HF4759

Purpose

• This proposal would amend Minnesota’s Constitution to stop the state from imposing new requirements on local governments unless the state provides funding to cover the full expected cost of complying. The goal is to prevent the state from shifting costs to local governments and to protect taxpayers from higher property taxes caused by unfunded mandates.

Main Provisions

• Unfunded mandates prohibition (Sec. 6)

  • The legislature cannot pass laws or agencies cannot adopt rules that force a local government to start, expand, modify, or run a program or duty if doing so would increase local spending unless the state provides funding to cover the entire anticipated cost based on objective evidence and forecasting.
  • If a law or rule would create unfunded costs, it is unenforceable to the extent of those unfunded costs.
  • Local governments can seek declaratory or injunctive relief if a mandate is imposed.
  • The section should be interpreted broadly to prevent transferring costs from the state to local governments and to protect taxpayers from indirect taxation through higher property taxes.

• Exceptions where funding is not required (Sec. 7)

  • Local governments must comply without regard to funding in these cases:
  • Laws defining criminal offenses or criminal procedures (or enforcing criminal law).
  • Laws enacted during a declared emergency and passed by a two-thirds vote of both legislative bodies.
  • Laws or rules required by federal law or to receive federal money.
  • Laws or regulations adopted by the local government and approved by the voters.
  • Laws or rules that have an anticipated fiscal impact on a local government unit but do not exceed 1% of that unit’s annual operating budget.

How it would work in practice

• Funding requirement: If the state wants a local government to comply with a new law or rule, the state must provide funding to cover the entire expected cost of compliance, supported by objective evidence and forecasting.
• Enforcement and relief: Local governments could challenge unfunded mandates in court to stop or limit enforcement or implementation.
• Balance with Exceptions: Some actions would still require local compliance even without funding if they fall into one of the listed exceptions (criminal law, emergencies with broad legislative support, federal requirements, voter-approved local actions, or the small-cost exception).

Submission to voters

• The amendment would be put to a public vote in the 2026 general election.
• Referendum question (as proposed): “Shall the Minnesota Constitution be amended to prohibit the state from imposing requirements on local government units without appropriating money to cover the cost of compliance except requirements associated with criminal laws emergencies approved by a two-thirds vote of the legislature compliance with federal requirements voter-approved local actions and mandates with a negligible cost effective as of January 1 2027?”
• Ballot label: “State Unfunded Mandates Prohibited.”

Potential impacts and considerations

• Could limit the state’s ability to enact new programs without providing funding to local governments.
• Might slow or change how state policies are implemented at the local level.
• Could influence local property taxes if mandates were previously funded by the state but now require local funding.
• Provides a mechanism for local governments to challenge unfunded mandates through legal relief.

Relevant terms

• unfunded mandates
• local government unit
• funding to cover the entire anticipated cost of compliance
• objective evidence
• forecasting
• unenforceable
• declaratory relief
• injunctive relief
• liberal/construction (liberally construed)
• property taxes
• criminal offense / criminal procedure
• emergency
• two-thirds vote
• federal requirements
• federal money
• voter-approved local actions
• negligible cost
• annual operating budget
• constitutional amendment
• Article XII
• submission to voters
• 2026 general election
• referendum question
• State Unfunded Mandates Prohibited (title)