SF 5242

Introduction - 94th Legislature (2025 - 2026)

Posted on 04/30/2026 08:56 a.m.

A bill for an act
relating to economic development; establishing a statewide public infrastructure
grant program to support housing densification and economic development;
appropriating money; proposing coding for new law in Minnesota Statutes, chapter
116J.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [116J.4391] PUBLIC INFRASTRUCTURE GRANT PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Grant program established; purpose. new text end

new text begin (a) The commissioner shall make
grants to counties, housing and redevelopment authorities, or cities to provide up to 50
percent of the following costs for an eligible housing project: (1) costs related to site
preparation and redevelopment; and (2) capital costs of necessary public infrastructure to
support housing density. The county, housing and redevelopment authority, or city receiving
a grant must provide for the remainder of the costs of the project, either in cash or in kind.
In-kind contributions may include the value of site preparation and redevelopment other
than the public infrastructure needed for the project.
new text end

new text begin (b) The purpose of the grants made under this section is to support housing densification,
increase workforce or affordable housing, keep or enhance jobs in the area, and expand or
create new economic development.
new text end

new text begin (c) In awarding grants under this section, the commissioner must adhere to the criteria
under subdivision 5.
new text end

new text begin (d) If the commissioner awards a grant for less than 50 percent of the project, the
commissioner shall provide the applicant and the chairs and ranking minority members of
the senate and house of representatives committees with jurisdiction over economic
development finance a written explanation of the reason less than 50 percent of the capital
costs were awarded in the grant.
new text end

new text begin Subd. 2. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (b) "City" means a statutory or home rule charter city.
new text end

new text begin (c) "Housing and redevelopment authority" means an authority established pursuant to
chapter 469 or special law.
new text end

new text begin (d) "Public infrastructure" means publicly owned physical infrastructure necessary to
support eligible housing projects, including but not limited to sewers, water supply systems,
utility extensions, streets, wastewater treatment systems, stormwater management systems,
and facilities for pretreatment of wastewater to remove phosphorus.
new text end

new text begin Subd. 3. new text end

new text begin Eligible housing projects. new text end

new text begin An eligible housing project for which a county,
housing and redevelopment authority, or city may be eligible to receive a grant under this
section includes a housing project to be located in an area with a shortage of workforce
housing or where there is a shortage of affordable housing.
new text end

new text begin Subd. 4. new text end

new text begin Ineligible housing projects. new text end

new text begin Single-family residential dwelling development
projects are not eligible for a grant under this section.
new text end

new text begin Subd. 5. new text end

new text begin Application. new text end

new text begin (a) The commissioner must develop forms and procedures for
soliciting and reviewing applications for grants under this section. At a minimum, a county,
housing and redevelopment authority, or city must include in its application a resolution of
the governing body of the county, housing and redevelopment authority, or city certifying
that half of the cost of the project is committed from nonstate sources. The commissioner
must evaluate complete applications for eligible projects using the following criteria:
new text end

new text begin (1) the project is an eligible housing project as described under subdivision 3;
new text end

new text begin (2) the project is expected to result in or will attract substantial public and private capital
investment and provide substantial economic benefit to the county, housing and
redevelopment authority, or city in which the project would be located; and
new text end

new text begin (3) the project will employ a local workforce.
new text end

new text begin (b) The determination of whether to make a grant for a site is within the discretion of
the commissioner, subject to this section. The commissioner's decisions and application of
the criteria are not subject to judicial review except for abuse of discretion.
new text end

new text begin Subd. 6. new text end

new text begin Maximum grant amount. new text end

new text begin A county, housing and redevelopment authority,
or city may receive no more than $....... in a two-year period for one or more projects.
new text end

new text begin Subd. 7. new text end

new text begin Cancellation of grant; return of grant money. new text end

new text begin If after five years the
commissioner determines that a project has not proceeded in a timely manner and is unlikely
to be completed, the commissioner must cancel the grant and require the grantee to return
all grant money awarded for the project.
new text end

new text begin Subd. 8. new text end

new text begin Appropriation. new text end

new text begin Grant money returned to the commissioner is appropriated to
the commissioner to make additional grants under this section.
new text end