2026 Minnesota Legislature Recap

Alert

05.27.2026

By Will Blauvelt, Erin Buie, Paul Cassidy & Dan Dwight

On Time and on Budget

After legislative leaders struck a deal with the governor in the days before the end of session, the Minnesota Legislature completed its work on time this past Sunday evening meeting its constitutional deadline just before the stroke of midnight. The deal reached proved to be the catalyst to bringing the 2026 legislative session to a close with little acrimony. Given the legislature's recent history of not finishing its work on time, the end of the 2026 session demonstrated a remarkable sense of urgency, punctuality, and efficiency.

Most political pundits had very low expectations for the 2026 session and were willing to concede that little needed to get done, and that everyone would execute their game plan this coming November during the 2026 midterm elections. The murder of House Speaker Melissa Hortman and her husband, Mark earlier this year casted a shadow over the session. The other challenges facing the legislature included:

A deeply divided and politically entrenched legislature: a 50-50 tie in the House of Representatives and a one-vote DFL majority in the Senate.
The national debate over immigration that spilled out into the streets of Minneapolis this past winter.
A sitting lame duck governor.
The 2026 midterm elections looming on the horizon, where all constitutional officers and the entire legislature will be up for election.

Although at times the legislature seemed to be at a stalemate at every turn these past few months, they were able to come to an agreement in a bipartisan fashion on a number of key "good government" proposals that give them a few victories in their back pockets to highlight for constituents. Those accomplishments include:

The creation and funding of an independent Office of Inspector General that will oversee fraud and misconduct investigations of state government departments and programs.
Numerous safeguards and firewalls were passed directing state agencies-in particular, the Department of Human Services and the Department of Children, Youth and Families, to clamp down on fraud and institute stronger safeguards in their program eligibility processes.
A multimillion-dollar package of information technology modernization proposals that will begin to replace Minnesota's antiquated computer and information technology systems that have been blamed as inefficient and broken for decades and incapable of properly and efficiently administering numerous government programs.

In the end, the 2026 legislature closed out the very last day of the session by passing other large proposals, including:

A historic $1.2 billion capital investment package that passed with historic bipartisan support.
A small tax bill that delivers some federal conformity, property tax relief and tax credits for the continuation of Minnesota's sustainable aviation fuel initiative.
A $205 million rescue package for the financially beleaguered Hennepin County Medical Center which also contains a $500 million reserves account that could be tapped in the future.

From here, the focus shifts to what promises to be a historic general election. 43 legislators have announced their retirements and more may follow before the filing deadline. That means that at least 20% of the legislature will be new faces coming into the 2027 legislative session, not to mention a new governor and state auditor. Only Attorney General Keith Ellison and Secretary of State Steve Simon are running for reelection.

2026 Minnesota Legislature Overview

The following is an overview of legislative matters addressed by the Minnesota Legislature this past year. Please feel free to reach out to any of the Stinson Government Relations Team members for additional information.

Cannabis
Capital Investment
Commerce
Artificial Intelligence
Environment & Energy
Health & Human Services
Housing
Jobs & Labor
Public Safety/Judiciary
Transportation
Taxes

Cannabis | Chapter 123

Once again, substantial changes were made to Minnesota's cannabis laws during this legislative session. The big item was the so-called "streamlining" of the adult-use/medical cannabis supply chain. Prior to the passage of SF4401, cannabis in Minnesota was designated as either "adult use" or "medical" and only a very small number of medical cannabis companies were growing medical cannabis and selling it to medical cannabis users. Under the new law, the distinction between adult-use and medical cannabis goes away for the most part. There will still be some medical-only products and operators will need to get medical endorsements to operate in the medical market. Getting a medical endorsement will confer benefits to cannabis business operators, including increased number of retail locations and canopy limits, as well as an option in some cases to "tier-up" a license after a number of years.

