Senate Taxes Committee advances omnibus tax bill, adopts amendments that cut Minneapolis funding and remove sports-betting study

The Minnesota Senate Taxes Committee on May 13 voted to adopt two amendments to Senate File 2374, the omnibus tax bill, and recommended the bill as amended be sent to general orders.

Sen. Rest, Minnesota state senator, offered what was labeled the A16 amendment, saying it made technical and substantive adjustments to revenue sources and program language in the omnibus bill and included provisions ranging from deleting a film tax credit reference to limiting certain tribal-owned property tax exemptions in Cook County. "I move the A16 amendment," Rest said before the committee adopted it by voice vote.

Why it matters: The bill bundles many tax and aid changes that affect local government aid and program funding across the state and repurposes or removes several targeted provisions, including a grant tied to Minneapolis. Committee action advances the package toward floor and conference committee consideration.

Key actions and provisions

- A16 amendment: The amendment deleted the film credit reference and limited the property tax exemption for tribal-owned property in Cook County to no more than five parcels (described in the amendment as coming from a House member's proposal). It also shifted the funding source for an agricultural water-quality property tax credit from the Clean Water Fund to the General Fund, required repayment of land bank abatement amounts to be distributed by counties in proportion to the original abatement, adjusted accelerated remittance percentages for June to offset Local Government Aid (LGA) and County Program Aid (CPA) changes, changed an annual LGA/CPA reduction to $10 million instead of $20 million, adjusted soil and water conservation district aide funding for FY26–27, removed a restriction on imposing a new local sales tax (LST) for one year after an existing one lapses, and modified e-bike rebate program reporting and cancellation language. Sen. Rest described some of these changes as clarifications and technical fixes.

- A20 amendment: The committee adopted an A20 amendment that removed a section creating a study of sports betting and related interests from the bill. Sen. West moved the A20 amendment to the pending amendment. After discussion, the committee adopted A20 by voice vote.

- Minneapolis grant reduction/cancellation: Committee members debated a $10 million Minneapolis grant included in earlier versions of legislation and whether portions of it had already been spent. Sen. Weber asked whether staff were aware that "some of the money has been spent." Sarah Ray, identified in the hearing as a representative from Minnesota Management and Budget (MMB), replied, "I don't know what it was spent for, but, you're correct. $400,000 was spent." Sen. Dibble said the program tied to the grant had been "stood up" late last year and that reimbursements had been paid over roughly the last six months, saying, "Those funds are paid out on a reimbursement basis." Committee members noted conflicting information about the timing and amount of expenditures; one committee member described being told the expenditure made the previous week was a little over $1 million. The record shows the committee applied a $368,000 reduction to the soil and water conservation district aid appropriation to balance that change in the amendment.

Other items noted in committee discussion

- LGA/CPA and local tax changes: The amendment package included adjustments to LGA and CPA calculations and timing of remittances, and removed an earlier restriction preventing local governments from imposing a new local sales tax within one year of expiration of a previous local sales tax.

- Health care/hospital and stadium-related language: Committee discussion referenced proposals tied to Hennepin County, the Twins/Target Field and hospitals, and the leader of the committee said the language was included to permit continued negotiations in conference committee. The chair said meetings with county and hospital representatives and others were scheduled to continue.

- E-bike rebate program: The amendment modified e-bike language to remove a required report and to cancel unencumbered and unexpended amounts for the rebate program.

Votes and next steps

The committee adopted A16 and A20 by voice votes and then voted to recommend Senate File 2374 as amended to pass and be sent to general orders. The committee record shows voice votes (ayes and nays) but does not record individual roll-call tallies in the transcript provided. Committee members indicated outstanding questions about the Minneapolis grant that could resurface if additional expenditures are reported before final floor action or conference committee work.

Quotations from the hearing

- "I move the A16 amendment," Sen. Rest said when offering the amendment.

- "Some of the money has been spent," Sen. Weber said, asking whether staff knew what the funds had been used for.

- "I don't know what it was spent for, but, you're correct. $400,000 was spent," Sarah Ray of MMB said.

- "Those funds are paid out on a reimbursement basis," Sen. Dibble said, describing how invoices and reimbursements for the Minneapolis program have been handled.

Ending

The committee recommended the omnibus tax bill, as amended, be advanced to general orders. Committee members said unresolved questions — particularly about the Minneapolis grant and related timing of expenditures — could prompt additional adjustments as the bill moves through the Senate and into conference committee.