by the date prescribed by the commissioner in the registration.

Subd. 4. Gas well contractor's license. (a) A person must not construct, repair, or seal a gas well without a gas well contractor's license issued by the commissioner.

(b) A person must file a complete application for a gas well contractor's license on a form provided by the commissioner with the fee under subdivision 2, paragraph (b), with the commissioner. The person applying must meet the qualifications for a gas well contractor license.

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(d) A gas well contractor must file a complete application with the fee under subdivision 2, paragraph (b), to renew the license by the date prescribed by the commissioner in the license. A person must not construct, repair, or seal a gas well until a gas well contractor's license is renewed. The commissioner may not renew a license until the renewal fee is paid.

(e) A gas well contractor must include information at the time of renewal that the applicant has met the continuing education requirements established by the commissioner for gas wells.

(f) A gas well contractor must designate a certified representative to supervise and oversee regulated work on gas wells.

(g) A person must file a complete application on a form provided by the commissioner with the fee under subdivision 2, paragraph (c), to qualify as a certified representative.

(h) A certified representative must file an application with the fee under subdivision 2, paragraph (c), to renew the certification by the expiration date prescribed by the commissioner on the certification. A certified representative may not supervise or oversee regulated work on a gas well until the renewal application and application fee are submitted. The commissioner may not review a certification until the renewal fee is paid.

(i) A certified representative must include information at the time of renewal that the applicant has met the continuing education requirements established by the commissioner for gas wells.

(j) The commissioner of natural resources may require a bond, security, or other assurance from a gas well contractor if the commissioner of natural resources has reasonable doubts about the person's financial ability to comply with the requirements of law relating to reclamation of a gas well and the process to restore the land disturbed by a gas well drilling and production operations back to the condition of original state.

(k) The commissioner may suspend or revoke a licensee's license according to section 144.99.

Subd. 5. Construction notification. (a) A gas well contractor must not begin drilling or constructing a gas well unless it is included in a valid gas resource development permit issued by the commissioner of natural resources.

(b) After receiving permit approval from the commissioner of natural resources and prior to drilling or constructing a gas well, the gas well contractor must submit a notification to construct a gas well:

(1) to the commissioner, along with the fee under subdivision 2, paragraph (f); and

(2) to any Tribal Nation for which the gas well will be located within five miles of the Tribal Nation's exterior boundary, or to the nearest Tribal Nation if the gas well will not be located within five miles of any Tribal Nation's exterior boundary.

Subd. 6. Access to drill sites. (a) The commissioner of health shall have access to gas well sites to inspect gas wells, including the drilling, construction, and sealing of gas wells.

(b) The commissioner of health has enforcement authority according to section 144.99.

Subd. 7. Emergency notification. In the event of an occurrence during construction, repair, or sealing of a gas well that has a potential for significant adverse public health or environmental effects, the person drilling or constructing a gas or well must promptly:

(1) take reasonable action to minimize the adverse effects; and

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(2) notify the commissioners of health, natural resources, and the Pollution Control Agency immediately by informing the Minnesota Duty Officer.

Subd. 8. Sealing notification. (a) A gas well, including an unsuccessful gas well, that is not in use must be sealed by a gas well contractor.

(b) A gas well contractor must file a notification and fee with the commissioner prior to sealing a gas well.

Subd. 9. Report of work. Within 60 days after completion or sealing of a gas well, the gas well contractor must submit a verified report to the commissioner on a form prescribed by the commissioner or in a format approved by the commissioner.

Sec. 14. [103I.707] MORATORIUM ON GAS WELL CONVERSION AND CONSTRUCTION.

A person shall not drill, convert under section 103I.601, subdivision 12, or construct a gas well for the primary purpose of extracting or producing gas until:

(1) rules are adopted under section 103I.706;

(2) the legislature enacts a statute specifically authorizing the issuance of gas resource development permits; and

(3) the legislature enacts fees for gas resource development permits.

Sec. 15. [103I.708] WELLS; RESTRICTIONS.

(a) Notwithstanding any provision of this chapter or chapter 93, or the rules adopted thereunder, to the contrary, a person shall not explore, prospect, or construct an oil well.

(b) Notwithstanding any provision of this chapter or chapter 93, or the rules adopted thereunder, to the contrary, a person shall not construct a gas well for the primary purpose of extracting or producing a gas other than helium. Gas wells constructed for the primary purpose of extracting or producing helium may only be constructed in Cook County, Lake County, and St. Louis County. Nothing in this paragraph shall be construed to prevent:

(1) the drilling or construction of an exploratory boring; or

(2) the sale of carbon dioxide extracted in the ordinary course of extracting or producing helium.

Sec. 16. [103I.709] GAS WELLS; PROHIBITIONS.

Subdivision 1. Injection prohibited. A gas well must not be used to inject or dispose surface water, groundwater, or any other liquid, gas, or chemical. This does not prohibit injection:

(1) of approved drilling fluids; or

(2) if a class 2 injection well permit is obtained for a gas well, as authorized by the Environmental Protection Agency.

Subd. 2. Hydraulic fracturing treatment prohibited. Hydraulic fracturing treatment is prohibited in a gas well.

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Sec. 17. TRIBAL CONSULTATION; REPORT.

An entity adopting rules under Minnesota Statutes, section 93.514 or 103I.706, must submit a report to the chairs and ranking minority members of the legislative committees with jurisdiction over health and the environment and natural resources, the Native American caucuses of the legislature, and the Minnesota Indian Affairs Council that details the process and results of meeting the requirements of Minnesota Statutes, section 10.65, for purposes of the rulemaking. The report must be submitted within 90 days of adoption of the rules.

Sec. 18. EFFECTIVE DATE.

This article is effective the day following final enactment.

ARTICLE 3

HOSPITAL STABILIZATION

Section 1. Minnesota Statutes 2024, section 16A.152, is amended by adding a subdivision to read:

Subd. 1c. Hospital stabilization reserve. A hospital stabilization reserve account is created in the general fund in the state treasury. Amounts in the hospital stabilization reserve are appropriated to the commissioner of management and budget for the uses authorized in subdivision 1d. Any balance remaining in the account on June 30, 2031, is canceled to the general fund.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 2. Minnesota Statutes 2024, section 16A.152, is amended by adding a subdivision to read:

Subd. 1d. Hospital stabilization reserve uses. The commissioner of management and budget, in consultation with the commissioner of health and after review by the Legislative Advisory Commission as required in subdivision 1e, may make payments to an eligible hospital as defined in section 144.7051.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 3. Minnesota Statutes 2024, section 16A.152, is amended by adding a subdivision to read:

Subd. 1e. Hospital stabilization reserve Legislative Advisory Commission review. (a) The Legislative Advisory Commission established under section 3.30 must review proposed allocations from the hospital stabilization reserve account.

(b) The commissioner of management and budget must submit proposed expenditures from the hospital stabilization reserve account to the Legislative Advisory Commission for its review and recommendation. Upon receiving a submission, the commission has seven days after the request is submitted to review the proposed expenditures submitted under this subdivision.

(c) Commission members may make a positive recommendation, a negative recommendation, or no recommendation on a proposed expenditure. If a majority of the commission members from the senate and a majority of the commission members from the house of representatives make a negative recommendation on a proposed expenditure, the commissioner is prohibited from expending the money. If a majority of the commission members from the senate and a majority of the commission members from the house of representatives do not make a negative recommendation, or if the commission makes no recommendation, the commissioner may expend the money.

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(d) The commission may hold a public meeting to approve or disapprove a proposed expenditure from the hospital stabilization reserve account. Notwithstanding section 3.055, the commission may conduct a public meeting remotely. The commission may approve or disapprove proposed expenditures without a public meeting. The commission members may approve or disapprove proposed expenditures via written communication sent to the commissioner of management and budget.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 4. Minnesota Statutes 2024, section 16A.152, subdivision 2, is amended to read:

Subd. 2. Additional revenues; priority. (a) If on the basis of a forecast of general fund revenues and expenditures, the commissioner of management and budget determines that there will be a positive unrestricted budgetary general fund balance at the close of the biennium, the commissioner of management and budget must allocate money to the following accounts and purposes in priority order:

(1) the cash flow account established in subdivision 1 until that account reaches $350,000,000;

(2) the budget reserve account established in subdivision 1a until that account reaches ~~$2,852,098,000~~ $3,421,764,000;

(3) the amount necessary to increase the aid payment schedule for school district aids and credits payments in section 127A.45 to not more than 90 percent rounded to the nearest tenth of a percent without exceeding the amount available and with any remaining funds deposited in the budget reserve; and

(4) the amount necessary to restore all or a portion of the net aid reductions under section 127A.441 and to reduce the property tax revenue recognition shift under section 123B.75, subdivision 5, by the same amount.

(b) The amounts necessary to meet the requirements of this section are appropriated from the general fund within two weeks after the forecast is released or, in the case of transfers under paragraph (a), clauses (3) and (4), as necessary to meet the appropriations schedules otherwise established in statute.

(c) The commissioner of management and budget shall certify the total dollar amount of the reductions under paragraph (a), clauses (3) and (4), to the commissioner of education. The commissioner of education shall increase the aid payment percentage and reduce the property tax shift percentage by these amounts and apply those reductions to the current fiscal year and thereafter.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 5. Minnesota Statutes 2024, section 16A.152, subdivision 4, is amended to read:

Subd. 4. Reduction. (a) If the commissioner determines that probable receipts for the general fund will be less than anticipated, and that the amount available for the remainder of the biennium will be less than needed, the commissioner shall, with the approval of the governor, and after consulting the Legislative Advisory Commission, reduce the amount in the budget reserve account and the hospital stabilization reserve as needed to balance expenditures with revenue.

(b) An additional deficit shall, with the approval of the governor, and after consulting the Legislative Advisory Commission, be made up by reducing unexpended allotments of any prior appropriation or transfer. Notwithstanding any other law to the contrary, the commissioner is empowered to defer or suspend prior statutorily created obligations which would prevent effecting such reductions.

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(c) If the commissioner determines that probable receipts for any other fund, appropriation, or item will be less than anticipated, and that the amount available for the remainder of the term of the appropriation or for any allotment period will be less than needed, the commissioner shall notify the agency concerned and then reduce the amount allotted or to be allotted so as to prevent a deficit.

(d) In reducing allotments, the commissioner may consider other sources of revenue available to recipients of state appropriations and may apply allotment reductions based on all sources of revenue available.

(e) In like manner, the commissioner shall reduce allotments to an agency by the amount of any saving that can be made over previous spending plans through a reduction in prices or other cause.

(f) The commissioner is prohibited from reducing an allotment or appropriation made to the legislature.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 6. [144.7051] HOSPITAL STABILIZATION RESERVE.

Subdivision 1. Eligibility. A hospital is eligible to receive payment under section 16A.152, subdivision 1d, if 40 percent of the hospital's total acute care admissions in each of calendar years 2022, 2023, and 2024 were medical assistance or MinnesotaCare enrollees, the hospital provided 15 percent or more of Minnesota's total uncompensated care in calendar year 2024 as determined by the commissioner of health, and costs incurred for uncompensated care were at least three percent of the hospital's operating revenue in calendar year 2024.

Subd. 2. Quarterly financial statements. An eligible hospital under subdivision 1 must submit a quarterly report to the commissioner of health beginning on October 1, 2026. Each report must provide the following information:

(1) the hospital's monthly cash position for the current quarter;

(2) the hospital's net operating margin for the previous quarter;

(3) updates to the hospital's net operating margin for the last four quarters that reflect adjustments and any completed audits since the prior quarterly report; and

(4) information necessary to support clauses (1) to (3).

Subd. 3. Eligibility certification. (a) If the chief executive officer of an eligible hospital under subdivision 1 provides written notice to the commissioner of health that the hospital had less than 60 days of operating cash at any time during the preceding 12 months, and that the hospital had an operating margin loss of at least 1.5 percent at any time during the preceding 12 months, the commissioner must review and certify whether the hospital is eligible to receive a payment from the hospital stabilization reserve to maintain stable operations and avoid substantial negative operating effects for the next 12 months. If the information provided to the commissioner is insufficient to make a certification of eligibility determination, the commissioner may request additional information to support the certification request. In making a certification determination, the commissioner must not include payments received from the hospital stabilization reserve established in section 16A.152, subdivision 1c, or any fiscal year 2026 and 2027 appropriations.

(b) The commissioner must make a certification decision within 30 days of receiving the written notice and associated documentation from the chief executive officer. The commissioner must provide a written response to the chief executive officer within 45 days of receiving the written notice and associated documentation. If the commissioner certifies that the hospital should receive a payment from the hospital stabilization reserve, the commissioner must notify the commissioner of management and budget within 15 days of making that certification.

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Subd. 4. Payment. (a) If the commissioner of management and budget receives notification from the commissioner of health under subdivision 3 that a hospital is certified to receive a payment from the hospital stabilization reserve, the commissioner of management and budget must submit the proposed payment to the Legislative Advisory Commission under section 16A.152, subdivision 1e, for the commission's review.

(b) A certified hospital must submit sufficient information determined by the commissioner of management and budget to support the submission of the certified payment to the Legislative Advisory Commission.

(c) If a negative review from the Legislative Advisory Commission is not received, the commissioner of management and budget must pay the eligible hospital from the hospital stabilization reserve under section 16A.152, subdivision 1d.

EFFECTIVE DATE. This section is effective July 15, 2027.

Sec. 7. Minnesota Statutes 2024, section 383B.903, subdivision 1, is amended to read:

Subdivision 1. Governance. The corporation shall be governed by a board of directors ~~consisting~~ that consists of between 11 and 15 directors and that includes members with the professional training and expertise needed to govern a health system and safety net hospital. Two of the directors on the board of the corporation must be county commissioners currently serving as elected officials on the county board who are chosen and may be removed by a majority vote of the county board.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 8. Minnesota Statutes 2024, section 383B.903, subdivision 4, is amended to read:

Subd. 4. Qualifications. Members of the board ~~shall~~ must possess a high degree of experience and knowledge in ~~relevant~~ fields needed to govern a health system and safety net hospital and must possess a high degree of interest in the corporation and support for its mission. Members shall be appointed based in part on the objective of ensuring that the corporation includes diverse and beneficial perspectives and experience including, but not limited to, those of medical or other health professionals, At least 75 percent of the board's noncounty commissioner members must have expertise in hospital administration, finance, business management, law, or health equity, or have other experience relevant to the administration of a health system and safety net hospital, with a preference for members with experience working in an urban setting with diverse cultural communities. Up to 25 percent of the board's noncounty commissioner members may represent urban, cultural, and ethnic perspectives of the population served by the corporation~~, business management, law, finance, health sector employees, public health, serving the uninsured, health professional training,~~ and the patient or consumer perspective. The corporation shall provide a public announcement of vacancies on the board of the corporation in the manner normally used by Hennepin County to provide public notice of open appointments.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 9. Minnesota Statutes 2024, section 383B.904, subdivision 1, is amended to read:

Subdivision 1. Election. (a) The officers of the board of the corporation shall consist of the chair, vice-chair, secretary, treasurer, and other officers as the board shall from time to time deem necessary. The board shall elect officers by a majority vote of the board at the annual meeting, or in the case of the initial board, at the first meeting following appointment by the county board. The county commissioner members of the corporate board are not eligible to serve as officers of the corporate board.

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(b) Any of the offices or functions, with the exception of the chair and vice-chair, may be held or exercised by the same person.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 10. Minnesota Statutes 2024, section 383B.908, subdivision 5, is amended to read:

Subd. 5. Financial oversight. The county board ~~shall~~ must approve the annual budget of the corporation as presented by the corporate board and shall receive an annual audited financial statement. The annual budget shall address how efficiencies and revenues contribute to stabilize or reduce county liabilities for indigent care. The county board shall also retain the right:

(1) to conduct an independent audit of the finances of the corporation.; and

(2) in sustained conditions of financial distress, to modify the corporation's annual budget as needed to respond to the corporation's financial condition while preserving access to essential health services provided by HCMC.

Sec. 11. Minnesota Statutes 2024, section 383B.908, subdivision 7, is amended to read:

Subd. 7. Dissolution or reorganization of corporation. The county board shall retain the right to dissolve the corporation, reorganize the corporation, or remove the entire corporate board in order to resume management of and financial oversight over Hennepin County Medical Center upon a two-thirds vote of the entire county board. if:

(1) the corporation experiences sustained conditions of financial distress, such as but not limited to the corporation meeting at least two of the following conditions:

(i) a negative operating margin of more than $30,000,000 for two consecutive years;

(ii) a decline in net assets of more than ten percent in the most recent year; or

(iii) a negative cash flow margin of more than ten percent in the most recent year;

(2) prior to taking any steps to dissolve the corporation, reorganize the corporation, or remove the entire corporate board, the county board and the corporate board engage in mediation in good faith. The attorney general may select an individual to serve as a mediator. In the mediation, the parties must attempt to address the corporation's conditions of financial distress through means other than dissolving the corporation, reorganizing the corporation, or removing the entire corporate board; and

(3) the county board and corporate board are not able to agree on another means to address the corporation's financial distress.

Sec. 12. Laws 2023, chapter 68, article 1, section 2, subdivision 2, as amended by Laws 2025, First Special Session chapter 8, article 1, section 13, is amended to read:

Subd. 2. Multimodal Systems

(a) Aeronautics

(1) Airport Development and Assistance			69,598,000	18,598,000
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	2024	2025
General	36,000,000	-0-
Airports	33,598,000	18,598,000

The appropriation from the state airports fund must be spent according to Minnesota Statutes, section 360.305, subdivision 4.

