Ramsey County District Court File No. C1032239.
Considered and decided by Stoneburner , Presiding Judge; Schumacher , Judge; and Forsberg , Judge.*fn1
1. Minn. Stat. § 16A.152, subd. 4(b) (2002), authorizes the commissioner of finance to reduce an allotment to a special account within the special revenue fund and transfer the amount of the reduction to the general fund.
2. General funds placed in a special reserve fund are not "expended" for purposes of applying Minn. Stat. § 16A.152, subd. 4(b), to reduce "unexpended allotments of any prior appropriation or transfer" to address a deficit.
3. Minn. Stat. § 16A.152, subd. 4(b) does not violate the separation-of-powers doctrine.
The opinion of the court was delivered by: Stoneburner, Judge
Affirmed in part and reversed in part; motion denied
Appellants challenge summary judgment dismissing, for lack of standing and on the merits, their claim that the commissioner of finance's $49 million reduction in allotments to the Minnesota Minerals 21st Century Fund (the mineral fund) and transfer of that amount to the general fund, under Minn. Stat. § 16A.152, subd. 4(b), to address the deficit in 2003, was unauthorized by the statute and unconstitutional. Because the range Association of Municipalities and Schools (RAMS) has standing to pursue the claim, we reverse the district court's determination that all of the appellants lack standing, but because the reduction and transfer is authorized by Minn. Stat. § 16A.152, subd.4, and the statute is not unconstitutional, we affirm the district court's grant of summary judgment on the merits.
Appellants are two taxpaying members of the 83rd Legislature, representing House District 5A and Senate District 5; three taxpaying Minnesota citizens who reside on the Iron Range; and the Range Association of Municipalities and Schools (RAMS), an association created to provide an area-wide approach to problems common to the areas of northeastern Minnesota affected by iron mining and taconite processing and to promote the general welfare and economic development within the cities, towns, and school districts of the iron-mining areas of northeastern Minnesota. Minn. Stat. § 471.58 (2002). Respondents are the governor and the commissioner of finance.
The mineral fund was created in 1999 by the legislature "as a separate account in the treasury." 1999 Minn. Laws ch. 223, art. 2, § 23, (codified at Minn. Stat. § 116J.423 (2002)). The purpose of the mineral fund is to help the Minnesota mineral industry become globally competitive. Minn. Stat. § 116J.23. The legislature appropriated approximately $60 million to the mineral fund. Money in the mineral fund was transferred from the general fund in accordance with three separate legislative appropriations.
The general fund consists of "moneys as have been deposited in the treasury for the usual, ordinary, running, and incidental expenses of the state government and does not include moneys deposited in the treasury for a special or dedicated purpose." Minn. Stat. § 16A.54 (2002). The commissioner of finance has at all times maintained the mineral fund as a separate account within the state's special revenue fund, which is separate from the general fund.
Before money can be disbursed from any fund, a prior obligation must be incurred. Minn. Stat. § 16A.15, subd. 3 (2002). At the time the commissioner of finance reduced the mineral fund by $49 million, no money in the mineral fund was encumbered or obligated for any project. And there were no pending economic development-project requests for any money to be expended from the mineral fund.
In response to the widely publicized 2001-03 biennium budget deficit, the commissioner of finance, with the approval of the governor and after consulting with the legislative advisory commission, reduced the mineral fund by $49 million in February 2003, leaving a balance of approximately $10.6 million.*fn2 The commissioner of finance took this action under Minn. Stat. § 16A.152, subd. 4(a) and (b) (2002), which provides:
(a) If the commissioner [of finance] determines that probable receipts for the general fund will be less than anticipated, and that the amount available for the remainder of the biennium will be less than needed, the commissioner shall, with the approval of the governor, and after consulting the legislative advisory commission, reduce the amount in the budget reserve account as needed to balance expenditures with revenue.
(b) An additional deficit shall, with the approval of the governor, and after consulting the legislative advisory commission, be made up by reducing unexpended allotments of any prior appropriation or transfer. Notwithstanding any other law to the contrary, the commissioner is empowered to defer or suspend prior statutorily created obligations which would prevent effecting such reductions.
Appellants sued respondents, seeking a declaratory judgment that the transfer of $49 million from the mineral fund to the general fund was not authorized by Minn. Stat. § 16A.152, subd. 4(b), and is an unlawful encroachment by the executive branch on the powers reserved to the legislative branch that violates the separation-of-powers provision of the Minnesota Constitution. Minn. Const. art. III, § 1. Appellants sought an order restoring $49 million to the mineral fund. The district court granted summary judgment to respondents, concluding that appellants lack standing to pursue the claims ...