Cities, towns could see restrictions lifted on unspent state funds

Cities and other local governments could get a one-time opportunity to put Minnesota Investment Fund money toward retail stores, sports arenas or casinos.

Those uses are now prohibited from receiving local loans through the fund. But HF1620/SF1456* would create a one-time exception if the local government first returns 20 percent of uncommitted fund money to the state’s General Fund. The remaining 80 percent would be freed of the fund’s statutory restrictions and could be used for any otherwise legal purpose.

Rep. Pat Garofalo

Rep. Pat Garofalo (R-Farmington), who sponsors the bill with Sen. Jeremy Miller (R-Winona), said it would give “local units of government the voluntary option of retaining some of those funds.” He termed the portion required to be returned “a small assessment to the State of Minnesota.” 

Passed 119-9, as amended, by the House Tuesday, it goes back to the Senate, where it passed 64-0 May 10. 

The amendment would change what the local government could use the money for, from “any lawful economic development purpose, including community development planning and loans to retail businesses” to “any purposes not otherwise forbidden by law.”

A March 1, 2017, fiscal note estimates the cost to the General Fund at $5 million.

“This bill has a long journey in front of it,” said Rep. Tim Mahoney (DFL-St. Paul). He objects to some of the language in the single-paragraph measure, but added, “We’ll fix it in conference.”