$36,000,000 in fiscal year 2024 is from the general fund for matches to federal aid and state investments related to airport infrastructure projects. This is a onetime appropriation and is available until June 30, 2027.

$15,000,000 in fiscal year 2024 is from the state airports fund for system maintenance of critical airport safety systems, equipment, and essential airfield technology.

Notwithstanding Minnesota Statutes, section 16A.28, subdivision 6, the appropriation from the state airports fund is available for five years after the year of the appropriation. If the appropriation for either year is insufficient, the appropriation for the other year is available for it.

If the commissioner of transportation determines that a balance remains in the state airports fund following the appropriations made in this article and that the appropriations made are insufficient for advancing airport development and assistance projects, an amount necessary to advance the projects, not to exceed the balance in the state airports fund, is appropriated in each year to the commissioner and must be spent according to Minnesota Statutes, section 360.305, subdivision 4. Within two weeks of a determination under this contingent appropriation, the commissioner of transportation must notify the commissioner of management and budget and the chairs, ranking minority members, and staff of the legislative committees with jurisdiction over transportation finance concerning the funds appropriated. Funds appropriated under this contingent appropriation do not adjust the base for fiscal years 2026 and 2027.

(2) Aviation Support Services

15,397,000

8,431,000

Appropriations by Fund
	2024	2025
General	8,707,000	1,741,000
Airports	6,690,000	6,690,000

$7,000,000 in fiscal year 2024 is from the general fund to purchase two utility aircraft for the Department of Transportation.

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(3) Civil Air Patrol

80,000

This appropriation is from the state airports fund for the Civil Air Patrol.

(b) Transit and Active Transportation

58,478,000

18,374,000

This appropriation is from the general fund.

$200,000 in fiscal year 2024 and $50,000 in fiscal year 2025 are for a grant to the city of Rochester to implement demand response transit service using electric transit vehicles. The money is available for mobile software application development; vehicles and equipment, including accessible vehicles; associated charging infrastructure; and capital and operating costs.

$40,000,000 in fiscal year 2024 is for matches to federal aid and state investments related to transit and active transportation projects. This is a onetime appropriation and is available until June 30, 2027.

15,297,000

10,500,000

This appropriation is from the general fund for the safe routes to school program under Minnesota Statutes, section 174.40.

If the appropriation for either year is insufficient, the appropriation for the other year is available for it. The appropriations in each year are available until June 30, 2027.

The base for this appropriation is $1,500,000 in each of fiscal years 2026 and 2027.

(d) Passenger Rail

197,521,000

4,226,000

This appropriation is from the general fund for passenger rail activities under Minnesota Statutes, sections 174.632 to 174.636.

$194,700,000 in fiscal year 2024 is for capital improvements and betterments for the Minneapolis-Duluth Northern Lights Express intercity passenger rail project, including preliminary engineering, design, engineering, environmental analysis and mitigation, acquisition of land and right-of-way, equipment and rolling stock, and construction. From this appropriation, the amount necessary is for: (1) Coon Rapids station improvements to establish a joint station that provides for Amtrak train service on the Empire Builder line between Chicago and Seattle; and (2) acquisition of equipment and rolling stock for purposes of participation in the Midwest fleet pool to provide for service on Northern Lights Express and expanded Amtrak train service between Minneapolis and St. Paul and Chicago. The commissioner of transportation

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must not approve additional stops or stations beyond those included in the Federal Railroad Administration's January 2018 Finding of No Significant Impact and Section 4(f) Determination if the commissioner determines that the resulting speed reduction would negatively impact total ridership. This appropriation is onetime and is available until June 30, 2028. Any remaining balance must cancel to the hospital stabilization reserve account under Minnesota Statutes, section 16A.152, subdivision 1c.

$1,833,000 in fiscal year 2024 and $3,238,000 in fiscal year 2025 are for a match to federal aid for capital and operating costs for expanded Amtrak train service between Minneapolis and St. Paul and Chicago. These amounts are available until June 30, 2028.

The base from the general fund is $5,742,000 in each of fiscal years 2026 and 2027.

(e) Freight

14,650,000

9,066,000

Appropriations by Fund
	2024	2025
General	8,283,000	2,400,000
Trunk Highway	6,367,000	6,666,000

$5,000,000 in fiscal year 2024 is from the general fund for matching federal aid grants for improvements, engineering, and administrative costs for the Stone Arch Bridge in Minneapolis. This is a onetime appropriation and is available until June 30, 2027.

$1,000,000 in each year is from the general fund for staff, operating costs, and maintenance related to weight and safety enforcement systems.

$974,000 in fiscal year 2024 is from the general fund for procurement costs of a statewide freight network optimization tool under Laws 2021, First Special Session chapter 5, article 4, section 133. This is a onetime appropriation and is available until June 30, 2025.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 13. Laws 2023, chapter 68, article 1, section 3, subdivision 2, as amended by Laws 2024, chapter 127, article 1, section 11, is amended to read:

Subd. 2. Transit System Operations

75,654,000

32,654,000

This appropriation is for transit system operations under Minnesota Statutes, sections 473.371 to 473.449.

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$40,000,000 in fiscal year 2024 is for a grant to Hennepin County for the Blue Line light rail transit extension project, including but not limited to predesign, design, engineering, environmental analysis and mitigation, right-of-way acquisition, construction, and acquisition of rolling stock. Of this amount, $30,000,000 is available only upon entering a full funding grant agreement with the Federal Transit Administration by June 30, 2027. This is a onetime appropriation and is available until June 30, 2030. If a full funding grant agreement with the Federal Transit Administration is not reached by June 30, 2027, this appropriation cancels to the hospital stabilization reserve under Minnesota Statutes, section 16A.152, subdivision 1c.

$3,000,000 in fiscal year 2024 is for highway bus rapid transit project development in the marked U.S. Highway 169 and marked Trunk Highway 55 corridors, including but not limited to feasibility study, predesign, design, engineering, environmental analysis and remediation, and right-of-way acquisition.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 14. HOSPITAL STABILIZATION RESERVE; TRANSFER.

(a) By July 15, 2027, the commissioner of management and budget must transfer $354,000,000 from the general fund budget reserve account to the hospital stabilization reserve account. This is a onetime transfer.

(b) By July 15, 2028, the commissioner of management and budget must transfer up to $146,000,000 from the general fund budget reserve account to the hospital stabilization reserve account. This is a onetime transfer.

(c) The total transfers and cancellations credited to the hospital stabilization reserve account must not exceed $500,000,000.

EFFECTIVE DATE. This section is effective July 1, 2027.

Sec. 15. HOSPITAL STABILIZATION PROGRAM.

Subdivision 1. Establishment. The commissioner of health must establish a hospital stabilization program to provide financial relief to critical access hospitals, rural emergency hospitals, and hospitals that provide a disproportionate level of uncompensated care.

Subd. 2. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Commissioner" means the commissioner of health.

(1) licensed under section 144.50;

(2) located within the state;

(3) that has filed a Medicare cost report in the Healthcare Cost Report Information System; and

(4) that is a Medicaid disproportionate share hospital, excluding a hospital that qualifies as a Medicaid disproportionate share hospital solely based upon providing transplant services.

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(d) "Qualifying uncompensated episode of care" means the provision by a qualifying hospital of one or more services that are covered under medical assistance to an individual during a single patient encounter or episode of care when the:

(1) individual is not enrolled in medical assistance, MinnesotaCare, or Medicare and does not have other health coverage;

(2) individual is determined to be ineligible for medical assistance and MinnesotaCare for the date of service following any retroactive eligibility determination; and

(3) total cumulative reimbursement amount for the services provided, if paid under medical assistance payment methodologies using a cost to charge methodology as defined in the Minnesota Health Care Cost Information System, would be at least $2,000 but not more than $50,000.

Subd. 3. Payments to critical access hospitals and rural emergency hospitals. The commissioner must make a onetime payment of $50,000 to each of the critical access hospitals and rural emergency hospitals in the state. Payments shall be made in a form and manner determined by the commissioner.

Subd. 4. Application for payments; qualifying hospitals. (a) A qualifying hospital seeking payment under this section must submit to the commissioner documentation identifying qualifying uncompensated episodes of care within a reporting period.

(b) The reporting periods are:

(1) January 1 through June 30; and

(2) July 1 through December 31.

(d) For services provided during the January 1 through June 30 reporting period, a qualifying hospital must submit the required documentation to the commissioner by September 15 of the same calendar year.

(e) For services provided during the July 1 through December 31 reporting period, a qualifying hospital must submit the required documentation to the commissioner by March 15 of the next calendar year.

(f) Qualifying hospitals must submit documentation in a form and manner specified by the commissioner and must provide supporting documentation as requested by the commissioner.

Subd. 5. Calculation of payments; qualifying hospitals. (a) For each reporting period, the commissioner must determine each qualifying hospital's share of the total value of qualifying uncompensated episodes of care submitted under subdivision 4.

(b) The commissioner must distribute payments proportionally based on each qualifying hospital's share of the statewide total among qualifying hospitals.

(d) If money remains after the payment limitation in paragraph (c), the commissioner must redistribute the remaining money among qualifying hospitals that have not reached the limit in paragraph (c) in proportion to their share of the value of qualifying uncompensated episodes of care.

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(e) The commissioner may establish procedures to reconcile adjustments, corrected claims, or late submissions in a subsequent reporting period.

Subd. 6. Distribution of payments; qualifying hospitals. (a) The amount available for payments to qualifying hospitals is the amount appropriated for this section that remains after payments are made under subdivision 3. One‑half of the amount available for payments to qualifying hospitals must be allocated to each reporting period.

(b) For the January 1 through June 30 reporting period, the commissioner must distribute payments no later than November 15 of the same calendar year.

(c) For the July 1 through December 31 reporting period, the commissioner must distribute payments no later than May 15 of the next calendar year.

Subd. 7. Reporting requirements; qualifying hospitals. (a) A qualifying hospital receiving payment under this section must submit to the commissioner any information necessary to evaluate the appropriate use of funds. The information must include, at minimum, by June 30, 2027, a detailed analysis of how the funds were used to preserve regional and local access to essential health care services, including emergency care, inpatient hospital care, maternal care and obstetrical services, behavioral and mental health care, and primary care and clinic services.

(b) A qualifying hospital receiving payment under this section must submit to the commissioner, by June 30, 2027, an organizational chart presenting the identities of and interrelationships among affiliated entities within the hospital system. No subsidiary of an entity specified on the chart need be shown if the equity or membership interest of the subsidiary held by the entity is less than ten percent of the subsidiary. As to each entity specified in the chart, the qualifying hospital must indicate the type of organization and the state of domicile.

(c) Upon receipt of notice by a qualifying hospital receiving payment under this section submitted pursuant to section 144.555, the commissioner must provide notice of the hospital's planned actions and documentation of the amount of any payment distributed to the hospital under this section to:

(1) the chairs and ranking minority members of the legislative committees with jurisdiction over health and human services finance and policy; and

(2) the majority and minority leaders of the senate and house of representatives.

(d) The commissioner must determine the reporting requirement for payments under this section in addition to the reporting requirements under section 16B.98, subdivision 12.

Subd. 8. Prohibited uses. Funds received under this section must not be used to:

(1) supplant any other funding sources; or

(2) increase the salary, benefits, or other discretionary payment to an officer, director, manager, or any other executive.

Subd. 9. Hospital stabilization program ineligibility. Hennepin Healthcare System, Inc., is ineligible for payment under this section.

Sec. 16. CORPORATE BOARD OF HENNEPIN HEALTHCARE SYSTEM, INC.; RECONSTITUTED AND OPERATIONAL.

(a) For purposes of this section, "Hennepin Healthcare System, Inc.," means the public corporation created under Minnesota Statutes, section 383B.901.

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(b) By January 15, 2027, the Hennepin County Board of Commissioners must:

(1) reconstitute the corporate board of Hennepin Healthcare System, Inc., with members who meet the requirements in Minnesota Statutes, section 383B.903, subdivision 4; and

(2) complete the transition of governance of Hennepin Healthcare System, Inc., to the reconstituted corporate board.

Sec. 17. HENNEPIN HEALTHCARE SYSTEM, INC.; STABILIZATION PAYMENTS.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Commissioner" means the commissioner of health.

(d) "Hennepin Healthcare System, Inc.," means the public corporation created under Minnesota Statutes, section 383B.901.

Subd. 2. Annual stabilization payments. The commissioner of health must award stabilization payments to Hennepin Healthcare System, Inc., in fiscal years 2026 and 2027 to stabilize HCMC operations, avoid the closure of HCMC, ensure that HCMC continues to provide high-quality care to patients, and preserve access to essential services at HCMC that support the health care needs of the communities served by HCMC and of the state of Minnesota.

Subd. 3. Accountability requirements. (a) To ensure that Hennepin Healthcare System, Inc., is meeting the requirements of this section, the commissioner must collect from HCMC the information necessary to complete the commissioner's reporting requirements under subdivision 4 and must collect from HCMC the following information in fiscal year 2027:

(1) a comprehensive financial analysis that describes the financial stability of HCMC. The report must consider the core financial metrics of HCMC, including expenses and staffing data; revenue, including payer mix; utilization data; and necessary data as determined by the commissioner; and

(2) quarterly updates of financial information submitted under the hospital annual report according to Minnesota Statutes, sections 144.695 to 144.703, on a schedule to be determined by the commissioner, and long-term capital spending priorities, including mandatory maintenance and replacement of existing facilities and equipment.

(b) Upon receipt of notice by Hennepin Healthcare System, Inc., provided according to Minnesota Statutes, section 144.555, the commissioner must provide notice of Hennepin Healthcare System, Inc.'s planned actions to:

(1) the chairs and ranking minority members of the legislative committees with jurisdiction over health and human services finance and policy; and

(2) the majority and minority leaders of the senate and house of representatives.

Subd. 4. Reporting requirement. (a) By January 15, 2028, the commissioner must report to the legislative committees with jurisdiction over health and human services finance and policy on the financial stabilization of Hennepin Healthcare System, Inc.

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(b) Hennepin Healthcare System, Inc., must provide the commissioner with all information and documents requested by the commissioner, including nonpublic data from HCMC, for purposes of this subdivision and subdivision 3. For purposes of this subdivision and subdivision 3, "nonpublic data" has the meaning given in Minnesota Statutes, section 13.02, subdivision 9.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 18. ADVISORY TASK FORCE ON GOVERNANCE AND FINANCING OF HENNEPIN HEALTHCARE SYSTEM, INC.

Subdivision 1. Establishment. An advisory task force on governance and financing of Hennepin Healthcare System, Inc., is established to develop recommendations to the legislature on the ownership, governance, and financing of Hennepin Healthcare System, Inc., including its integrated system of health care facilities and services that includes Hennepin County Medical Center. The advisory task force must evaluate options that recognize Hennepin County Medical Center as a regional and statewide public health and public safety asset that:

(1) provides critical health care services to:

(i) complex patients with high medical needs;

(ii) a large proportion of the state's medical assistance, MinnesotaCare, and uninsured populations; and

(iii) patients from health care providers and health systems across Minnesota and the surrounding region. These services include level I trauma care, hyperbaric medicine, treatment services for burns and complex wounds, comprehensive cancer care, and accredited poison control services; and

(2) supports Minnesota's future health care workforce through education and training.

Subd. 2. Membership. (a) The advisory task force shall consist of the following nine members appointed by the governor. Members shall be direct appointments as defined in Minnesota Statutes, section 15.0597, subdivision 1:

(1) one individual from the Health Subcabinet under Minnesota Statutes, section 4.047;

(2) the chief executive officer of Hennepin County Medical Center;

(3) one individual representing Hennepin County;

(4) one individual with expertise in academic medicine, clinical and public health research, hospital operations, or health system finance;

(5) one individual with professional experience in public health;

(6) one individual with professional experience in safety net hospital and clinical system operations;

(7) two individuals with professional experience in health care finance and public health care programs; and

(8) one individual with professional experience in public sector governance and public authorities.

(b) Members must be appointed to the advisory task force by August 1, 2026, and serve until the advisory task force expires.

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Subd. 3. Governance; first meeting; chairperson. (a) Compensation and removal of members appointed under subdivision 2 are governed by Minnesota Statutes, section 15.059.

(b) The individual from the Health Subcabinet who is appointed to the advisory task force must convene the first meeting of the advisory task force by September 1, 2026, and shall serve as the chairperson of the advisory task force.

Subd. 4. Duties. The advisory task force must:

(1) evaluate the current governance structure, payer mix, and financing of Hennepin Healthcare System, Inc.;

(2) evaluate whether public health care program reimbursement rates adequately reimburse Hennepin County Medical Center for the cost of care provided;

(3) evaluate labor and workforce needs and challenges at Hennepin County Medical Center;

(4) identify and evaluate Hennepin County Medical Center's capital, infrastructure, and technology needs;

(5) evaluate governance and ownership models of health systems comparable to Hennepin Healthcare System, Inc.;

(6) evaluate financing and funding mechanisms that would allow Hennepin Healthcare System, Inc., to achieve sustainable, long-term financial stability while ensuring the continued operation of critical specialized services by Hennepin County Medical Center that are essential to Minnesota's comprehensive statewide hospital network of rural, regional, and safety net hospitals;

(7) engage with public health leaders throughout the state and professionals and individuals with the following qualifications or with expertise in the following areas:

(i) rural hospitals and rural health systems;

(ii) urban, nonprofit hospitals other than Hennepin County Medical Center;

(iii) physicians licensed and practicing in Minnesota with experience in emergency medicine, trauma care, critical care, or hospital medicine;

(iv) registered nurses;

(v) organized labor representing hospital workers or health care workers;

(vi) ambulance service providers or emergency medical services;

(vii) local public health departments or community health boards;

(viii) federally qualified health centers or other community clinics serving low-income patients;

(ix) consumer or patient advocates with experience accessing services from a safety net hospital; and

(x) state legislators, county commissioners, and state agency commissioners; and

(8) develop specific recommendations for an ownership structure, governance and oversight, and sustainable, long-term funding for Hennepin Healthcare System, Inc. In developing these recommendations, the task force must consider how to maintain Hennepin County Medical Center as a public hospital and whether ownership of Hennepin Healthcare System, Inc., should be transferred to an entity other than solely Hennepin County. These

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recommendations must identify legislative changes needed to implement the recommendations, provide legislative language for the needed legislative changes, and specify a process to implement changes to ownership, governance and oversight, and funding.

