Tax law a vehicle for laws on health, human services, energy and elsewhere

In the waning hours of the 2024 legislative session, nine bills became one.

The conference committee that had been negotiating a synthesis of the House and Senate tax bills took the product of their discussions and added to it eight other bills ranging from a health and human services finance bill to legislation covering policy and appropriations for transportation, labor, housing, higher education, agriculture, and climate and energy.

It also included separate measures regarding rideshare driver rights and pay scales, firearms and paid leave. Technically, the law was sponsored by Rep. Aisha Gomez (DFL-Mpls) and Sen. Ann Rest (DFL-New Hope), but committee chairs in multiple subject areas sponsored the original legislation folded into the law.

Here are some changes in the law.

Except where indicated, sections involving appropriations take effect July 1, 2024, while Aug. 1, 2024 is the effective date if the language does not have appropriations

HF5247*/SF5234/CH127

Articles 1-3: Transportation

The law calls for $30 million from the proceeds of bond sales to be spent on construction projects, with half going to the Corridors of Commerce program. (Art. 1, Secs. 1-4)

Other appropriations include:

• $11.4 million for road projects in small cities;

• $3.8 million to build a pedestrian bridge over U.S. Highways 10 and 169 in Ramsey;

• $3 million to hire additional driver’s license examiners; and

• $1.2 million allowing police officers the opportunity to give drivers vouchers to make small vehicle repairs, such as fixing headlights. (Art. 1, Secs. 2, 4, 9)

A pilot program will allow Minneapolis and Mendota Heights to enforce speeding and red light laws using cameras, starting Aug. 1, 2025. Violations will generally carry a $40 penalty, with limits on data collected, shared and saved. (Art. 3, Secs. 1-3, 9-10, 39, 42-44, 46-52, 69, 71, 98, 113, 115-117)

Beginning July 1, 2025, “lane splitting,” in which motorcyclists can ride between cars, will be allowed. A practice that can make riding in stop-and-go traffic much safer, lane splitting will not be allowed at speeds over 25 mph or 15 mph faster than other vehicles. (Art. 3, Secs. 53, 58, 61, 122)

Among its various provisions, the law also:

• establishes the Minnesota Advisory Council on Infrastructure to coordinate across agencies and jurisdictions;

• requires that the Department of Transportation, during the next 10 years, install rumble strips at highway intersections, unless there is a residence within 750 feet;

• implements measures to reduce transportation-related greenhouse gas emissions or mitigate their effects;

• authorizes Minnesota United and Rotary International license plates;

• extends deadlines on title transfers, effective Oct. 1, 2024;

• revises e-bike requirements and tightens the regulations to disallow bicycles to be marketed as e-bikes if they can be readily modified to perform like motorcycles;

• limits locomotive yardmasters’ hours of service;

• expands areas where cities may create pedestrian malls; and

• revises Metropolitan Council planning to transition to zero-emission transit vehicles. (Art. 3, Secs. 5-7, 12, 14-15, 30, 32, 36, 40-41, 55-58, 88, 95, 101, 106)

The law provides for studies identifying:

• transportation service gaps in rural areas;

• potential improvements for Metro Mobility;

• standards for committees to approve highway and bridge dedications and special license plates; and

• ways to beef up the commercial driver workforce. (Art. 3, Secs. 125-126, 130-131)

Articles 4-13: Labor and Industry

The labor and industry finance portion of the law increases the fiscal year 2025 appropriation for workers’ compensation and workforce development by $973,000. It also allocates $9.7 million to the Department of Employment and Economic Development, with $9 million for the Rise Up workforce center in Minneapolis and $651,000 for implementation of broadband. (Art. 4, Secs. 3, 8)

Among other provisions, the law adds the unified rules of Muay Thai to the list of acceptable combative sports rules, and allows University of Minnesota employees — including student employees — more flexibility in organizing collective bargaining units. (Art. 5, Sec. 1; Art. 12, Secs. 1-3)

Effective July 1, 2024 (except where indicated), the law will also:

• require residential energy codes from 2026 to 2038 to incrementally move toward achieving a 70% reduction in annual net energy consumption;

• increase the maximum amount a homeowner can receive from the residential building contractor recovery fund from $75,000 to $100,000; and

• effective May 25, 2024, add air flight crews to employees who can earn sick and safe time, while excluding volunteer or paid on-call firefighters, ambulance service personnel, elected officials and farm laborers. (Art. 6, Secs. 1-2; Art. 11, Sec. 7)

The Department of Labor and Industry may penalize a business up to $10,000 per violation plus compensatory damages if it classifies, represents, treats, reports, discloses or documents an employee as something other than an employee, such as an independent contractor. A business cannot require employees to agree to be misclassified or enter into an agreement to do so.

