Legislative ripple effect returns funds for environmental projects

Each year, the Minnesota State Lottery pays into the coffers of the state’s Environment and Natural Resources Trust Fund. In turn, the trust fund spends a percentage of its assets for the “protection, conservation, preservation, and enhancement of the state's air, water, land, fish, wildlife, and other natural resources.”

As amended, HF2032, sponsored by Rep. Rick Hansen (DFL-South St. Paul), proposes how $64.3 million would be spent in Fiscal Year 2020, $10.7 million more than initially expected.

The House Environment and Natural Resources Finance Division approved the bill Thursday and sent it to the House Ways and Means Committee. Sen. Torrey Westrom (R-Elbow Lake) sponsors the companion, SF2201, which awaits action by the Senate Finance Committee.

Wastewater objections

Potentially sparking controversy – and directly linked to the tale of how those funds made their way back into the trust fund budget – is $6.5 million for a wastewater infrastructure revolving loan fund.

Last year, legislators passed a bill allowing the fund to be tapped for debt service on wastewater treatment plants. Before the amendment was added, bill allocations reflected that subtraction of available funds.

Rep. Rick Hansen

Aaron Klemz, director of public engagement for the Minnesota Center for Environmental Advocacy, argued the debt service payment was in direct contradiction of state statute which specifies that the fund “may not be spent for (the) purpose of municipal water pollution control … hazardous waste disposal facilities … (or) solid waste disposal facilities.”

While the center supports funding infrastructure, and the state’s wastewater plants in particular, the trust fund is not the constitutionally acceptable vehicle for doing so, Klemz argued.

“(T)he magnitude of this need is the exact reason why ERTF statute limited the amount of money that could be loaned for that purpose,” Klemz said. “… The need is so great, it would swallow the entire fund.”

Yet, money from the trust fund was not spent on debt service for Fiscal Year 2019. Initially held up by a lawsuit challenging the constitutionality of using appropriation bonds, the issue became moot when Gov. Tim Walz signed HF80 into law earlier this month. That legislation provided general-obligation bonding for pressing environmental and infrastructure projects, freeing up $2.94 million in Fiscal Year 2019 and $7.84 million in Fiscal Year 2020 for trust fund projects.

Where the money is going

Provisions in the bill for Fiscal Year 2020 incorporate recommendations from the Legislative-Citizen Commission on Minnesota Resources:

• $25.1 million for land acquisition projects;
• $9.92 million for natural resource data and information projects;
• $5.07 million for water resources projects ($149,000 less than recommended);
• $4.45 million for protection, restoration and enhancement projects;
• $3.1 million for invasive species projects;
• $2 million for wastewater treatment related projects;
• $1.54 million for contract administration expenses of the Department of Natural Resources and the LCCMR;
• nearly $1.49 million for air quality and renewable energy projects; and
• $886,000 for technical assistance, outreach, and environmental education projects.

Funding added through the amendment would provide:

• up to $6.5 million in water infrastructure loans;
• $3.41 million to acquire, restore, enhance and provide landowner technical assistance for the Minnesota Native Prairie Bank;
• $780,000 to accelerate DNR nongame wildlife study, management, education and promotion programming;
• $636,000 for continuing the DNR native bee survey;
• $330,000 for a project records management system at the LCCMR;
• $250,000 for internships and mentorships that encourage diversity in environmental careers; and
• $200,000 for construction of ADA compliant access to Rainy Lake.