Impasse over 'clean cars' rule continues to jeopardize Minnesota environmental funding

Millions of dollars for environmental efforts around Minnesota, from fighting off invasive carp to operating state parks, remain in limbo despite a broad state budget agreement because of the ongoing impasse over new vehicle emissions rules.

Senate Republicans have blocked the omnibus environment bill, determined to stop Minnesota from following California's lead in tightening tailpipe emissions standards and requiring automakers to send more electric vehicles to the state for sale.

That package of environmental legislation sets the budgets for the Minnesota Pollution Control Agency (MPCA), the Department of Natural Resources (DNR) and the state Board of Water and Soil Resources, as well as other institutions already bleeding heavily from COVID-19 revenue losses, such as the Minnesota Zoo and the Science Museum of Minnesota.

The impasse also threatens more than 150 projects around the state financed by the Environment and Natural Resources Trust Fund, whose funding from lottery proceeds is constitutionally dedicated.

"I don't understand why this is being held hostage," said Della Schall Young, newly elected citizen chairwoman of the commission advising the trust fund spending. "This is dedicated funding that is based on overwhelming support from the citizens of Minnesota."

If a compromise isn't struck by the end of June, the DNR might have to close state parks, as it did for 21 days during the 2011 state shutdown.

Work on environmental issues ground to halt Saturday morning when no Senate Republican members showed up for the last scheduled conference committee meeting.

The overarching state budget agreement announced Monday increases total spending for the environment by $30 million for the biennium. That is less than what Gov. Tim Walz and the DFL-led House had asked for, but much more than the $20 million in cuts the Republican-led Senate had sought, said Judy Erickson, a veteran environmental lobbyist with Conservation Strategies Inc.

With the legislative session over, unfinished business moves to informal working groups. It's unclear whether those will be open to the public via Zoom. That work is supposed to wrap up May 28. A special legislative session is expected to convene in June.

"It's a bit of a waiting game," Erickson said.

When asked about the environment impasse Monday, Senate Majority Leader Paul Gazelka said both sides are passionate.

"We just have a disagreement about the emissions standards," Gazelka said, referencing the MPCA's new clean cars rule. "We're looking to see if there's a solution there."

Walz, whose DFL administration has championed the clean cars rule, said negotiations will continue: "We'll see what they come up with."

MPCA Commissioner Laura Bishop declined to comment.

An administrative law judge this month approved the MPCA's clean cars rule, clearing it for adoption within six months. But Republican lawmakers see the program as regulatory overreach and have strenuously opposed it.

Rep. Rick Hansen, the South St. Paul DFLer leading the House in the environment negotiations, said Tuesday that the Senate GOP has stuck to its promise not to negotiate unless the clean cars rule is changed. "It's going to be extremely difficult," Hansen said. "This is unprecedented, unnecessary and unproductive. We can't let the parks shut down."

Sen. Bill Ingebrigtsen, a Republican from Alexandria leading the Senate on the matter, declined to comment.

The standoff threatens to cut off funding for hundreds of popular outdoor programs, pollinator recovery projects and research into toxic algae blooms and other water and soil problems.

And it compounds deep problems for the Environment and Natural Resources Trust Fund. Senate Republicans blocked the fund last year from spending $61 million.

Now an additional $71 million is held up. The combined $132 million supports 165 projects around the state and 745 jobs, said Becca Nash, director of Legislative-Citizen Commission on Minnesota Resources that recommends projects for legislative approval.

Work at risk of losing all funding includes the Voyageurs Wolf Project and the University of Minnesota's research lab for fighting off terrestrial invasive pests such as the emerald ash borer, which is killing millions of trees throughout the state, and the brown marmorated stink bug, which can devastate corn and soybean crops.

If the $61 million that wasn't spent over the past year is not cleared by the end of June, it cannot be spent and must be returned to the trust fund's main account, back to generating interest. Because of limits on how much of the trust fund's value can be spent each year, that chunk of funding effectively disappears.

"If it gets held up again, those projects are gone," Nash said.

Steve Morse, executive director of the Minnesota Environmental Partnership, called the trust fund hit "just one of the most onerous" aspects of the far-reaching bill.

"People expect our leaders to work together and do their basic job," Morse said. "This is a fundamental breakdown of what is really a simple task."

Senate Republicans also challenged MPCA authority elsewhere in the bill. For example, they sought to overturn new requirements the agency added to feedlot permits for large hog operations and other animal farms.

The MPCA is seeking to control nitrate leaching from manure spread on cropland when the ground is frozen or covered in snow. Farmers would be required to either plant cover crops or take other measures to limit nitrate loss when spreading manure on the frozen soil.

The Senate version of the bill gutted those changes.

Manure becomes a problem when spread on frozen ground because it can sit on the surface until spring, when rain washes it into rivers and lakes, causing toxic algae blooms and dead zones, said Brian DeVore of the Land Stewardship Project, an organization that advocates sustainable farming practices.

"Manure can be a source of fertility, and it can be a waste product to get rid of," he said. "When you're dealing with massive amounts of manure, and you can't haul it and you can't store it anymore, you become almost like a city that's trying to get rid of sewage."

Staff writer Briana Bierschbach contributed to this story.