Enforcement of the provision will also allow the department to give a stop work order and require the cessation of all business operations across all of the employer’s workplaces and places of business until the business comes into compliance. (Art. 10, Secs. 7, 21)

The law, effective July 1, 2024, also creates the Intergovernmental Misclassification Enforcement and Education Partnership to improve communication and collaboration between government entities to detect, investigate and deter employee misclassification; and establishes the Intergovernmental Misclassification Enforcement and Education Partnership Act for preventing employee misclassification and for coordination, collaboration, and information sharing between partnership entities. The law will fund the misclassification enforcement of the provision with $1.4 million for the 2026-27 biennium. (Art. 10, Secs. 9-10)

Articles 14-16: Housing

The Housing Finance Agency is appropriated $8.7 million in fiscal year 2025, $8.1 million of which is for the family homeless prevention and assistance program. The law also increases the fiscal year 2025 appropriation for the community stabilization program by $25 million and stipulates uses for the program’s $115 million in appropriations for fiscal years 2024 and 2025.

Seeing their fiscal year 2024 appropriations reduced are the supportive housing program (by $15 million) and the workforce homeownership program (by $3 million). For fiscal year 2025, appropriations for the economic development and housing challenge program are reduced by $7 million, effective May 25, 2024. (Art. 14, Secs. 2, 7-9 and 11)

The law makes numerous changes that affect municipalities, housing assistance programs and private sector housing. Effective May 25, 2024 (except where indicated), they include provisions saying:

• comprehensive plans and amendments adopted by local government units in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott and Washington counties are not subject to the environmental policy law;

• financially distressed residential properties are eligible for statewide local housing aid, beginning with aid amounts payable in 2024, and the Housing Finance Agency’s community stabilization loan and grant program may support recapitalization of distressed buildings, effective Aug. 1, 2024;

• the Department of Labor and Industry must develop code update recommendations for single-egress apartment buildings to determine life safety outcomes in comparison to other housing types, by Dec. 31, 2025; and

• the Legislative Coordinating Commission must facilitate two new groups: one to study how existing laws regulating common interest communities and homeowners’ associations help home occupants access safe and affordable housing, and another to evaluate issues and provide recommendations on affordable housing sustainability. (Art. 15, Secs. 26, 33, 38, 46, 48-49).

Effective July 1, 2024, the law requires relevant state agencies to measure the timeliness of processing applications for rental assistance, particularly the family homelessness prevention and assistance program, with a goal of processing an application in two weeks and paying a landlord in 30 days. Agencies must also simplify verification processes and develop uniform e-signature options on applications. (Art. 16, Secs. 3-5)

Article 17: Transportation Network Companies

The law will mandate that transportation network companies in Minnesota pay rideshare drivers $1.28 per mile and 31 cents per minute with a $5 minimum per ride. It will also grant drivers the right to appeal a deactivation and possibly reactivate their account on a rideshare app.

It will appropriate $173,000 in fiscal year 2025 for enforcement, education and outreach, with an annual base of $123,000 beginning in fiscal year 2026.

A transportation network company will be required to maintain auto insurance on a driver’s behalf and provide a blanket accident and sickness insurance policy that provides at least $1 million in benefits for personal injuries to drivers.

A transportation network company must maintain a written plain-language deactivation policy and keep it available online in several languages.

Transportation network companies also:

• are prohibited from discrimination against a driver due to race, national origin, color, creed, religion, sex, disability, sexual orientation, marital status, or gender identity;

• must provide a driver with the option to opt out of arbitration, although the driver must not seek remedies on the same alleged violation through district court if they choose arbitration;

• must give drivers compensation notice, assignment notice, a daily trip receipt, a weekly summary and keep these records for three years;

• pay drivers with wheelchair accessible vehicles an additional 91 cents per mile; and

• pay drivers 80% of a ride cancellation fee if the driver has already departed and the ride is cancelled.

