MN HF3582

Local governments receiving state funding for capital improvement projects must establish a capital project replacement fund for major rehabilitation, expansion, or replacement once the project reaches its useful life.

Grantees must adopt a capital project replacement policy specifying risks to be mitigated, intended uses of the fund, and criteria for addressing other capital improvement needs including safety, security, maintenance, and utility costs.

Commissioner of management and budget must determine annual minimum deposit amounts into replacement funds by capital project type, considering depreciation, construction cost inflation, and other relevant factors.

Capital projects already requiring replacement funds under section 446A.072 or other law are exempt if deposits are at least as large as the commissioner's minimum deposits.

Grantees failing to comply face a penalty fee equal to one percent of the state appropriation for the capital project for each year of noncompliance, with fees remitted to the general fund.

Effective for capital projects receiving state funding on or after July 1, 2024.