Subd. 5. Data. (a) The advisory task force may request data and technical assistance from state agencies, hospital systems, and other stakeholders as necessary to carry out its duties.

(b) Data provided to the advisory task force under this subdivision retains its classification under Minnesota Statutes, chapter 13, and any other applicable state or federal law.

Subd. 6. Administrative support and cooperation. The Health Subcabinet must provide meeting space and administrative services for the advisory task force. State agencies must provide technical assistance upon the request of the advisory task force.

Subd. 7. Findings and recommendations. (a) By January 15, 2027, the advisory task force must submit preliminary findings and recommendations to the chairs and ranking minority members of the legislative committees with jurisdiction over health and human services finance and policy. The preliminary findings and recommendations must include information on the meetings and activities of the advisory task force to date, identification of priority focus areas and preliminary findings and recommendations on the subjects listed in subdivision 4, recommendations on steps to improve the stabilization of Hennepin Healthcare System, Inc., and plans for future meetings and work.

(b) By January 15, 2028, the advisory task force must submit final findings and recommendations to the chairs and ranking minority members of the legislative committees with jurisdiction over health finance and policy and human services finance and policy. The final findings and recommendations must address the subjects listed in subdivision 4.

Subd. 8. Expiration. The advisory task force expires June 30, 2028.

ARTICLE 4

HEALTH LICENSING BOARDS

Section 1. Minnesota Statutes 2024, section 148.01, subdivision 1, is amended to read:

Subdivision 1. Definitions. For the purposes of sections 148.01 to 148.10:

(1) "abnormal articulation" means the condition of opposing bony joint surfaces and their related soft tissues that do not function normally, including subluxation, fixation, adhesion, degeneration, deformity, dislocation, or other pathology that results in pain or disturbances within the nervous system, results in postural alteration, inhibits motion, allows excessive motion, alters direction of motion, or results in loss of axial loading efficiency, or a combination of these;

(2) "acupuncture" means a modality of treating abnormal physical conditions by stimulating various points of the body or interruption of the cutaneous integrity by needle insertion to secure a reflex relief of the symptoms by nerve stimulation as utilized as an adjunct to chiropractic adjustment;

(3) "animal chiropractic diagnosis and treatment" means treatment that includes identification and resolution of vertebral subluxation complexes, spinal manipulation, and manipulation of the extremity articulations of nonhuman vertebrates. Animal chiropractic diagnosis and treatment does not include:

(i) performing surgery;

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(ii) dispensing or administering medications; or

(iii) performing traditional veterinary care and diagnosis;

~~(1)~~ (4) "chiropractic" means the health care discipline that recognizes the innate recuperative power of the body to heal itself without the use of drugs or surgery by identifying and caring for vertebral subluxations and other abnormal articulations by emphasizing the relationship between structure and function as coordinated by the nervous system and how that relationship affects the preservation and restoration of health;

~~(2)~~ (5) "chiropractic services" means the evaluation and facilitation of structural, biomechanical, and neurological function and integrity through the use of adjustment, manipulation, mobilization, or other procedures accomplished by manual or mechanical forces applied to bones or joints and their related soft tissues for correction of vertebral subluxation, other abnormal articulations, neurological disturbances, structural alterations, or biomechanical alterations, and includes, but is not limited to, manual therapy and mechanical therapy as defined in section 146.23;

(3) "abnormal articulation" means the condition of opposing bony joint surfaces and their related soft tissues that do not function normally, including subluxation, fixation, adhesion, degeneration, deformity, dislocation, or other pathology that results in pain or disturbances within the nervous system, results in postural alteration, inhibits motion, allows excessive motion, alters direction of motion, or results in loss of axial loading efficiency, or a combination of these;

~~(4)~~ (6) "diagnosis" means the physical, clinical, and laboratory examination of the patient, and the use of diagnostic services for diagnostic purposes within the scope of the practice of chiropractic described in sections 148.01 to 148.10;

~~(5)~~ (7) "diagnostic services" means clinical, physical, laboratory, and other diagnostic measures, including diagnostic imaging that may be necessary to determine the presence or absence of a condition, deficiency, deformity, abnormality, or disease as a basis for evaluation of a health concern, diagnosis, differential diagnosis, treatment, further examination, or referral;

(8) "good standing" means that a license is not the subject of current disciplinary action under section 148.10 or an equivalent disciplinary law in another jurisdiction;

(9) "reinstatement" means the process by which a board-terminated license or voluntarily retired license returns to active license status under section 148.071 or 148.076;

~~(6)~~ (10) "therapeutic services" means rehabilitative therapy as defined in Minnesota Rules, part 2500.0100, subpart 11, and all of the therapeutic, rehabilitative, and preventive sciences and procedures for which the licensee was subject to examination under section 148.06. When provided, therapeutic services must be performed within a practice where the primary focus is the provision of chiropractic services, to prepare the patient for chiropractic services, or to complement the provision of chiropractic services. The administration of therapeutic services is the responsibility of the treating chiropractor and must be rendered under the direct supervision of qualified staff; and

(7) "acupuncture" means a modality of treating abnormal physical conditions by stimulating various points of the body or interruption of the cutaneous integrity by needle insertion to secure a reflex relief of the symptoms by nerve stimulation as utilized as an adjunct to chiropractic adjustment. Acupuncture may not be used as an independent therapy or separately from chiropractic services. Acupuncture is permitted under section 148.01 only after registration with the board which requires completion of a board-approved course of study and successful completion of a board-approved national examination on acupuncture. Renewal of registration shall require completion of board-approved continuing education requirements in acupuncture. The restrictions of section 147B.02, subdivision 2, apply to individuals registered to perform acupuncture under this section; and

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(8) "animal chiropractic diagnosis and treatment" means treatment that includes identifying and resolving vertebral subluxation complexes, spinal manipulation, and manipulation of the extremity articulations of nonhuman vertebrates. Animal chiropractic diagnosis and treatment does not include:

~~(i) performing surgery;~~

~~(ii) dispensing or administering of medications; or~~

~~(iii) performing traditional veterinary care and diagnosis.~~

(11) "voluntarily retired license" means a license held by a chiropractor who has changed the chiropractor's license status to a voluntarily retired license under section 148.075.

Sec. 2. Minnesota Statutes 2024, section 148.01, subdivision 4, is amended to read:

Subd. 4. Practice of chiropractic. An individual licensed to practice under section 148.06 is authorized to perform chiropractic services~~, acupuncture,~~ and therapeutic services, and to provide diagnosis and to render opinions pertaining to those services for the purpose of determining a course of action in the best interests of the patient, such as a treatment plan, appropriate referral, or both.

Sec. 3. Minnesota Statutes 2024, section 148.01, is amended by adding a subdivision to read:

Subd. 5. Practice of therapeutic services. Therapeutic services must be performed within a practice where the primary focus is the provision of chiropractic services, preparing the patient for chiropractic services, or complementing the provision of chiropractic services. The administration of therapeutic services is the responsibility of the treating chiropractor and must be rendered under the direct supervision of qualified staff.

Sec. 4. Minnesota Statutes 2024, section 148.01, is amended by adding a subdivision to read:

Subd. 6. Practice of acupuncture. Acupuncture must not be used as an independent therapy or separately from chiropractic services. Acupuncture is permitted under this section only after registration with the board, which requires completing a board-approved course of study and a board-approved national examination on acupuncture. Renewal of registration requires completing board-approved continuing education requirements in acupuncture. The restrictions of section 147B.02, subdivision 2, apply to individuals registered to perform acupuncture under this section.

Sec. 5. [148.071] REINSTATEMENT OF A LICENSE TERMINATED FOR FAILING TO RENEW OR TO COMPLETE CONTINUING EDUCATION.

Subdivision 1. Scope. This section applies to a chiropractor whose Minnesota license was terminated by the board for failing to timely renew the license or complete annual continuing education requirements.

Subd. 2. Application requirements. At the time of application for reinstatement, the applicant must:

(1) submit an application for reinstatement and pay the application fee;

(2) pay the current renewal fee;

(3) complete a criminal background check as prescribed under section 214.075 and pay the required fee;

(4) submit license verification from each jurisdiction where the applicant holds or has held a chiropractic license;

(5) submit evidence of passing the board's jurisprudence exam;

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(6) submit evidence of correcting any outstanding requirements and paying any outstanding fees that existed at the time the license was terminated; and

(7) complete any additional applicable requirements established in subdivisions 3, 4, 5, 6, and 9.

Subd. 3. Reinstatement of terminated license for licensee in good standing in another jurisdiction. The board must reinstate the license of an applicant who is currently licensed and in good standing in another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2;

(2) provides verification of the active chiropractic license in good standing in another jurisdiction; and

(3) provides verification of completing 20 continuing education hours in the year immediately preceding the application for reinstatement.

Subd. 4. Reinstatement of terminated license after five years or less. The board must reinstate the license of an applicant who does not meet the requirements of subdivision 3 and who applies for reinstatement five years or less after license termination in Minnesota or another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2; and

(2) provides verification of:

(i) completing 20 continuing education hours for each year since the applicant last held an active license in good standing in Minnesota or another jurisdiction and 20 continuing education hours in the year immediately preceding the application for reinstatement; or

(ii) passing the Special Purposes Examination for Chiropractic, or an alternate examination the board determines is equivalent, within 12 months after application.

Subd. 5. Reinstatement of terminated license after more than five years. The board must reinstate the license of an applicant who does not meet the requirements of subdivision 3 and who applies for reinstatement more than five years after license termination in Minnesota or another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2;

(2) provides verification of completing 20 continuing education hours for each year since the applicant last held an active license in good standing in Minnesota or another jurisdiction and 20 continuing education hours in the year immediately preceding the application for reinstatement, not to exceed a maximum of 100 required continuing education hours; and

(3) provides verification of passing the Special Purposes Examination for Chiropractic, or an alternate examination the board determines is equivalent, within 12 months after application.

Subd. 6. Reinstatement within the same calendar year of continuing education termination. The board must reinstate the license of an applicant whose license was terminated for failing to submit the required number of continuing education hours if within the same calendar year of termination the applicant:

(1) completes the required number of continuing education hours and outstanding penalty hours imposed by the board; and

(2) pays all application fees and penalty fees.

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Subd. 7. Board authority. Applications for reinstatement and licenses reinstated under this section are subject to the same board authority under sections 148.10 and 214.103 as other applications and licenses issued by the board to deny, refuse to issue, revoke, suspend, condition, or limit a license or to take disciplinary or corrective action against a licensee or applicant for conduct that violates applicable law or professional standards.

Subd. 8. Continuing education in year of reinstatement. A licensee must not use continuing education hours obtained for the purpose of applying for reinstatement of a terminated license under this section to meet the annual hour requirement for the year in which the license is reinstated.

Subd. 9. Previously terminated licenses. If a chiropractor's license was terminated before July 1, 2026, and the chiropractor applies for reinstatement under this section, the chiropractor is not required to repay any renewal fees that accrued before the license reinstatement.

Sec. 6. [148.075] VOLUNTARILY RETIRED LICENSE.

Subdivision 1. Application. A Minnesota licensed chiropractor in good standing and with no continuing education audit deficiencies may apply to the board to voluntarily retire a license by submitting an application on a form provided by the board and a signed affidavit stating that the applicant will no longer actively practice chiropractic in Minnesota.

Subd. 2. Grounds for denial. The board may deny an application to voluntarily retire a license if the applicant's Minnesota license or license issued in another jurisdiction is not in good standing or is subject to a pending disciplinary action.

Sec. 7. [148.076] REINSTATEMENT OF A VOLUNTARILY RETIRED LICENSE.

Subdivision 1. Scope. This section applies to a chiropractor who voluntarily retired a Minnesota chiropractic license under section 148.075.

Subd. 2. Application requirements. At the time of application for reinstatement, the applicant must:

(1) submit an application for reinstatement;

(2) pay the current renewal fee;

(3) complete a criminal background check as prescribed under section 214.075 and pay the required fee;

(4) submit license verification from each jurisdiction where the applicant holds or has held a chiropractic license;

(5) submit evidence of passing the board's jurisprudence exam;

(6) submit evidence of correcting any outstanding requirements and paying any outstanding fees that existed at the time the license was voluntarily retired; and

(7) complete any additional applicable requirements in subdivisions 3, 4, 5, and 7.

Subd. 3. Reinstatement of voluntarily retired license for licensee in good standing in another jurisdiction. The board must reinstate the license of an applicant who is currently licensed and in good standing in another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2;

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(2) provides verification of the active chiropractic license in good standing in another jurisdiction; and

(3) provides verification of completing 20 continuing education hours in the year immediately preceding the application for reinstatement.

Subd. 4. Reinstatement of voluntarily retired license after five years or less. The board must reinstate the license of an applicant who does not meet the requirements of subdivision 3 and who applies for reinstatement five years or less after voluntary license retirement in Minnesota or the equivalent in another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2; and

(2) provides verification of:

(ii) passing the Special Purposes Examination for Chiropractic, or an alternate examination the board determines is equivalent, within 12 months after application.

Subd. 5. Reinstatement of voluntarily retired license after more than five years. The board must reinstate the license of an applicant who does not meet the requirements of subdivision 3 and who applies for reinstatement more than five years after voluntary license retirement in Minnesota or the equivalent in another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2;

(3) provides verification of passing the Special Purposes Examination for Chiropractic, or an alternate examination the board determines is equivalent, within 12 months after application.

Subd. 6. Board authority. Applications for reinstatement and licenses reinstated under this section are subject to the same board authority under sections 148.10 and 214.103 as other applications and licenses issued by the board to deny, refuse to issue, revoke, suspend, condition, or limit a license or to take disciplinary or corrective action against a licensee or applicant for conduct that violates applicable law or professional standards.

Subd. 7. Continuing education in year of reinstatement. A licensee must not use continuing education hours obtained for the purpose of applying for reinstatement of a voluntarily retired license under this section to meet the annual hour requirement for the year the license is reinstated.

Subd. 8. Previously voluntarily retired licensees. (a) If a chiropractor who voluntarily retired before July 1, 2026, applies for reinstatement under this section, the chiropractor is not required to repay any renewal fees that accrued before the license reinstatement.

(b) Before reinstatement under this subdivision, the voluntarily retired licensee must complete any outstanding continuing education hours due at the time the license was voluntarily retired.

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Sec. 8. Minnesota Statutes 2024, section 148.09, is amended to read:

148.09 INDEPENDENT EXAMINATION.

Subdivision 1. Requirements for examiners. (a) A doctor of chiropractic conducting a physical examination of a patient or a review of records by a doctor of chiropractic, for the purpose of generating a report or opinion to aid a reparation obligor under chapter 65B in making a determination regarding the condition or further treatment of the patient, shall meet the following requirements:

(1) the doctor of chiropractic must either be an instructor at an accredited school of chiropractic or have devoted not less than 50 percent of practice time to direct patient care during the two years immediately preceding the examination;

(2) the doctor of chiropractic must have completed any annual continuing education requirements for chiropractors prescribed by the Board of Chiropractic Examiners;

(3) the doctor of chiropractic must not accept a fee of more than $500 for each independent exam conducted; and

(4) the doctor of chiropractic must register with the Board of Chiropractic Examiners as an independent examiner and adhere to all rules governing the practice of chiropractic.

(b) The examiner must identify in the written report the source of all records reviewed and the dates or period of services covered by those records. The examiner's notes and a copy of the final written report must be retained for at least four years following the examination.

(c) Before conducting an independent examination, the examiner must provide written disclosures to the examinee that clearly state the purpose of the examination and the examinee's right to have a third party present under subdivision 2.

Subd. 2. Third-party presence during examinations. (a) An examiner performing an independent examination under this section must not prohibit the examinee from having a third party of the examinee's choice present during the consultation and examination. The examiner must not bar the presence of a third party based on the third party's training or credentials. Advance notice to the examiner or to any other person, organization, or agency is not required for the presence of a third party under this subdivision.

(b) The third party must provide their name to the examiner. The examiner must document the presence and stated identity of any third party in the written report of the examination.

(c) A third party may make a written or audio recording of the consultation or examination if the recording does not obstruct the conduct of the examination. A third party must not make a video recording of the consultation or examination.

(d) An examiner must not consider the examinee's exercise of rights under this subdivision as failing to cooperate with the examination. If an examiner determines that the examination has been obstructed, the examiner must describe in detail the nature of the obstruction in the body of the written report. For purposes of this subdivision, "obstruct" means to hinder the examination to the degree that the examination cannot be completed, unless the obstruction is necessary for the safety or well-being of the patient.

