SF5023

Purpose

• Establish a road construction business mitigation grant program to support businesses negatively affected by transportation construction and to promote retention of jobs in transportation construction areas.

Key Provisions

• Creates a Road Construction Mitigation Grant Program within the state’s economic development framework.
• Eligible projects: trunk highway corridor redesign or construction projects that will include substantial business impacts.
• Grant recipients: local community-based development organizations, chambers of commerce, or initiative foundations. Grants are one-time and distributed in equal amounts to qualified businesses along the project corridor.
• Qualified businesses rules:
  • Employed 25 or fewer full-time equivalent employees.
  • Located within 300 feet of the construction project.
  • Experiencing impairment of road access, parking, or visibility due to the project.
• Use of funds: grants may cover employee payroll, operating expenses, or facilities expenses. Grants may not be used for bonuses, new equipment, furniture, capital improvements, construction, or expansion.
• Administrative costs:
  • The state (commissioner) may use up to 1% of each grant for administrative costs.
  • The local recipient organization may retain up to 4% for administrative costs.
• Reporting: By January 15, 2028 and annually thereafter, the commissioner must report to legislative chairs and minority leaders. Reports must include project details, the local organization, and each business that received funds (names, addresses, business types, and award amounts).
• Funding level: 1% of the total project budget is allocated for the grant awards for each eligible project.

How Grant Funds Are Managed

• For each eligible transportation project, the grant is awarded to a local organization (CDO, chamber, or initiative foundation) to distribute to qualifying businesses along the project corridor.
• Grants are one-time and expressed as equal amounts per qualifying business; the exact per-business amount is determined by the program rules and project specifics.

Changes to Existing Law

• Amends Minnesota Statutes 2024, section 160.165, subdivision 2.
• Adds a business liaison requirement:
  • Before construction begins, transportation authorities must identify whether the project will have substantial business impacts.
  • A business liaison must be designated to work with affected businesses, both before and during construction, to explore mitigation options (including signage) and to provide information on project duration, timelines, lane closures, detours, access impacts, customer parking, visibility, noise, dust, vibration, and opportunities for public participation.
  • For projects where the commissioner is the transportation authority, the liaison must inform affected businesses about the road construction business mitigation grant program.

Funding and Timing Overview

• Each eligible project sets aside 1% of the total project budget for grant awards under the program.
• Administrative and operating guidelines allow for limited administrative costs at both the state and local recipient levels.
• The program requires annual reporting to legislative committees with transportation jurisdiction, beginning with a 2028 reporting deadline.

Significant Changes Highlight

• Formal creation of a dedicated grant program to financially assist small, nearby businesses affected by road construction.
• Codification of a business liaison role to proactively communicate impacts and mitigation options to affected businesses.
• Clear caps on how grant funds may be used and specific limits on administrative costs.
• Mandated annual reporting to legislative bodies to track outcomes and accountability.

Relevant Terms - road construction mitigation grant program - trunk highway corridor - substantial business impacts - eligible transportation project - qualified business - local community-based development organization - chamber of commerce - initiative foundation - one-time financial assistance - equal amounts - full-time equivalents (FTE) - within 300 feet - impairment (road access, parking, visibility) - use of funds (payroll, operating expenses, facilities) - prohibited uses (bonuses, new equipment, capital improvements, construction) - administrative costs (1% state, up to 4% local) - reporting requirement - business liaison - signage - Minnesota Statutes 160.165 Subd. 2 - transportation authority - substantial business impacts - project duration, detours, lane closures, access, parking, visibility, noise, dust, vibration, public participation - road construction grant program outreach - funding mechanism (1% of project budget)