$700 million capital investment law funds transportation, water projects throughout Minnesota

Funding capital projects throughout the state, a bonding law focused on water infrastructure and transportation projects, totals $700 million. It includes more than $649.3 million in proceeds from bond sales and $78 million from the transportation fund. Cancellations from previous appropriations help lower the overall total.

Sponsored by Rep. Mary Franson (R-Alexandria) and Sen. Sandra Pappas (DFL-St. Paul), the law took effect June 15, 2025.

2025 Special Session: SSHF18*/SSSF21/CH15

Water projects

Many communities continue to request funding for clean water and water infrastructure projects. The law will establish a statewide drinking water contamination program to provide grants for projects that mitigate hazardous materials in drinking water sources. Initial funding will provide $43.5 million each for wastewater projects on the Pollution Control Agency’s project priority list and the same amount for drinking water projects on the Health Department’s project priority list.

The law will also provide $18 million for a new emerging contaminants grant program to “award grants to a governmental unit for up to 50 percent of the cost of drinking water infrastructure projects to address a confirmed exceedance of a health advisory level for a drinking water emerging contaminant as defined by the Environmental Protection Agency.”

Housing

Two public housing programs will be funded with $29 million. A public housing rehabilitation program will be authorized with $26 million to rehab and preserve public housing — defined as “for low-income persons and households financed by the federal government and publicly owned” — and a cooperative manufactured housing grant program is established and funded with $3 million for “grants to counties and cities to provide up to 50 percent of the capital costs of housing infrastructure necessary for an eligible cooperative manufactured housing development project.”

Transportation

Of the $80 million dedicated to transportation purposes, $47 million is for the local roads, with $5 million of the appropriation designated for township roads; $31 million for bridge replacements; $1 million for highway rail grade crossing construction; and $1 million to the Rail Service Improvement Program.

Asset Preservation

The law provides $60 million in asset preservation to both Minnesota State and the University of Minnesota, $33 million for the Department of Corrections, $33 million for natural resources; $7.5 million to the Department of Veterans Affairs, $7.5 million at facilities operated by Direct Care and Treatment following the department's separation from the Department of Human Services, $5 million for the National Sports Center in Blaine; $4 million for historic sites, $2.74 million to the Minnesota Zoo, $1.26 million for the Perpich Center for Arts, and $1 million for Minnesota State Academies for the Deaf and Blind.

Other funding includes:

• $67 million to construct a regional office and laboratory in Mankato for the Bureau of Criminal Apprehension;

• $55 million for a new 50-bed psychiatric residential treatment facility at the Anoka Metro Regional Treatment Center;

• $39 million to match federal capitalization grants for the clean water revolving loan program;

• $32 million for the Point Source Implementation Grants Program;

• $24 million for a new transportation center at Alexandria Technical and Community College;

• $15 million for the inflow and infiltration public infrastructure grant program;

• $11 million to build a new animal hospital at the Minnesota Zoo;

• $8.5 million for ADA improvements in a pedestrian tunnel at the Capitol Complex;

• $7.4 million for a programming and support space at the Lino Lakes Correctional Facility;

• $6 million for statewide drinking water contamination mitigation;

• $6 million for Pollution Control Agency capital assistance grants;

• $5 million to acquire land and to restore, create, enhance, preserve and replace wetlands drained or filled as a result of public road construction;

• $2 million for security upgrades at the Capitol Complex;

• $1.5 million in transportation economic development infrastructure;

• $1.5 million to the Greater Minnesota Business Development Public Infrastructure Grant Program;

• $1 million for community tree planting grants;

• $1 million for the Mighty Ducks Ice Arena Grants Program;

• $1 million to the Department of Children, Youth, and Families for childhood learning facilities grants;

• $1 million for county and local history preservation grants;

• $1 million for reforestation and stand improvement on state forest lands;

• $1 million to improve accessibility to state parks, recreation areas, and wildlife management areas; and

• $750,000 for Mary C. Murphy library construction grants.

SF0571* / HF0360 / CH15