The other substantive part of the streamlining legislation was to transition the "medical combination business license" into a "macrobusiness license." This license operates in a similar fashion to the old license, except instead of different canopy limits for medical cannabis and adult-use cannabis, the macrobusiness license holder may now grow up to 38,000 sq feet of indoor canopy. The amount that can be grown may be increased year over year, capping out at 45,000 square feet. Macrobusiness license holders are also required to supply the market with certain high-need medical cannabis products. The maximum number of macrobusiness licenses is eight, inclusive of the six medical combination business licenses that have already been issued.

The remainder of the bill also includes a number of technical updates and fixes to various aspects of Minnesota's cannabis law, including but not limited to:

Allowing operators to transport compliance samples to labs without making use of a cannabis transport company.
Allowing investors in a low-potency hemp edible license holder to simultaneously be investors in a cannabis license holder (the usual true party of interest and license ownership limitations continue to apply).
Fixed the prohibition on cannabis operators to change their business structure
Updated and improved the "event organizer" licensing type.
Modified statute so that cannabis operators were under less of a threat of automatically losing their license for minor offenses.
Allowing investors to purchase up to 33% of up to four social equity cannabis businesses (the need for social equity operators to maintain 65% ownership by verified social equity applicants remains unchanged).

Two final items of note that were not passed through cannabis legislation this year:

A ban on disposable vapes was sought by the Office of Cannabis Management but ultimately not passed.
There was no increase to the cannabis tax.

Capital Investment | Chapters 129 & 130

A $1.2 billion bonding bill and a $28 million cash capital investment bill were passed on the last night of session. Notable highlights include:

$150 million for public colleges and universities.
$80 million on Department of Natural Resources projects.
$13 million for the Pollution Contral Agency – $10 million of which was directed toward the Capital Assistance Program.
$19 million on public safety improvements for local governments.
$180 million on transportation projects – with most of that directed to local projects.
$57 million to the Met Council – including $10 million for metro parks and $9.35 million for the Como Zoo.
$154 million to the Department of Employment and Economic Development – much of it as grants to local subdivisions – including $50 million the City of Saint Paul for improvements to the Roy Wilkens Auditorium and the River Center.
$420 million to the Public Facilities Authority for local water treatment projects.

Commerce | Chapter 124

As with most of the bills passed this session, what is included in the Commerce bill is light on controversy and only contains policy the divided government could agree upon. The bill did not come together until Saturday afternoon, with one of the largest sticking points being a provision to require health insurance plans to cover home care nursing services for children with complex medical needs. While state law already requires this, several health insurance providers re-evaluated their coverage and capped coverage — the proposed fix would have prohibited capping coverage. Instead, an amendment was added that requires a report by the beginning of next session with recommendations for proposals for legislative action to support the needs of medically complex individuals and their families utilizing home care nursing services. The conference report passed the House 121-13 and the Senate 49-15.

A number of other noncontroversial proposals were included in the final omnibus:

Increases the maximum value of a meat raffle prize to $200 and a maximum ticket cost to $5.
Prohibits a utilization review organization from exclusively using artificial intelligence to make an adverse determination for coverage of benefits and requires a clinician review for this purpose.
Modifies the required information included on a scrap metal copper license application for an individual or entity.
Defines "insurance lead generator" and requires them to keep records and prohibits the distribution of false information or advertisements.
Authorizes short-term insurance for home health and nursing care.
Requires health insurers and nonprofit health service plan corporations to notify the Department of Commerce if they experience a significant increase in enrollees.
Presumes virtual currency abandoned three years after the apparent owner's latest
indication of interest in the virtual currency.
Presumes pre-paid funeral or funeral related expenses abandoned under certain circumstances.

Earlier in the year, the Commerce Committees and both Chambers passed the feel-good legislation of the session as part of the omnibus liquor bill. The "Grandparents Happy Hour" allows nursing homes and assisted living communities to host happy hours for seniors without a traditional liquor license.

