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Bill Summary · HF 4948

Summary of HF 4948 (2025-2026) – Plastic Bottle Excise Tax to Fund Water Infrastructure

Purpose and Intent

  • Establish a new excise tax on taxable plastic bottles to fund water infrastructure projects.
  • Create a dedicated water infrastructure account within Minnesota’s special revenue fund.
  • Provide for the ongoing use of tax revenue and other eligible funds to support public water facilities and related infrastructure.
  • Set an expiration for the tax and related provisions, with a defined post-tax distribution period.

Key Provisions

Section 297H.50 – Plastic Bottles Excise Tax

  • Definitions:
    • “Beverage” excludes certain items (notably drugs under federal law and infant formula).
    • “Bottle distributor” is the first seller of a taxable plastic bottle to a Minnesota retailer.
    • “Taxable plastic bottle” is a formed/molded plastic bottle, primarily plastic resin, sealed, containing a beverage, and under 3 liters when full.
  • Tax Imposition:
    • An excise tax is imposed on bottle distributors for each taxable bottle sold to a retailer in Minnesota.
    • Tax is payable quarterly in the form and manner prescribed by the Commissioner of Revenue.
  • Tax Rate:
    • The bill specifies a rate of “.......” cents per taxable plastic bottle (the exact amount is to be filled in by the legislative process).
  • Use of Proceeds:
    • All tax proceeds are deposited into the Water Infrastructure Account (Sec. 297H.51).
  • Expiration:
    • The plastic bottle excise tax section expires on December 31, 2031.
  • Effective Date:
    • Effective January 1, 2027.

Section 297H.51 – Water Infrastructure Revenue Distributions

  • Account and Management:
    • Establishes the Water Infrastructure Account in the state treasury’s special revenue fund.
    • Account is funded by tax proceeds, additional appropriations, and other permissible receipts.
    • Earnings (interest, dividends, etc.)credited to the Account.
    • The Public Facilities Authority Board manages the Account.
  • Appropriations and Eligible Expenditures:
    • Money in the Account is appropriated to the Board for eligible projects.
    • Eligible expenditures include Public Facilities Authority projects under specified statute sections (446A.072, 446A.073, 446A.077, 446A.082) and other board-approved water infrastructure projects.
  • Expiration:
    • The section expires once all revenues in the Water Infrastructure Account have been distributed in grants, but no later than January 1, 2032.
  • Effective Date:
    • Effective January 1, 2027.

Affected Parties

  • Bottle Distributors: liable for the new excise tax on taxable plastic bottles sold to Minnesota retailers.
  • Retailers/Consumers: indirectly affected through higher costs per taxable bottle passed along by distributors.
  • Public Facilities Authority and Minnesota State Treasury: responsible for administering the new account and approving eligible water infrastructure projects.
  • General Public: potential long-term benefits from funded water infrastructure improvements.

Timing and Procedural Aspects

  • The bill was introduced and referred to the House Committee on Taxes (April 2026).
  • Effective date for the tax and related provisions is January 1, 2027.
  • The tax and dedicated account are set to expire after all revenues have been distributed and no later than January 1, 2032 (with the base tax expiration date December 31, 2031 for the tax provision itself).

Notes

  • The exact tax rate (cents per bottle) is not specified in the text provided and would be determined during the legislative process.
  • The framework mirrors a dedicated funding mechanism: a tax on a specific consumer product to finance public infrastructure needs, with oversight by the Public Facilities Authority and specific statutory project authorizations.

If you’d like, I can add a brief comparison to similar bottle taxes in other states or draft a plain-language one-page explainer for the public.

Compiled from official sources — confirm details with the bill’s official record.

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