2025 Legislative Session Overview

June 23, 2025

An overview of the key legislative issues and outcomes for Minnesota cities from the 2025 legislative session.

The Legislature concluded work on the state’s two-year budget in the wee hours of June 10. The session, which was marked by a one-seat Democratic Farmer Labor (DFL) Party majority in the Senate and a 67-67 partisan tie in the House, began in a chaotic fashion due to disagreements over House leadership and committee control.

Despite initial hurdles and the need for a special session, legislative leaders ultimately guided the House and Senate to an orderly conclusion. Lawmakers passed all budget bills, a $700 million bonding bill, and a tax bill — successfully balancing the budget and averting a partial state government shutdown that would have begun July 1 without a biennial plan in place.

With 6,893 bills introduced during the regular session, the Legislature eclipsed the 2023 record of 6,705 for most bills introduced in a single legislative session. The regular session yielded 39 new chapters of law, and an additional 15 chapters passed in the special session.

As effective dates of new laws approach, the League of Minnesota Cities is here to analyze the implications for cities. Detailed information about new laws will be provided in the League’s annual law summaries, which will be available by mid-July. We will also share city-by-city runs of revenues for various state aids to cities as they become available.

Key Outcomes for Cities

Bonding

The Legislature passed $700 million in general obligation bonds, including:

  • $176 million for water and sewer infrastructure through the Public Facilities Authority.
  • $78 million for local roads and bridges, wetland replacement, and major bridges.
  • $26 million for public housing rehabilitation.
  • $15 million for metro area inflow and infiltration work required by the Metropolitan Council.
  • $9 million for projects on the state flood hazard mitigation list.
  • $6 million for infrastructure to mitigate drinking water contamination.
  • $3 million divided between grant programs for economic development infrastructure.
  • $1 million in tree planting grants through the Metropolitan Council.

Cannabis

  • Cities with a municipal cannabis retailer license are now allowed to also hold a lower-potency edible hemp retailer license. Previously no entity could hold more than one license.
  • The law was clarified to say that cities may issue a retail registration to a cannabis business that has preliminary license approval.

Data Practices

  • Government entities may suspend responses to a public data request if the requester fails to inspect or collect the data within five days of being notified of its availability.
  • The definition of “public official” for purposes of disciplinary record disclosure now applies to all cities, eliminating the 7,500 population threshold.
  • Subjects of data entitled to a collision report must provide an unredacted copy of body camera footage upon request.
  • Judicial officials’ personal information in real property records will now be classified as private.
  • Government entities may share data with the Commissioner of the Minnesota Department of Administration when a data subject appeals the accuracy or completeness of data.
  • Authority was granted for government entities to share data related to confirmed or suspected fraud in public programs with other government entities, agencies, and law enforcement.

Elections

  • General voter registration process changes were made including record requirements, synchronizing, voter registration and registration updating, postelection sampling, and statewide voter registration system checks.
  • Absentee voting and ballot process changes were made including application ID requirements, voter registration application requirements, and change of deadline for dropping off absentee ballots on Election Day (the deadline was previously 8 p.m. but has now been changed to 5 p.m.), notice of absentee polling places, and new process and procedures for absentee ballot boards.
  • Process changes were made to requirements for removing, securing, and documenting ballots on each day of early voting.
  • Changes were made to requirements related to polling places including posting notices of closed polling places and polling places changed due to an emergency, and a new prohibition on polling places adjacent to cannabis sales or services.
  • Chain of custody plans will now require physical and cyber security of election materials.
  • Other election process changes were made including initialing of ballots, assisting voters outside of polling places, special election changes for legislators, and filing period changes for municipal elections.

Emerald Ash Borer (EAB)

The Legislature allocated funds for several EAB-related initiatives, including:

  • $400,000 per year for the ReLeaf Community Forestry Grants program.
  • $900,000 for statewide grants for community tree removal and planting.
  • $900,000 for metro area grants for community tree removal and planting.
  • $1 million in grants for tree planting through the Metropolitan Council (included in the bonding bill).

Emergency Medical Services (EMS)

$27.5 million was appropriated for the 2026-2027 biennium to support EMS programs, including:

  • Training and education for ambulance staff.
  • A rural, uncompensated care pool payment program.
  • An ambulance service training/staffing grant program.
  • An ambulance operating deficit grant program.