A standalone bill, HF 4138, that regulates the use of social media by children was passed in the last days of the session. The bill requires age monitoring and verification for social media platforms and parental approval for children 15 years of age and younger. It also requires the default settings on a social media account for a child to be the most private and prohibits a child from changing the privacy settings without parental consent. It further provides that addictive interface features and targeted paid ads cannot be displayed on a child's account. The bill also allows a private right of action for violations and includes statutory damages and punitive damages for reckless or knowing violations of the law.

Artificial Intelligence

There was a significant increase in artificial intelligence-related legislation introduced this year. More than 40 bills were proposed that would regulate the use of AI across a wide range of workplace operations, including hiring practices, customer service, automated decision-making systems, and employer responsibilities related to workforce displacement caused by AI technologies.

Although none of these bills ultimately passed, many are expected to be reintroduced next year. Legislators engaged in extensive discussions regarding how best to address this rapidly evolving technology, which is already transforming business operations and is expected to continue reshaping industries in the years ahead. It is anticipated that the legislature will establish a dedicated AI subcommittee next session, through which all AI-related legislation will be reviewed.

Environment & Energy

Environment (Chapter 104)

The House and Senate failed to come to an agreement on an omnibus environment bill this year. What did pass was an Environmental and Natural Resources Trust Fund bill for a variety of projects totaling $102 million. Additionally, a $191 million appropriation from the Outdoor Heritage Fund was passed which will be directed toward a variety of wildlife habitats, wetland restorations and watershed protection projects.

Energy

The House and Senate failed to come to an agreement on an omnibus energy bill this year. One item that did pass, via the tax bill, was a $500,000 appropriation for the Great Plains Institute to conduct a study regarding the potential impact of new nuclear energy generation "on the public interest of Minnesota, including affordability, reliability, environmental protection, and public health." The study is due by January 30, 2027.

The lack of an agreement also meant that there will be no spending from the Renewable Development Account (RDA), either in the form of projects or rate relief for consumers. Per statute, the funds in the RDA will carry over to next year and will continue to be added to, leaving a substantial fund for the 2027 legislature to tap.

Health & Human Services

Perhaps the most high-profile item to pass that impacts Human Services space is the creation of a Human Services Advisory Council and accompanying Human Services Modernization Fund. The purpose of this council and fund is to jump start the modernization of county and state human services IT systems, with $50 million being appropriated from the general fund to seed the Human Services Modernization Fund. Additional general fund dollars have been appropriated to the commissioner of information technology services to update county IT systems ($10 million) and specifically for fraud prevention and detection ($15 million).

The big winner of the legislative session was Hennepin County Medical Center, with the legislature allocating $205 million in support of HCMC. Of those funds, $105 million is a direct stabilization payment to HCMC; the remaining $100 million is a payment towards the non-federal share of HCMC's Directed Payment Program. A separate reserve account of up to $500 million was also created to serve as a hospital stabilization fund. This fund is intended to be a safeguard, is subject to a legislative process, and is written in such a way that only HCMC would be able to access it. Other aid for hospitals that was passed include a one-time, $30 million "hospital stabilization pool" available to critical access hospitals, hospitals that provide disproportionate levels of uncompensated care, and rural hospitals. Critical access hospitals will also see some nominal fee-for-service rate increases and managed care reimbursements.

What did not pass was any increase in Medicaid reimbursement rates outpatient mental health services or the legislation that would have given the attorney general enforcement authority over participation in the 340B drug pricing program and removed the current law's sunset provision.

One final item that did pass is an "infectious waste study." The proper disposal of medical/infectious waste was a contentious topic during the 2026 legislative session. The Minnesota Pollution Control Agency is charged with producing a study on the topic by January 15, 2027, which shall include a survey of waste generator policies and procedures, and recommendations for future legislative actions, including potential fines.

Early Childhood Education/Childcare

The House failed to come to an agreement on a Children and Families omnibus bill this year, but a number of provisions in that jurisdiction made it into the final Health and Human Services omnibus bill. Highlights include legislation modernizing childcare licensing and allocating additional funding to counties to implement the Minnesota African American Family Preservation and Child Welfare Disproportionality Act.

