Highlights From the 2026 Legislative Session
The 2026 legislative session adjourned on May 18 at the constitutional deadline following a closely divided session marked by a tied House, a narrow Senate majority, and significant negotiation on budget, tax, and policy issues.
For Minnesota’s technology sector, the session was defined less by sweeping new technology policy and more by a series of high-impact proposals that would have shaped how technology companies operate, innovate, and engage with customers in Minnesota.
Throughout the session, MnTech focused on advancing a policy environment that supports innovation, protects consumers, and preserves Minnesota’s long-term competitiveness. In several cases, proposals that raised significant concerns for the technology ecosystem did not advance. In others, lawmakers enacted narrower approaches that addressed specific public concerns while avoiding broader unintended consequences. The key developments are summarized below.
Ban/Liability Regime for AI Chatbots
- Proposal: Lawmakers considered language that would have created operating restrictions and potential liability for certain AI chatbot systems, particularly those used by minors or designed for highly interactive engagement.
- Outcome: The proposal was not included in final legislation.
- Why it matters: As drafted, the language risked sweeping in a broad range of legitimate tools, including customer-service applications, educational platforms, and general-purpose assistants.
MnTech position: MnTech opposed the provision because it was overly broad and could have limited innovation while creating uncertainty for companies developing and deploying responsible AI tools.
Parental Consent and Design Limits for Minors’ Social Media Accounts
- Proposal: Legislators advanced requirements for how social media platforms handle accounts for younger users, including parental consent, limits on certain design features, advertising restrictions, and privacy protections.
- Outcome: The legislation was enacted and takes effect July 1, 2027.
- Why it matters: The law reflects continued interest in youth online safety and will require affected platforms to adjust product, privacy, and advertising practices for minor users in Minnesota.
MnTech position: MnTech supports thoughtful approaches to youth online safety and will continue monitoring implementation to ensure compliance expectations are clear, workable, and appropriately tailored.
Limits on Automated Processes in Insurance Prior Authorization
- Proposal: Lawmakers considered limits on the use of automated processes in insurance prior authorization decisions, with particular focus on ensuring meaningful human review when coverage is denied.
- Outcome: Final legislation prohibits the exclusive use of automated processes for adverse benefit determinations and requires clinician review.
- Why it matters: This issue illustrates how policymakers are approaching automated decision-making in high-stakes settings. Even when legislation is not framed explicitly as AI regulation, it can still shape the use of automated tools in practice.
MnTech position: MnTech supports clear, targeted policymaking that addresses specific harms without unnecessarily restricting responsible technology adoption.
Digital Advertising Tax
- Proposal: A proposal was introduced to tax digital advertising revenue as a new state revenue source.
- Outcome: The proposal did not advance and was not included in the final tax package.
- Why it matters: Taxes on digital advertising can create downstream costs for businesses of all sizes, including Minnesota companies that rely on digital platforms to reach customers, recruit talent, and grow.
MnTech position: MnTech opposed the proposal because it would have added cost and complexity to Minnesota’s innovation economy and risked undermining business growth and competitiveness.
Social Media Tax
- Proposal: The Governor’s supplemental tax proposal included a new tax on social media platforms.
- Outcome: The proposal was not included in final legislation.
- Why it matters: Proposals of this kind can affect not only large platforms but also the many Minnesota organizations, employers, and community groups that depend on those tools for outreach, engagement, and communication.
MnTech position: MnTech opposed the proposal because of its potential economic impact on Minnesota’s broader technology ecosystem and the businesses and organizations that use these platforms every day.
Nondisclosure Agreement Restrictions for Data Center Development
- Proposal: Lawmakers considered restricting the use of nondisclosure agreements by local officials and staff in connection with development projects, including data center proposals.
- Outcome: The proposal did not become law this session.
- Why it matters: The issue sits at the intersection of public transparency, local development, and Minnesota’s approach to supporting major technology infrastructure investment.
MnTech position: MnTech will continue engaging on data center policy to support balanced approaches that provide transparency while preserving Minnesota’s ability to compete for significant technology investment.
Looking Ahead to 2027
As MnTech looks ahead to the 2027 session, our focus will be on proactive engagement with policymakers, members, and partners to advance practical, balanced technology policy. That includes helping decision-makers better understand how proposed legislation may affect innovation, investment, talent, and competitiveness in Minnesota. We will continue advocating for policies that support responsible technology adoption while strengthening Minnesota’s position as a place where technology companies can grow and lead.
