2026 LEGISLATIVE REVIEW: Insights from Area Legislators
Hear from local legislators about the 2026 legislative session and the impacts to the business community.
With the 2026 legislative session in the rearview mirror and election season approaching, hear from local legislators on the session's key outcomes and their impact on the business community. As the second year of the biennium, the 2026 session was shorter with it being a bonding year rather than a budget year. The session continued the historic tie in the Minnesota House, while the Senate maintained a one-seat DFL majority. Although progress was slow for much of the session, several key Chamber priorities advanced quickly before the legislature gaveled out. This included passage of a $1.2B bonding bill, defeating legislation to amend funding for Rochester’s regional sports and recreation complex, and defeating legislation to ban non-disclosure agreements. Despite these successes, there’s still much work to be done next session, including the modification of Paid Family Medical Leave. What You Need to Know
The Chamber's advocacy was successful. HF4194 did not pass and was not included in the final omnibus tax bill. With the City of Rochester having over $10M already invested in land acquisition, design, grading, and construction, and $50M in contracts with local builders already awarded and signed, halting the project at this stage would have been especially costly to the community. Had the project been halted, these costs would have shifted to Rochester taxpayers rather than being funded by the local sales tax, much of which is generated by visitors and non-Rochester residents. MANDATES Since its passage in 2023, businesses have consistently voiced concerns about the Paid Family Medical Leave (PFML) program. With the program taking effect as of January 1, 2026, the need for modifications is clear. As a result, numerous bills were introduced aimed at reforming PFML, including: HF4386/SF3645: which would establish a formal process allowing individual employees to opt out of the state-run paid leave system and HF4569/SF4862: which would modify the maximum days a seasonal employee can work, and remove the requirement that an employee's primary line of work must be strictly in the "hospitality" industry. Despite widespread business support, no modifications to PFML occurred this session. Regardless, the Chamber continues to engage with our members on PFML, gathering feedback on the program’s operations and impact.
INFRASTRUCTURE/BONDING 2026 saw bonding priorities take center stage with $1.2B in funding allocated through the bonding bill. Local projects, including the East Zumbro Sewer & Water Project , secured $13.2M in state funding to upsize sewer and water infrastructure in Southeast Rochester, opening over 1,000 acres for future development. The Hwy 14/CSAH 3 & 5 Interchange Project also received $8M from the bonding bill, which covers right of way acquisition and environmental review. When completed, this project will open over 300 acres for commercial and industrial development. Additionally, 15th Ave NE in Stewartville received $3.06M for improvements while the History Center of Olmsted County was the recipient of $3.32M for the expansion of its facilities. REGIONAL SPORTS AND RECREATION COMPLEX Despite being approved by the legislature in 2023, Rochester’s local sales tax (LST) authority, specifically for the regional sports and recreation complex portion, was put in jeopardy this past session. HF4194 and its consideration for inclusion in the omnibus tax bill, would have removed the Regional Sports and Recreation Complex as an approved use of LST funds. This bill would have set a dangerous precedent, undermining voter-approved authorization and exposing the City to significant legal challenges.
AUGUST 2026 — ROCHESTER AREA CHAMBER OF COMMERCE ADVANTAGE MAGAZINE | 11
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