Housing | Chapter 100

One of the omnibus packages to make it to the desk of Governor Walz was HF1141, the omnibus housing finance and policy package. The $165 supplemental budget includes an additional $40 million for the Family Homelessness Prevention Assistance Program and appropriates $25 million from Minnesota Housing interest earnings to fund workforce housing in Greater Minnesota, homeownership education, and supportive housing programs. The package was passed in the House (104-28) and Senate (42-25).

Jobs & Labor

The Legislature passed a relatively small labor policy bill (SF2373) at the end of the 2026 session. Notable provisions from the bill include an exemption from minimum wage requirements for minor-league baseball players and a 26-week extension of unemployment insurance benefits for laid-off iron miners. The bill did not include any new employer mandates or restrictions on the use of artificial intelligence in the workplace.

Public Safety/Judiciary | Chapter 97

Much of the discussion in the area of public safety focused on the murders of former House Speaker Melissa Hortman, her husband Mark, their dog Gilbert and the attempted murders of Senator John Hoffman and his wife Yvette. Because of the circumstances around these violent crimes where the murderer dressed as a police officer, a new law was passed to increase penalties for impersonating an officer earlier in session. The Public Safety Finance bill, SF 3432, largely dealt with Capitol and legislative security, with the following items being funded:

32 million for Capitol security screening.
$4.7 million for Capitol security enhancements.
$1.74 million for legislative services/protective services unit.

The bill also contained language to ban prediction markets such as Kalshi and Polymarket from operating in the state. There are exemptions provided for traditional futures commodities trading. The federal government has already filed a lawsuit to prevent the law from taking effect, arguing the space is regulated by the Commodity Futures Trading Commission.

The bill passed the House 100-34 and the Senate 59-8.

Transportation

There was not a supplemental transportation appropriations or transportation bill that passed during the 2026 legislative session. The Capital Investment bill contained one notable transportation item: A one-year reduction in license tab fees. Beginning January 1, 2027 license tab fees will be reduced to 2022 rate schedule for one year.

Taxes | Chapter 128

The Taxes omnibus bill came right down to the wire, with the bill passing both Chambers late Sunday night on votes of 126-8 in the House and 52-15 in the Senate. The bill contained a provision that was part of the overall end-of-session leadership deal: a one-time refund for property taxes. The property tax provision gives earners of under $143,000 a $173 rebate on their property taxes, but homeowners must apply to receive the funds. The bulk of the bill relates to federal tax conformity and brings Minnesota's tax code in line with many of the changes made at the federal level.

Other provisions in the bill include:

Increases credits for sustainable aviation fuel and extends the expiration date for the credits.
Provides a sales tax exemption for the sale of admission to a world championship golf tournament sponsored by the Professional Golfer's Association of America (PGA) and to related events sponsored by the PGA.
Requires the Department of Revenue (DOR) to establish an electronic system through which taxpayers can directly file their returns for free. Software vendors currently providing paid tax preparation services to Minnesota taxpayers are not eligible to participate in the system. DOR must make the system available on its website and must not limit access based on income.
Modifies tax rates on homestead resorts.
Imposes a 100% penalty for money received due to fraud of a public program.
Appropriates $500,000 for a study on nuclear energy.
Appropriates $38 million for the family homeless prevention and assistance program.
Postpones the sunset of the local homeless prevention aid program until 2032.

The Minerals Article modifies the taconite production tax structure from the forthcoming Mesabi Metallics project to increase funding to range area schools and cities. It provides a two-year guaranteed increase to the taconite municipal aid, school fund, building maintenance fund, and railroad account once Mesabi Metallics is in operation, with any shortfall to be covered by the Doug Johnson Fund. It also prohibits Mesabi Metallics from accessing the Taconite Economic Development Fund.

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