Governor Walz Issues Executive Order 26-03 Aimed at Environmental Permitting Reform in Minnesota

Minnesota’s latest attempt to improve long‑criticized inefficiencies in processing environmental permit applications came in the form of an executive order signed by Governor Tim Walz on February 13, 2026. Executive Order 26‑03, “Protecting Minnesota’s Environment and Health and Supporting Economic Opportunity through Permitting Reform,” includes several provisions with the potential to improve the permitting process. However, many largely reiterate or modestly refine existing agency obligations, or establish new goals and initiatives with minimal accountability for the agencies charged with implementing them. And although the Order for the first time assigns some responsibility for permitting efficiency to an agency other than the Minnesota Pollution Control Agency (MPCA), the limited role given to the Department of Employment and Economic Development (DEED) seems unlikely, on its own, to produce significant changes. Executive Order 26‑03 becomes effective 15 days after publication in the State Register and filing with the Secretary of State.

To better understand how Executive Order 26-03 may impact environmental permitting for your business, please contact Fredrikson’s environmental team.

Executive Order 26-03 is discussed in more detail below.

Prior Attempts to Improve Permitting Efficiency in Minnesota

Minnesota’s environmental permitting system has long been criticized as inefficient. In 2011, the Legislature attempted to address the problem by adopting Minn. Stat. § 116.03, subd. 2b, which established nonbinding “goals” for permit decisions: 90 days for Tier 1 permits and 150 days for Tier 2 permits (more complex, individual permits), measured from the submission of a complete application. The statute also requires MPCA to publish an annual permitting efficiency report by August 1 assessing whether those goals were met and, if not, explaining the reasons for delay.

Despite these statutory goals, MPCA’s permitting efficiency has remained persistently poor, particularly when compared to peer states. A 2024 report by the Minnesota Chamber of Commerce highlighted the magnitude of the problem, finding that Minnesota’s environmental permit review times can be up to six times longer than those in other Midwestern states, especially for Tier 2 permits. The report further concluded that these delays contributed to nearly $1 billion in lost economic activity between 2017 and 2022.

Against this backdrop, the Legislature revisited Section 116.03, subd. 2b during the 2025 special session. The resulting amendments, however, were modest. They included incremental changes such as narrowing MPCA’s ability to reject permit applications as incomplete and expanding the content requirements for MPCA’s annual efficiency reports. While these revisions acknowledged the ongoing problem, they did little to alter the underlying structure, incentives, or accountability mechanisms that had allowed permitting delays to persist.

Executive Order 26‑03: The Details

Executive Order 26-03 is divided into two sections. Section 1 is directed at MPCA. Section 2 is directed at DEED, acting through Minnesota Business First Stop (MBFS), which describes itself as an interagency organization offering permitting and regulatory assistance to complex business location and expansion projects.

Directives to MPCA

Perhaps the most impactful directive in Section 1 requires MPCA to implement a two‑stage air permitting process by March 1, 2026, consistent with Minn. R. 7007.0750, subp. 7. (Pointedly, the rule already requires MPCA to take this two-stage approach.) Under the rule, for new or amended Part 70 permits that include construction authorization under the New Source Review (NSR) program, MPCA may finalize the NSR construction‑related provisions immediately after completion of the applicable public notice and comment period, while deferring final action on the Part 70 operational provisions until after the mandatory 45‑day EPA review period for Part 70 provisions. The implementation of this two‑stage approach could allow permittees to begin construction of a stationary source or modification — at least to the extent authorized under the NSR provisions — while EPA reviews the Part 70 operating permit provisions.  

Other MPCA directives in Section 1 are less likely to significantly affect permitting efficiency. By March 31, 2026, MPCA must “launch an initiative to reduce permitting timelines,” which includes revisiting the existing permitting efficiency goals in Minn. Stat. § 116.03, subd. 2b, incorporating those goals into MPCA’s 2024–2028 strategic plan, modernizing the permit application process through web‑based formats and artificial intelligence, establishing a permitting efficiency technical advisory group, and submitting an annual progress report to the Governor by October 1, 2026. While these measures may improve process visibility and internal planning, they largely reiterate existing expectations and don’t meaningfully constrain MPCA’s discretion in issuing permits.

Section 1 also directs MPCA to enhance its online Permit Application Tracker by April 1, 2026, so that “anyone may track the status of open permit applications.” Again, however, much of this information is already available, and the directive appears aimed more at transparency than at reducing review times.

Finally, the Order requires MPCA to publish a list of consultants that have successfully submitted complete permit applications at least 80 percent of the time — an unusual provision that shifts some focus away from agency performance and towards the consultants hired by project proponents. 

Directives to DEED

Section 2 of the Order is notable primarily because it assigns a limited role in permitting reform to an agency other than MPCA.

Specifically, DEED, acting through MBFS, must convene at least two meetings per year focused on Minnesota’s overall regulatory environment and on improving the customer experience for project proposers seeking environmental permits. In addition, MBFS must submit a report to the Governor by December 1, 2026, identifying concerns raised by businesses seeking environmental permits, highlighting permitting efficiency initiatives in other states, identifying potential permitting barriers for emerging industries, and offering recommendations for reducing permitting timelines and improving customer experience.

While these measures may help surface business concerns and comparative information, they do not alter MPCA’s permitting authority or impose any binding obligations on the agency responsible for issuing permits. As a result, they are unlikely, on their own, to significantly increase permitting efficiency.

For more information, contact Jeremy P. Greenhouse.