Subd. 3. Violation. A violation of this section constitutes unprofessional conduct under section 148.10, subdivision 1, paragraph (e).

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Sec. 9. [148.095] ADMINISTRATIVE HOLD DURING COMPLAINT RESOLUTION PROCESS.

Subdivision 1. Administrative hold. (a) If there is a pending complaint against a licensee and the licensee fails to pay required renewal fees, fails to renew the license, or fails to complete required continuing education hours within the time prescribed by law, the board must place the license on an administrative hold.

(b) A license on an administrative hold:

(1) is expired and does not authorize the licensee to engage in the practice of chiropractic; and

(2) remains under the board's full jurisdiction for all purposes under sections 148.10 and 214.103, including investigation, adjudication, and imposition of discipline.

Subd. 2. Prohibition on status change while on administrative hold. (a) If the board places a license on administrative hold, the board must not:

(1) accept an application to voluntarily retire the license under section 148.075;

(2) terminate the license for failing to renew or to complete continuing education requirements; or

(3) otherwise change the license status of the licensee in a manner that allows the licensee to delay, avoid, or terminate the complaint resolution process.

(b) The board must remove the administrative hold upon the resolution of all pending complaints against the licensee.

Subd. 3. Licensee obligations not suspended. An administrative hold on a license does not relieve a licensee of the legal obligation to timely renew the license, pay renewal or other required fees, or complete continuing education hours according to law.

Sec. 10. Minnesota Statutes 2024, section 148.10, is amended by adding a subdivision to read:

Subd. 8. Loss and restoration of good standing. The pendency of a complaint does not cause a license to lose good standing unless: (1) the complaint results in disciplinary action under this section or an equivalent disciplinary law in another jurisdiction; or (2) a stipulation and order or an equivalent order in another jurisdiction provides for the loss of good standing. A license is restored to good standing upon the satisfactory completion, expiration, or other agreed-upon termination of all terms of a stipulation and order or an equivalent order in another jurisdiction. An agreement for corrective action as described under section 214.103, subdivision 6, does not cause a license to lose good standing.

Sec. 11. Minnesota Statutes 2024, section 148.102, subdivision 3, is amended to read:

Subd. 3. Insurers. ~~Two times each year~~ (a) Every January 1 and July 1, each insurer authorized to sell insurance described in section 60A.06, subdivision 1, clause (13), and providing professional liability insurance to chiropractors shall submit to the board a report concerning the chiropractors against whom malpractice settlements or awards have been made to the plaintiff. The report must contain at least the following information:

(1) the total number of malpractice settlements or awards made to the plaintiff;

(2) the date the malpractice settlements or awards to the plaintiff were made;

(3) the allegations contained in the claim or complaint leading to the settlements or awards made to the plaintiff;

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(4) the dollar amount of each malpractice settlement or award;

(5) the regular address of the practice of the doctor of chiropractic against whom an award was made or with whom a settlement was made; and

(6) the name of the doctor of chiropractic against whom an award was made or with whom a settlement was made.

(b) The insurance company shall, in addition to the above information, report to the board any information it possesses which tends to substantiate a charge that a doctor of chiropractic may have engaged in conduct violating section 148.10 and this section.

Sec. 12. Minnesota Statutes 2024, section 148.105, subdivision 1, is amended to read:

Subdivision 1. Generally. Any person who practices, or attempts to practice, chiropractic or who uses any of the terms or letters "Doctors of Chiropractic," "Chiropractor," "DC," or any other title or letters under any circumstances as to lead the public to believe that the person who so uses the terms is engaged in the practice of chiropractic, without having complied with the provisions of sections 148.01 to 148.104, is guilty of a gross misdemeanor; and, upon conviction, fined not less than $1,000 nor more than $10,000 or be imprisoned in the county jail for not less than 30 days nor more than six months or punished by both fine and imprisonment, in the discretion of the court. It is the duty of the county attorney of the county in which the person practices to prosecute. Nothing in sections 148.01 to ~~148.105~~ 148.108 shall be considered as interfering with any person:

(1) licensed by a health-related licensing board, as defined in section 214.01, subdivision 2, including psychological practitioners with respect to the use of hypnosis;

(2) registered or licensed by the commissioner of health under section 214.13; or

(3) engaged in other methods of healing regulated by law in the state of Minnesota;

provided that the person confines activities within the scope of the license or other regulation and does not practice or attempt to practice chiropractic.

Sec. 13. Minnesota Statutes 2025 Supplement, section 148.108, subdivision 5, is amended to read:

Subd. 5. Chiropractic license fees. Fees for chiropractic licensure are the following amounts but may be adjusted lower by board action:

(1) initial application for licensure ~~fee~~, $300;

(2) annual renewal of an active license ~~fee~~, $250;

~~(3) annual renewal of an inactive license fee, 75 percent of the current active license renewal fee under clause (2);~~

~~(4)~~ (3) late renewal penalty ~~fee~~, $150 per month late; ~~and~~

~~(5)~~ (4) application for reinstatement of a ~~voluntarily retired or inactive~~ terminated license ~~fee~~, ~~$187.50.~~ $100; and

(5) penalty for failure to complete CE requirements at the time of license renewal:

(i) at the first failure to complete CE requirements at the time of license renewal, the amount of the fee for annual renewal of an active license under clause (2);

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(ii) at the second failure to complete CE requirements at the time of license renewal, two times the amount of the fee for annual renewal of an active license under clause (2); and

(iii) at the third failure to complete CE requirements at the time of license renewal and every subsequent failure, three times the amount of the fee for annual renewal of an active license under clause (2).

Sec. 14. Minnesota Statutes 2024, section 151.01, subdivision 35, is amended to read:

Subd. 35. Compounding. "Compounding" means preparing, mixing, assembling, packaging, and labeling a drug for an identified individual patient as a result of a practitioner's prescription drug order. Compounding also includes anticipatory compounding, as defined in this section, and the preparation of drugs in which all bulk drug substances and components are nonprescription substances. Compounding does not include mixing or reconstituting a drug according to the product's labeling or to the manufacturer's directions, provided that such labeling has been approved by the United States Food and Drug Administration (FDA) or the manufacturer is licensed under section 151.252. Compounding does not include the preparation of a drug for the purpose of, or incident to, research, teaching, or chemical analysis, provided that the drug is not prepared for dispensing or administration to patients. All compounding, regardless of the type of product, must be done pursuant to a prescription drug order unless otherwise permitted in this chapter or by the rules of the board. Compounding does not include a minor deviation from such directions with regard to radioactivity, volume, or stability, which is made by or under the supervision of a licensed nuclear pharmacist or a physician, and which is necessary in order to accommodate circumstances not contemplated in the manufacturer's instructions, such as the rate of radioactive decay or geographical distance from the patient. Compounding does not include the use of a flavoring agent to flavor a drug.

Sec. 15. Minnesota Statutes 2024, section 151.01, is amended by adding a subdivision to read:

Subd. 44. Flavoring agent. "Flavoring agent" means a therapeutically inert, nonallergenic substance consisting of inactive ingredients that is added to a drug to improve the drug's taste and palatability.

Sec. 16. Minnesota Statutes 2024, section 151.555, subdivision 7, is amended to read:

Subd. 7. Standards and procedures for inspecting and storing donated drugs and supplies. (a) A pharmacist or authorized practitioner who is employed by or under contract with the central repository or a local repository shall inspect all donated drugs and supplies before the drug or supply is dispensed to determine, to the extent reasonably possible in the professional judgment of the pharmacist or practitioner, that the drug or supply is not adulterated or misbranded, has not been tampered with, is safe and suitable for dispensing, has not been subject to a recall, and meets the requirements for donation. If a local repository receives drugs and supplies from the central repository, the local repository does not need to reinspect the drugs and supplies.

(b) The central repository and local repositories shall store donated drugs and supplies in a secure storage area under environmental conditions appropriate for the drug or supply being stored. Donated drugs and supplies may not be stored with nondonated inventory.

(c) The central repository and local repositories shall dispose of all drugs and medical supplies that are not suitable for donation in compliance with applicable federal and state statutes, regulations, and rules concerning hazardous waste.

(d) In the event that controlled substances or drugs that can only be dispensed to a patient registered with the drug's manufacturer are shipped or delivered to a central or local repository for donation, the shipment delivery must be documented by the repository and returned immediately to the donor or the donor's representative that provided the drugs.

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(e) Each repository must develop drug and medical supply recall policies and procedures. If a repository receives a recall notification, the repository shall destroy all of the drug or medical supply in its inventory that is the subject of the recall and complete a record of destruction form in accordance with paragraph (f). If a drug or medical supply that is the subject of a Class I or Class II recall has been dispensed, the repository shall immediately notify the recipient of the recalled drug or medical supply. A drug that potentially is subject to a recall need not be destroyed if its packaging bears a lot number and that lot of the drug is not subject to the recall. If no lot number is on the drug's packaging, it must be destroyed.

(f) A record of destruction of accepted donated drugs and supplies that are not dispensed under subdivision 8~~, are subject to a recall under paragraph (e), or are not suitable for donation~~ or are subject to a recall under paragraph (e) shall be maintained by the repository for at least two years. ~~For each drug or supply destroyed,~~ The record shall include the following information:

(1) the date of destruction;

(2) the name, strength, and quantity of the drug destroyed; and

(3) the name of the person or firm that destroyed the drug.

No other record of destruction is required.

Sec. 17. Minnesota Statutes 2024, section 151.741, subdivision 4, is amended to read:

Subd. 4. Insulin safety net program account. (a) The insulin safety net program account is established in the special revenue fund in the state treasury. Money in the account is appropriated each fiscal year to:

(1) the MNsure board in an amount sufficient to carry out assigned duties under section 151.74, subdivision 7; and

(2) the Board of Pharmacy in an amount sufficient to cover costs incurred by the board ~~in assessing and collecting the registration fee under this section and~~ in administering the insulin safety net program under section 151.74.

(b) The commissioner of management and budget shall annually transfer from the health care access fund to the insulin safety net program account an amount sufficient to implement paragraph (a).

Sec. 18. Minnesota Statutes 2025 Supplement, section 151.741, subdivision 5, is amended to read:

Subd. 5. Insulin repayment account; annual transfer from health care access fund. (a) The insulin repayment account is established in the special revenue fund in the state treasury. Money in the account is appropriated each fiscal year to the commissioner of administration to reimburse manufacturers for insulin dispensed under the insulin safety net program in section 151.74, in accordance with section 151.74, subdivisions 3, paragraph (h), and 6, paragraph (h), and to cover costs incurred by the commissioner in providing these reimbursement payments.

(b) ~~By June 30, 2025, and~~ Each June 30 ~~thereafter~~, the commissioner of administration shall certify to the commissioner of management and budget the total amount expended in the prior fiscal year for:

(1) reimbursement to manufacturers for insulin dispensed under the insulin safety net program in section 151.74, in accordance with section 151.74, subdivisions 3, paragraph (h), and 6, paragraph (h); and

(2) costs incurred by the commissioner of administration in providing the reimbursement payments described in clause (1).

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(c) Each July 1, the commissioner of management and budget shall transfer from the health care access fund to the insulin repayment account~~, beginning July 1, 2025, and each July 1 thereafter,~~ an amount equal to the amount to which the commissioner of administration certified pursuant to paragraph (b).

Sec. 19. Minnesota Statutes 2024, section 214.41, is amended to read:

214.41 ~~PHYSICIAN~~ HEALTH CARE PROVIDER WELLNESS PROGRAM.

Subdivision 1. ~~Definition~~ Definitions. (a) For the purposes of this section, the following terms have the meanings given.

(b) "Health care provider" or "provider" means an individual who is licensed or registered by the state to perform health care services within the provider's scope of practice and in accordance with state law.

(c) " ~~physician~~ Health care provider wellness program" means a program for health care providers of evaluation, counseling, or other modality to address an issue related to career fatigue or wellness related to work stress ~~for physicians licensed under chapter 147~~ that is administered by a statewide association that is exempt from taxation under United States Code, title 26, section 501(c)(6), and that primarily represents physicians and osteopaths of multiple specialties. ~~Physician~~ Health care provider wellness program does not include the provision of services intended to monitor for impairment under the authority of section 214.31.

Subd. 2. Confidentiality. Any record of a ~~person's~~ health care provider's participation in a ~~physician~~ health care provider wellness program is confidential and not subject to discovery, subpoena, or a reporting requirement to the applicable health-related licensing board or to the commissioner of health, unless the ~~person~~ provider voluntarily provides for written release of the information or the disclosure is required to meet the ~~licensee's~~ provider's obligation to report certain information to the applicable health-related licensing board or the commissioner of health according to ~~section 147.111~~ law governing the practice of the provider's profession.

Subd. 3. Civil liability. Any person, agency, institution, facility, or organization employed by, contracting with, or operating a ~~physician~~ health care provider wellness program is immune from civil liability for any action related to their duties in connection with a ~~physician~~ health care provider wellness program when acting in good faith.

Sec. 20. Laws 2025, First Special Session chapter 3, article 23, section 2, subdivision 12, is amended to read:

Subd. 12. Board of Pharmacy

Appropriations by Fund

General

937,000

State Government

Special Revenue

6,280,000

Medication Repository Program. $450,000 in fiscal year 2026 and $450,000 in fiscal year 2027 are from the general fund for the medication repository program ~~to purchase prescription drugs~~ under Minnesota Statutes, section 151.555~~, subdivision 6, paragraph (g)~~.

EFFECTIVE DATE. This section is effective the day following final enactment.

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Sec. 21. TRANSITION OF INACTIVE LICENSES.

On July 1, 2026, the Board of Chiropractic Examiners must administratively change all chiropractic licenses put on inactive license status under Minnesota Rules, part 2500.2020, before that date to a voluntarily retired license under Minnesota Statutes, section 148.075.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 22. INTERIM CHIROPRACTIC ACUPUNCTURE REGISTRATION REINSTATEMENT PROCEDURES.

Subdivision 1. Scope. This section applies to a chiropractor whose Minnesota chiropractic acupuncture registration was canceled.

Subd. 2. Application requirements. At the time of application for reinstatement of an acupuncture registration, the applicant must:

(1) hold an active Minnesota chiropractic license;

(2) submit an application for reinstatement;

(3) pay the current renewal fee;

(4) submit license verification from each jurisdiction where the applicant holds or has held a chiropractic license; and

(5) complete any additional applicable requirements as established in subdivisions 3, 4, and 5.

Subd. 3. Reinstatement of canceled registration for registrant in good standing in another jurisdiction. The Board of Chiropractic Examiners must reinstate the chiropractic acupuncture registration of an applicant in good standing in another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2;

(2) provides verification of a chiropractic acupuncture credential in good standing from each jurisdiction where the applicant is authorized to perform chiropractic acupuncture; and

(3) provides verification of completing two continuing education units in acupuncture or acupuncture-related subjects in the year immediately preceding the application for reinstatement.

Subd. 4. Reinstatement of canceled registration after five years or less. The board must reinstate the chiropractic acupuncture registration of an applicant who does not meet the requirements of subdivision 3 and who applies for reinstatement five years or less after the Minnesota registration cancellation if the applicant:

(1) completes all requirements in subdivision 2; and

(2) provides verification of:

(i) completing two continuing education hours in acupuncture or acupuncture-related subjects for each year since the applicant last held an active chiropractic acupuncture registration in Minnesota or credential in another jurisdiction; or

(ii) passing the National Board of Chiropractic Examiners Acupuncture Examination or the National Certification Commission for Acupuncture and Oriental Medicine (NCCAOM) Examination, or an alternate examination the board determines is equivalent, within 12 months after application.

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Subd. 5. Reinstatement of canceled registration license after more than five years. The board must reinstate the chiropractic acupuncture registration of an applicant who does not meet the requirements of subdivision 3 and who applies for reinstatement more than five years after the Minnesota registration cancellation if the applicant:

(1) completes all requirements in subdivision 2; and

(2) provides verification of passing either the National Board of Chiropractic Examiners Acupuncture Examination or the NCCAOM Examination, or an alternative examination the board determines is equivalent, within 12 months after application.

Subd. 6. Continuing education in year of reinstatement. A licensee must not use continuing education units obtained for the purpose of applying for reinstatement of a canceled registration under this section to meet the annual requirement for the year the license is reinstated.

Subd. 7. Board authority. Applications for reinstatement and registrations reinstated under this section are subject to the same board authority under Minnesota Statutes, sections 148.10 and 214.103, as other applications and registrations issued by the board to deny, refuse to issue, revoke, suspend, condition, or limit a license or to take disciplinary or corrective action against a registrant or applicant for conduct that violates applicable law or professional standards.

Subd. 8. Expiration. This section expires on the date that rules adopted by the board removing the inactive status for chiropractic acupuncture registration reinstatement and establishing new chiropractic acupuncture registration reinstatement procedures become effective.

Sec. 23. INTERIM ANIMAL CHIROPRACTIC REGISTRATION REINSTATEMENT PROCEDURES.

Subdivision 1. Scope. This section applies to a chiropractor whose Minnesota animal chiropractic registration was canceled.

Subd. 2. Application requirements. At the time of application for reinstatement of an animal chiropractic registration, the applicant must:

(1) hold an active Minnesota chiropractic license;

(2) submit an application for reinstatement;

(3) pay the current renewal fee;

(4) submit license verification from each jurisdiction where the applicant holds or has held a chiropractic license; and

(5) complete any additional applicable requirements as established in subdivisions 3 and 4.

