Governor Approves $1.9 Billion Bonding Bill

October 26, 2020

The League-supported measure provides funding for dozens of specific projects throughout the state, and infuses millions of dollars into accounts that will fund grants to meet local and regional infrastructure needs.

A long-awaited $1.87 billion bonding bill was passed by the House and Senate during the special session earlier this month, and Gov. Tim Walz signed the bill into law on Oct. 21.

The measure, 5th Special Session HF 1, authored by Rep. Mary Murphy (DFL-Hermantown) and Sen. David Senjem (R-Rochester), passed off the House floor on Oct. 14 by a vote of 100-34 and off the Senate floor on Oct. 15 on a vote of 64-3.

The League-supported package contains $1.36 billion in general obligation bonding and also contains tax relief provisions for farmers and small businesses, funding for low-income housing, and $31 million in supplemental general fund budget spending. Although many individual projects requested by cities were not included, the bill funds dozens of accounts that will award grants for local and regional projects on a competitive basis.

View the details of the 2020 Capital Budget (pdf)

Below are some of the accounts that benefit cities that are funded in the bill:

  • Housing infrastructure bonds (HIBs): $100 million in HIBs, which are appropriation bonds used to finance the construction and rehabilitation of qualified multifamily housing. The bill also includes policy language allowing for the use of HIBs for the acquisition, rehabilitation, and new construction of certain owner-occupied, income-limited single family homes.
  • General obligation (GO) bonds for housing: In addition to the HIB authorization, the bill includes $16M in GO bonds for the preservation and rehabilitation of public housing.
  • Local Road Improvement Program: $70 million in undesignated funding for the Local Road Improvement Program, which provides grants to assist local agencies with constructing or reconstructing local roads.
  • Local Bridge Replacement Program: $30 million for the Local Bridge Replacement Program, which fund reconstruction, rehabilitation, or removal of bridges or structures on the local system.
  • Local roads wetland replacement: $15 million in bonding and $8 million from the general fund to meet future needs and replenish current balances for state wetland banks to meet wetland replacement requirements of local government road projects.
  • Safe Routes to School Program: $3 million for the Safe Routes to School Program for grants to local governments.
  • Water and wastewater infrastructure: Over $269 million through the Public Facilities Authority for water, wastewater, and stormwater projects.
  • Flood hazard mitigation: $17 million for approved local projects to prevent flood damage.
  • Parks and trails: $20 million through the Department of Natural Resources for city park and trail projects.
  • Inflow and infiltration: $5 million through Met Council for metropolitan area inflow and infiltration grants to cities.
  • Infrastructure costs tied to business development: $13 million through the Department of Employment and Economic Development for public infrastructure grants related to economic development.
  • Local projects: $147.5 million through the Department of Employment and Economic Development for earmarked local project grants.

The Legislature failed to pass a bonding bill during the 2020 regular session and four subsequent special sessions. Passage in the fifth special session is largely attributable to the persistence of stakeholders, including the many city officials who kept pressure on lawmakers to get the bill passed.

League staff will add a summary of the law to the LMC 2020 Law Summaries and release an updated version of the publication soon.

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