HF5001

Purpose

• This bill creates a one-time exception to how Minnesota Investment Fund Local Government Loan Repayment Funds can be used. It lets certain local governments temporarily redirect some of the uncommitted repayment money to the state, while still allowing most of the money to be used for general purposes. It also requires an accounting/report on how the funds are used.

Main Provisions

• Notwithstanding Minnesota Statutes section 116J.8731, a home rule charter or statutory city, county, or town with uncommitted money from repayments may transfer 20 percent of the balance to the state general fund. This transfer must occur before June 30, 2027.
• The remaining 80 percent of the uncommitted money may instead be used as general purpose aid for any lawful expenditure.
• By February 15, 2028, any local government that uses this option must submit to the chairs and ranking minority members of the relevant legislative committees (economic development policy and finance) an accounting and explanation of how the money was used and distributed.

Timing and Eligible Entities

• Eligible entities: home rule charter cities, statutory cities, counties, and towns.
• Transfer deadline: before June 30, 2027.
• Reporting deadline: February 15, 2028.

Reporting and Oversight

• The required accounting and explanation must cover the use and distribution of the money and be provided to the specified legislative leaders.

Significance and Potential Impact

• Temporarily shifts a portion of repayment funds into the state general fund, while permitting most of the funds to be used as general purpose aid for local needs.
• Introduces transparency requirements through the mandated accounting/report to legislators.
• Affects how local governments handle Minnesota Investment Fund loan repayments and potentially their economic development and general spending decisions for a limited period.

Significant Changes to Law

• Adds a one-time, temporary modification to restrictions on the use of Minnesota Investment Fund Local Government Loan Repayment Funds, allowing a 20% transfer to the state general fund and 80% to be used as general purpose aid.
• Establishes a reporting requirement to legislative committee leaders.

Relevant Terms - Minnesota Investment Fund Local Government Loan Repayment Funds - uncommitted money - repayments - Minnesota Statutes section 116J.8731 - home rule charter - statutory city - county - town - 20 percent - state general fund - 80 percent - general purpose aid - any lawful expenditure - February 15, 2028 - June 30, 2027 - accounting - explanation - chairs - ranking minority members - legislative committees - economic development policy and finance - one-time exception - temporary modification