The Minnesota State Capitol, Minnesotans needing affordable housing and higher education institutions will see some of the most profound transformations as part of a $1.17 billion package of state-backed construction projects.

The Minnesota House overwhelmingly passed the measure early Friday morning and it now goes to the Senate for final approval.

The measure includes $126 million to finish the State Capitol renovation – the single-largest item in the package.

"Bonding bills have many good things in them, and many things that are less good," said state Rep. Dean Urdahl, R-Grove City. He said that for him, the Capitol renovation outweighs the things he finds less desirable.

Legislators set aside $240 million for new and renovated buildings at the state's higher education institutions, including money for the Tate Laboratory of Physics at the University of Minnesota and a clinical sciences facility at Minnesota State University, Mankato.

The agreement includes $100 million for affordable housing, the largest housing investment in state history. Community leaders from around Minnesota have pleaded with state officials for more housing, saying the limited supply is holding back growth in their regions.

Legislators want $56 million to renovate the Minnesota Security Hospital, a psychiatric facility in St. Peter. They also want nearly $30 million for the Department of Corrections, including a perimeter fence at the correctional center in Shakopee, coming less than a year after an inmate escaped from the facility.

Democrats included $22 million for the Lewis and Clark Regional Water System, a multistate project to pipe water from South Dakota to a handful of southwestern Minnesota communities with unreliable water supplies.

Lawmakers have also agreed to allow local communities to borrow money to pay for the remainder of the $69 million project. The state will increase aid to local communities to pay a large share of the local debt load.

The state is paying for convention center expansions in Rochester, Mankato and St. Cloud, projects that have been passed over for years.

The measure includes money to redevelop Nicollet Mall, expand the Minnesota Children's Museum in St. Paul and renovate Duluth's historic NorShor Theatre.

Minnesota Zoo will get $12 million from the state, including $5 million for Heart of the Zoo II and the rest in asset preservation and new exhibits.

The House overwhelmingly passed the $846 million borrowing portion by a vote of 92-40. An additional $200 million in cash passed a short time later, 82-50.

Legislative leaders who negotiated the construction package asked Gov. Mark Dayton to sign a letter pledging not to veto any of the projects.

He replied with a last-minute list of his own requirements, including passage of a government reform measure, a provision that requires disclosure of toxic chemicals in children's products and a handful of other provisions.

Negotiations continued early Friday morning and Dayton had yet to sign the letter.