SF5059

Purpose

This bill creates a one-time exception to how local governments can use money that comes from repayments of Minnesota Investment Fund loans. It allows certain local governments to shift part of these repayments to the state and use the rest for general purposes, with a reporting requirement.

Main provisions

• Notwithstanding existing rules (Minnesota Statutes section 116J.8731), a local government entity with uncommitted money from loan repayments may act if it is a home rule charter city, statutory city, county, or town.
• Paragraph a: Such a local government may transfer 20 percent of the balance of the uncommitted loan repayment money to the state general fund before June 30, 2027. After transferring that 20 percent, the local government may use the remaining 80 percent as general purpose aid for any lawful expenditure.
• Paragraph b: If a local government exercises this option, it must submit by February 15, 2028 an accounting and explanation of how the money was used and distributed to the chairs and ranking minority members of the legislative committees that oversee economic development policy and finance.

Significant changes to existing law

• Creates a temporary, one-time change to how uncommitted Minnesota Investment Fund loan repayment funds can be used.
• Reallocates a portion (20%) of uncommitted funds to the state general fund and designates the remainder (80%) as general purpose aid for permissible expenditures.
• Adds a reporting requirement to track and explain the use and distribution of the funds.

Practical impact and considerations

• Local governments with similar funds now have an option to provide money to the state while retaining most of the funds for broader uses.
• The change is time-limited, with specific deadlines for transferring funds and for reporting.
• Oversight is introduced through required accounting and reporting to legislative committees.

Relationship to existing law

• The measure operates as a temporary modification to the restrictions in Minnesota Statutes section 116J.8731, using a Notwithstanding clause to override current limitations for the duration of the option.

Deadlines and timelines

• June 30, 2027: Deadline to transfer 20% of the uncommitted money to the state general fund (if the local government opts in).
• February 15, 2028: Deadline to submit accounting and explanation of use and distribution to the specified legislative committee chairs and ranking minority members.

Relevant terms - Minnesota Investment Fund - local government loan repayment funds - uncommitted money - repayment of funding - Minnesota Statutes section 116J.8731 - home rule charter - statutory city - county - town - state general fund - general purpose aid - any lawful expenditure - accounting and explanation - chairs - ranking minority members - legislative committees - economic development policy and finance - Notwithstanding - June 30, 2027 - February 15, 2028