HF4425: Capital Investment and LCCMR bill

The capital investment bill often referred to as the “bonding bill” appropriates money for the acquisition and betterment of public lands and buildings, and other public improvements of a capital nature. The capital investment bill included $825 million of general obligation bonds, $417 million in trunk highway bonds, $98 million in appropriation bonds, and other state financed funding.

Also inserted into HF4425 was most of the 2018 recommendations of the Legislative Citizen Commission on Minnesota Resources (LCCMR). LCCMR projects are funded by the proceeds of the Environment and Natural Resources Trust Fund for natural resource-related projects.

Unlike in the past, the debt service on the capital investment appropriation bonds will be paid for by the proceeds of the ENRTF. This type of financing is different and more expensive than traditional general obligation bonds that are paid for by the general fund.

The ENRTF proceeds will now be required to pay debt service on the $98 million in appropriation bonds. Debt service will cost the ENRTF about $3 million in the first year, and about $8 million every year after that for 19 additional years. This will reduce the amount of money the LCCMR will be able to recommend for natural resource-related projects for the next 20 years.

The combined capital investment and LCCMR bill was signed into law by Governor Dayton on May 30, 2018. Even upon signing the bill, Governor Dayton noted several concerns, including line item vetoing an appropriation to review water quality standards. Governor Dayton noted his concern for policy directives in the bill, including language that directs LCCMR to consider funding wastewater treatment plants and hazardous landfill cleanups. Governor Dayton’s concerns can be read here.

The Senate passed this bill with 42 “Yes” votes and 25 “No” votes.