Subd. 3. Reinstatement of canceled registration for registrant in good standing in another jurisdiction. The Board of Chiropractic Examiners must reinstate the animal chiropractic registration of an applicant who holds an animal chiropractic credential that is equivalent to a Minnesota registration and in good standing in another jurisdiction if the applicant:

(1) completes all requirements in subdivision 2;

(2) provides verification of an animal acupuncture credential in good standing from each jurisdiction where the applicant is authorized to perform animal acupuncture; and

(3) provides verification of completing six continuing education units in animal chiropractic diagnosis and treatment in the year immediately preceding the application for reinstatement.

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Subd. 4. Reinstatement of canceled registration for registrant with no animal chiropractic credential in good standing in another jurisdiction. The board must reinstate the registration of an applicant who does not meet the requirements of subdivision 3 if the applicant:

(1) completes all requirements in subdivision 2; and

(2) provides verification of completing six continuing education units related to animal chiropractic diagnosis and treatment for each year the applicant cannot verify an active animal chiropractic credential that is equivalent to a Minnesota registration and in good standing.

Subd. 5. Continuing education in year of reinstatement. A licensee must not use continuing education hours obtained for the purposes of applying for reinstatement of a canceled registration under this section to meet the annual hour requirement for the year the license is reinstated.

Subd. 6. Board authority. Applications for reinstatement and registrations reinstated under this section are subject to the same board authority under Minnesota Statutes, sections 148.10 and 214.103, as other applications and registrations issued by the board to deny, refuse to issue, revoke, suspend, condition, or limit a license or to take disciplinary or corrective action against a registrant or applicant for conduct that violates applicable law or professional standards.

Subd. 7. Expiration. This section expires on the date that rules adopted by the board removing the inactive status for animal chiropractic registration reinstatement and establishing new animal chiropractic registration reinstatement procedures become effective.

Sec. 24. REVISOR INSTRUCTION.

The revisor of statutes shall renumber each provision of Minnesota Statutes listed in column A to the number listed in column B. The revisor shall also make necessary cross-reference changes consistent with the renumbering:

Column A	Column B
148.01, subdivision 1a	148.032, subdivision 1
148.01, subdivision 1b	148.032, subdivision 2
148.01, subdivision 1c	148.032, subdivision 3
148.01, subdivision 1d	148.032, subdivision 4
148.032, paragraphs (a) and (b)	148.032, subdivision 5, paragraphs (a) and (b)
148.032, paragraphs (c) and (d)	148.032, subdivision 6, paragraphs (a) and (b)
148.032, paragraph (e)	148.032, subdivision 7

Sec. 25. REPEALER.

(a) Minnesota Statutes 2024, section 151.741, subdivisions 2, 3, and 6, are repealed.

(b) Minnesota Rules, parts 2500.0100, subparts 5b, 6, and 12; 2500.1900; 2500.2020; 2500.2040; 2500.2100; 2500.2110; 6800.0400; and 6800.1150, are repealed.

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ARTICLE 5

HEALTH CARE

Section 1. Minnesota Statutes 2024, section 62V.05, subdivision 7, is amended to read:

Subd. 7. Agreements; consultation. (a) The board shall:

(1) establish and maintain an agreement with the commissioner of human services for cost allocation and services regarding eligibility determinations and enrollment for public health care programs that use a modified adjusted gross income standard to determine program eligibility. The board may establish and maintain an agreement with the commissioner of human services for other services;

(2) establish and maintain an agreement with the commissioners of commerce and health for services regarding enforcement of MNsure certification requirements for health plans and dental plans offered through MNsure. The board may establish and maintain agreements with the commissioners of commerce and health for other services; and

(3) establish interagency agreements to transfer funds to other state agencies for their costs related to implementing and operating MNsure, excluding medical assistance allocatable costs.

(b) The board shall consult with the commissioners of commerce and health regarding the operations of MNsure.

(d) Beginning March 15, 2016, and each March 15 thereafter, the board shall submit a report to the chairs and ranking minority members of the committees in the senate and house of representatives with primary jurisdiction over commerce, health, and human services on all the agreements entered into with the chief information officer of the Department of Information Technology Services, or the commissioners of human services, health, or commerce in accordance with this subdivision. The report shall include the agency in which the agreement is with; the time period of the agreement; the purpose of the agreement; and a summary of the terms of the agreement. A copy of the agreement must be submitted to the extent practicable.

Sec. 2. Minnesota Statutes 2024, section 62V.13, is amended to read:

62V.13 EASY ENROLLMENT HEALTH INSURANCE OUTREACH PROGRAM.

Subdivision 1. Establishment. The board, in cooperation with the commissioner of revenue, must establish the easy enrollment health insurance outreach program to:

(1) reduce the number of uninsured Minnesotans and increase access to affordable health insurance coverage;

(2) allow the commissioner of revenue to provide return information, at the request of the taxpayer, to MNsure to provide the taxpayer with information about the taxpayer's potential eligibility for financial assistance and health insurance enrollment options through MNsure;

(3) allow MNsure to ~~estimate taxpayer potential eligibility for financial assistance for health insurance coverage~~ provide general information regarding potential eligibility for health insurance programs and financial assistance available through MNsure; and

(4) allow MNsure to conduct targeted outreach to assist interested taxpayer households in applying for and enrolling in affordable health insurance options through MNsure, including connecting interested taxpayer households with a navigator or broker for free enrollment assistance.

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Subd. 2. Screening for eligibility for insurance assistance. Upon receipt of ~~and based on~~ return information received from the commissioner of revenue under section 270B.14, subdivision 22, MNsure may ~~make a projected assessment on whether the interested taxpayer's household may qualify for a financial assistance program for health insurance coverage~~ review the information to identify households that may benefit from health coverage through MNsure and provide general information on available coverage and financial assistance programs.

Subd. 3. Outreach letter and special enrollment period. (a) MNsure must provide a written letter ~~of the projected assessment under subdivision 2~~ with general information about health insurance coverage and financial assistance available through MNsure to a taxpayer who indicates to the commissioner of revenue that the taxpayer is interested in obtaining information on access to health insurance.

(b) MNsure must allow a special enrollment period for taxpayers who receive the outreach letter in paragraph (a) and are determined eligible to enroll in a qualified health plan through MNsure. The triggering event for the special enrollment period is the day the outreach letter under this subdivision is mailed to the taxpayer. An eligible individual, and their dependents, have 65 days from the triggering event to select a qualifying health plan and coverage for the qualifying health plan is effective the first day of the month after plan selection.

(c) Taxpayers who have a member of the taxpayer's household currently enrolled in a qualified health plan through MNsure are not eligible for the special enrollment under paragraph (b).

(d) MNsure must provide information to the general public about the easy enrollment health insurance outreach program and the special enrollment period described in this subdivision.

Subd. 4. Appeals. (a) ~~Projected~~ Any eligibility ~~assessments for financial assistance under this section are not appealable~~ information provided under this section is not appealable.

(b) Qualification for the special enrollment period under this section is appealable to MNsure under this chapter and Minnesota Rules, chapter 7700.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 3. Minnesota Statutes 2025 Supplement, section 256.9657, subdivision 2b, is amended to read:

Subd. 2b. Hospital assessment. (a) For purposes of this subdivision, the following terms have the meanings given:

(1) "eligible hospital" means:

(i) PrairieCare psychiatric hospital; or

(ii) a hospital licensed under section 144.50, located in Minnesota, and with a Medicare cost report filed and showing in the Healthcare Cost Report Information System (HCRIS), except for the following:

(A) federal Indian Health Service facilities;

(B) state-owned or state-operated regional treatment centers and all state-operated services;

(D) long-term acute care hospitals;

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(2) "net outpatient revenue" means total outpatient revenue less Medicare revenue as calculated from:

(i) values on Worksheet G of the hospital's Medicare cost report; or

(ii) for PrairieCare psychiatric hospital, data available to the commissioner; and

(3) "total patient days" means total hospital inpatient days as reported on:

(i) Worksheet S-3 of the hospital's Medicare cost report; or

(ii) for PrairieCare psychiatric hospital, data available to the commissioner.

(b) Subject to paragraphs (m) to ~~(o)~~ (p), each eligible hospital must pay assessments to the hospital directed payment program account in the special revenue fund, with an aggregate annual assessment amount equal to the sum of the following:

(1) $120.22 multiplied by total patient days; and

(2) 5.96 percent of the hospital's net outpatient revenue.

(c) The assessment amount for calendar years 2026 and 2027 must be based on the total patient days and net outpatient revenue reflected on an eligible hospital's Medicare cost report as follows:

(1) an eligible hospital with a fiscal year ending on March 31 or June 30 must use data from a cost report from the hospital's fiscal year 2022; and

(2) an eligible hospital with a fiscal year ending on September 30 or December 31 must use data from a cost report from the hospital's fiscal year 2021.

(d) The annual assessment amount for calendar years after 2027 must be set for a two-year period and must be based on the total patient days and net outpatient revenue reflected on an eligible hospital's most recent Medicare cost report filed and showing in HCRIS as of August 1 of the year prior to the subsequent two-year period.

(e) The commissioner may, after consultation with the Minnesota Hospital Association, modify the rates of assessment in paragraph (b) as necessary to comply with federal law, obtain or maintain a waiver under Code of Federal Regulations, title 42, section 433.72, or otherwise maximize under this section federal financial participation for medical assistance. Notwithstanding the foregoing authorization to maximize federal financial participation for medical assistance, the commissioner must reduce the rates of assessment in paragraph (b) as necessary to ensure:

(1) the state's aggregated health care-related taxes on inpatient hospital services do not exceed 5.75 percent of the net patient revenue attributable to those services; and

(2) the state's aggregated health care-related taxes on outpatient hospital services do not exceed 5.75 percent of the net patient revenue attributable to those services.

(f) Eligible hospitals must pay the annual assessment amount under paragraph (b) to the commissioner by paying four equal, quarterly assessments. Eligible hospitals must pay the quarterly assessments by January 1, April 1, July 1, and October 1 each year. Assessments must be paid in the form and manner specified by the commissioner. An eligible hospital is prohibited from paying a quarterly assessment until the eligible hospital has received the applicable invoice under paragraph (g).

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(g) The commissioner must provide eligible hospitals with an invoice by December 1 for the assessment due January 1, March 1 for the assessment due April 1, June 1 for the assessment due July 1, and September 1 for the assessment due October 1 each year.

(h) The commissioner must notify each eligible hospital of the hospital's estimated annual assessment amount for the subsequent calendar year by October 15 each year.

(i) If any of the dates for assessments or invoices in paragraphs (f) to (h) fall on a holiday, the applicable date is the next business day.

(j) A hospital that has merged with another hospital must have the surviving hospital's assessment revised at the start of the hospital's first full fiscal year after the merger is complete. A closed hospital is retroactively responsible for assessments owed for services provided through the final date of operations.

(k) If the commissioner determines that a hospital has underpaid or overpaid an assessment, the commissioner must notify the hospital of the unpaid assessment or of any refund due. The commissioner must refund a hospital's overpayment from the hospital directed payment program account created in section 256B.1975, subdivision 1.

(l) Revenue from an assessment under this subdivision must only be used by the commissioner to pay the nonfederal share of the directed payment program under section 256B.1974.

(m) The commissioner is prohibited from collecting any assessment under this subdivision during any period of time when:

(1) federal financial participation is unavailable or disallowed, or if the approved aggregate federal financial participation for the directed payment under section 256B.1974 is less than 51 percent; or

(2) a directed payment under section 256B.1974 is not approved by the Centers for Medicare and Medicaid Services.

(n) The commissioner must make the following discounts from the inpatient portion of the assessment under paragraph (b), clause (1), in the stated amount or as necessary to achieve federal approval of the assessment in this section:

(1) Hennepin Healthcare, with a discount of 25 percent;

(2) Mayo Rochester, with a discount of ten percent;

(3) Gillette Children's Hospital, with a discount of 90 percent;

(4) each hospital not included in another discount category, and with greater than $200,000,000 in total medical assistance inpatient and outpatient revenue in fee-for-service and managed care, as reported in state fiscal year 2022 medical assistance fee-for-service and managed care claims data, with a discount of five percent; and

(5) any hospital responsible for greater than 12 percent of the total assessment annually collected statewide, with a discount in the amount necessary such that the hospital is responsible for 12 percent of the total assessment annually collected statewide.

(o) The commissioner must make the following discounts from the outpatient portion of the assessment under paragraph (b), clause (2), in the stated amount or as necessary to achieve federal approval of the assessment in this section:

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(1) each critical access hospital or independent hospital located outside a city of the first class and paid under the Medicare prospective payment system, with a discount of 40 percent;

(2) Gillette Children's Hospital, with a discount of 90 percent;

(3) Hennepin Healthcare, with a discount of 60 percent;

(4) Mayo Rochester, with a discount of 20 percent; and

(5) each hospital not included in another discount category, and with greater than $200,000,000 in total medical assistance inpatient and outpatient revenue in fee-for-service and managed care, as reported in state fiscal year 2022 medical assistance fee-for-service and managed care claims data, with a discount of ten percent.

(p) The commissioner must not impose any assessment under this subdivision on a hospital that does not receive payments under section 256B.1974.

~~(p)~~ (q) If the federal share of the hospital directed payment program under section 256B.1974 is increased as the result of an increase to the federal medical assistance percentage, the commissioner must reduce the assessment on a uniform percentage basis across eligible hospitals on which the assessment is imposed, such that the aggregate amount collected from hospitals under this subdivision does not exceed the total amount needed to maintain the same aggregate state and federal funding level for the directed payments authorized by section 256B.1974.

~~(q)~~ (r) Eligible hospitals must submit to the commissioner on an annual basis, in the form and manner specified by the commissioner in consultation with the Minnesota Hospital Association, all documentation necessary to determine the assessment amounts under this subdivision.

EFFECTIVE DATE. This section is effective the date that Laws 2025, First Special Session chapter 3, article 8, section 4, becomes effective.

Sec. 4. Minnesota Statutes 2024, section 256.969, subdivision 2b, is amended to read:

Subd. 2b. Hospital payment rates. (a) For discharges occurring on or after November 1, 2014, hospital inpatient services for hospitals located in Minnesota shall be paid according to the following:

(1) critical access hospitals as defined by Medicare shall be paid using a cost-based methodology;

(2) long-term hospitals as defined by Medicare shall be paid on a per diem methodology under subdivision 25;

(3) rehabilitation hospitals or units of hospitals that are recognized as rehabilitation distinct parts as defined by Medicare shall be paid according to the methodology under subdivision 12; and

(4) all other hospitals shall be paid on a diagnosis-related group (DRG) methodology.

(b) For the period beginning January 1, 2011, through October 31, 2014, rates shall not be rebased, except that a Minnesota long-term hospital shall be rebased effective January 1, 2011, based on its most recent Medicare cost report ending on or before September 1, 2008, with the provisions under subdivisions 9 and 23, based on the rates in effect on December 31, 2010. For rate setting periods after November 1, 2014, in which the base years are updated, a Minnesota long-term hospital's base year shall remain within the same period as other hospitals.

(c) Effective for discharges occurring on and after November 1, 2014, payment rates for hospital inpatient services provided by hospitals located in Minnesota or the local trade area, except for the hospitals paid under the methodologies described in paragraph (a), clauses (2) and (3), shall be rebased, incorporating cost and payment

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methodologies in a manner similar to Medicare. The base year or years for the rates effective November 1, 2014, shall be calendar year 2012. The rebasing under this paragraph shall be budget neutral, ensuring that the total aggregate payments under the rebased system are equal to the total aggregate payments that were made for the same number and types of services in the base year. Separate budget neutrality calculations shall be determined for payments made to critical access hospitals and payments made to hospitals paid under the DRG system. Only the rate increases or decreases under subdivision 3a or 3c that applied to the hospitals being rebased during the entire base period shall be incorporated into the budget neutrality calculation.

(d) For discharges occurring on or after November 1, 2014, through the next rebasing that occurs, the rebased rates under paragraph (c) that apply to hospitals under paragraph (a), clause (4), shall include adjustments to the projected rates that result in no greater than a five percent increase or decrease from the base year payments for any hospital. Any adjustments to the rates made by the commissioner under this paragraph and paragraph (e) shall maintain budget neutrality as described in paragraph (c).

(e) For discharges occurring on or after November 1, 2014, the commissioner may make additional adjustments to the rebased rates, and when evaluating whether additional adjustments should be made, the commissioner shall consider the impact of the rates on the following:

(1) pediatric services;

(2) behavioral health services;

(3) trauma services as defined by the National Uniform Billing Committee;

(4) transplant services;

(5) obstetric services, newborn services, and behavioral health services provided by hospitals outside the seven‑county metropolitan area;

(6) outlier admissions;

(7) low-volume providers; and

(8) services provided by small rural hospitals that are not critical access hospitals.

(f) Hospital payment rates established under paragraph (c) must incorporate the following:

(1) for hospitals paid under the DRG methodology, the base year payment rate per admission is standardized by the applicable Medicare wage index and adjusted by the hospital's disproportionate population adjustment;

(2) for critical access hospitals, payment rates for discharges between November 1, 2014, and June 30, 2015, shall be set to the same rate of payment that applied for discharges on October 31, 2014;

(3) the cost and charge data used to establish hospital payment rates must only reflect inpatient services covered by medical assistance; and

(4) in determining hospital payment rates for discharges occurring on or after the rate year beginning January 1, 2011, through December 31, 2012, the hospital payment rate per discharge shall be based on the cost-finding methods and allowable costs of the Medicare program in effect during the base year or years. In determining hospital payment rates for discharges in subsequent base years, the per discharge rates shall be based on the cost‑finding methods and allowable costs of the Medicare program in effect during the base year or years.

