Lawmakers pass $700 million bonding package funding water, road projects across state

UPDATED 10:10 p.m. 

Minnesota lawmakers unveiled and passed a pair of capital investment packages during Monday’s special session.

The agreements, which focus on transportation and water infrastructure, would fund those projects and more with about a net $700 million, including more than $646 million in proceeds from bond sales, $73 million from the transportation fund and $6.5 million in cash. Cancellations from previous appropriations help lower the overall total.

SSHF17, the cash bonding bill, is sponsored by Rep. Fue Lee (DFL-Mpls). It was passed 96-34 by the House, as amended to allow the Center for Communication and Development grant to go toward predesign and construction.

Rep. Mary Franson (R-Alexandria), sponsors SSHF18, the general obligation bonding bill that was passed 116-15 by the House. An approved amendment would allow the Alexandria Runestone Community Center and the City of Redwood Falls grants to go toward predesign and construction.

Both bills are expected to be passed by the Senate Monday night and sent to the governor.

[MORE: View the general obligation, General Fund spreadsheets]

“This is a good bill … and this is the way we should do bonding,” said Rep. Jon Koznick (R-Lakeville). “Fund the programs and the needs of the state of Minnesota. Take out a lot of the politics. This is a good clean bonding bill that addresses the needs of Minnesota across the state.”

Included in the general obligation proposals is:

• $80 million for transportation purposes, including $42 million for the local road improvement program and $31 million for bridge replacements;
• $67 million to construct a Southern Minnesota regional office and laboratory in Mankato for the Bureau of Criminal Apprehension;
• $60 million in asset preservation for both Minnesota State and the University of Minnesota;
• $44 million for natural resources purposes, including $33 million for asset preservation and $9 million for flood hazard mitigation;
• $16 million to the Metropolitan Council with $15 million going to the inflow and infiltration public infrastructure grant program;
• $12 million to the Minnesota Pollution Control Agency with $6 million going to statewide drinking water contamination mitigation;
• $11 million for a new animal hospital at the Minnesota Zoo; and

• $750,000 for library construction grants.

Ten projects would be funded with cash, including $4 million to extend skate park grants for eight locations, $3.5 million for a wastewater facility in Litchfield, $1 million for law enforcement school entry devices, and $325,000 for a U.S. Capitol statue of Hubert H. Humphrey.

“We made significant investment into water to help our communities who are facing water issues across the entire state of Minnesota and we made significant investment into our transportation system, whether that’s highways or roads and bridges,” Lee said.

The Legislature last passed a bonding bill in 2023 to the tune of $2.6 billion. The House approved a $71 million cash-only bill in 2024, but the Senate did not.

“It’s never easy to get a bonding bill,” said Sen. Sandra Pappas (DFL-St. Paul), the Senate sponsor of each bill said at a Monday meeting of the Capital Investment Working Group. “Even though it looks like kind of a skinny bill compared to [2023], it’s still really important to the state. The infrastructure that we’re funding in here, for asset preservation, for water, for roads, for housing everything is really important to the people of Minnesota.”

Water projects

As many communities continue to request funding for clean water and water infrastructure projects, the agreement would establish a statewide drinking water contamination program to provide grants for projects that mitigate hazardous materials in drinking water sources. Initial funding would give the program $87 million: $43.5 million each for drinking water grants and wastewater grants.

The bill would also create an emerging contaminants grant program. Funded with $18 million, it would target drinking water projects to address contaminants that exceed health advisory levels.

Housing

Two public housing programs would be created and funded with $29 million.

A public housing rehabilitation program would be authorized with $26 million to develop or acquire housing owned by a city or county. A cooperative manufactured housing grant program would also be established and funded with $3 million for manufactured housing development projects across the state.