The House voted 80-50 for the project on Thursday. But it needed 81 votes because it involves borrowing.
The Capitol renovation is a priority of Democratic Gov. Mark Dayton. The building’s exterior is crumbling and architects say the interior needs updates to outdated electrical and mechanical systems.
Eleven Democrats joined 69 Republicans voting for it. Some Democrats objected to the plan moving separately from a broader construction projects bill.
Backers say that repairs are urgent and the state must commit to the project now to keep costs as low as possible.
The Senate has budgeted $25 million for Capitol restoration in its construction projects bill.