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(g) The commissioner shall validate the rates effective November 1, 2014, by applying the rates established under paragraph (c), and any adjustments made to the rates under paragraph (d) or (e), to hospital claims paid in calendar year 2013 to determine whether the total aggregate payments for the same number and types of services under the rebased rates are equal to the total aggregate payments made during calendar year 2013.

(h) Effective for discharges occurring on or after July 1, 2017, and every two years thereafter, payment rates under this section shall be rebased to reflect only those changes in hospital costs between the existing base year or years and the next base year or years. In any year that inpatient claims volume falls below the threshold required to ensure a statistically valid sample of claims, the commissioner may combine claims data from two consecutive years to serve as the base year. Years in which inpatient claims volume is reduced or altered due to a pandemic or other public health emergency shall not be used as a base year or part of a base year if the base year includes more than one year. Changes in costs between base years shall be measured using the lower of the hospital cost index defined in subdivision 1, paragraph (a), or the percentage change in the case mix adjusted cost per claim. The commissioner shall establish the base year for each rebasing period considering the most recent year or years for which filed Medicare cost reports are available, except that the base years for the rebasing effective July 1, 2023, are calendar years 2018 and 2019. The estimated change in the average payment per hospital discharge resulting from a scheduled rebasing must be calculated and made available to the legislature by January 15 of each year in which rebasing is scheduled to occur, and must include by hospital the differential in payment rates compared to the individual hospital's costs.

(i) Effective for discharges occurring on or after July 1, 2015, through December 31, 2026, inpatient payment rates for critical access hospitals located in Minnesota or the local trade area shall be determined using a new cost‑based methodology. The commissioner shall establish within the methodology tiers of payment designed to promote efficiency and cost-effectiveness. Payment rates for hospitals under this paragraph shall be set at a level that does not exceed the total cost for critical access hospitals as reflected in base year cost reports. Until the next rebasing that occurs, the new methodology shall result in no greater than a five percent decrease from the base year payments for any hospital, except a hospital that had payments that were greater than 100 percent of the hospital's costs in the base year shall have their rate set equal to 100 percent of costs in the base year. The rates paid for discharges on and after July 1, 2016, covered under this paragraph shall be increased by the inflation factor in subdivision 1, paragraph (a). The new cost-based rate shall be the final rate and shall not be settled to actual incurred costs. Hospitals shall be assigned a payment tier based on the following criteria:

(1) hospitals that had payments at or below 80 percent of their costs in the base year shall have a rate set that equals 85 percent of their base year costs;

(2) hospitals that had payments that were above 80 percent, up to and including 90 percent of their costs in the base year shall have a rate set that equals 95 percent of their base year costs; and

(3) hospitals that had payments that were above 90 percent of their costs in the base year shall have a rate set that equals 100 percent of their base year costs.

(j) The commissioner may refine the payment tiers and criteria for critical access hospitals to coincide with the next rebasing under paragraph (h). The factors used to develop the new methodology may include, but are not limited to:

~~(1) the ratio between the hospital's costs for treating medical assistance patients and the hospital's charges to the medical assistance program;~~

(2) the ratio between the hospital's costs for treating medical assistance patients and the hospital's payments received from the medical assistance program for the care of medical assistance patients;

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(3) the ratio between the hospital's charges to the medical assistance program and the hospital's payments received from the medical assistance program for the care of medical assistance patients;

~~(4) the statewide average increases in the ratios identified in clauses (1), (2), and (3);~~

~~(5) the proportion of that hospital's costs that are administrative and trends in administrative costs; and~~

~~(6) geographic location.~~

(j) Effective for discharges occurring on or after January 1, 2027, inpatient payment rates for critical access hospitals located in Minnesota or the local trade area must be determined using 100 percent of each hospital's base year costs. The base year costs must be increased by the percentage change in the Centers for Medicare and Medicaid Services Inpatient Hospital Market Basket between the base year and the payment year. Effective January 1, 2027, payments made by managed care plans and county-based purchasing plans must be at least equivalent to those paid by fee-for-service.

(k) Subject to subdivision 2g, effective for discharges occurring on or after January 1, 2024, the rates paid to hospitals described in paragraph (a), clauses (2) to (4), must include a rate factor specific to each hospital that qualifies for a medical education and research cost distribution under section 62J.692, subdivision 4, paragraph (a).

Sec. 5. Minnesota Statutes 2025 Supplement, section 256.969, subdivision 2f, is amended to read:

Subd. 2f. Alternate inpatient payment rate. (a) Effective January 1, 2022, for a hospital eligible to receive disproportionate share hospital payments under subdivision 9, paragraph (d), clause (6), the commissioner shall reduce the amount calculated under subdivision 9, paragraph (d), clause (6), by 99 one percent and compute an alternate inpatient payment rate. The alternate payment rate shall be structured to target a total aggregate reimbursement amount equal to what the hospital would have received for providing fee-for-service inpatient services under this section to patients enrolled in medical assistance had the hospital received the entire amount calculated under subdivision 9, paragraph (d), clause (6). This paragraph expires when paragraph (b) becomes effective.

(b) For hospitals eligible to receive payment under section 256B.1973 or 256B.1974 and meeting the criteria in subdivision 9, paragraph (d), the commissioner ~~must~~ may reduce the amount calculated under subdivision 9, paragraph (d), by one percent and compute an alternate inpatient payment rate. The alternate payment rate must be structured to target a total aggregate reimbursement amount equal to the amount that the hospital would have received for providing fee-for-service inpatient services under this section to patients enrolled in medical assistance had the hospital received 99 percent of the entire amount calculated under subdivision 9, paragraph (d). Hospitals that do not meet federal requirements for Medicaid disproportionate share hospitals are not eligible for the alternate payment rate.

EFFECTIVE DATE. This section is effective upon the date that Laws 2025, First Special Session chapter 3, article 8, section 5, becomes effective.

Sec. 6. Minnesota Statutes 2024, section 256.969, subdivision 25, is amended to read:

Subd. 25. Long-term hospital rates. (a) Long-term hospitals shall be paid on a per diem basis.

(b) For admissions occurring on or after April 1, 1995, a long-term hospital as designated by Medicare that does not have admissions in the base year shall have inpatient rates established at the average of other hospitals with the same designation. For subsequent rate-setting periods in which base years are updated, the hospital's base year shall be the first Medicare cost report filed with the long-term hospital designation and shall remain in effect until it falls within the same period as other hospitals.

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(c) For admissions occurring on or after July 1, 2023, long-term hospitals must be paid the higher of ~~a per diem amount computed using the methodology described in subdivision 2b, paragraph (i), or~~ the per diem rate as of July 1, 2021., or a per diem amount computed as follows:

(1) hospitals that had payments at or below 80 percent of the hospital's costs in the base year must have a rate set that equals 85 percent of the hospital's base year costs;

(2) hospitals that had payments that were above 80 percent up to and including 90 percent of the hospital's costs in the base year must have a rate set that equals 95 percent of the hospital's base year costs; and

(3) hospitals that had payments that were above 90 percent of the hospital's costs in the base year must have a rate set that equals 100 percent of the hospital's base year costs.

Sec. 7. Minnesota Statutes 2024, section 256B.056, subdivision 1, is amended to read:

Subdivision 1. Residency. (a) To be eligible for medical assistance, a person must reside in Minnesota, or, if absent from the state, be deemed to be a resident of Minnesota, in accordance with Code of Federal Regulations, title 42, section 435.403. A child who is placed in a family foster home in Minnesota by another state is a Minnesota resident in accordance with Minnesota's interstate agreements and Code of Federal Regulations, title 42, section 435.403(k). For the purposes of this paragraph, "family foster home" has the meaning given in section 260C.007, subdivision 16b.

(b) The commissioner shall identify individuals who are enrolled in medical assistance and who are absent from the state for more than 30 consecutive days, but who continue to qualify for medical assistance in accordance with paragraph (a).

(c) If the individual is absent from the state for more than 30 consecutive days but still deemed a resident of Minnesota in accordance with paragraph (a), any covered service provided to the individual must be paid through the fee-for-service system and not through the managed care capitated rate payment system under section 256B.69 or 256L.12.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 8. Minnesota Statutes 2025 Supplement, section 256B.0625, subdivision 8, is amended to read:

Subd. 8. Physical therapy. (a) Medical assistance covers physical therapy and related services. Specialized maintenance therapy is covered for recipients age 20 and under.

(b) Services provided by a physical therapy assistant shall be reimbursed at the same rate as services performed by a physical therapist when the services of the physical therapy assistant are provided under the direction of a physical therapist who is on the premises. Services provided by a physical therapy assistant that are provided under the direction of a physical therapist who is not on the premises shall be reimbursed at 65 percent of the physical therapist rate.

(c) Payment for physical therapy and related services is limited to 14 visits per year unless prior authorization of a greater number of visits is obtained. This paragraph expires upon the effective date of paragraph (d).

(d) Effective January 1, 2027, or upon federal approval, whichever is later, payment for physical therapy and related services is limited to the following number of visits per year unless prior authorization of a greater number of visits is obtained:

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(1) for children following an inpatient or outpatient hospital-based surgery, 30 visits; and

(2) for all other recipients, 14 visits.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 9. Minnesota Statutes 2025 Supplement, section 256B.1973, subdivision 9, is amended to read:

Subd. 9. Interaction with other directed payments. (a) An eligible provider under subdivision 3 may participate in the hospital directed payment program under section 256B.1974 for inpatient hospital services, outpatient hospital services, or both. A provider participating in the hospital directed payment program must not receive a directed payment under this section for any provider classes paid via the hospital directed payment program. A hospital subject to this section must notify the commissioner in writing no later than 30 days after enactment of this subdivision of the hospital's intention to participate in the hospital directed payment program under section 256B.1974 for inpatient hospital services, outpatient hospital services, or both.

(b) The election under this subdivision is a onetime election, except that if an eligible provider elects to participate in the hospital directed payment program, and the hospital directed payment program expires or is not federally approved, the eligible provider may subsequently elect to participate in the directed payment under this section.

(c) If an eligible provider elects not to participate in the hospital directed payment program under section 256B.1974 and the federal statutes or regulations related to hospital directed payment programs are subsequently substantially changed, the eligible provider may elect to participate in the hospital directed payment program under section 256B.1974.

(d) The effective date of the election to participate in the hospital directed payment program under this section must align with the beginning of the calendar year in which payment rates under this section are updated. The eligible provider must notify the commissioner of the eligible provider's intention to make the election ten months before the effective date of the election.

Sec. 10. Minnesota Statutes 2025 Supplement, section 256B.69, subdivision 6d, is amended to read:

Subd. 6d. Prescription drugs. (a) The commissioner may exclude or modify coverage for prescription drugs from the prepaid managed care contracts entered into under this section in order to increase savings to the state by collecting additional prescription drug rebates.

(b) The contracts must maintain incentives for the managed care plan to manage drug costs and utilization and may require that the managed care plans maintain an open drug formulary. In order to manage drug costs and utilization, the contracts may authorize the managed care plans to use preferred drug lists and prior authorization. The contracts must require that the managed care plans enter into contracts with the state's selected pharmacy benefit manager vendor to administer the pharmacy benefit.

(c) This subdivision is contingent on federal approval of the managed care contract changes and the collection of additional prescription drug rebates.

(d) The commissioner must require that the final reimbursement to a pharmacy from managed care and county‑based purchasing plans and any pharmacy benefit managers under contract with these entities be at least a dispensing fee of $11.55 per claim for prescriptions filled with drugs meeting the definition of covered outpatient drugs. The commissioner must require the payment of a dispensing fee of at least $3.65 for drugs not meeting the definition of covered outpatient drug.

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(e) In addition to the dispensing fee set forth in paragraph (d), the commissioner must require that the final reimbursement to a pharmacy from managed care and county-based purchasing plans and any pharmacy benefit managers under contract with these entities be equal to the ingredient cost for a drug as either:

(1) the lower of the National Average Drug Acquisition Cost (NADAC) or the Minnesota actual acquisition cost (MNAAC) under section 256B.0625, subdivision 13, paragraph (g);

(2) the maximum allowable cost, if a drug ingredient cost is unreported in the NADAC and the MNAAC; or

(3) the wholesale acquisition cost minus two percent, if a drug ingredient cost is unreported in the NADAC and the MNAAC and a maximum allowable cost is unavailable.

(f) The commissioner must monitor the effect of this requirement on access to pharmaceutical services in rural and underserved areas of the state. If, for any contract year, federal approval is not received for paragraphs (d) and (e), the commissioner must adjust the capitation rates paid to managed care plans and county-based purchasing plans for that contract year to reflect removal of paragraphs (d) and (e). A contract between a managed care plan or county-based purchasing plan, or any pharmacy benefit manager under contract with one of those entities, and a provider to whom paragraphs (d) and (e) apply must allow recovery of payments from those providers if capitation rates are adjusted in accordance with this paragraph. Payment recoveries must not exceed the amount equal to any increase in rates that results from paragraphs (d) and (e). This subdivision expires if federal approval is not received for paragraphs (d) and (e) at any time.

(g) Paragraphs (d) to (g) expire upon the effective date of a master contract under section 256B.696. The commissioner shall notify the revisor of statutes of the effective date.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 11. Minnesota Statutes 2025 Supplement, section 256B.695, subdivision 5, is amended to read:

Subd. 5. CARMA enrollment. (a) Subject to ~~paragraphs~~ paragraph (d) ~~and (e)~~, eligible individuals must be automatically enrolled in CARMA, but may decline enrollment. Eligible individuals may enroll in fee-for-service medical assistance. Eligible individuals may change their CARMA elections on an annual basis.

(b) Eligible individuals must be able to enroll in CARMA through the selection process in accordance with the election period established in section 256B.69, subdivision 4, paragraph (e).

(c) Enrollees who were not previously enrolled in the medical assistance program or MinnesotaCare can change their selection once within the first year after enrollment in CARMA. Enrollees who were not previously enrolled in CARMA have 90 days to make a change and changes are allowed for additional special circumstances.

(d) The commissioner may not offer a second health plan to eligible individuals other than, ~~and~~ or in addition to, CARMA except that the commissioner may offer a second health plan to eligible individuals ~~when another health plan is~~ enrolling in MinnesotaCare, if required by federal law or rule. Eligible individuals who do not select a health plan at the time of enrollment must automatically be enrolled in CARMA.

(e) The commissioner may offer a replacement plan to eligible individuals, as determined by the commissioner, when counties administering CARMA have their contract terminated for cause.

~~(e)~~ (f) The commissioner may, on a county-by-county basis, offer a health plan other than~~, and in addition to,~~ CARMA to individuals who are eligible for both Medicare and medical assistance due to age, income, or disability if the commissioner deems it necessary for enrollees to have another choice of health plan. Factors the commissioner must consider when determining if the other health plan is necessary include the number of available

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Medicare Advantage Plan options that are not special needs plans in the county, the size of the enrolling population, the additional administrative burden placed on providers and counties by multiple health plan options in a county, the need to ensure the viability and success of the CARMA program, and the impact to the medical assistance program there is not already a health plan available under CARMA.

(f) In counties where the commissioner is required by federal law or elects to offer a second health plan other than CARMA pursuant to paragraphs (d) and (e), eligible enrollees who do not select a health plan at the time of enrollment must automatically be enrolled in CARMA.

(g) This subdivision supersedes section 256B.694.

EFFECTIVE DATE. This section is effective January 1, 2028.

Sec. 12. Minnesota Statutes 2024, section 256B.75, is amended to read:

256B.75 HOSPITAL OUTPATIENT REIMBURSEMENT.

(a) For outpatient hospital facility fee payments for services rendered on or after October 1, 1992, the commissioner of human services shall pay the lower of (1) submitted charge, or (2) 32 percent above the rate in effect on June 30, 1992, except for those services for which there is a federal maximum allowable payment. Effective for services rendered on or after January 1, 2000, payment rates for nonsurgical outpatient hospital facility fees and emergency room facility fees shall be increased by eight percent over the rates in effect on December 31, 1999, except for those services for which there is a federal maximum allowable payment. Services for which there is a federal maximum allowable payment shall be paid at the lower of (1) submitted charge, or (2) the federal maximum allowable payment. Total aggregate payment for outpatient hospital facility fee services shall not exceed the Medicare upper limit. If it is determined that a provision of this section conflicts with existing or future requirements of the United States government with respect to federal financial participation in medical assistance, the federal requirements prevail. The commissioner may, in the aggregate, prospectively reduce payment rates to avoid reduced federal financial participation resulting from rates that are in excess of the Medicare upper limitations.

(b) Notwithstanding paragraph (a), payment for outpatient, emergency, and ambulatory surgery hospital facility fee services for critical access hospitals designated under section 144.1483, clause (9), shall be paid on a cost-based payment system that is based on the cost-finding methods and allowable costs of the Medicare program. Effective for services provided on or after July 1, 2015, rates established for critical access hospitals under this paragraph for the applicable payment year shall be the final payment and shall not be settled to actual costs. Effective for services delivered on or after the first day of the hospital's fiscal year ending in 2017, the rate for outpatient hospital services shall be computed using information from each hospital's Medicare cost report as filed with Medicare for the year that is two years before the year that the rate is being computed. Rates shall be computed using information from Worksheet C series until the department finalizes the medical assistance cost reporting process for critical access hospitals. After the cost reporting process is finalized, rates shall be computed using information from Title XIX Worksheet D series. The outpatient rate shall be equal to ancillary cost plus outpatient cost, excluding costs related to rural health clinics and federally qualified health clinics, divided by ancillary charges plus outpatient charges, excluding charges related to rural health clinics and federally qualified health clinics. Effective for services delivered on or after January 1, 2024, the rates paid to critical access hospitals under this section must be adjusted to include the amount of any distributions under section 62J.692, subdivision 4, paragraph (a), that were not included in the rate adjustment described under section 256.969, subdivision 2b, paragraph (k).