The provisions take effect on Dec. 1, 2024, unless otherwise noted. (Art. 17, Secs. 1, 3-5, 7, 9, 12)

Articles 34 and 35: Higher Education

The 2024 higher education supplemental policy and finance law affects funding and policies for the Office of Higher Education that oversees the state’s financial aid programs, Minnesota State system of colleges and universities, University of Minnesota system, and other postsecondary institutions in the state.

The provisions in these articles also appear in Chapter 124. Please see that New Laws entry for details.

Article 36: Firearms

By Feb. 1 of each year, the Department of Public Safety must report to the Legislature the following information regarding actions taken by the Bureau of Criminal Apprehension and Violent Crime Enforcement Teams: the number of firearms seized; the number of gun trafficking investigations conducted; and a summary of the types of investigations conducted. This section takes effect Aug. 1, 2024.

Effective Jan. 1, 2025, guns with “binary triggers” are added to the list of guns prohibited by state law. A binary trigger allows a firearm to shoot one shot on the pull of the trigger and a second shot on the trigger release.

A straw purchase occurs when an individual buys a firearm for someone ineligible to purchase or possess one. Effective Aug. 1, 2024, the penalty for a person knowingly making a straw purchase of a firearm increases to a felony, punishable by up to two years of imprisonment and a $10,000 fine. Using an illegally transferred weapon in a felony crime of violence within a year will be an aggravated violation punishable by up to five years of imprisonment and a $20,000 fine.

A defendant can make an “affirmative defense” in court if it’s proven by clear and convincing evidence they were forced to make the straw purchase under threat of “substantial bodily harm or death.” (Art. 36, Secs. 1-4)

Articles 37-39: Agriculture

The law’s agriculture provisions include providing home water treatment for nitrate contamination, compensating farmers for elk damage, adjusting grant programs for beginning farmers, and pesticides policy.

The provisions in these articles also appear in Chapter 126. Please see that New Laws entry for details.

Articles 40-45: Climate and Energy

The law includes $15.4 million in allocations from the Renewable Development Account for such renewable energy projects as a geothermal energy system and an anaerobic digester, and streamlines the permitting process for electricity-generating projects to be hooked up to the transmission grid.

The provisions in these articles also appear in Chapter 126. Please see that New Laws entry for details.

Article 46: Disability Services

Effective Aug. 1, 2024, the law makes several changes to state-provided and governed disability services, including:

• eliminating parental fees for certain mental health and disability residential facilities;

• reimbursing parents and spouses for providing personal care assistant services;

• establishing a pediatric hospital-to-home transition pilot program; and

• establishing capacity building for “own home” services providers.

The Department of Human Services must award grants to eligible financially distressed organizations that provide early intensive developmental and behavioral intervention services to rural communities (Art. 46, Secs. 1, 6, 45-47).

Article 47: Aging Services

The law provides that assisted living facilities must offer three meals and snacks daily, including seasonal fresh fruit and fresh vegetables, and that no facility may require a resident to pay for meals in their contract. Facilities must also provide weekly cleaning and laundry service, assistance with transportation and accessing community resources and social services, culturally sensitive programs, and daily social and recreational activities.

It also expands a loan program to include long-term services, support providers and facilities, and lists circumstances under which a participant is eligible to request an elderly waiver budget and rate exception. The law also:

• retroactively sunsets submission of new applications for disproportionate share facilities, effective Sept. 30, 2023, and prohibits processing any further applications, effective Oct. 1, 2023;

• allows a facility that receives rate floor payments in 2024 to apply to maintain its designation as a disproportionate share facility for rate year 2025;

• sunsets the rate floor established for 24-hour customized living services provided to an elderly waiver participant in a designated disproportionate share facility, effective Dec. 31, 2025;

• sets the rate floor at $141 per resident day for 24-hour customized living services for rate year 2025; and

• sets an expiration date for the elderly waiver disproportionate share rate adjustment statute of Jan. 1, 2026. (Art. 47, Secs. 3-4, 7, 16-18, 20-21)

Article 51: Miscellaneous Human Services Provisions

Effective May 25, 2024, the Department of Human Services must develop a strategy to implement interventions to address unmet health-related social needs, including nutrition, housing, case management and violence prevention. The law establishes a working group to streamline access, eligibility, and administration of supportive housing resources for people experiencing homelessness (Art. 51, Sec. 3).

