The Minnesota Legislature adjourned on May 18 after passing a $1.24 billion bonding bill, along with relatively few water-related policy bills. Freshwater, along with our team at Park Street Public, engaged with bipartisan legislators and partners to build support for water infrastructure funding, and we backed passage of funding bills for the Outdoor Heritage Fund and the Environmental and Natural Resources Trust Fund.
Here are some key outcomes from this year’s session, plus a look at several bills we were following that did not move forward.
$1.2B bonding bill supports water infrastructure, falls short on lead pipes
The 2026 Capital Investment (bonding bill) includes a number of important investments in Minnesota’s water:
- $420 million to the Public Facilities Authority for water/wastewater infrastructure projects.
- $56 million to the Public Facilities Authority for water/wastewater infrastructure grants.
- $1.8 million to the Minnesota Department of Health for Drinking Water Regionalization Planning Grants.
- $15 million to the Metropolitan Council for inflow and infiltration grants.
- $2 million to the Board of Water and Soil Resources for Reinvest in Minnesota (RIM) and Conservation Reserve Enhancement Program (CREP).
The bonding bill also included $15 million for lead service line replacement, significantly less than what Freshwater and our partners had expected. An earlier bill, HF3748/SF4122, would have appropriated $250 million and kept the state on track to replace all lead service lines by 2033. With an estimated $1 billion needed to address this issue in Minnesota, we will continue to advocate for robust funding in the coming years.
Dedicated environmental funding bills passed late in session
Two large environmental funding bills made it across the finish line just in time. The Legislature passed SF2077, the latest round of Outdoor Heritage Fund projects, along with governance updates to the Lessard-Sams Outdoor Heritage Council, which oversees the fund.
The Legislature also passed HF3426, funding projects from the Environment and Natural Resources Trust Fund. This includes $28 million for the new Community Grant program that is administered by the DNR.
Looking forward, Freshwater will be following the Clean Water Council’s process of finalizing budget recommendations for the next biennium. Those recommendations will go before the Legislature during next year’s session.
Policy bills stall around data centers and large water users
Freshwater continues to lead on careful siting and comprehensive planning for large water users such as data centers. We contributed to a policy statement recently published by the Clean Water Council and coordinated with partners on policy solutions to increase transparency in water-use reporting and protect groundwater supplies. Several related bills were considered (but not passed) during this legislative session:
- HF3793 would strengthen DNR permitting oversight of large water users while also expanding allowable use of the Mt. Simon-Hinckley aquifer in a limited geographic area.
- HF2862 would specify a series of guidelines for data center permitting and environmental review.
- HF4077/SF4379 would prohibit municipalities from entering into nondisclosure agreements that restrict them from disclosing information about projects to the public.
Private wells, PFAS and sustainable aviation fuel
Safe drinking water for private well owners is one of Freshwater’s top priorities and the focus of our Rural Health and Drinking Water project. While policies supporting private well owners did not move forward this session, we are encouraged by the introduction of HF3252/SF3577 that would establish a rebate program for residents with contaminated water to install home treatment systems.
Minnesota’s landmark PFAS prohibition (Amara’s Law), continued to garner attention at the Legislature this session with several proposals to delay reporting requirements and narrow the scope of products subject to those requirements. While a reporting delay did not pass, SF4612 limits PFAS reporting to products manufactured on or after July 1, 2023. The current deadline for reporting is September 15, 2026.
We are pleased to see the tax bill included environmental guardrails on Minnesota’s sustainable aviation fuel tax credit. These policies encourage the use of water friendly feedstocks such as winter camelina, and also help prevent conversion of natural lands into cropland for aviation fuel.