MICA Weekly Legislative Update #12

Governor Walz makes final state of the state address

On Tuesday April 28 Governor Walz made his final state of the state address before both the Minnesota House and Senate. This year the address is coming later than usual, so the speech was less focused on what to prioritize during the remaining weeks of session but instead of looking back at the Governor’s time in office overall as well as the issues that have dominated headlines at the state and federal level over the last year.

When he did speak about the legislative session, it was mostly highlighting his priorities from the supplemental budget recommendations released last month. They included:

• A significant increase in the dependent care credit for families paying child care expenses, especially for children six and younger
• Increasing spending in a first-time homebuyer account
• Providing relief to businesses that were impacted by Operation Metro Surge
• A new tax on social media companies
• A $907 million bonding bill (smaller than the amounts proposed by House and Senate DFLers or the House Republicans)

But the speech overall was focused on what the Governor viewed as the major accomplishments of his time in office, which were largely passed during the 2023 legislative session. Most relevant to counties near the end of the speech he mentioned his proposal to overhaul how human service systems are administered, saying “I want us to move away from a complex, layered administration managed by a patchwork network of counties, managed care organizations, and state agencies. Towards a single model, where a single centralized agency can make sure they have control before the money goes out the door to ensure it gets out efficiently.”

The reply from House and Senate Republican leaders raised issue with the lack of focus on addressing fraud during the Governor’s speech, noting that his comments on it all came near the very end of his speech. Speaker Lisa Demuth said, “Property taxes are incredibly high right now, prices at every business in Minnesota are high because of mandates that have been put on specifically during 2023 and 2024, full Democrat control in the state of Minnesota.” 

When following up after the Republican response Senate Majority Leader Erin Murphy said that “there is no special session, we are going to get done with our work.” She noted conference committees or working groups could start meeting this week. When asked about how the process would work with bills not matching up between the House and Senate, House DFL Caucus Leader Zack Stephenson noted “When there’s a will there’s a way. If members and leaders want to do things in those areas, we will figure out a way to make the mechanics work.”

The reality is that as leadership negotiations continue this week many rank and file legislators may be in the dark. We’re creeping closer to the fishing opener deadline that Governor Walz set weeks ago to come to universal targets by. Even if leaders do reach universal targets by then, it’s a very short turnaround to May 17 if there’s any momentum to pass larger bills. If there’s a breakthrough it will have to come at the leader level. But having conversations with your legislators, especially chairs, is as valuable as ever because leadership listens to their members and caucus and respond to pressure from them.

MICA Legislative Priorities Update

All three county priorities are included in the Senate Health and Human Services omnibus bill (SF4612/ Wiklund), which passed the Senate floor on a vote of 34-32 on Wednesday. Below is more detail on the current status of the three MICA priorities in the that bill as well as a few talking points if you have conversations with legislators on the topic.

Technology Modernization: The bill includes a version of SF4719 (Wiklund) on which we have been engaged since the beginning of session. The language includes our steering committee language that gives counties an equal voice with the state in the development and prioritization of modernization projects. It includes funding of $45 million in FY26-27 and $25 million in FY28-29.

• Ensuring a county role in oversight of modernization projects and spending is essential so that the legislature and counties have a better understanding of where dollars are being spent.
• In 2023 the legislature appropriated $200 million but left the language vague and with little oversight, we don’t want to repeat that experience.
• Making essential investments in outdated technology systems from the 1990s can be an important tool in preventing fraud
• Counties have both short and long term technology modernization needs. We need to address the long term vision AND we need the essential projects included in SF4612 (Senate HHS bill) to pass this year.

Supplemental Nutrition Assistance Program: The Senate includes funding to address cost shifts to the state from the federal government relating to SNAP by specifically holding counties harmless from the non-federal cost shifts. This includes the portion of the SNAP benefit costs based on “error rates” and covering lost federal administrative reimbursement for state information technology systems. The state picking up the benefit share totals $10.107 million in FY26-27 and $194.124 million in FY28-29; whereas the administrative costs total $24.286 million in FY26-27 and $64.762 million in FY28-29.

• The federal law changes around SNAP represent the most significant property tax shifts onto counties that we’ve seen considered at the capitol the last few sessions if the legislature fails to act
• The SNAP changes at the federal level hurt counties on numerous levels, reducing funding to carry out the mandate while simultaneously requiring counties to do new work with less funding
• Unless the state intervenes we expect property tax levies to continue increasing the next two years to cover this budget shift, that’s not the outcome counties or either side of the aisle wants at the capitol.
• Supporting the language in the Senate HHS bill is absolutely necessary if the state wants to address this problem.

MAAFPCWDA Modifications: We also have a positive position on our request to resource and effectively implement the Minnesota African-American Family Preservation and Child Welfare Disproportionality Act. This includes $15 million per year to counties for administration and implementation, as well as requiring DCYF to conduct case reviews of 10% of certain child protection cases.

• Under current law this law is going into effect on January 1, 2027. There is general agreement to have DCYF pick up a percentage of case reviews of certain child protection cases, that’s an essential law change that we need to pass this year if the legislature wants this law to be successful
• Counties are facing enormous amounts of pressure on the property tax levy. Changing this from an unfunded mandate to a funded one would help ensure that the law achieves what it sets out to.

House Ethics Committee

On Friday the House Ethics Committee heard complaints against Representatives Elliot Engen, Walter Hudson, and Alex Falconer. The complaint against Rep. Engen and Rep. Hudson were focused on the two leaving a House Education Committee hearing to have lunch and drink beer several blocks from the State Capitol while the committee hearing continued. The complaint against Rep. Falconer was over an alleged conflict of interest for doing lobbying work while serving as a legislator. The committee met on and off throughout the day. The complaints were ultimately dismissed against all three members. Ethics Committee Co-Chair Greg Davids mentioned that both decisions were unanimous, and that’s an unusual result in his experience. The committee did release a statement clarifying the expectations and norms of committee members, saying members should be in committee.

