This year’s bonding bill (HF 18) made enormous progress in ensuring that Minnesota will continue to be a healthier, safer, better-educated, and more prosperous place to live for everyone. The 2025 bonding bill provides $700 million in infrastructure investments across the state, and far exceeded the 3/5 threshold needed for passage, receiving strong bipartisan support by a 57-10 vote. The smaller, cash appropriations bill (HF 17), passed 37-30.
Note: Jack Fischer, Capital Investment CA, made significant contributions to this section.
State Debt and Budget Guidelines
In approximately mid-session, with the support of committee members and DFL leadership, Capital Investment Committee Chair Pappas advanced the idea of a bold, $1.35 billion bonding bill that would have gone much further to address investment shortfalls across the state, and that would have funded a number of much-needed local projects. While initially supported by co-chair Housley, GOP leadership opposed this approach and directed Sen. Housley to support the
Governor’s proposed $700 million cap.
The $700 million target for bonding is determined, in part, by MMB’s use of a set of three debt “guidelines.” Over the course of the session, Chair Pappas held a number of informational hearings with the three nation-wide ratings agencies that rate Minnesota’s (and others’) creditworthiness. Those hearings resulted in MMB agreeing to revisit the state’s arcane debt guidelines. Specifically, Guideline 3 has recently led to our borrowing capability being somewhat artificially restricted. This was the first time this has happened since the current guidelines were implemented more than a decade ago.
Capital Investment Highlights
Just over 30% of the total bonding bill is for asset preservation, funds that go to every corner of Minnesota, and help keep our public goods, buildings, and lands in an operational state – saving money long term, by keeping what we have in operating condition. Before passage of this bill, statewide deferred maintenance needs in state-owned buildings and properties exceeded $2 billion. This bill makes significant progress is addressing those needs.
The largest single investment made in the bill is $120 million in Higher Education Asset Preservation and Replacement (HEAPR) funding, which is split evenly between the University of Minnesota and Minnesota State Colleges and Universities systems. Minnesota State will also get an additional $16 million specifically for the Alexandria Technical College project. Minnesota State will be required to pay for a third of the project cost ($8M) through user financing.
The bill also includes $67 million to build a new Bureau of Criminal Apprehension building to be located in Mankato that will primarily serve Southern Minnesota. This will increase capacity for law enforcement to store and test evidence, reduce unnecessary driving/mailing costs, and increase responsiveness to victims of crime and their communities. This was a Governor’s priority but was also broadly supported by state and local officials and members of law enforcement.
Another significant investment with far-reaching impact is $55 million for constructing a new Miller building on the DHS campus in Anoka. Paired with $20 million from DHS, this project creates desperately needed beds and capacity for individuals struggling with mental illness. Currently, many of these individuals are being held in local jails, which is expensive, inhumane, and does nothing to treat underlying health needs. Counties, sheriffs, and mental health advocates are strong supporters of this provision.
Overview of 2025 Bonding Projects
| $120M | HEAPR Both the University of Minnesota and Minnesota State Colleges and Universities systems will receive $60 million. Minn State will also get anadditional $16million specifically for the Alexandria Technical College project. Minnesota State is required to pay for a third of the project cost ($8M) through user financing. |
| $67M | Bureau of Criminal Apprehension – Mankato Builds a new BCA, primarily covering Southern Minnesota. This will increase capacity for law enforcement to store and test evidence, reduce unnecessary driving/mailing costs, and increase responsiveness to victims of crime and their communities. |
| $55M | Miller Building – Anoka Funds the demolition and construction of a new Miller building in Anoka, Minn., for Direct Care and Treatment. In addition to the $20 million appropriated in the Human Services bill, this $75 million project creates desperately needed beds and capacity for individuals struggling with mental illness. |
$33M | DNR Asset Preservation Funds a significant number of asset preservation projects in some of our most treasured state parks and publiclands, from DNR buildings, to bridges in parks, to fish hatcheries and drop toilets. |
| $1M | Improving Accessibility at State Parks DNR program to renovate parks to make them more accessible, a portion of this is expected to flow to Ft. Snelling State Park |
| $18M | Emerging Contaminants Grant Program Establishes a new state program, in partnership with a federal program, to provide grants to municipalities thatare dealing with emerging contaminants such as PFAS or Manganese. Some of these funds are expected to go to Hastings for PFAS mitigation. |
| $26M | Public Housing Rehabilitation – Statewide This investment in public housing continues the work done in the 2023-24 biennium to restore, renovate, and rehab existing public housing units so they can continue their useful life as critical low-income housing. This is a Request for Proposal program. |
| $2.439M | Local Public Housing – Revolving Loan Fund This Senator Boldon bill establishes a new MHFA program to support locally owned and controlled deeplyaffordable public housing. This initial investment will create a revolving loan fund for local units of government to draw from to create new public housing units |
| $15M | Inflow and Infiltration – Metropolitan Council Grant Program This is a metro-specific competitive grant program to assist local units of government with aging water/sewer infrastructure to maintain and enhancetheir water infrastructure. This is a Request for Proposal program. |
| $11M | Major Local Bridge Replacement Program This program for major local bridges represents a $9 million investment to finish the Hennepin Avenue bridge, and a $2 million investment for the Nicollet Avenue bridge. |
| $11M | Minnesota Zoo Animal Hospital The animal hospital at the Minnesota Zoo will become a regional asset to the upper Midwest. It will increase theZoo’s veterinary capacity, as well as create new educational opportunities for veterinary science students. |
| $2.74M | Minnesota Zoo Asset Preservation For the Zoo to maintain aging infrastructure. |
| $6M | Dakota/Scott County – MPCA Capital Assistance Program This program will fund the integrated solid waste and recycling facility for Dakota and Scott Counties, serving theSouthern Metro. |
| $7.4M | Lino Lakes Prison – Treatment & Programming Expansion This will increase treatment and programming opportunities at the Lino Lakes Prison, which is desperately needed, especially in light of the Stillwater Prison closure. |
Additional Highlights
In addition to the broad-reaching statewide investment projects noted above, a number of other projects and new programs will receive funds via the bonding and cash appropriations bills.