(c) Effective for services provided on or after July 1, 2003, rates that are based on the Medicare outpatient prospective payment system shall be replaced by a budget neutral prospective payment system that is derived using medical assistance data. The commissioner shall provide a proposal to the 2003 legislature to define and implement this provision. When implementing prospective payment methodologies, the commissioner shall use general methods and rate calculation parameters similar to the applicable Medicare prospective payment systems for services delivered in outpatient hospital and ambulatory surgical center settings unless other payment methodologies for these services are specified in this chapter.

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(d) For fee-for-service services provided on or after July 1, 2002, the total payment, before third-party liability and spenddown, made to hospitals for outpatient hospital facility services is reduced by .5 percent from the current statutory rate.

(e) In addition to the reduction in paragraph (d), the total payment for fee-for-service services provided on or after July 1, 2003, made to hospitals for outpatient hospital facility services before third-party liability and spenddown, is reduced five percent from the current statutory rates. Facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.

(f) In addition to the reductions in paragraphs (d) and (e), the total payment for fee-for-service services provided on or after July 1, 2008, made to hospitals for outpatient hospital facility services before third-party liability and spenddown, is reduced three percent from the current statutory rates. Mental health services and facilities defined under section 256.969, subdivision 16, are excluded from this paragraph.

(g) Critical access hospitals that convert to rural emergency hospitals in accordance with section 1861(kkk) of the Social Security Act must be paid the rate described in paragraph (b). The rate must be classified as either an outpatient hospital rate or a clinic rate as determined upon federal approval.

Sec. 13. Minnesota Statutes 2024, section 256L.05, subdivision 3, is amended to read:

Subd. 3. Effective date of coverage. (a) The effective date of coverage is the first day of the month following the month in which eligibility is approved and the first premium payment has been received. The effective date of coverage for new members added to the family is the first day of the month following the month in which the change is reported. All eligibility criteria must be met by the family at the time the new family member is added. The income of the new family member is included with the family's modified adjusted gross income and the adjusted premium begins in the month the new family member is added.

(b) The initial premium must be received by the last working day of the month for coverage to begin the first day of the following month.

(c) Notwithstanding any other law to the contrary, benefits under sections 256L.01 to 256L.18 are secondary to a plan of insurance or benefit program under which an eligible person may have coverage and the commissioner shall use cost avoidance techniques to ensure coordination of any other health coverage for eligible persons. The commissioner shall identify eligible persons who may have coverage or benefits under other plans of insurance or who become eligible for medical assistance.

(d) The effective date of coverage for individuals or families who are exempt from paying premiums under section 256L.15, ~~subdivision~~ subdivisions 1~~, paragraph (c)~~ and 2, is the first day of the month following the month in which eligibility is approved.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 14. Minnesota Statutes 2024, section 256L.06, subdivision 3, is amended to read:

Subd. 3. Commissioner's duties and payment. (a) Premiums are dedicated to the commissioner for MinnesotaCare.

(b) The commissioner shall develop and implement procedures to: (1) require enrollees to report changes in income; (2) adjust sliding scale premium payments, based upon both increases and decreases in enrollee income, at

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the time the change in income is reported; and (3) disenroll enrollees from MinnesotaCare for failure to pay required premiums. Failure to pay includes payment with a dishonored check, a returned automatic bank withdrawal, or a refused credit card or debit card payment. The commissioner may demand a guaranteed form of payment, including a cashier's check or a money order, as the only means to replace a dishonored, returned, or refused payment.

(c) Premiums are calculated on a calendar month basis and may be paid on a monthly, quarterly, or semiannual basis, with the first payment due upon notice from the commissioner of the premium amount required. The commissioner shall inform applicants and enrollees of these premium payment options. Premium payment is required before enrollment is complete and to maintain ~~eligibility~~ coverage in MinnesotaCare. Premium payments received before noon are credited the same day. Premium payments received after noon are credited on the next working day.

(d) Nonpayment of the premium will result in disenrollment from the plan effective for the calendar month following the month for which the premium was due. Persons disenrolled for nonpayment may not reenroll prior to the first day of the month following the payment of an amount equal to ~~two months' premiums~~ one monthly premium.

(e) The commissioner shall forgive the past-due premium for persons disenrolled under paragraph (d) prior to issuing a premium invoice for the ~~fourth~~ next month ~~following disenrollment~~.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 15. Minnesota Statutes 2024, section 295.52, subdivision 8, is amended to read:

Subd. 8. Contingent reduction in tax rate. (a) By December 1 of each year, beginning in 2011, the commissioner of management and budget shall determine the projected balance in the health care access fund for the biennium.

(b) If the commissioner of management and budget determines that the projected balance in the health care access fund for the biennium reflects a ratio of revenues to expenditures and transfers greater than 125 percent, and if the actual cash balance in the fund is adequate, as determined by the commissioner of management and budget, the commissioner, in consultation with the ~~commissioner~~ commissioners of revenue and human services, shall reduce the tax rates levied under subdivisions 1, 1a, 2, 3, and 4, for the subsequent calendar year sufficient to reduce the structural balance in the fund. The rate may be reduced to the extent that the projected revenues for the biennium do not exceed 125 percent of expenditures and transfers. The new rate shall be rounded to the nearest one‑tenth of one percent. The rate reduction under this paragraph expires at the end of each calendar year and is subject to an annual redetermination by the commissioner of management and budget.

(c) For purposes of the analysis defined in paragraph (b), the commissioner of management and budget shall include projected revenues.

Sec. 16. Laws 2025, First Special Session chapter 3, article 8, section 25, the effective date, is amended to read:

EFFECTIVE DATE. This section is effective January 1, ~~2027~~ 2028, or upon federal approval, whichever is later. The commissioner of human services shall notify the revisor of statutes when federal approval is obtained.

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Sec. 17. REPEALER.

Minnesota Statutes 2024, section 256B.198, is repealed.

ARTICLE 6

FEDERAL CONFORMITY

Section 1. Minnesota Statutes 2024, section 116J.035, is amended by adding a subdivision to read:

Subd. 9. Disclosure to the commissioner of human services. The commissioner may disclose workforce program participation data gathered under chapter 116L to the commissioner of human services for the purpose of administering section 256B.0562 without the consent of the subject of the data.

Sec. 2. Minnesota Statutes 2024, section 256.01, is amended by adding a subdivision to read:

Subd. 46. Health care eligibility oversight unit. (a) The commissioner shall establish and maintain a Department of Human Services health care eligibility oversight unit responsible for collaboration at a regional level to ensure federal and state Medicaid eligibility requirements are consistently applied by all processing entities.

(b) The oversight unit must monitor compliance, identify systemic issues, and provide guidance and technical assistance to lead agencies.

(c) The commissioner shall require lead agencies to work directly with the oversight unit on corrective action planning and implementation to achieve compliance and strengthen performance outcomes.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 3. Minnesota Statutes 2024, section 256B.04, subdivision 27, is amended to read:

Subd. 27. Disenrollment under medical assistance and MinnesotaCare. (a) The commissioner shall regularly obtain and use information from reliable data sources, including but not limited to managed care and county-based purchasing plans, state health and human services programs, mail returned by the United States Postal Service with a forwarding address, and the National Change of Address database maintained by the United States Postal Service, to update mailing addresses and other contact information for medical assistance and MinnesotaCare enrollees ~~in cases of returned mail and nonresponse using information available through managed care and county‑based purchasing plans, state health and human services programs, and other sources~~.

(b) The commissioner shall not disenroll an individual from medical assistance or MinnesotaCare in cases of returned mail until the commissioner makes at least two attempts by phone, email, or other methods to contact the individual. The commissioner may disenroll the individual after providing no less than 30 days for the individual to respond to the most recent contact attempt.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 4. Minnesota Statutes 2024, section 256B.05, subdivision 5, is amended to read:

Subd. 5. Obligation of local agency to process medical assistance applications within established timelines. (a) The local agency must act on an application for medical assistance within ten working days of receipt of all information needed to act on the application but no later than required under Minnesota Rules, part 9505.0090, subparts 2 and 3.

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(b) A local agency must notify the commissioner within five calendar days when the local agency fails to meet at least 80 percent of the local agency's monthly application and redetermination deadlines.

Sec. 5. Minnesota Statutes 2024, section 256B.05, is amended by adding a subdivision to read:

Subd. 6. Authority to intervene. Upon receiving a notice from a local agency pursuant to subdivision 5, paragraph (b), the commissioner may provide support to the local agency to timely process the local agency's outstanding applications and redeterminations.

Sec. 6. Minnesota Statutes 2024, section 256B.056, subdivision 2a, is amended to read:

Subd. 2a. Home equity limit for medical assistance payment of long-term care services. (a) Effective for requests of medical assistance payment of long-term care services filed on or after July 1, 2006, and for renewals on or after July 1, 2006, for persons who received payment of long-term care services under a request filed on or after January 1, 2006, the equity interest in the home of a person whose eligibility for long-term care services is determined on or after January 1, 2006, shall not exceed $500,000, unless it is the lawful residence of the person's spouse or child who is under age 21, or a child of any age who is blind or permanently and totally disabled as defined in the Supplemental Security Income program. The amount specified in this paragraph shall be increased beginning in year 2011, from year to year based on the percentage increase in the Consumer Price Index for all urban consumers (all items; United States city average), rounded to the nearest $1,000.

(b) Effective January 1, 2028, the amount specified in paragraph (a) must not exceed $1,000,000.

~~(b)~~ (c) For purposes of this subdivision, a "home" means any real or personal property interest, including an interest in an agricultural homestead as defined under section 273.124, subdivision 1, that, at the time of the request for medical assistance payment of long-term care services, is the primary dwelling of the person or was the primary dwelling of the person before receipt of long-term care services began outside of the home.

~~(c)~~ (d) A person denied or terminated from medical assistance payment of long-term care services because the person's home equity exceeds the home equity limit may seek a waiver based upon a hardship by filing a written request with the county agency. Hardship is an imminent threat to the person's health and well-being that is demonstrated by documentation of no alternatives for payment of long-term care services. The county agency shall make a decision regarding the written request to waive the home equity limit within 30 days if all necessary information has been provided. The county agency shall send the person and the person's representative a written notice of decision on the request for a demonstrated hardship waiver that also advises the person of appeal rights under the fair hearing process of section 256.045.

Sec. 7. Minnesota Statutes 2024, section 256B.056, subdivision 3d, is amended to read:

Subd. 3d. Reduction of excess assets. Assets in excess of the limits in subdivisions 3 to 3c may be reduced to allowable limits as follows:

(a) Assets may be reduced in ~~any of the three~~ either one or two calendar months before the month of application in which the applicant seeks coverage, according to the applicant's retroactive eligibility under section 256B.061 by paying bills for health services that are incurred in the retroactive period for which the applicant seeks eligibility, starting with the oldest bill. After assets are reduced to allowable limits, eligibility begins with the next dollar of MA-covered health services incurred in the retroactive period. Applicants reducing assets under this subdivision who also have excess income shall first spend excess assets to pay health service bills and may meet the income spenddown on remaining bills.

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(b) Assets may be reduced beginning the month of application by paying bills for health services that are incurred during the period specified in Minnesota Rules, part 9505.0090, subpart 2, that would otherwise be paid by medical assistance. After assets are reduced to allowable limits, eligibility begins with the next dollar of medical assistance covered health services incurred in the period. Applicants reducing assets under this subdivision who also have excess income shall first spend excess assets to pay health service bills and may meet the income spenddown on remaining bills.

EFFECTIVE DATE. This section is effective January 1, 2028.

Sec. 8. Minnesota Statutes 2024, section 256B.056, subdivision 7, is amended to read:

Subd. 7. Period of eligibility. (a) Except as provided in paragraphs (b), (c), and (e), medical assistance enrollees are eligible for 12 months. Until December 31, 2027, eligibility is available for the month of application and for three months prior to application if the person was eligible in those prior months. ~~A redetermination of eligibility must occur every 12 months.~~ Effective January 1, 2028, eligibility is available for the month of application and for:

~~(b) Notwithstanding any other law to the contrary:~~

~~(1) a child under 19 years of age who is determined eligible for medical assistance must remain eligible for a period of 12 months;~~

~~(2) a child 19 years of age and older but under 21 years of age who is determined eligible for medical assistance must remain eligible for a period of 12 months; and~~

(1) one month prior to application for an individual described in paragraph (e) if the individual was eligible for medical assistance in the prior month; or

(2) two months prior to application for all other individuals eligible for medical assistance if the individual was eligible in those prior months.

~~(3)~~ (b) A child under six years of age who is determined eligible for medical assistance must remain eligible through the month in which the child reaches six years of age.

(1) the child or the child's representative requests voluntary termination of eligibility;

(2) the child ceases to be a resident of this state;

(3) the child dies;

(4) the child attains the maximum age; or

(5) the agency determines eligibility was erroneously granted at the most recent eligibility determination due to agency error or fraud, abuse, or perjury attributed to the child or the child's representative.

(d) For ~~a person~~ an individual eligible for an insurance affordability program as defined in section 256B.02, subdivision 19, who reports a change that makes the ~~person~~ individual eligible for medical assistance, eligibility is available for the month the change was reported and ~~for three months prior to the month the change was reported, if the person was eligible in those prior months.~~:

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(1) until December 31, 2027, for three months prior to the month the change was reported; and

(2) effective January 1, 2028, for:

(i) one month prior to the month the change was reported for an individual described in paragraph (e); or

(ii) two months prior to the month the change was reported for all other individuals eligible for medical assistance if the individual was eligible in the prior month or months.

(e) The period of eligibility for a person subject to six-month eligibility redeterminations under Public Law 119‑21, section 71107, is six months.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 9. Minnesota Statutes 2024, section 256B.056, subdivision 7a, is amended to read:

Subd. 7a. Periodic renewal of eligibility. (a) Except as provided in paragraphs (d) and (e), the commissioner shall make an annual redetermination of eligibility based on information contained in the enrollee's case file and other information available to the agency, including but not limited to information accessed through an electronic database, without requiring the enrollee to submit any information when sufficient data is available for the agency to renew eligibility.

(b) If the commissioner cannot renew eligibility in accordance with paragraph (a), the commissioner must provide the enrollee with a prepopulated renewal form containing eligibility information available to the agency and permit the enrollee to submit the form with any corrections or additional information to the agency and sign the renewal form via any of the modes of submission specified in section 256B.04, subdivision 18.

(c) An enrollee who is terminated for failure to complete the renewal process may subsequently submit the renewal form and required information within four months after the date of termination and have coverage reinstated without a lapse, if otherwise eligible under this chapter. The local agency may close the enrollee's case file if the required information is not submitted within four months of termination.

(d) ~~Notwithstanding paragraph (a),~~ A person who is eligible under subdivision 5 ~~shall be~~ is subject to a review of the person's income every six months.

(e) A person subject to six-month eligibility redeterminations under Public Law 119-21, section 71107, is subject to a redetermination of eligibility every six months.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 10. Minnesota Statutes 2024, section 256B.0561, subdivision 2, is amended to read:

Subd. 2. Periodic data matching. (a) The commissioner shall conduct periodic data matching to identify recipients who, based on available electronic data, may not meet eligibility criteria for the public health care program in which the recipient is enrolled. The commissioner shall conduct data matching for medical assistance or MinnesotaCare recipients at least once during a recipient's 12-month period of eligibility, except as provided in paragraph (f).

(b) If data matching indicates a recipient may no longer qualify for medical assistance or MinnesotaCare, the commissioner must notify the recipient and allow the recipient no more than 30 days to confirm the information obtained through the periodic data matching or provide a reasonable explanation for the discrepancy to the state or

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county agency directly responsible for the recipient's case. If a recipient does not respond within the advance notice period or does not respond with information that demonstrates eligibility or provides a reasonable explanation for the discrepancy within the 30-day time period, the commissioner shall terminate the recipient's eligibility in the manner provided for by the laws and regulations governing the health care program for which the recipient has been identified as being ineligible.

(c) The commissioner shall not terminate eligibility for a recipient who is cooperating with the requirements of paragraph (b) and needs additional time to provide information in response to the notification.

(d) A recipient whose eligibility was terminated according to paragraph (b) may be eligible for medical assistance no earlier than the first day of the month in which the recipient provides information that demonstrates the recipient's eligibility.

(e) Any termination of eligibility for benefits under this section may be appealed as provided for in sections 256.045 to 256.0451, and the laws governing the health care programs for which eligibility is terminated.

(f) Effective January 1, 2027, a person subject to six-month eligibility redeterminations under Public Law 119‑21, section 71107, is exempt from periodic data matching under this subdivision.

EFFECTIVE DATE. This section is effective the day following final enactment.

Sec. 11. [256B.0562] WORK OR COMMUNITY ENGAGEMENT REQUIREMENTS.

Subdivision 1. Definitions. (a) For purposes of this section, the following terms have the meanings given.

(b) "Applicable individual" has the meaning given in Public Law 119-21, section 71119, paragraph (9).