Funds will be managed by the Minnesota Office of Emergency Medical Services.

Employment

  • The Minnesota Paid Leave maximum premium rate was reduced to 1.1% of taxable wages.
  • Earned Sick and Safe Time (ESST) was modified to:
    • Allow employers to require reasonable notice and documentation if an employee is using two or more consecutive days of ESST.
    • Allow employees to find a replacement worker. 
    • Allow employers to prorate frontloaded ESST hours.
  • Mandatory break policy changes require employers to allow for a 15-minute rest break for every four hours worked by an employee as well as a meal break of 30 minutes for every six hours worked.
  • The notice of termination statute was modified to include definitions of “fraud,” “misuse,” and “personal gain.”

Housing, Land Use, and Zoning

  • No preemption of city zoning and land use authority passed this session; we anticipate that it will reemerge as a significant focus during the 2026 session.
  • Minnesota Housing Finance Agency will now be required to award additional points for grant applications from jurisdictions that include one of eight zoning and land use provisions in ordinance.
  • $2 million in one-time increases for the Challenge Fund Grant Program, Workforce Homeownership Program, and Greater Minnesota Housing Infrastructure Grants.
  • $50 million was allocated for housing infrastructure bonds.
  • Cities will be required to provide a link to the Attorney General’s Landlord-Tenant Guide, along with instructions for requesting it in alternative formats with any renewal of rental license, registration, or certificate of occupancy.

Jobs and Economic Development

The Department of Employment and Economic Development was asked to reduce its budget by $30 million for the biennium. Some programs that support cities received additional funding, some stayed the same, and others experienced cuts.

  • $4.6 million for the Greater Minnesota Business Development Public Infrastructure Grant Program.
  • $2.5 million for the contaminated site clean-up and development grants.
  • $1.4 million for the Host Community Economic Development Program.
  • $3 million for local community child care grants.
  • $10 million for the Minnesota Job Creation Fund (a $6 million cut).
  • $2.5 million for the Redevelopment Grant Program (a $2 million cut).
  • $24.7 million for the Minnesota Investment Fund.

Open Meeting Law

  • The “open and accessible to the public” requirement for remote participants was removed.
  • The newspaper publication requirement was amended to allow for posting notices on the public entity’s website if its designated qualified newspaper discontinues publication.

Public Safety Duty Disability

  • Employees who are eligible for a normal retirement (age 55+ with more than 20 years of service) will now be ineligible for regular duty disability benefits, including the continued health insurance benefit.
  • Regular duty disabled employees will receive continued health insurance for 60 months from the date of disability, replacing the previous benefit that extended coverage to age 65.
  • Continued health insurance benefits to age 65 were preserved for totally and permanently disabled employees and their dependents.
  • Monetary settlements in lieu of continued health insurance will now be prohibited.
  • Employers will now be prohibited from challenging the Public Employees Retirement Association’s (PERA) duty disability determinations.

Taxes

  • The taxes budget target required reductions in spending and/or increasing revenue, which made it a difficult year for new expenditures.
  • While there were discussions about cutting local government aid (LGA), the appropriation was ultimately not reduced.
  • The Senate and House discussed the sales tax exemption on construction materials purchased by local governments, but neither the general proposal nor individual projects were included in the final tax bill.
  • The cannabis gross receipts tax rate was increased from 10% to 15%, and local government cannabis aid was eliminated.
  • The House and Senate proposed different local sales tax policies, with the Senate providing general authority and the House extending the moratorium. In the end there was no new general policy language, and the local sales tax moratorium ended on May 31, 2025.

Transportation

  • No significant increases were made to local road and bridge funding.
  • Greater Minnesota transit funding was reduced by $22 million for the 2026-2027 biennium.
  • A provision that would have transferred $93 million in regional transportation sales tax revenue from metro-area counties to the Met Council for bus rapid transit was not included in the final bill.
  • A total of $8 million ($3 million in the transportation bill and $5 million in the bonding bill) was allocated for local road wetland replacement.
  • The Minnesota Department of Transportation is now required to update its local cost participation policy.

Water Infrastructure and Policies

  • No new requirements were imposed on cities for water or wastewater management.
  • The fees for water appropriation permits increased, nearly doubling in cost in most instances.

Further Reading/Resources

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