Omnibus bill tracking

Figuring out exactly what bills match up where and what is traveling and what isn’t is more challenging than typical this year. MICA is providing an omnibus bill tracker to help, that will be periodically updated on our website. But with such an abnormal session and process, the caveats to this bill tracker are bigger than ever. Language could be moved from one bill to another. An old conference committee left open from 2025 could re-open with brand new language in consideration. A supplemental omnibus bill could be added as a last minute amendment to a single subject stand alone bill. That said, this should be a useful tool over the next week to figure out where we are in the process.

Legislative timeline:

• May 17: Midnight deadline for the legislature to pass bills that can be signed into law during regular legislative session
• May 18: Constitutional deadline for adjournment

Almanac visits Stearns County: On Friday the Twin Cities Public Television program Almanac traveled to St. Cloud to perform a live show on Friday night. Stearns County Commissioner Tarryl Clark served on the current and former legislator panel to discuss what is going on at the capitol this year. 

Republican field for Governor and US Senator narrow: Last week David Hann dropped out of the race for US Senator, and current Fraud Prevention committee chair Rep. Kristin Robbins dropped out of the race for Governor.

Senate releases omnibus tax bill: On Wednesday and Thursday the Senate tax committee heard and voted on their omnibus tax bill, SF5052 (Rest). The bill contains little that would directly impact county budgets, but notably does not include anything related to levy limits, valuation limitations, or significant property tax shifts outside of increasing the disabled veterans homestead market value exclusion. The largest individual item on the tax cut or spending side of the ledger is a onetime 12% increase to the existing Homestead Credit Refund which is projected to increase refunds for 588,000 homeowners by an average $171.

The bill includes numerous smaller property tax changes, including:

• Provides that exempt property owned by a nonprofit conservation organization that is leased, loaned, or otherwise made available to an individual, corporation, or association for grazing activities that further the nonprofit conservation organization’s conservation objectives for the property, remains exempt
• Expands the exemption to apply to an airport hangar used to manufacture aircraft, and provides a twelve-year 50% net tax capacity reduction for certain property owned or operated by a city with a population over 50,000 but less than 150,000 and used as a hangar for storage, repair, or manufacture of aircraft
• Expands the qualified relatives required for special agricultural homestead for purposes of unoccupied agricultural property to include grandparents, stepparents, stepchild, uncle, aunt, nephew, and niece, of the owner or the owner’s spouse
• Allows property to qualify for special agricultural homestead if the owner and the person actively farming the agricultural property lives within the county where the property is located, or lives within a county that is adjacent to the county where the property is located. Under current law, the owner of the property and the person actively farming the property must live within four cities or townships of the property
• Modifies the classification tier rates for Class 1c homestead resorts by providing that the first $1,500,000 of market value is Tier 1, the market value from $1,500,001 to $4,500,000 is Tier II, and any value over $4,500,000 is Tier III
• Provides that land otherwise eligible to be classified as Class 2c managed forest land is eligible regardless of whether it is wholly or partially subject to a conservation easement
• Expands class 2 agricultural classification to include certain farm wineries by providing that contiguous acreage that contains a licensed farm winery
• Increases, from $150,000 to $175,000, the market value exclusion for veterans with a disability (MVEVD) rating of 70 percent or more, and increases, from $300,000 to $350,000, the market value exclusion for veterans with a 100 percent total and permanent disability

From a property tax shift proposal, the most significant proposals here are likely the disabled veterans homestead market value exclusion and the changes to the homestead resorts classification. An analysis of these two changes show that the Homestead Resorts reflects a $357,000 reduction (-.09%)in property taxes for those properties statewide and shifted elsewhere. The MVEVD reflects a $3.074 million reduction (-.05% for residential homesteads) in property taxes and shifted elsewhere, including onto other residential homesteads. The overall net reduction in taxable net tax capacity as a result of these changes is $8.3 million (less than one tenth of 1%) statewide. The largest net classification shift is onto commercial and industrial property, with a $1.375 million property tax increase statewide.

A local property tax analysis was provided with a limited number of county specific examples. Please note that table reflects tax capacity, not property taxes paid:

The omnibus tax bill also includes a provision for the Hennepin County Sales tax, increasing the rate from 0.15% to 0.25% and modifying the allowed uses and caps.

On net the senate omnibus tax bill costs $10.47 million in FY 26-27 and raises $416.8 million in FY 28-29. The revenue increase is largely due to the tax on social media companies, which raises $104.7 million in FY 26-27 and $432.5 million in FY 28-29.

Sen. Rest mentioned that the pass through entity tax and credit (also known as the state and local tax deduction cap workaround) would be added on the floor as an amendment. She also noted the constraints that the Senate is under from a process perspective, bills that raise revenue must start in the House according to the Minnesota Constitution, so the Senate can’t send the bill to the House until they receive one first.
Senate omnibus tax bill language
Senate omnibus tax bill summary
Senate omnibus tax bill spreadsheet

House hears bill that creates new fifth tier income tax to pay for increases to County Program Aid and Local Government Aid: On Wednesday the House tax committee heard HF4845 (Hollins) which would establish a fifth tier of the individual income tax at a rate of 10.85%, up from 9.85%. The rate would apply to Minnesota taxable income in excess of $1,000,000 for married joint returns, $600,000 for single returns, and $800,000 for head of household returns. The bill also increases the local government aid (LGA) and county program aid (CPA) appropriations by $155,500,000 each, beginning with aids payable in 2026. MICA submitted a combined letter with AMC on the county program aid portion of the bill only.

Republicans on the committee expressed sympathy to the spending in the bill but raised concerns with the tax increase that the bill uses to pay for them. Rep. Jim Joy proposed dedicating a portion of the cannabis gross receipts to cities and counties rather than increasing taxes to pay for increasing CPA and LGA. Rep. Bobby Harder proposed reducing mandates on counties rather than increasing these state aids. Rep. Mike Howard said that he appreciated the bill but doubted that increasing LGA specifically is the best way to spend this money, saying cities do not have a strong track record of producing results. Rep. Liz Lee said that the county program aid formula penalizes large counties like Hennepin and Ramsey. Co-Chair Rep. Greg Davids noted that the bill has no chance of passage, saying that hearing the bill moved the committee further away from a deal.

There has been a great deal of speculation on what will transpire this week as far as process for a tax bill at the capitol. On Saturday morning the House Republicans posted a hearing on the Hennepin County sales tax proposal for Wednesday, which was heard previously in March. Shortly thereafter, most likely in response, the House DFL posted a hearing on the same bill for Tuesday. Earlier last week there were discussions that there may be a combined House and Senate Working Group on taxes, despite the House not having a position or any kind of tax bill. Those have died down recently but could come up again at any moment.

Tuesday, May 5

House Taxes

• HF4841 (Agbaje) - Hennepin County local sales tax authority modified, and grants provided to county health care facilities and to ballpark authority for improvements. (Informational only)

Wednesday, May 6

House Taxes

• HF4841 (Agbaje) Hennepin County local sales tax authority modified, and grants provided to county health care facilities and to ballpark authority for improvements. (Informational only)

Senate Omnibus Transportation Bill Stalls

Last week, the Senate Finance Committee was expected to take up the Senate Omnibus Transportation Bill, SF3988, and incorporate the budget provisions into HF2433, which is serving as vehicle for all of the Senate’s budget proposals lacking a House companion. However, SF3988 was pulled from the agenda, and HF2433 was passed out of Senate Finance without any transportation provisions.

Rumor has it that the bill got tied up in negotiations between Transportation Minority Lead John Jasinski (R-Faribault) and Chair Scott Dibble (DFL-Minneapolis). Jasinski has requested that if Dibble agrees to delay implementation of the Transportation Greenhouse Gas Mitigation and Assessment law, he’ll prevent any floor amendments from being offered to reduce vehicle tab fees to their pre-2023 levels. For now, SF3988 is stalled out in Senate Finance Committee.

Bill Introductions of Interest:

To see a list of all the transportation bills being tracked on behalf of MICA, click here.

No committee action on any transportation issues is scheduled. MICA will be watching to see if either the Senate or House take up any relevant bills/amendments during their respective floor sessions.

Senate Pushes for Bonding Bill

Last Tuesday, Senate Capital Investment Chair Sandy Pappas (DFL-St. Paul), accompanied by Senate DFL leadership and labor, held a press conference to underscore the importance of enacting a bonding bill this session. Pappas reiterated her support for a $1.4 billion capital investment package, which is higher than what either Governor Walz or House Republicans have said they will support. And while Pappas is encouraged by the bipartisan negotiations underway in the House, she is concerned things aren’t moving quickly enough.

With just two weeks of session left, it’s unlikely that either body will reveal their own bonding proposal. A package is likely to be determined through negotiations between legislative leadership and the governor, which have started occurring in earnest. Complicating conversations is the fact that the governor is insisting the debt service for a bonding bill be identified and paid for from the general fund. Historically, the amount of debt service was incorporated into the state’s budget forecast, but a change in law last session requires the debt service (which equates to about 10% of the package) be appropriated and passed with the bill.

MICA continues to advocate for funding for statewide transportation and solid waste programs that support the advancement of county infrastructure projects.

All three county priorities are included in the Senate Health and Human Services omnibus bill (SF4612/ Wiklund), which passed the Senate floor on a vote of 34-32 on Wednesday.

Technology Modernization: The bill includes a version of SF4719 (Wiklund) on which we have been engaged since the beginning of session. The language includes our steering committee language that gives counties an equal voice with the state in the development and prioritization of modernization projects. It includes funding of $45 million in FY26-27 and $25 million in FY28-29.

MAAFPCWDA Modifications: We also have a positive position on our request to resource and effectively implement the Minnesota African-American Family Preservation and Child Welfare Disproportionality Act. This includes $15 million per year to counties for administration and implementation, as well as requiring DCYF to conduct case reviews of 10% of certain child protection cases.

Supplemental Nutrition Assistance Program: The Senate includes funding to address cost shifts to the state from the federal government relating to SNAP by specifically holding counties harmless from the non-federal cost shifts. This includes the portion of the SNAP benefit costs based on “error rates” and covering lost federal administrative reimbursement for state information technology systems. The state picking up the benefit share totals $10.107 million in FY26-27 and $194.124 million in FY28-29; whereas the administrative costs total $24.286 million in FY26-27 and $64.762 million in FY28-29.

SF4612 Bill Index

Amendments:

• A63 (Wiklund) technical corrections and modifications; adopted on voice vote
• A59 (Wiklund) Hennepin Healthcare System, Inc (HCMC) term; removes some reporting; adopted 33-32
• A67 (Wiklund) Childcare Licensing: changes to Article 6 and 7; naps; moved language on Natural Elements and Materials; social media accounts; restrooms; adopted as amended 56-9
• A74 (Koran) language regarding Class C license; adopted on voice vote
• A69 (McEwen) Health Care Worker Retention and Protection (addressing Allina merger); not germane
• A76 (Hauschild) helium rulemaking; adopted by voice vote
• A65 (Boldon) extended foster care reporting; adopted by voice vote
• A47 (Dibble) technical correction to centers for victims of torture; adopted 35-31
• A51 (Boldon) Affordable Care Act: policy stating that as soon as legally possible, people losing coverage because of HR1 work requirements will be covered; adopted 34-32
• A55 (Utke) allowable use of grant funds; withdrawn
• A49 (Dibble) adding exemption for people living with HIV and AIDS under Work or Community Engagement Requirements; adopted 36-30
• A72 (Koran) in-home childcare firearms language; restores previous language; Wiklund wants to continue discussions; adopted by voice vote
• A100 (Koran) Psilocybin Therapeutic Use Program; withdrawn
• A44 (Heintzeman) Infertility Treatment; Coverage of Restorative Reproductive Medicine; ruled out of order
• A101 (McEwen) Health Care Worker Retention and Protection; adopted 35-31
• A79 (Lucero) HCMC accountability “charity care” to undocumented noncitizens; withdrawn
• A103 (Maye Quade) amendment to A79; undocumented citizens; adopted
• A104 (Lucero) amendment to A79; undocumented immigrants; ruled out of order
• A78 (Westrom) Hennepin Healthcare: must cease spending on DEI and initiatives on climate change, climate justice, and environmental sustainability; failed 32-34
• A102 (Heintzeman)Infertility Treatment; coverage of Restorative Reproductive Medicine: applies only to large group health plans; failed 32-34

SF4612 Spreadsheet

Department of Human Services:

• Line 50: DHS Total Appropriations: $18,545M in FY26-27; ($5,460M) in FY28-29
• Line 186: Federal Compliance/HR1: no change to retroactive eligibility: $7,146M in FY26-27; ($29,222M) in FY28-29
• Line 207: Federal Compliance/HR1: no cost sharing: $1,334M in FY26-27; $2,080M in FY28-29
• Line 346: MA Mental Health Provider Rate Modifications: $5,844M in FY26-27: $30,319M in FY28-29
• Line 373: HCAF Appropriation for MA: $2,167M in FY26-27; ($1,423M) in FY28-29

Department of Children, Youth, and Families:

• Line 60: DCYF Total Appropriations: $73,110M in FY26-27; $293,860M in FY28-29
• Line 386: Addressing Federal Changes/SNAP Modifications: $10,107M in FY26-27; $194,124M in FY28-29
• Line 439: MAAFPCWDA Modifications: $15M in FY27; $30M in FY28-29
• Line 446: Child Care Licensing Modernization: $2,949M in FY26-27; $2,106M in FY28-29
• Line 454: County SNAP Administrative Costs: $24,286M in FY26-27; $64,762M in FY28-29

Department of Health:

• Line 78: Department of Health Total Appropriations: $285,805M in FY26-27; $430,000 in FY28-29
• Line 534: HCMC Stabilization Grant: $150M in FY26-27
• Line 540: Other Stabilization Grant Programs: $133,600M in FY26-27; $800,000 in FY28-29

Other Agencies:

• Office of Emergency Medical Services (EMS):
• Line 657: Uncompensated Care Pool Payment Program: $15M in 26-27

• Department of Information Technology
• Line 663: County IT Priorities; Steering Committee: $45M in FY26-27; $25M in FY28-29

• Department of Management and Budget:
• Line 696: Health Care Safety Net Stability Study: $250,000 in FY26-27
• Line 697: Hospital Stability Report: $200,000 in FY26-27; $400,000 in FY28-29

On Wednesday, House Ways and Means reviewed HF4466 (Bierman), which addresses federal compliance related to HR1. Video Link
1st Engrossment
HF4466 Bill Summary
HF4466 Spreadsheet
Session Daily

Amendments:

• HF4466 A8 (Bierman); technical; adopted
• HF4466 A9 (Kotyza-Witthuhn); child care licensing modification

    In explaining her amendment, Rep. Kotyza-Witthuhn described the amendment as the noncontroversial, bipartisan language from the children and families committee. In addition to     child care licensing, it contains several other components, including crisis nursery licensing, drug testing related to MFIP and SNAP benefits, allowing child care providers to self-report     certain violations, recognizing physical abuse/placing posters in child care centers, and provides that children in foster care receive priority for enrollment in community education     programs. Includes appropriations for crisis nursery licensing, funding for Parent Support Outreach Program (PSOP), and forensic interview scholarships.
    The amendment failed on a party-line vote of 12-14.

• HF4466 A11 (Scott); all payer claims data base; expressed concern that the language had not been reviewed in Judiciary. Amendment withdrawn
  HF4466 Spreadsheet
  
  

• Line 35: Federal Compliance/MA Eligibility Changes/HR1: ($3,776M) in FY26-27; ($99,365M) in FY28-29.

Policy:

Article 1: Health-Related Licensing Boards: Modifies statutes governing the insulin safety net program and the registration fee assessed on insulin manufacturers by adding definitions of covered insulin and requiring manufacturers to make covered insulin available through the program. It also makes changes to requirements for supervision and the practice of student physical therapists and student physical therapist assistants.

Article 2: Department of Health: Makes changes to Department of Health activities and programs, including modifying provisions governing the all-payer claims database, permitting homeowners to conduct swimming classes in their private residential pools, modifying health care workforce training and loan forgiveness programs, modifying requirements to serve as a mortuary science intern, changing requirements for reciprocal licensure to practice mortuary science, and extending the time period a natural organic reduction facility may hold a deceased individual before beginning natural reduction.

Article 3: Federal Conformity: Contains provisions that align state statutes with federal requirements of HR1, including several changes to MA eligibility and the establishment of cost-sharing requirements for some MA enrollees. Makes changes to the state’s hospital directed payment program (DPP) that are the result of federal changes to regulations governing provider taxes and DPPs.

During the debate, Rep. Mohamud Noor referenced outdated technology and his concern that it is not addressed in the bill. Co-Chair Jeff Backer agreed, stating that he hopes it can still be addressed.

In his final comments, Co-Chair Bierman stated that he was not at all happy with the bill. He indicated that he would reluctantly vote for the bill to move it along, but only because he wants to see it come back from conference committee in better form. The bill passed as amended on a vote of 15-13 and was sent to the House floor.

On Wednesday, House Ways and Means also addressed HF729/SF476 (Noor), which includes various provisions relating to Direct Care and Treatment, the Department of Health, health care, MA provider enrollment, aging and disability services, behavioral health, homelessness, housing, and support services, maltreatment of vulnerable adults, and requires the release of initial Optum reports.

Process:

• HF729 A15 Amendment; technical; adopted
• limits disclosure of personnel data within DCT;
• requires enhanced training of assisted living personnel to be able to address nonemergency medical needs of residents due to falling, including needs for lift assistance
• HF729, as amended, was then amended into theSenate file (SF476), which had previously passed the Senate.
• House Ways and Means then passed SF476 as amended on a voice vote and sent it to the House floor.

HF729.2 2^nd Engrossment
HF729 Bill Summary

Note that the bill does not include the language that would have banned counties from using contracted case management. Rather, the proposal focuses on a study that examines current uses of contracted case management, evaluates payment rates, explores appropriate guardrails, and discusses the proper role of counties.

 What is in the bill:

Article 1: Direct Care and Treatment Policy: Modifies Direct Care and Treatment data privacy requirements, makes clarifying and technical changes, allows Direct Care and Treatment to modify employee classifications with permission from Minnesota Management and Budget, changes the procedures for medical decision-making for patients who are not competent to consent to treatment, and modifies the timeframe for committed persons to voluntarily return to a secure treatment facility.

Article 2: Department of Health Policy: Deletes obsolete references to housing with services establishment, limits the use of restraints in assisted living facilities, modifies change of ownership provisions for home care providers and assisted living facilities, authorizes the commissioner of health to access certain records for enforcement regarding supplemental nursing services agencies, establishes a special projects grant program to improve quality of care and outcomes for home care clients, and establishes requirements for appointments to the home care and assisted living advisory council.

Article 3: Health Care Policy: Reorganizes and updates section 256B.064 and adds language to other sections of statute to clarify how those statutes apply to the MA program. Section 3 directs DHS to establish prepayment review of MA fee-for-service claims when the commissioner or CMS designate a provider type or a covered service as “high-risk.” Section 3 also specifies requirements for prepayment review.

Article 4: Medical Assistance Provider Enrollment: Makes changes to the MA provider enrollment processes and requirements and incorporates parts of federal regulations into state statutes.

Article 5: Aging and Disability Services: Contains aging and disability services policy provisions related to senior nutrition programs, the foster care licensing moratorium, positive support analyst and professional qualifications, early intensive developmental and behavioral intervention (EIDBI), MnCHOICES assessments, targeted case management, the disability waiver rate system, community first services and supports (CFSS) and elderly waiver cost reporting, the pediatric hospital-to-home transition pilot program, and repeal of intermediate care facility for persons with developmental disabilities (ICF/DD) historical rates.

Article 6: Behavioral Health Policy: Includes changes to mental health emergency and crisis services, peer recovery support services, and substance use disorder treatment and mental health treatment services administrative and staffing requirements. Places limitations on mental health professionals’ affiliations with organizations or service lines receiving Medicaid reimbursement, expands utilization review to apply to all vendors of substance use disorder treatment services, and clarifies that reimbursement for improperly provided substance use disorder treatment services may be recovered under existing sanctions powers. Aligns statutes, and adds requirements for substance use disorder treatment programs to assess for and provide information on tobacco and nicotine use disorder.

Article 7: Homelessness, Housing, and Support Services Policy: Contains provisions related to projects for assistance in transition from homelessness, and housing with support for adults with serious mental illness.

Article 8: Maltreatment of Vulnerable Adults: Updates the Minnesota Vulnerable Adults Act to comply with federal regulations for adult protective services.

Article 9: Miscellaneous Policy: Miscellaneous policy provisions related to insurance claims adjustments, the repeal of housing stabilization services, and the release of unredacted initial Optum reports.

On Friday, Senate Finance reviewed SF4476 and, on a voice vote, passed it to the floor as a stand-alone bill where it will be heard on Wednesday. SF4476 Bill Summary

Amendments:

• SF4476 A37 Amendment (Hoffman); adopted:

• MnCHOICES; commissioner must employ certified assessors​ within the department to conduct assessments on behalf of lead​ agencies under certain conditions and circumstances
• PCA rates for shared services
• Long-Term Services and Supports (LTSS) savings:
  • Accessibility Adaptations:

        o   $40,000 annual limit for home modification changed to $40,000 every three years

        o   $40,000 annual limit for vehicles changed to $40 000 every five years

• NEMT: Removes 7/1/26 implementation date for DHS takeover of the administration of the NEMT program:
• July 1, 2026, is replaced with “upon implementation of the administrator.” Pages 19-24
• Requires commissioner to “provide six months notice to counties, managed care organizations, and county-based purchasing organizations before implementing the administrator.” Page 25, lines 10-15.

• SF4476 A25 (Hoffman); discussed, but not adopted; we expect to see in another bill:
• budget reserve contingent reduction (in the event federal funds are less than projected in FY26 and FY27
• exception to allotment reduction; DHS may not reduce obligations for MA long-term care or MA long-term services and supports in FY26 and FY27.
• SF4476 A40 (Pratt) $10 million for “Granny Tax’” (nursing home licensure surcharge; provider surcharges); failed by a vote of 5-7

 
SF4476 Spreadsheet

The bill includes several items resulting in LTSS savings:

• Line 155: Modify Nursing Facility Level of Care Eligibility for CADI/BI: ($2,612M) in FY26-27; ($42,649M) in FY28-29
• Line 212: Reduce the LTSS Assumed Spending Reductions: $113,691M in FY28-29. Note that this is a 37% decrease in potential county costs; the 2025 legislation required the identification of LTSS savings of $178 million.
• Line 227: Disability Waiver Annual Vehicle and Home Limit Modifications: unknown savings at this time
• Line 449: Reduce Human Services Grants: ($73,746M) in FY26-27; ($5,762M) in FY28-29
• Line 456: LTSS Loan Program Balance: ($70,854) in FY26
• Line 458: LTSS Loan Program Appropriation: ($822,000) in FY26

Other Department of Human Services:

• Line 146: Establish Continuity of Care Team: $4,574M in FY26-27; $11,386M in FY28-29
• Line 161: Enhanced HCBS Colocation Prohibitions: $1,174M in FY26-27; $2,162M in FY28-29
• Line 177: Interpretive Guidelines for Disability Waiver Regulations: $300,000 in FY26-27; $704,000 in FY28-29
• Line 182: CFSS Shared Services Requirements Modification: $399,000 in FY26-27; $936,000 in FY28-29
• Line 187: Transforming the Human Services System; MnCHOICES Assessment Team; Redesign Workgroup, and Study: $2,538M in FY26-27; $13,113M in FY28-29
• Line 206: Waiver Reimagine Repeal: $2,026M in FY26-27; $50,683M in FY28-29
• Line 217: Waiver Case Management Work Group and Rates Study: $374,000 in FY26-27; $510,000 in FY28-29
• Line 223: Family Residential Services High Needs Rate Increase: $189,000 in FY26-27; $5,605M in FY28-29
• Line 234: Federal Compliance: Medicaid Access Rule: $1,400M in FY26-27; $2,268M in FY28-29
• Line 417: Federal Compliance: Access to Services for Incarcerated Individuals: $178,000 in FY26-27; $3,023M in FY28-29
• Line 443: Additional Funding for Human Services Response Contingency Account: $10 million in FY27

Department of Direct Care and Treatment:

• Line 595: County Correctional Facility Pilot Program Appropriation Extension: Extends the date; no cost

Federal Action: On Thursday, the Trump Administration notified Minnesota that it is deferring an additional $91 million in Medicaid funding, due to new concerns about vulnerabilities to fraud. The announcement from Dr. Mehmet Oz, CMS Administrator, cited recent searches by federal agents at childcare and learning centers led to the decision. Earlier, CMS approved the state’s corrective action plan in March for the $243 million that had already been withheld from the state, but has yet to send any of it our way at this point.

Monday House Ways and Means: HF4195 (Kotyza-Witthuhn) establishes grants to youth intervention programs under DCYF. Youth intervention programs are nonresidential community-based programs that provide advocacy, education, counseling, mentoring, and referral services to youth and their families who are experiencing personal, familial, school, legal, or chemical problems, with the goal of resolving the problems and preventing future issues. HF4195 Bill Summary

HF4195 Fiscal Note

Wednesday Senate Finance: SF2689 (Johnson Stewart) Modifies Medicaid fraud provisions; authorizes Attorney General certain subpoena and enforcement authority. SF2689 Bill Summary

SF2689 AG Handout

SF2689 Fiscal Note

Amendments:

• SF2689 A54; defines acts constituting MA fraud; establishes penalties
• SF2689 A65; AG annual reporting to Legislature

SF2689, as amended, was then amended into HF2433 (Marty), the Senate Supplemental Finance bill, which also contains provisions related to education, higher education, agriculture, environment and natural resources (including battery stewardship program), energy, jobs and economic development, labor, state government, Medicaid fraud, and clemency provisions. Bill Summary HF2433 is scheduled to be heard on the Senate floor on Tuesday.,

Wednesday House Ways and Means: SF856 (Norris) would create an Executive Office of Inspector General (OIG).

SF856 2nd Unofficial Engrossment (House Language)

SF856 Fiscal Note

On a voice vote, the bill to create an OIG has finally found its way to the House floor. Having passed the Senate last session, the bill has been a priority for all caucuses this session.

On Thursday, Rep. Nolan West moved to suspend the rules to declare an urgency to recall HF3819 from the Children and Families committee to the House floor. The bill represents the Republican proposal related to CCAP integrity. Bill Summary The motion failed on a vote of 63-67.

Both bodies will continue to meet on their respective floors processing bills Monday through Thursday this week.

Monday:

• Joint meeting of the Human Services and Health and Human Services Committees to comprise an omnibus  program integrity bill.
• House Ways and Means will meet to pass the Human Services Budget bill (HF4338/Schomacker) and HF2354 (Norris), which will provide additional funds to the Medicaid Fraud Control Unit.

Wednesday Senate Floor: SF4476 (Hoffman) Omnibus Human Services supplemental appropriations

Combined legislative schedule

Monday, May 4

8:30 AM

Joint Meeting: Senate Human Services; Committee on Health and Human Services

• Program Integrity: The joint committee will hear and review draft language representing the program integrity omnibus bill (Hoffman/Wiklund). A joint committee is not permitted to take formal action on legislation, but members may draft amendments to be considered, and informal votes of joint committee members will be taken on each amendment. The chairs commit to incorporating the results of informal votes on draft amendments into the DE amendment presented to the Finance Committee.
  
  

Program integrity omnibus (Hoffman/Wiklund)

• Bill Language
• Spreadsheet

10:15 AM

House Ways and Means

• HF4338 (Schomacker) Human Services Supplemental Finance Bill.
• HF4338 HRD Summary
• HF4338 House Fiscal Spreadsheet
• HF4338 A21 Amendment
• HF2354 (Norris) Medical assistance fraud governing provisions added and modified, attorney general provided subpoena and enforcement authority, criminal penalties provided, conforming changes made, and money appropriated.
• HF2354 HRD Summary
• HF2354 A9 Amendment
• HF4548 (Youakim) K12 Education Forecast Adjustments bill.
• HF4548 DE1 Amendment

11:00 AM

Senate Floor session

Taiwan delegation resolution and recognition

Special Orders:

• SF4067 (Mohamed) Omnibus Firearms Bill

1:00 PM

House Floor Session
CALENDAR FOR THE DAY.

• HF1141 (Howard) Housing supplemental finance and policy.

Tuesday, May 5

8:30 AM

Senate Health and Human Services

Consideration of Confirmation of the Commissioner of the MN Department of Human Services, Shireen Gandhi

11:00 AM

Senate Floor session

Special Orders

• HF2433 (Marty) Omnibus Supplemental Finance bill
• Articles will be taken up individually starting with article 1
• SF3298 (Wiklund) Omnibus Health Professional Scope and Licensing bill

1:15 PM

House Fraud Prevention and State Agency Oversight Policy

• End of Session Wrap-Up Discussion

Wednesday, May 6

11:00 AM

Senate Floor Session

Special Orders:

• SF4476 (Hoffman) Omnibus Human Services supplemental appropriations

Thursday, May 7

11:00 AM

Senate Floor Session

Special Orders:

• HF1141(Port) Housing Policy and Finance Omnibus bill
  
  

Late last week, the Senate Finance Committee finalized their supplemental finance omnibus bill, HF2433 (Marty). On Thursday, they added the finance contents from the Senate Energy, Utilities, Climate and Environment omnibus bill, SF4504 (Frentz), to the supplemental budget bill via the A39 amendment. A spreadsheet is linked here. As a reminder, the bill includes appropriations for relevant projects in and/or requested by MICA member counties: a biomass energy generation plant in Shakopee (Scott County) to help process wood waste, an anaerobic digester energy system in Louisville Township (Scott County), and an anaerobic digester or biomass facility in Becker (Sherburne County). There were no amendments to the underlying language or appropriations and limited discussion during committee. 

On Friday, the Senate Finance Committee did a final markup of HF2433. This included adopting an amendment from Sen. Sandy Pappas (DFL), tweaking language requiring a study on the transportation of infectious waste included in the bill as part of the Senate environment omnibus, which was added the week prior. The bill, as amended, was sent to the Senate floor. However, without a House companion to the Senate’s supplemental finance bill, it’s unclear what the path forward looks like for provisions included in HF2433.

On the House side,HF3426 (Jordan), which contains the recommendations of the Legislative-Citizen Commission on Minnesota Resources (LCCMR) for FY2027 appropriations from the environment and natural resources trust fund (ENRTF), was heard on the House floor on Thursday. There was limited discussion related to the community grants program and removal of funding for a program operated by the Friends of the Boundary Waters, and the bill passed 117-15.

Two relevant tax provisions were also heard last week. HF3172 (Anderson) was heard in the House Taxes Committee on Tuesday. As amended, the bill would dedicate revenues from solid waste management taxes for a new program that would make payments to certain waste processing facilities for recycling and reuse activities. A bill summary and revenue estimate are linked here. The bill was laid over for possible inclusion.

Written testimony in support of the bill was submitted by Ramsey/Washington Recycling and Energy, Olmsted County, and the Minnesota Resource Recovery Association, while the MN Zero Waste Coalition, City of Minneapolis and Eureka Recycling expressed concerns with the bill. 

Rep. Wayne Johnson (R), who authored the county’s SCORE bill and has experience touring the Ramsey/Washington R+E facility and has supported their funding request to build out an anaerobic digestor, expressed his support for the bill and said the state needs to do more to help counties trying to innovate in the solid waste space.

Rep. Athena Hollins (DFL) said that more money needed to be allocated to county SCORE grants. She asked about how the rebate amount per ton was decided on and had questions about how the revenue estimate was determined. She said that this wasn't the most cost-effective way to reduce landfilling and the state should invest in more upstream waste-prevention activities, and worried that this bill would encourage waste generation.

The Senate Taxes Committee released their tax package last week, SF5052 (Rest). A spreadsheet and bill summary are linked here. The bill includes a small change related to the solid waste management tax in Article 4, Sections 3 and 4 that modifies the definition of “residential” and “commercial” generator so that some nonprofit organizations (such as Goodwill, which collects donations of home goods from individual households) pay the residential solid waste management tax instead of the commercial solid waste tax. This pulls in language from SF2437 (Dibble), and the revenue estimate provided noted this would only decrease tax collections by about $40,000 per year.

Senate Finance

Wednesday, May 6

• SF4304 (Hawj) Outdoor Heritage Fund
  
  

Senate passes supplemental spending bill out of Finance Committee: Over the last couple of weeks the Senate Finance Committee has been hearing finance bills from various committees, removing their appropriations and adding them to HF2433. HF2433 is the 2025 omnibus education finance bill which passed the House but the Senate did not act on. Instead of using it for its original language, the Senate is using HF2433 as a vehicle to roll spending proposals across multiple committees into one bill. The plan is for the Senate to pass that bill, even knowing the House will not want to act in response. Senate Majority Leader Erin Murphy has said that taking a positive position on these items will make it easier to bring them into final negotiations to get them included in a possible deal.

The Senate Finance committee has been regularly working to put this plan into action, even going so far as releasing and updating a memo daily to spell out exactly how its work is coming together, given how this is a relatively complicated legislative maneuver. Sen. Eric Pratt offered concluding remarks saying the process has not been transparent, doesn’t match up with the House, and possibly violates the single subject clause, even if it didn’t go as far as the 2024 omnibus bill. Sen. John Marty said the single subject in the bill was supplemental appropriations and is considerably smaller than other supplemental omnibus bills passed by either party in previous years. The bill was referred to the general register on a voice vote.

HF2433 language (before amendments on Friday)
HF2433 spreadsheet
HF2433 summary

On Tuesday the Pensions Commission will hear a few individual bills before the 2026 omnibus pensions bill. The agenda is below and the current omnibus pensions language can be found here. As of now that language only includes bills that have been voted affirmatively on by the commission this year. The commission will also consider amendments on Tuesday. It is anticipated that there will be an amendment converting SF4464 (Howe) which had proposed undoing the 2025 pension law changes for those in the police and fire plan claiming a physical duty disability, converting that to a working group to examine the issue, the current account, and the options available to the legislature. Otherwise most notably the language from the Probation Officer and 911 Telecommunicator Task Force will be considered as an amendment as well.

Tuesday, May 5

Legislative Commission on Pensions and Retirement

• SF1122 (Frentz); HF139 (O'Driscoll); reformatted as S4276-8A: PERA Police & Fire; MSRS State Patrol; increasing COLAs; reducing the waiting period for a PERA P&F Plan COLA.
• Delete-everything amendment S1122-DE1 - adopted by the Commission on April 21
• Delete-everything amendment S1122-DE1 Summary
  
  
• Legislation recommended by the Probation Officers and 911 Telecommunicators Pension Plans Work Group.
• Summary of Probation and Telecommunicator Work Group Bills
   
• SF5097 (Frentz); HF4878 (Lillie); reformatted as S4276-9A: Establishment of the Probation and Telecommunicator Retirement Subplan administered by the Minnesota State Retirement System (MSRS).
   
• SF5096 (Frentz); HF4877 (Lillie); reformatted as S4276-10A: Establishment of the Local Government Probation and Telecommunicator Retirement Plan administered by the Public Employees Retirement Association (PERA).
   
• SF5093 (Frentz); HF4879 (Lillie); reformatted as S4276-11A: Technical changes incorporating references to the Local Government Probation and Telecommunicator Retirement Plan administered by PERA.
   
• Appendix C to the Standards for Actuarial Work 
   
• 2026 Omnibus Pension and Retirement Bill; SF 4276 (Frentz); HF 4074 (Lillie).
• Delete-everything amendment S4276-DE1. The delete-everything amendment contains the language of the bills passed by the Commission as of the April 21, 2026, meeting.
• Amendment S4276-5A (related to PERA SVF Plan)
• Motion authorizing staff to make any necessary technical corrections.
• Adoption of SF 4276 (Frentz); HF 4074 (Lillie), as amended, as the 2026 Omnibus Pension and Retirement Bill.

Wednesday, May 6

Senate Finance   

• SF5202 (Clark) Settlement provision of certain claims
• SF4304 (Hawj) Outdoor Heritage Fund
• SF4401 (Dibble) Omnibus Cannabis bill
• SF3720 (McEwen) 2026 recommendations adoption of the Workers' Compensation Advisory Council
• Chamber AFL-CIO Joint Letter
  
  

Activity at the Capitol continues to ramp up as the legislature moves deeper into extended floor sessions and begin finalizing major policy packages ahead of conference committee negotiations. With committee work largely complete, attention has shifted to passage of omnibus-style bills and positioning legislation for final agreement between the House and Senate. This week, House floor action was highlighted by consideration of a comprehensive judiciary and public safety policy package, marking a key step toward end-of-session negotiations.

House Advances Judiciary and Public Safety Policy Package (SF4760)
The House took up SF4760 and adopted additional amendments prior to passage, ensuring the bill will be sent to a conference committee to resolve differences with the Senate. That conference committee process is expected to be shaped by several newly adopted provisions, including a Rep. Emma Greenman amendment related to prediction markets, which introduces an additional policy area that will need to be reconciled between the two chambers alongside broader judiciary and public safety provisions. The Senate passed a similar prediction market ban bill SF451156-10 on the floor on Thursday.

The package combines a wide range of public safety and judiciary policy provisions into a single vehicle that is expected to play a central role in final negotiations. It includes provisions drawn from multiple House bills, reflecting a broader effort to consolidate priority proposals advanced throughout session. Among the House bills incorporated into the package are HF1410 (correctional officer disciplinary procedures), HF3404 (impersonating a peace officer), HF3155 (organized retail theft and gift card fraud), along with additional public safety provisions carried in the broader policy omnibus.

Also adopted as part of the package was a Rep. Jeff Witte amendment addressing the administration of medications in local correctional facilities, an issue that arose following implementation of the Larry R. Hill reform act. The amendment incorporates the collaborative framework that was reached by stakeholders to resolve operational challenges that emerged from the prior changes, with the intent of reducing disruption in facility operations and mitigating liability concerns that had impacted providers serving county jails. The motion prevailed and the amendment was adopted on the House floor.

During floor debate, members also discussed a portion of the package related to proposed changes to the age of delinquency and the potential impacts on counties and system capacity. Two amendments were offered by Rep. Bidal Duran to address those concerns.

The first amendment would have delayed implementation of the age change until August 2027, allowing additional time to build out system capacity and prepare for the anticipated shift of youth into the child protection system. Following that vote, a second amendment was offered to create a carve-out for youth ages 10–12 who commit violent offenses, allowing those cases to remain in the juvenile justice system while shifting other cases into the child protection framework.

Both amendments failed on 67–67 tie votes, leaving key county concerns unresolved as the bill advances to conference committee.

The following bills have been incorporated in part or in whole into the public safety policy package:

• HF2169 (Schwartz)
• HF2358 (Van Binsbergen)
• HF3155 (Tabke)
• HF3453 (Hanson)
• HF3496 (Harder)
• HF3768 (Curran)
• HF3769 (Curran)
• HF3771 (Johnson, P.)
• HF3782 (Moller)
• HF3825 (Repinski)
• HF3826 (Witte)
• HF3827 (Duran)
• HF3870 (Curran)
• HF3946 (Moller)
• HF3990 (Novotny)
• HF4151 (Witte)