2026 Legislative Session Overview

May 29, 2026

An overview of the key legislative issues and outcomes for Minnesota cities from the 2026 legislative session.

Minnesota’s 2026 legislative session concluded May 17 with a relatively calm finish. Unlike the 2024 even-year session — when lawmakers advanced a 1,400-page omnibus supplemental budget bill — the 2026 Legislature passed dozens of standalone measures along with several omnibus budget and policy bills. In the final hours of session, lawmakers passed an omnibus tax bill and a long-anticipated $1.2 billion capital investment package, which received the supermajority vote required for passage.

Adjournment marked the end of a challenging biennium. The House of Representatives operated under a power-sharing agreement after Republicans and Democrats held an even split, while the Senate maintained a narrow 34-33 DFL majority.

The session was also shaped by several significant events, including the political violence that claimed the lives of former Speaker Emerita Melissa Hortman and her husband, Mark, and critically injured Sen. John Hoffman and his wife, Yvette. Other major issues influencing the session included the tragic school shooting at Annunciation in Minneapolis, the discovery of widespread fraud involving social service programs, and the federal government’s Operation Metro Surge.

During the biennium, the House and Senate introduced nearly 10,500 bills, and outgoing Gov. Tim Walz signed 91 chapters of law.

Throughout the 2026 session, the League advocated for city priorities and interests. As new laws are implemented, the League will continue analyzing the implications for cities. Additional details about new laws will be included in the League’s annual Law Summaries, which will be published on or around July 1.

Key outcomes for cities

Bonding

The Legislature passed a $1.2 billion capital investment bill. In addition to dozens of local project earmarks, funding of interest to cities includes:

$1.8 million for drinking water regionalization planning.
$2 million for Greater Minnesota Business Development Public Infrastructure grants.
$4.5 million for the local road wetland replacement program.
$5 million for metropolitan-area tree planting.
$9 million for flood hazard mitigation grants.
$13 million for city public safety projects.
$15 million for specified city dam, impoundment, and river crossing projects.
$15 million for metropolitan-area inflow and infiltration projects.
$17.5 million for public housing support.
$25 million for local bridge replacement.
$47 million for local road improvements.
$54 million for specified city transportation projects.
Approximately $100 million for specified city economic development projects.
$137 million for Public Facilities Authority water and sewer programs.
$345 million for specified city water and sewer projects.

Cannabis

Allows cities to contract with private entities to operate municipal cannabis stores.
Clarifies language related to the 12,500-population cap.

Civil and criminal law

Public entities must provide contractors and subcontractors working on public improvement projects with project payment information upon request.
Prediction markets — online platforms that allow users to bet on event outcomes – are banned beginning Aug. 1. The federal Commodity Futures Trading Commission (CFTC) filed a lawsuit on May 19 seeking to block the law from taking effect.
Cryptocurrency kiosk operations are banned beginning Aug. 1. All kiosks must be removed by Dec. 31, and customer funds must be paid out or transferred.
The Office of the Inspector General (OIG), an independent executive agency, was established in law. The OIG, tasked with overseeing public dollars and investigating fraud allegations across the state, must be fully operational by September 2027.

Elections

Elected officials and candidates are prohibited from placing wagers on their own elections.
Designated municipalities are granted flexibility to shorten absentee voting timelines.
Candidate street address data on certain campaign filings is classified as private data.

Employment

Clarifies standards related to evidence of rehabilitation for public employment.
Requires employer contributions to PERA for reemployed retirees.

Housing

The $165 million housing package includes $100 million in Housing Infrastructure Bonds, along with funding for Greater Minnesota workforce housing and manufactured home infrastructure grants.
Homeowners Association Bill of Rights:
- Reforms HOA fines, governance, and enforcement.
- Limits local government authority to require or regulate HOAs as part of development approval.
No residential zoning and land use preemption bills passed.

Public safety

Law enforcement insignia and equipment must be removed from law enforcement vehicles before they are sold or transferred to the public.
The criminal penalty for impersonating a peace officer was enhanced to a felony.

Pensions and benefits

A work group that includes League representation will take a comprehensive look at the public safety duty disability approval process and benefits and provide recommendations to the Legislature.
Another work group, also including League representation, will develop legislation to shorten vesting schedules for paid on-call firefighters and include emergency medical providers in firefighter relief associations and the Statewide Volunteer Firefighter Plan.
Line-of-duty death benefits provided through the Public Safety Officers’ Benefit Program are expanded retroactively to February 2020 to include deaths caused by certain cancers and communicable illnesses that can be traced to exposure on the job.

Taxes

Includes $125 million in one-time property tax relief expected to assist approximately 600,000 homeowners.
No local sales tax provisions authorizing new taxes or modifying existing taxes were enacted.

Transportation

No omnibus transportation policy or finance bills were enacted.
The bonding bill includes tens of millions of dollars for transportation-related grants.
A one-year reduction in the motor vehicle registration tax rate (license tab fees) was approved and will be backfilled with a $254 million general fund appropriation.
Several issues were debated but did not pass, including regulation of electric-assisted bicycles and e-motos, a regulatory framework for driverless vehicles, and modifications to the local cost-share formula for utility relocation during state highway construction.

Water infrastructure and policies

Although lawmakers introduced and heard numerous bills related to data centers, city authority to use nondisclosure agreements during development, and regulation of large water users, none were enacted into law.