House panel lays over bill to forgive LGA penalty for Stuart

The House Taxes Committee on Oct. 12 laid over House File 146 for possible inclusion in the omnibus tax bill. The bill would forgive an LGA (local government aid) penalty that kept the city of Stuart from receiving a scheduled payment after a missed audit deadline.

Chair Davids opened the item and Representative Gilman moved House File 146, describing it as “a rerun” of a measure brought last year. Beth Johnston of the League of Minnesota Cities told the committee, “H.F. 146 is what we commonly refer to as an LGA penalty forgiveness bill,” and said the league works with cities and the Office of the State Auditor to help municipalities meet audit deadlines.

Johnston said Stuart had missed a deadline while transitioning between city clerks and “they are now in compliance with the Office of the State Auditor.” Committee members noted far fewer cities appear before the tax committee for LGA forgiveness than in prior years. Chair Davids described the proposal as intended to make the city whole for what committee members called a clerical error.

No formal committee vote was taken on the floor; Representative Gilman moved that the bill be laid over for possible inclusion in the omnibus tax bill, and the chair announced it would be carried forward in that manner.

Why it matters: LGA payments are a recurring state aid stream for cities; forgiveness bills allow a city that missed a statutory deadline (often audit-related) to receive funds it would have otherwise lost. The committee discussed that the League of Minnesota Cities had worked to reduce the number of cases in recent years, and that Stuart’s missed payment stemmed from an administrative error during a staff transition.

Next steps: House File 146 was laid over for possible inclusion in the omnibus tax bill, meaning the bill remains active for consideration during tax bill negotiations.