Numerous water, road, and bridge infrastructure projects and programs will be supported by funds that flow through state agencies. In some cases, it is possible to identify recipients of competitive grants based on their ranking on agency project priority lists. In other cases, further steps must be taken by applicants to attain funds. In those cases, we are unable to project who will receive funds for those programs and projects.
Below is a summary of a number of both new and existing projects and programs that were supported or created by the 2025 bonding process. This is not an exhaustive list of projects that may be funded by or eligible for funding.
| Competitive Grant Programs Funded/Established | |||
| Program | Agency | Eligibility | Appropriation |
| Public Housing Rehabilitation | PFA | Statewide | $26,000,000 |
| Emerging Contaminants | PFA | Statewide | $18,000,000 |
| Inflow & Infiltration | Met Council | Metro Area | $15,000,000 |
| Local Road Wetlands Replacement | BWSR | Statewide | $5,000,000 |
| Manufactured Housing Infrastructure | MHFA | Statewide | $3,000,000 |
| Local Public Housing Revolving Loan | MHFA | Statewide | $2,439,000 |
| Greater MN Business Development | DEED | Greater MN | $1,500,000 |
| Transportation Economic Development | DEED | Statewide | $1,500,000 |
| County/Local History Preservation Grants | Historical S. | Statewide | $1,000,000 |
| Early Childhood Facilities | DCYF | Statewide | $1,000,000 |
| Emerald Ash Borer Grants | Met Council | Metro Area | $1,000,000 |
| Reforestation | DNR | State Forest Lands | $1,000,000 |
| Emergency Entry Devices for Schools | MDE | Statewide | $1,000,000 |
| Mighty Ducks Ice Rink Grants | Sports Comm. | Statewide | $1,000,000 |
| Library Construction Grants | MDE | Statewide | $750,000 |
| Peace Officer Hearing Protection Grants | DPS | Statewide | $500,000 |
Emerging Contaminants Grants – SF 862, Johnson Stewart
Grants to political subdivisions for drinking water infrastructure projects to mitigate emerging contaminants like PFAS and Manganese. Grants of up to 50% of the project cost, max of $5 million per project.
Inflow & Infiltration Grants – SF 1788, Carlson
Grants to political subdivisions within the metropolitan area, as defined by Met Council, to reduce aging pipes and increase their efficiency and capacity. Grants of up to 50% of project costs.
County/Local History Preservation Grants
Grants to political subdivisions from the Minnesota Historical Society to support the historic preservation of publicly owned buildings. Minimum grant award of $10,001, no maximum award; a 1:1 local match is required.
Community Tree Planting Grants
Grants to political subdivisions to plant trees on public land for environmental benefit, or to replace trees lost to forest pests like the Emerald Ash Borer.
Peace Officer Hearing Protection Grants – SF 3020, Seeberger
Establishes a grant program in the Department of Public Safety for local public safety officers or agencies to request high-quality hearing-protection equipment for firefighters, peace officers, emergency medical personnel, or other emergency response personnel while supplies last.
Emergency Entry Devices for Schools – SF 3426, Clark
Establishes a program in the Department of Education for local schools (public and charter) to install Emergency Entry Devices on their property. Emergency responders will have key access to these devices, which will store building keys, allowing emergency professionals streamlined access to entire campuses.
Reforestation – SF 1833, Dibble
Grants to the Department of Natural Resources to plant new trees and repopulate state forest lands.
Local Public Housing Revolving Loan Program – SF 1913, Boldon
Establishes a new program at the Minnesota Housing Finance Agency to administer a revolving loan program to local units of government seeking to create new affordable public housing units, similar to federally funded public housing, but the state version.
Districts Eligible for the PFA Low-Interest Loan Program
Within this framework, $39 million is appropriated to the Public Facilities Authority to draw down a previously appropriated federal match of approximately $200M to continue and expand this loan program. The following Members have cities that qualify for low-interest loans for water-related projects.
| PFA Low-Interest Loan Program | |||
| City/Local | Project | Est. Loan | Senator |
| Tower | Plant Improvements | $139,392 | Hauschild |
| Silver Bay | Plant Improvements | $6,200,000 | Hauschild |
| Ely | Ram Water Intake | $4,513,000 | Hauschild |
| Int. Falls | Water Main – 9th St | $1,625,950 | Hauschild |
| Detroit Lakes | Elevated StorageTank | $8,355,000 | Kupec |
| Eveleth | Mater Main – Miller Rd | $692,000 | Hauschild |
| Saint Cloud | Calvary Booster | $3,216,000 | Putnam |
| Two Harbors | Water Main – 4th St | $388,000 | Hauschild |
| Two Harbors | Water Main – 7th/4th | $477,000 | Hauschild |
| Two Harbors | Water Main – 7th Ave | $815,000 | Hauschild |
| Hastings | PFAS Treatment 1 | $17,600,000 | Seeberger |
| Fridley | PFAS Treatment | $3,632,000 | Kunesh |
| Hastings | PFAS Treatment 2 | $23,700,000 | Seeberger |
| Mound | ManganeseTreatment | $22,227,248 | Johnson Stewart |
The projects in this table are all carry-over projects that have previously applied to the PFA low-interest loan program. Many more cities are expected to apply and have yet to be evaluated or scored for priority order – this chart is non-exhaustive.