SF5038

Purpose

This bill establishes a one-time reimbursement program to help Minnesota cities pay costs they incurred related to federal immigration enforcement actions between December 1, 2025, and May 31, 2026. It creates a specific funding stream from the general fund to compensate cities for eligible costs.

Key definitions and scope

• City: includes statutory cities and home rule charter cities.
• Commissioner: the Minnesota Commissioner of Revenue.
• Eligible costs: operating and capital costs in four areas—municipal public safety, emergency management, public works, and legal counsel.
• Federal enforcement actions: the presence of U.S. Department of Homeland Security immigration officials in Minnesota for federal immigration enforcement purposes during the specified period.

What the bill does (main provisions)

• Certification of costs: By August 1, 2026, each city can submit a report to the state auditor detailing eligible costs. The state auditor may require additional documentation to verify accuracy and attribution to federal enforcement actions. By September 1, 2026, the state auditor certifies each city’s eligible costs, excluding any costs deemed inaccurate, ineligible, or not attributable.
• Distribution of aid: The amount each city receives is proportional to its certified costs relative to all cities’ certified costs. The total aid distribution is based on the amount appropriated for this purpose.
• Federal reimbursement incentive: Cities are encouraged to make good faith efforts to obtain federal reimbursement for costs tied to federal enforcement actions. If a city receives federal reimbursement, it must return to the commissioner the lesser of the federal reimbursement amount or the city’s received share of the state aid for the same or similar costs. Any returned aid goes to the general fund as canceled appropriations.
• Certification and payment timeline: By December 1, 2026, the commissioner must calculate and certify the aid amounts for each city. By December 26, 2026, the commissioner must distribute the federal enforcement reimbursement aid to cities.
• Appropriation and funding: The bill appropriates $10,000,000 from the general fund in fiscal year 2027 to the commissioner of revenue for these aid payments. This is a one-time appropriation.

Notable changes to law

• Establishes a new, one-time aid program specifically tied to costs incurred by cities due to federal immigration enforcement actions.
• Creates a formal process involving the state auditor for cost certification, with documentation requirements and appeal-like verifications.
• Introduces a reimbursement mechanism that coordinates state aid with any federal reimbursement received by cities, including a clawback to the general fund if federal reimbursement is obtained.
• Allocates a new, explicit general fund appropriation for this purpose.

Practical impact

• Cities affected by federal immigration enforcement actions during the defined period can seek financial relief for eligible costs in four areas (public safety, emergency management, public works, legal counsel).
• The aid amount is contingent on verified costs and is distributed proportionally among eligible cities.
• The program is temporary, with a defined timeframe and a one-time funding source.

Significance for local government operations

• Provides a grant-like mechanism to offset costs associated with federal immigration enforcement.
• Requires local governments to maintain documentation and coordinate with state auditors to receive funding.
• Aligns state aid with any federal reimbursements, potentially limiting net spending by returning funds if federal help is received.

Relevant terms

• federal enforcement actions
• U.S. Department of Homeland Security
• immigration officials
• eligible costs
• municipal public safety
• emergency management
• public works
• legal counsel
• state auditor
• commissioner of revenue
• onetime appropriation
• general fund
• certification
• documentation
• attribution
• reimbursement
• distribution
• statutory city
• home rule charter city
• costs ineligible or unattributable
• December 1, 2025 to May 31, 2026 (period of enforcement actions)
• August 1, 2026; September 1, 2026; December 1, 2026; December 26, 2026 (deadlines)