Proposed Minnesota bill may increase fertilizer tax

The Minnesota House of Representatives will consider a bill that would require a new fee on all nitrogen fertilizer sold or distributed in the state to provide funds to secure safe drinking water for residents, while also adding to a fertilizer inspection fee.

HF 4135 would add a drinking water fee of 99¢ per ton of nitrogen sold or distributed in the state for 2024 and 2025, enforced by the Minnesota Department of Agriculture (MDA). The MDA's revenue from this tax would be bestowed upon the health boards of Minnesotan counties based on the number of private drinking wells with nitrate levels excess of 10mg/liter (l), which is the health risk limit for drinking water, according to the Minnesota Department of Health.

The fee would increase to $1.39/t in 2026 for anhydrous ammonia only. If nitrogen sales continue to increase year over year in 2027, the fee would rise at the MDA's discretion.

The new tax would include DAP and MAP, urea, liquid fertilizer with 28pc and 32pc total nitrogen, and anhydrous ammonia.

The bill also calls for the current 40¢/t fertilizer inspection fee to increase to 44¢/t in 2025 and then to 70¢/t in 2026. This tax would come from the existing Agricultural Fertilizer Research and Education Council (AFREC) fee.

An analysis and report would be required from the Minnesota Pollution Control Agency (MPCA) of the sewer sludge used for fertilizer for polyfluoroalkyl substances — long-lasting chemicals which can lead to a variety of health effects, according to the Environmental Protection Agency. The MPCA would then report results and recommendations to the legislature by 1 February 2025.

Minnesota Farm Bureau opposes the bill along with 10 southeast county farm bureaus. "We already have 3 taxes on fertilizer," expressed the bureau's President Dan Glessing in the committe hearing on 29 February.

The bill was originally introduced by Representatives Hansen (D) and Rehm (D) on 22 February, recently adding Representative Fischer (D) as an author on 4 March. "Average taxpayers have been on the hook to subsidize those who use fertilizer, said Hansen. "My bill would add a dedicated source paid by users to address the drinking water crisis."

The bill was meant to be heard today by the Environment and Natural Resources Finance and Policy committee, but was removed from the agenda.

By Meghan Yoyotte