(1) receives inpatient hospital or nursing facility services, services in an intermediate care facility for individuals with intellectual disabilities, inpatient psychiatric hospital services, or other services of similar acuity;

(2) resides in a county in which there is an emergency or disaster declared by the President of the United States pursuant to the National Emergencies Act or the Robert T. Stafford Disaster Relief and Emergency Assistance Act;

(3) resides in a county that has an unemployment rate at or above the lesser of:

(i) eight percent; or

(ii) 1.5 times the national unemployment rate; or

(4) must travel, or the person's dependent must travel, outside of the person's community for an extended period of time to receive medical services that are not available within the community of residence necessary to treat a serious or complex medical condition of the person or the person's dependent.

Subd. 2. Application. To be eligible for medical assistance, an applicable individual applying for medical assistance must either demonstrate work or community engagement or meet an exemption in accordance with Public Law 119-21, section 71119, for the month immediately preceding the month during which the person submits an application for medical assistance.

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Subd. 3. Renewal requirement. (a) To renew eligibility, an applicable individual must either demonstrate work or community engagement or meet an exemption in accordance with Public Law 119-21, section 71119, for at least one month during the person's previous period of eligibility.

(b) The commissioner must notify an applicable individual of the renewal requirement in paragraph (a) at least 75 days prior to the individual's renewal date.

Subd. 4. Short-term hardship events. A person is deemed to have met the requirement to demonstrate work or community engagement for a given month under subdivisions 2 and 3 if (1) the person experiences a short-term hardship event for part or all of that month, and (2) for purposes of a short-term hardship described in subdivision 1, paragraph (c), clause (1) or (4), the person submits a request to the commissioner.

Subd. 5. Noncompliance procedure. Before denying or terminating medical assistance eligibility for failure to demonstrate work or community engagement or meet an exemption, the commissioner must comply with the procedures in the case of noncompliance set forth in Public Law 119-21, section 71119, paragraph (6).

Subd. 6. Interpretation of federal law. (a) In all cases where an obligation imposed on the commissioner under Public Law 119-21, section 71119, is materially ambiguous, the commissioner must construe the ambiguity in the light most favorable to the applicant, enrollee, or disenrollee, as applicable. For purposes of this subdivision, an obligation on the commissioner includes but is not limited to an obligation respecting the following:

(1) enrollee notice and outreach;

(2) demonstration of work or community engagement;

(3) medical frailty;

(4) fair hearing rights;

(5) the provision of medical assistance benefits or coverage;

(6) submission documentation, including self-attestations of eligibility or exemption;

(7) eligibility or termination determinations;

(8) short-term hardship requests; and

(9) timing.

(b) Paragraph (a) does not require the commissioner to take any action that the commissioner determines:

(1) is more likely than not to result in a loss of federal financial participation;

(2) would be clearly impractical, absurd, or unreasonably detrimental to the medical assistance program or another insurance affordability program; or

(3) relies on an unreasonable interpretation of federal law.

(c) Prior to the interpretation of an ambiguity under paragraph (a), the commissioner must, in order to determine the reasonable interpretation of the applicable federal law most favorable to an applicant, enrollee, or disenrollee:

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(1) consult with the health care eligibility oversight unit established in section 256.01;

(2) consult with the chairs and ranking minority members of the legislative committees with jurisdiction over health and human services finance and policy; and

(3) take best efforts to consult with, and receive guidance from, the Centers for Medicare and Medicaid Services.

Subd. 7. Expedited rulemaking authority. The commissioner may adopt rules necessary to implement and administer this section using the expedited rulemaking process under section 14.389. The 18-month time limit under section 14.125 does not apply to the rulemaking authority under this subdivision.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 12. [256B.0563] REVIEW OF DEATH MASTER FILE.

Subdivision 1. Definition. For purposes of this section, "death master file" means information about deceased individuals maintained by the Social Security Administration under United States Code, title 42, section 1306c(d), or any successor system.

Subd. 2. Review of the death master file. (a) Beginning January 1, 2027, the commissioner must review the death master file at least quarterly to identify any medical assistance recipients who are deceased.

(b) If review of the death master file or any other source indicates that a recipient is deceased, the commissioner must:

(1) terminate the recipient's eligibility for medical assistance in the manner provided for by the laws and regulations governing medical assistance;

(2) notify the recipient and the recipient's representative no later than the date of the termination; and

(3) discontinue any payments to providers under this chapter made on behalf of the recipient as of the date of the termination.

(c) If the commissioner determines that a recipient was misidentified as deceased and erroneously disenrolled from medical assistance based on information obtained from the death master file or any other source, the commissioner must immediately re-enroll the individual in medical assistance retroactive to the date of termination under paragraph (b).

Subd. 3. Review of other sources. Nothing in this section prevents the commissioner from reviewing other sources to identify recipients of medical assistance who are deceased, provided the commissioner is in compliance with this section and all other requirements under this chapter related to medical assistance eligibility determination and redetermination.

Sec. 13. Minnesota Statutes 2024, section 256B.06, subdivision 4, is amended to read:

Subd. 4. Citizenship requirements. (a) Except as provided in paragraph (c), eligibility for medical assistance is limited to citizens and nationals of the United States~~, qualified noncitizens as defined in this subdivision, and other persons residing lawfully in the United States~~ and noncitizens who are eligible for coverage with federal financial participation provided by Medicaid or the Children's Health Insurance Program. Noncitizens who are eligible for federal financial participation include but are not limited to:

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(1) children and pregnant women who are lawfully residing in the United States as provided by section 214 of the federal Children's Health Insurance Program Reauthorization Act of 2009, Public Law 111-3, and who otherwise meet eligibility requirements of this chapter; and

(2) pregnant noncitizens who are ineligible for federal financial participation because of immigration status; who are not covered by a group health plan or health insurance coverage according to Code of Federal Regulations, title 42, section 457.310; and who otherwise meet the eligibility requirements of this chapter. These individuals are eligible for medical assistance through the period of pregnancy, including labor and delivery, and 12 months postpartum.

(b) Citizens or nationals of the United States must cooperate in obtaining satisfactory documentary evidence of citizenship or nationality according to the requirements of the federal Deficit Reduction Act of 2005, Public Law 109-171.

(c) Beginning October 1, 2003, persons who are receiving care and rehabilitation services from a nonprofit center established to serve victims of torture and who are otherwise ineligible for medical assistance under this chapter are eligible for medical assistance without federal financial participation. These individuals are eligible only for the period during which they are receiving services from the center. Individuals eligible under this paragraph are not required to participate in prepaid medical assistance. The nonprofit center referenced in this paragraph may establish itself as a provider of mental health targeted case management services through a county contract under section 256.0112, subdivision 6. If the nonprofit center is unable to secure a contract with a lead county in its service area, then, notwithstanding the requirements of section 256B.0625, subdivision 20, the commissioner may negotiate a contract with the nonprofit center for provision of mental health targeted case management services. When serving clients who are not the financial responsibility of their contracted lead county, the nonprofit center must gain the concurrence of the county of financial responsibility prior to providing mental health targeted case management services for those clients.

~~(b) "Qualified noncitizen" means a person who meets one of the following immigration criteria:~~

~~(1) admitted for lawful permanent residence according to United States Code, title 8;~~

~~(2) admitted to the United States as a refugee according to United States Code, title 8, section 1157;~~

~~(3) granted asylum according to United States Code, title 8, section 1158;~~

~~(4) granted withholding of deportation according to United States Code, title 8, section 1253(h);~~

~~(5) paroled for a period of at least one year according to United States Code, title 8, section 1182(d)(5);~~

~~(6) granted conditional entrant status according to United States Code, title 8, section 1153(a)(7);~~

(7) determined to be a battered noncitizen by the United States Attorney General according to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, title V of the Omnibus Consolidated Appropriations Bill, Public Law 104-200;

(8) is a child of a noncitizen determined to be a battered noncitizen by the United States Attorney General according to the Illegal Immigration Reform and Immigrant Responsibility Act of 1996, title V, of the Omnibus Consolidated Appropriations Bill, Public Law 104-200; or

~~(9) determined to be a Cuban or Haitian entrant as defined in section 501(e) of Public Law 96-422, the Refugee Education Assistance Act of 1980.~~

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(c) All qualified noncitizens who were residing in the United States before August 22, 1996, who otherwise meet the eligibility requirements of this chapter, are eligible for medical assistance with federal financial participation.

(d) Beginning December 1, 1996, qualified noncitizens who entered the United States on or after August 22, 1996, and who otherwise meet the eligibility requirements of this chapter are eligible for medical assistance with federal participation for five years if they meet one of the following criteria:

~~(1) refugees admitted to the United States according to United States Code, title 8, section 1157;~~

~~(2) persons granted asylum according to United States Code, title 8, section 1158;~~

~~(3) persons granted withholding of deportation according to United States Code, title 8, section 1253(h);~~

~~(4) veterans of the United States armed forces with an honorable discharge for a reason other than noncitizen status, their spouses and unmarried minor dependent children; or~~

~~(5) persons on active duty in the United States armed forces, other than for training, their spouses and unmarried minor dependent children.~~

Beginning July 1, 2010, children and pregnant women who are noncitizens described in paragraph (b) or who are lawfully present in the United States as defined in Code of Federal Regulations, title 8, section 103.12, and who otherwise meet eligibility requirements of this chapter, are eligible for medical assistance with federal financial participation as provided by the federal Children's Health Insurance Program Reauthorization Act of 2009, Public Law 111-3.

~~(e)~~ (d) Nonimmigrants who otherwise meet the eligibility requirements of this chapter are eligible for the benefits as provided in paragraphs ~~(f)~~ (e) to ~~(h)~~ (g). For purposes of this subdivision, a "nonimmigrant" is a person in one of the classes listed in United States Code, title 8, section 1101(a)(15).

~~(f)~~ (e) Payment shall also be made for care and services that are furnished to noncitizens, regardless of immigration status, who otherwise meet the eligibility requirements of this chapter, if such care and services are necessary for the treatment of an emergency medical condition.

~~(g)~~ (f) For purposes of this subdivision, the term "emergency medical condition" means a medical condition that meets the requirements of United States Code, title 42, section 1396b(v).

~~(h)~~ (g) (1) Notwithstanding paragraph ~~(g)~~ (f), services that are necessary for the treatment of an emergency medical condition are limited to the following:

(i) services delivered in an emergency room or by an ambulance service licensed under chapter 144E that are directly related to the treatment of an emergency medical condition;

(ii) services delivered in an inpatient hospital setting following admission from an emergency room or clinic for an acute emergency condition; and

(iii) follow-up services that are directly related to the original service provided to treat the emergency medical condition and are covered by the global payment made to the provider.

(2) Services for the treatment of emergency medical conditions do not include:

(i) services delivered in an emergency room or inpatient setting to treat a nonemergency condition;

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(ii) organ transplants, stem cell transplants, and related care;

(iii) services for routine prenatal care;

(iv) continuing care, including long-term care, nursing facility services, home health care, adult day care, day training, or supportive living services;

(v) elective surgery;

(vi) outpatient prescription drugs, unless the drugs are administered or dispensed as part of an emergency room visit;

(vii) preventative health care and family planning services;

(viii) rehabilitation services;

(ix) physical, occupational, or speech therapy;

(x) transportation services;

(xi) case management;

(xii) prosthetics, orthotics, durable medical equipment, or medical supplies;

(xiii) dental services;

(xiv) hospice care;

(xv) audiology services and hearing aids;

(xvi) podiatry services;

(xvii) chiropractic services;

(xviii) immunizations;

(xix) vision services and eyeglasses;

(xx) waiver services;

(xxi) individualized education programs; or

(xxii) substance use disorder treatment.

(i) Pregnant noncitizens who are ineligible for federally funded medical assistance because of immigration status, are not covered by a group health plan or health insurance coverage according to Code of Federal Regulations, title 42, section 457.310, and who otherwise meet the eligibility requirements of this chapter, are eligible for medical assistance through the period of pregnancy, including labor and delivery, and 12 months postpartum.

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(j) Beginning October 1, 2003, persons who are receiving care and rehabilitation services from a nonprofit center established to serve victims of torture and are otherwise ineligible for medical assistance under this chapter are eligible for medical assistance without federal financial participation. These individuals are eligible only for the period during which they are receiving services from the center. Individuals eligible under this paragraph shall not be required to participate in prepaid medical assistance. The nonprofit center referenced under this paragraph may establish itself as a provider of mental health targeted case management services through a county contract under section 256.0112, subdivision 6. If the nonprofit center is unable to secure a contract with a lead county in its service area, then, notwithstanding the requirements of section 256B.0625, subdivision 20, the commissioner may negotiate a contract with the nonprofit center for provision of mental health targeted case management services. When serving clients who are not the financial responsibility of their contracted lead county, the nonprofit center must gain the concurrence of the county of financial responsibility prior to providing mental health targeted case management services for those clients.

~~(k)~~ (h) Notwithstanding paragraph ~~(h)~~ (g), clause (2), the following services are covered as emergency medical conditions under paragraph ~~(f)~~ (e) except where coverage is prohibited under federal law for services under clauses (1) and (2):

(1) dialysis services provided in a hospital or freestanding dialysis facility;

(2) surgery and the administration of chemotherapy, radiation, and related services necessary to treat cancer if the recipient has a cancer diagnosis that is not in remission and requires surgery, chemotherapy, or radiation treatment; and

(3) kidney transplant if the person has been diagnosed with end stage renal disease, is currently receiving dialysis services, and is a potential candidate for a kidney transplant.

~~(l)~~ (i) Effective July 1, 2013, recipients of emergency medical assistance under this subdivision are eligible for coverage of the elderly waiver services provided under chapter 256S, and coverage of rehabilitative services provided in a nursing facility. The age limit for elderly waiver services does not apply. In order to qualify for coverage, a recipient of emergency medical assistance is subject to the assessment and reassessment requirements of section 256B.0911. Initial and continued enrollment under this paragraph is subject to the limits of available funding.

Sec. 14. Minnesota Statutes 2024, section 256B.061, is amended to read:

256B.061 ELIGIBILITY; RETROACTIVE EFFECT; RESTRICTIONS.

(a) If any individual has been determined to be eligible for medical assistance and is subject to six-month eligibility redeterminations under Public Law 119-21, section 71107, it medical assistance will be made available for care and services included under the plan and furnished in or after the ~~third~~ first month before the month in which the individual made application for such assistance, if such individual was, or upon application would have been, eligible for medical assistance at the time the care and services were furnished.

(b) If any individual has been determined to be eligible for medical assistance and is not subject to six-month eligibility redeterminations under Public Law 119-21, section 71107, medical assistance will be made available for care and services included under the plan and furnished in or after the second month before the month in which the individual made application for such assistance if such individual was, or upon application would have been, eligible for medical assistance at the time the care and services were furnished.

(c) The commissioner may limit, restrict, or suspend the eligibility of an individual for up to one year upon that individual's conviction of a criminal offense related to application for or receipt of medical assistance benefits.

EFFECTIVE DATE. This section is effective January 1, 2028.

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Sec. 15. Minnesota Statutes 2024, section 256B.0631, subdivision 1a, is amended to read:

Subd. 1a. Prohibition on cost-sharing and deductibles. ~~Effective January 1, 2024~~ Except for recipients eligible under section 256B.055, subdivision 15, the medical assistance benefit plan must not include cost-sharing or deductibles for any medical assistance recipient or benefit.

Sec. 16. Minnesota Statutes 2024, section 256B.0631, is amended by adding a subdivision to read:

Subd. 5. Cost sharing. (a) Effective for services provided on or after October 1, 2028, except as provided in subdivision 6, the medical assistance benefit plan includes the following cost sharing for recipients eligible under section 256B.055, subdivision 15, with income above 100 percent of the federal poverty level:

(1) $3 per nonpreventive visit, except as provided in paragraph (c). For purposes of this subdivision, a visit means an episode of service that is required because of a recipient's symptoms, diagnosis, or established illness, and that is delivered in an ambulatory setting by a physician or physician assistant, chiropractor, podiatrist, nurse midwife, advanced practice nurse, audiologist, optician, or optometrist;

(2) $3.50 for nonemergency visits to a hospital-based emergency room; and

(3) $3 per brand-name drug prescription, $1 per generic drug prescription, and $1 per prescription for a brand‑name multisource drug listed in preferred status on the preferred drug list, subject to a $12 maximum per month for prescription drug co-payments. No co-payments shall apply to antipsychotic drugs when used for the treatment of mental illness.

(b) Cost sharing for prescription drugs and related medical supplies to treat chronic disease must comply with the requirements of section 62Q.481.

(c) A person eligible for medical assistance under section 256B.055, subdivision 15, is responsible for all co‑payments and deductibles in this subdivision.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 17. Minnesota Statutes 2024, section 256B.0631, is amended by adding a subdivision to read:

Subd. 6. Exceptions. Co-payments and deductibles are subject to the exceptions and limits required by Public Law 119-21, section 71120.

EFFECTIVE DATE. This section is effective January 1, 2027.

Sec. 18. Minnesota Statutes 2024, section 256B.0631, is amended by adding a subdivision to read:

Subd. 7. Collection. (a) The medical assistance reimbursement to the provider must be reduced by the amount of the co-payment or deductible, except that reimbursements must not be reduced:

(1) once a recipient has reached the $12 maximum per month for prescription drug co-payments; or

(2) for a recipient who has met the recipient's monthly five percent cost-sharing limit.

(b) The provider collects the co-payment or deductible from the recipient. Providers must not deny services to recipients who are unable to pay the co-payment or deductible.

EFFECTIVE DATE. This section is effective January 1, 2027.

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Sec. 19. Minnesota Statutes 2025 Supplement, section 268.19, subdivision 1, is amended to read: