Transportation

Last year, while compromise on a transportation bill during the regular session was elusive, the Senate and House had at least passed bills to negotiate. This year, neither body even got a significant transportation bill off the floor. In the tied House, Republicans on the Transportation Committee declined to craft either an omnibus policy or finance bill. In the Senate, Chair Scott Dibble (DFL-Minneapolis) put forward an omnibus transportation budget bill that moved out of committee to Senate Finance, but advanced no further. Because the underlying bill used as the vehicle for the Senate’s Transportation Omnibus Bill was MnDOT’s non-controversial housekeeping bill, those provisions made no progress either.

Leading up to committee deadlines, the Senate Transportation Committee heard largely routine bills that typically passed on unanimous voice votes. The House Transportation Committee initially followed a similar path, but after Co-Chair Jon Koznick’s (R-Lakeville) priority legislation establishing a regulatory framework for autonomous vehicles stalled due to DFL and labor opposition, the collegial atmosphere began to erode. The House co-chairs then alternated scheduling more controversial bills, many of which died on party-line tied votes. Republicans focused on initiatives to reduce transportation taxes and defund light rail operations, while Democrats pursued proposals that would make it more difficult to add new highway capacity or would expand the use of technology to address dangerous driving behaviors.

MICA recognized that it made little sense to engage heavily in debates over bills that were unlikely to advance and where our involvement could unnecessarily strain relationships with committee members. We weighed in strategically and conserved political capital, recognizing it may be needed next session should Democrats regain full control of state government. If Representative Brad Tabke (DFL-Shakopee) becomes sole House Transportation Chair in 2027, we anticipate he and a DFL majority will likely pursue policies that impose new conditions on building roads and bridges and redirect already limited highway funding toward transit and other modes — as demonstrated during the 2025 Special Session proposal to divert metro sales tax proceeds from counties to transit.

Here’s a recap of the priority issues MICA followed this session and their status:

What did become law this Session

License Tab Fee Reductions
Status: One-time reduction of $250 million for calendar year 2027 enacted

Minnesotans have begun to feel the effects of the 2023 changes that increased motor vehicle registration taxes and slowed the vehicle depreciation schedule used to calculate those taxes. With tab fees now exceeding $1,000 annually on some non-luxury vehicles, lawmakers increasingly heard concerns from constituents. Given the broader legislative focus on “affordability,” Republicans made reducing tab fees a major priority this session and introduced legislation to return fees to their pre-2023 levels. However, any reduction in tab fee revenue creates a shortfall in the Highway User Tax Distribution Fund (HUTDF), which is already insufficient to meet the state’s road and bridge needs.

House File 3562, authored by Representative Patti Anderson (R-Dellwood), received a hearing in the House Transportation Committee shortly before committee deadlines. Although no public testimony was allowed, MICA and AMC submitted a letter opposing the loss of constitutionally dedicated HUTDF revenues. During committee discussion, Rep. Anderson offered an amendment to backfill the lost revenue with general fund dollars, though those revenues would be unpredictable during times of budget deficits. The bill failed on a party-line vote, and the Senate companion never received a hearing.

As end-of-session negotiations shifted behind closed doors, Republican leadership made reducing tab fees a centerpiece of their demands. While Democrats and the Governor rejected a permanent reduction, they ultimately agreed to a one-time cut. To hold the HUTDF harmless, the agreement also included a general fund backfill. Article 4 of House File 719, the bonding bill, contains the temporary registration tax reduction. During calendar year 2027, registration taxes will be calculated using the pre-2023 rates, and vehicle owners will receive notice of the one-time savings on their renewal invoices.

Provisions that did not become law this Session

Modifications to the Transportation Greenhouse Gas Mitigation and Assessment Program
Status: Commitment from MnDOT to work with counties on programmatic changes to pursue next session

Following the backlash to efforts to delay implementation of the greenhouse gas (GHG) mitigation and assessment program in 2025, it was clear that advancing statutory changes this session would be difficult. MICA’s primary goal was to secure legislative hearings so committee members could receive a status update from MnDOT and hear examples of what project mitigation could look like in practice. MICA successfully secured such a hearing in the House Transportation Committee.

MnDOT Assistant Commissioner Jon Solberg provided an overview of where the agency is in the implementation process and outlined the substantial work still needed before the portfolio assessment requirement — scheduled to take effect August 1, 2027 — can be implemented. While he stopped short of explicitly stating the deadline would not be met, he acknowledged that major questions remain unresolved, including how the portfolio will be defined and assessed. Solberg also indicated that new coordination mechanisms and accompanying legislation would likely be necessary to manage mitigation offsets, including land use changes.

The committee also heard testimony from impacted stakeholders, including MICA counties that routinely sponsor trunk highway capacity improvements subject to the new law. Washington County Commissioner Karla Bigham highlighted a major interchange safety project her county is co-leading and outlined numerous unresolved issues, including increased mitigation costs, lack of funding to cover those costs, and limited feasible options for offsetting increased emissions. She also raised concerns about how potential land-use mitigation requirements could conflict with the Metropolitan Council’s comprehensive planning process.

Anoka County Commissioner Julie Jeppson reinforced concerns about how land-use mitigations would be implemented, particularly because they depend on cooperation from cities — including those outside the project sponsor’s county — that cannot be compelled to rezone property. She also reiterated that estimated project cost increases of 30–50% would place significant additional strain on county budgets already burdened by unfunded mandates.

These ongoing concerns prompted legislative Republicans to continue pushing for a pause in the program until implementation issues could be addressed. Although no formal legislation advanced, Senate Republicans included a pause proposal in every offer made during end-of-session negotiations. Democrats declined to engage on the issue.

During the final week of session, MICA and AMC met with MnDOT Commissioner Nancy Daubenberger and Assistant Commissioner Solberg to reiterate that implementing the portfolio approach without modifications would effectively halt individual expansion and new interchange projects, which would otherwise bear the costs of GHG and vehicle miles traveled mitigation on their own. MICA emphasized that this would jeopardize critical safety projects. Daubenberger and Solberg committed to convening a working group during the interim to discuss legislative and programmatic changes needed to make implementation practicable, particularly regarding multi-jurisdictional mitigation offsets.

Limits on Highway Expansion Projects
Status: Bills heard but not advanced, likely to return in 2027

This session, lawmakers introduced a suite of bills modeled after the GHG law that would restrict highway expansion projects unless specific conditions are met.

House File 3728/Senate File 4055 would prohibit adding lane miles or new interchanges on the trunk highway system unless a 60-year comprehensive maintenance plan and funding strategy accompany the project. A second proposal, HF3740/SF3990, would prohibit adding highway capacity unless a new project development process is conducted that includes analysis of a broad range of design alternatives. A third bill, HF4531/SF4657, would require every proposed trunk highway project to include a formal “purpose and need” statement explaining why the project is necessary and whether it justifies inclusion in the State Transportation Improvement Program.

Senator Dibble, an author of all three bills, argued they were necessary to shift Minnesota away from reactive spending patterns and assumptions that default to highway expansion, and toward more strategic, multimodal investments. Proponents, including Our Streets, the Sierra Club, Move Minnesota, and the Bicycle Alliance of Minnesota, argued the state should prioritize maintaining existing infrastructure before expanding highways and criticized the tendency to pursue wider highways and grade separations.

Because HF3728 received a House hearing before deadlines, MnDOT formally testified with numerous concerns, including that the agency’s existing maintenance funding gap would make compliance with the bill virtually impossible.

MICA joined other transportation stakeholders in a coalition letter expressing concern about the impact these bills would have on necessary highway improvements. During the Senate hearing, Senator John Jasinski (R-Faribault) criticized the proposals as metro-centric and argued they would disproportionately harm rural Minnesota by making it nearly impossible to complete critical highway expansions — such as converting dangerous two-lane highways into four-lane corridors — without a 60-year maintenance funding plan.

The tone of these discussions foreshadows the debate likely to occur next biennium should Democrats regain full control of state government. To prepare, MICA and its transportation partners must proactively articulate how Minnesota’s current road and bridge planning and funding systems have made the state a national leader in highway safety and mobility.

Changing state aid design standards
Status: Bill heard but not advanced

Legislation introduced in 2025 sought to mandate new design standards for state-aid roads through statute rather than through the traditional MnDOT-led process developed in partnership with local governments. In response, MnDOT reconvened its State-Aid Standards Rules Advisory Committee (RAC), which has historically served as the venue for developing these standards. The committee began meeting monthly during the summer of 2025 and is working to update standards so they align with MnDOT’s new facility design guide.

This session, Chair Dibble introduced a revised version of the legislation, SF4598. Although less prescriptive than the 2025 proposal, it would still insert the Legislature into decisions historically made by transportation practitioners.

During the hearing, Chair Dibble invited testimony from local government representatives, including RAC member and Anoka County Commissioner Julie Jeppson, regarding the RAC’s work to update state-aid standards in a manner that balances consistency with flexibility. Dibble expressed appreciation that the RAC process is underway and acknowledged that it may provide a path toward modernized standards without legislative intervention. However, if the RAC process stalls or fails to produce meaningful progress, additional legislation is likely to return in 2027.

Transit Planning and Operation Reforms
Status: Bills heard but not advanced, likely to return in 2027

Reforming metropolitan transit operations was a priority for both Republican and Democratic members of the transportation committees.

Following a hearing on high-subsidy transit routes — many operated by suburban “opt-out” transit providers — House Transportation Co-Chair Koznick introduced HF4111, which would consolidate transit operations under the Metropolitan Council and establish a working group to oversee the transition. Despite significant opposition from suburban elected officials and residents, the bill advanced to the House Ways & Means Committee.

A second bill, HF4449, authored by Representative Katie Jones (DFL-Minneapolis) and dubbed “Transit for a Resilient Metro,” would retain the current opt-out system while fundamentally reshaping transit planning by prioritizing density and transit-oriented development when determining future investments.

The bill would:

Establish benchmarks for prioritizing transit corridors based on service density, operating costs, and frequency.
Require greater coordination between road and transit projects by financially penalizing road authorities that move forward with projects inconsistent with transit plans.
Grant the Metropolitan Council authority to acquire and develop property around transit stations to support ridership growth.

Rep. Jones also proposed an amendment creating an Investment Framework Coordination Committee composed of local governments, transit riders, and other stakeholders to advise the Metropolitan Council and determine when road projects conflict with regional transit plans.

County officials expressed mixed reactions. Hennepin County Commissioner Marion Greene testified in support of the bill, while Scott County Commissioner Jody Brennan raised concerns about conflicts with locally vetted county transit plans and objected to penalties that would divert county funding to the Metropolitan Council. The bill’s density requirements would heavily favor transit expansion in Hennepin and Ramsey Counties while limiting future investment in the collar counties.

Although the legislation did not advance this year, Rep. Jones and Co-Chair Tabke remain committed to pursuing some version of the proposal next session, including renewed discussions about distribution of metro-area sales tax revenues. MICA will continue engaging to ensure future transit planning efforts do not disproportionately favor Hennepin and Ramsey Counties and that transportation investments continue to reflect the priorities and needs of local communities.