Articles 52-53: Human Services Response Contingency Account

A human services response contingency account is created in the special revenue fund to respond to emerging and immediate needs related to supporting the health, welfare or safety of people for which no other funding or insufficient funding is available. This takes effect Aug.1, 2024.

Minnesota Management and Budget is permitted to transfer money from the Minnesota Forward Fund, the Minnesota climate innovation authority account, and the state competitiveness fund account to the human services response contingency account to respond to emergency state needs and to other state agencies to maximize federal funding opportunities, with the total transfer amount not to exceed $100 million. (Art. 52, Sec. 1, Art, 53, Sec. 2)

Article 57: Health Insurance

Effective Jan. 1, 2025, the new law prohibits Minnesota Management and Budget from purchasing state-paid hospital, medical, and dental benefits for eligible employees from a health maintenance organization that is not a nonprofit corporation. (Art. 57, Sec.1)

Article 63: Office of Emergency Medical Services

An Office of Emergency Medical Services will be created, effective Jan. 1, 2025, to “promote the public health and welfare, protect the safety of the public, and effectively regulate and support the operation of the emergency medical services system in this state. (Art. 63, Secs. 1-23)

Article 67: Health and Human Services Appropriations

The law appropriates and (reallocates) money for fiscal year 2025 from the General Fund or special state revenue funds to:

• Human Services, $23 million;

• MNsure, $2.3 million;

• Rare Disease Advisory Council, $342,000;

• Department of Commerce, $149,000;

• Attorney general’s office, $53,000

• Board of Pharmacy, $27,000;

• Minnesota Management and Budget, ($132,000);

• Department of Health, ($251,000); and

• Health care central office, ($1 million).

It also authorizes a transfer of $284.6 million from the premium security plan account to the General Fund in fiscal year 2026. (Art. 67, Secs. 2-9, 11-15)

Articles 68-72: Taxes

The law makes changes to the child tax credit signed into law in 2023. The law requires the Department of Revenue to move forward with the advance payments, which requires the credit to be available in smaller increments over the course of a year rather than one lump sum and distributed as an advance payment for the following tax year that would equal 50% of the taxpayer’s credit in the previous year (Art. 68, Secs. 1-4).

Most taxpayers will not have to repay their advance payments if they exceeded the amount of credit for which they were eligible.

Other tax provisions in the law will:

• increase the maximum taconite homestead credit to $515;

• require the Iron Range Resources and Rehabilitation Board to issue up to $80 million in bonds in 2024 and 2025 to fund a variety of projects;

• alter the state’s tax-forfeited property statutes to clarify that the previous owner may be entitled to proceeds of a subsequent sale, appropriating $1.5 million in fiscal year 2025 to the Department of Natural Resources to administer the process;

• subject synthetic nicotine products to the tobacco excise tax;

• establish a housing support account with an annual appropriation of $450,000; and

• require the Department of Revenue to regularly make grants to taxpayer assistance organizations and tax outreach organizations, appropriating $1 million for each grant program in fiscal year 2025. (Art. 69, Secs. 2, 15-16; Art. 70, Secs. 2, 8-11; Art. 71, Secs. 1, 4)

Article 73: Paid Leave

The law makes modifications to the Paid Family and Medical Leave Act, a 2023 law that established a state-run insurance program scheduled to begin operating Jan. 1, 2026, that will provide Minnesota workers with up to 20 weeks per year of paid time off to deal with family or medical issues, including bonding time with a newborn. Among changes to the law are:

• except for bonding leave, a seven-day or longer “qualifying event” is required before paid leave benefits can be requested;

• the initial paid week is a retroactively payable period;

• the Department of Employment and Economic Development must notify all employers from which an applicant is taking leave, not more than five business days after a claim for benefits has been filed by an employee or former employee;

• it establishes procedures for filing an appeal of an initial denial of paid leave benefits;

• under certain conditions, the premium payroll tax rate for employers having fewer than 30 employees is 75% of the annual rate calculated for larger employers;

• it stipulates that the Department of Employment and Economic Development has the option to adjust the annual premium rates prior to the scheduled program start date of Jan. 1, 2026, and, by July 31 of each year thereafter, adjust the annual premium rates for the following calendar year. (Art. 73, Secs. 12, 14-15, 23, 39, 42

HF5247* / SF5234 / CH127