Legislative update: Legislature adjourns; special session upcoming
The regular session of the Minnesota Legislature adjourned before the deadline last night with much work left to be done during a special session. Last Thursday, Governor Walz, the House DFL and GOP caucus leaders and the Senate DFL leader reached an agreement on an overall budget framework which should have enabled the legislature to complete most of their work before the end of the regular session. The budget framework represented a $66 billion two-year state budget, which is about $5 billion smaller than the budget enacted for the current biennium and should reduce some pressure on the future projected budget deficit. However, while the press conference announcing the agreement was occurring several DFL legislators were outside the Governor’s reception room protesting the agreement. It was clear that Leadership was going to have a challenge selling the framework in an evenly divided State Legislature with 101 DFL members and 100 GOP members. As the days unfolded with little bits of legislative activity each day, a special session was inevitable.
Before the adjournment of the regular session, the legislature was able to approve seven out of 16 budget areas and the rest will need to be taken up during a special session, which could happen as soon as this week. Without a completed state budget, layoff notices will be sent to state employees beginning June 1 to prepare for a partial government shutdown. The Legislature would like to be done before those notices are sent out and Leadership set a 5:00pm Wednesday deadline for remaining budget areas to finalize the details using the budget target that were agreed to last Thursday. Perhaps a looming holiday weekend will provide the motivation to reach compromises in an evenly divided legislature.
One of the budget bills that was able to be completed was the Agriculture Finance and Policy bill. The conference committee charged with resolving differences between the House and Senate was given a $9 million budget target from leadership. Going into conference committee the House passed an agriculture budget with $17 million in new funding while the Senate had a $330,000 budget reduction from base. The agriculture budget includes funding for the MN Department of Agriculture, the Board of Animal Health, the Agricultural Utilization Research Institute and the Office of Broadband. Included in the final agriculture were several priority areas for MCGA.
Biofuels Infrastructure
The Biofuels Infrastructure Grant Program was funded at $2,750,000 in both fiscal years 2026 and 2027. The program provides grants up to $199,000 to fuel retailers to upgrade their equipment and begin offering mid and higher-level biofuels blends including E15, a fuel blend containing 15 percent ethanol. Since the program was started in 2021, MDA has awarded a total of 60 grants to fuel retailers to upgrade equipment.
Soil health equipment assistance program
The Soil Health Equipment Assistance Program will continue to be funded at $639,000 in both fiscal years 2026 and 2027. There will be an additional $3.5 million available to the Department from the Clean Water Fund. The program offers grants to farmers to purchase equipment to aid in soil health practice adoption. The program has proven very popular with nearly 5 times the number of funding requests compared to the money that has been available.
AGREETT base funding
The Agriculture Research, Education, Extension and Technology Transfer Program (AGREETT) continued to be funded at base level. AGREETT funds research and education through the University of Minnesota, Extension and other state institutions.
There are also important items to note that were also included.
Avian flu and ag emergency account
Avian Influenza was a large topic of conversation in the Agriculture Committee this year and the bill provides funding to test for and respond to Avian Influenza outbreaks. The bill allows the Department to spend up to $750,000 to test milk and milk products along with poultry products, and petfood for the presence of avian influenza. There is funding for research into avian influenza at the University of Minnesota and continued funding for livestock grants that support the installation of measures to prevent the transmission of avian influenza.
Grain licensing fee phase in
The Department of Agriculture brought a proposal to increase their grain license and examination fees. These fees had not been increased in over 20 years. The bill changes the previous license structure that had a tiered approach to a flat $500 fee and changes the examination fee from a tiered approach to a per bushel amount based off of the grain facilities total storage capacity with a minimum inspection fee of $350 and a maximum fee of $4000. There are some facilities who will see a reduction in their overall license and examination fee while those who will see an increase will have it phased in at a maximum increase of 150 percent each year. While the fee is phased in MDA will be using interest accrued from the Indemnity Fund in the amount of $500,000 to cover their inspection program while the fees go into effect.
Olmsted County Soil Health Program Study– The bill includes a study of the groundwater protection and soil health program in Olmsted County. The goal of the study is to determine the feasibility of expanding the program.
Reduction in green fertilizer grant program
The bill reduces the amount available to the Green Fertilizer Grant Program that was passed in 2023 by $3 million. MDA has not awarded a grant from the program at this time.
The Legacy budget, which includes projects authorized using Clean Water Funds, was also approved during the regular session. There are several projects that MCGA has supported because of their focus on local implementation and include:
Soil health equipment assistance program- $3.5 Million
MDA Agricultural Water Quality Certification Program – $7 million
Ag weather stations and Soil temperature network- $2.3 Million
Technical Assistance- $3.2 Million some of which goes to Discover Farms Research
OTHERS
Outstanding budget areas and priorities that MCGA is watching closely for final agreement prior to a special session include the Sustainable Aviation Fuel Tax Credit in taxes and permitting reform in the environment budget. We will also be keeping an eye on the energy and transportation budgets.
