HF 2887, Transportation Omnibus Bill

This $1.3 billion bill includes a historic investment in Minnesota’s transportation infrastructure, including funding for improvements to the state’s roads and bridges and enhancements to the multimodal transportation system. The bill includes the necessary matching dollars for the Infrastructure Investment and Jobs Act, invests millions in the national electric vehicle infrastructure program, and provides funding to keep Minnesota’s communities connected.

The Minnesota Sustainable Aviation Fuel (SAF) Tax Credit provides state tax credit to qualifying taxpayers for producing or blending SAF in the state between July 1, 2024, and June 30, 2030.

SAF is liquid fuel that:

- Is derived from biomass
- Is not derived from palm fatty acid distillates
- Reduces at least 50% life cycle greenhouse gas emissions

To qualify for the tax credit, you must either:

- Produce SAF, or
- Blend SAF with aviation, gasoline, or jet fuel

The SAF Tax Credit is a refundable tax credit.

Your credit amount equals $1.50 for each gallon of SAF that is both:

- Produced in Minnesota or blended with aviation, gasoline, or jet fuel in Minnesota, AND
- Sold in Minnesota to a purchaser who certifies that the SAF is for use as fuel in an aircraft departing from an airport in Minnesota



Sustainable Aviation Fuel Tax Credit

During the 2023 legislative session, Minnesota made a landmark investment in climate resilience by allocating over $100 million to a Climate Resiliency and Water Infrastructure Grant Program for local and tribal governments, along with $5 million for a Local Climate Action Grant Program. This combined funding marks Minnesota’s most substantial commitment to enhancing climate resilience. The MPCA is utilizing these funds to support Minnesota communities through planning grants that assess risks, identify options, and develop strategies for improving the resilience of stormwater and wastewater systems and overall community adaptability to climate change impacts. Additionally, implementation grants are being provided for the construction of priority projects aimed at bolstering resilience against climate-related conditions, while local climate action grants are designated for developing and executing plans that either increase resilience or mitigate local contributions to climate change.

Local Climate Action Grant Program

During the 2023 legislative session, Minnesota invested over $100 million in a Climate Resiliency and Water Infrastructure Grant Program for local governmental units and tribal governments. MPCA is using these funds to provide Minnesota communities with: planning grants to assess risk, identify options, and develop plans for resiliency of stormwater systems, wastewater systems, and overall community resilience to the impacts of climate change; implementation grants for construction of priority projects that are designed to increase resilience to conditions caused by climate change; local climate action grants to develop and implement plans of action that increase resilience or reduce local contributions to the causes of climate change.

Climate Resiliency and Water Infrastructure Grant Program

Updates land use planning requirements for local governments in the Twin Cities metro region. Comprehensive plans must include an inventory and projections pertaining to greenhouse gas emissions and vehicle miles traveled that are generated from activity that occurs within the local government's jurisdiction. The inventory and projections must include the emission sources from transportation, land use, energy use, solid waste, and, where available and applicable, livestock and agriculture. The inventory and projections must include the estimated impact of strategies, including efficient land use and compact growth, that reduce or naturally sequester greenhouse gas emissions across sectors.

Updates to Local Land Use Planning Requirements

Requires the development of an e-bike rebate program to begin on July 1, 2024.

Electric-Assisted Bicycle Rebate

The Commissioner of Transportation must convene a working group comprised of a variety of stakeholders to assist in the development of a process for the transportation GHG emissions impact assessment, an impact mitigation plan, consideration of options related to funding greenhouse gas emissions mitigation activities in conjunction with transportation capacity expansion projects, and consideration of options for alternative mitigation options.

On Feb. 2024, the work group shared recommendations for enhancing the greenhouse gas emissions impact assessment for capacity expansion projects on state highways along with considerations for managing mitigation.

Greenhouse Gas Emissions Impact Working Group

The 2023 Legislature established the Clean Transportation Standard (CTS) Work Group to study and address information gaps and opportunities related to implementing a standard in Minnesota. The work group was jointly convened by the Commissioners of Agriculture, Commerce, Transportation, and the Pollution Control Agency.

A CTS is a technology and fuel-neutral market-based policy framework that requires carbon intensity reductions for transportation fuels including gasoline, diesel, biofuels, and electricity. When structured and implemented properly, a CTS can reduce transportation greenhouse gas emissions, create green jobs, attract new investments, reduce air and water pollution, and improve soil and water health in Minnesota. A CTS could be the largest single policy for reducing carbon pollution from transportation in Minnesota.

The work group was tasked with considering a CTS program that requires an aggregate carbon intensity of transportation fuel supplied to Minnesota be reduced by 25% by 2030, 75% by 2040, and 100% by 2050 (compared to 2018 levels).

The work group met between July 2023 and January 2024. The work group's report to the Legislature was delivered on Feb. 1, 2024, and includes the work group's recommendations and suggested areas for further exploration, as well as the scenario modeling results that informed work group discussion.

Clean Transportation Standard Working Group

Prior to inclusion of a capacity expansion project in the state transportation improvement program or a metropolitan transportation improvement program, Minnesota's Department of Transportation and state metropolitan planning organizations must perform a capacity expansion impact assessment of the project. Following the assessment, the applicable entity must determine if the project conforms with the GHG emission reduction targets set by the Department of Transportation and VMT reduction targets established in the statewide multimodal transportation plan. If the applicable entity determines that the capacity expansion project is not in conformance, the applicable entity must alter the scope or design of the project so it meets requirements established under this section, interlink sufficient impact mitigation, or halt project development and disallow project inclusion in transportation improvement programs.

Minnesota DOT must also establish greenhouse gas emissions reduction performance targets to assist in this effort.

Sustainable Aviation Fuel Tax Credit

Action History

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