Legislature Wraps up 2023 Session With Passage of $2.6 Billion Infrastructure Package

The Legislature adjourned the first regular session of the biennium after completing work on two bills that combine cash and bonding to make capital investments in hundreds of projects and fund accounts that distribute water infrastructure, housing, economic development, and transportation grants.

The Legislature completed the 2023 session late in the evening of May 22. Although 2023 was a biennial budget-setting session, there was great pressure to pass a robust capital investment bill after not passing a meaningful one since 2020. Passage of the $2.6 billion package was one of the last actions of the Legislature, which is typical of capital investment bills.

End of session deal

As the May 22 constitutional adjournment deadline approached, passage of a capital investment bill had been in question. Although the House passed a borrowing measure on a vote of 91-43 and a cash bill on a vote of 91-43 in March, the borrowing bill did not secure enough votes for a needed supermajority in the Senate, and the body did not take up the cash bill. Since then, negotiations on budget, tax, and policy bills took center stage and capital investment discussions seemingly moved to the back burner.

The bills that ultimately passed May 22, HF 669 and HF 670 (both authored in the House by Rep. Fue Lee, DFL-Minneapolis, and in the Senate by Sen. Sandra Pappas, DFL-St. Paul), are made up of three primary finance components:

• $1.5 billion in borrowing.
• $1.1 billion in cash.
• $300 million in general fund spending for nursing homes. The nursing home investment provision was key to securing support from Republican legislators.

Spending details

The League has been tracking several provisions in the bills. Some key provisions in the final package include the following:

Housing and economic development

• $41.868 million in general obligation bond resources and $30.132 million in general fund appropriations to finance the costs of rehabilitation to preserve public housing.
• $3 million in general obligation bond resources for the Greater Minnesota Housing Infrastructure Program.
• $10 million in general obligation bond resources for the Business Development Public Infrastructure Grant Program.
• $1.5 million in general obligation bond resources for Innovative Business Development Public Infrastructure grants.

Transportation

• $79 million, plus additional funds for earmarked projects, for the Local Road Improvement Program.
• $67 million for the Local Bridge Replacement Program.
• $12 million for the Local Road Wetlands Replacement Program.
• $2.4 million for the Safe Routes to School Infrastructure Program.

Environment

• $49.7 million for Flood Hazard Mitigation.
• $10.5 million for community tree planting.
• $12 million for metro area inflow and infiltration.

Public Facilities Authority

• $41 million in matching funds for federal revolving loan programs.
• $87.2 million for Water Infrastructure Grants ($32.5 million drinking water/$52 million clean water).
• $80 million for Point Source Implementation Grants.
• $293 million in specified local and regional water and wastewater projects.

The package contains hundreds of earmarks for projects requested by cities, and they are listed on the combined cash and borrowing spreadsheet (pdf).

The cash bill passed on a vote of 35-15 in the Senate and 78-43 in the House. The borrowing measure passed on a vote of 56-11 in the Senate and 97-35 in the House.

The capital investment bills, tax bill, and other budget and policy bills of interest to cities will be thoroughly summarized in the 2023 Law Summaries which are scheduled for publication in late June.

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